Document:

Unassociated Document

    
      

      

    

    

     

    

    FUSHI
      INTERNATIONAL, INC.

     

    $40,000,000

     

    GUARANTEED
      SENIOR SECURED 

    FLOATING
      RATE NOTES DUE 2012

    ______________________________

     

    INDENTURE

     

    Dated
      January 25, 2007

     

    ______________________________

     

    THE
      BANK
      OF NEW YORK,

    a
      New
      York banking corporation

    as
      Trustee

     

    

     

    
      

      

    

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              TABLE
                OF CONTENTS

            	 	
              Page

            
	 	 	 
	
              ARTICLE
                1.

            	
              DEFINITIONS
                AND INCORPORATION BY REFERENCE

            	
              1

            
	 	 	 
	
              Section
                1.01.

            	
              Definitions

            	
              1

            
	
              Section
                1.02.

            	
              Other
                Definitions

            	
              25

            
	
              Section
                1.03.

            	
              Rules
                of Construction

            	
              25

            
	 	 	 
	
              ARTICLE
                2.

            	
              THE
                NOTES

            	
              26

            
	 	 	 
	
              Section
                2.01.

            	
              Form
                and Dating

            	
              26

            
	
              Section
                2.02.

            	
              Execution
                and Authentication

            	
              27

            
	
              Section
                2.03.

            	
              Registrar,
                Paying Agent and Calculation Agent

            	
              27

            
	
              Section
                2.04.

            	
              Paying
                Agent to Hold Money in Trust

            	
              28

            
	
              Section
                2.05.

            	
              Holder
                Lists

            	
              28

            
	
              Section
                2.06.

            	
              Transfer
                and Exchange

            	
              28

            
	
              Section
                2.07.

            	
              Replacement
                Notes

            	
              30

            
	
              Section
                2.08.

            	
              Outstanding
                Notes

            	
              30

            
	
              Section
                2.09.

            	
              Treasury
                Notes

            	
              30

            
	
              Section
                2.10.

            	
              Temporary
                Notes

            	
              30

            
	
              Section
                2.11.

            	
              Cancellation

            	
              31

            
	
              Section
                2.12.

            	
              Payment
                of Interest; Defaulted Interest

            	
              31

            
	
              Section
                2.13.

            	
              ISIN
                Numbers

            	
              31

            
	
              Section
                2.14.

            	
              Record
                Date

            	
              31

            
	 	 	 
	
              ARTICLE
                3.

            	
              REDEMPTION
                AND PREPAYMENT

            	
              32

            
	 	 	 
	
              Section
                3.01.

            	
              Notices
                to Trustee

            	
              32

            
	
              Section
                3.02.

            	
              Notice
                of Redemption

            	
              32

            
	
              Section
                3.03.

            	
              Effect
                of Notice of Redemption

            	
              32

            
	
              Section
                3.04.

            	
              Deposit
                of Redemption Price

            	
              33

            
	
              Section
                3.05.

            	
              Optional
                Redemption

            	
              33

            
	
              Section
                3.06.

            	
              Mandatory
                Redemption

            	
              33

            
	
              Section
                3.07.

            	
              Offer
                To Purchase

            	
              34

            
	 	 	 
	
              ARTICLE
                4.

            	
              COVENANTS

            	
              36

            
	 	 	 
	
              Section
                4.01.

            	
              Payment
                of Notes

            	
              36

            
	
              Section
                4.02.

            	
              Maintenance
                of Office or Agency

            	
              36

            
	
              Section
                4.03.

            	
              Reports

            	
              37

            
	
              Section
                4.04.

            	
              Compliance
                Certificate

            	
              37

            
	
              Section
                4.05.

            	
              Taxes

            	
              38

            
	
              Section
                4.06.

            	
              Stay,
                Extension and Usury Laws

            	
              38

            
	
              Section
                4.07.

            	
              Corporate
                Existence

            	
              38

            
	
              Section
                4.08.

            	
              Payments
                for Consent

            	
              38

            
	
              Section
                4.09.

            	
              Incurrence
                of Additional Debt

            	
              38

            
	
              Section
                4.10.

            	
              Restricted
                Payments

            	
              40

            
	
              Section
                4.11.

            	
              Liens

            	
              42

            
	
              Section
                4.12.

            	
              Asset
                Sales

            	
              42

            
	
              Section
                4.13.

            	
              Restrictions
                on Distributions from Subsidiaries

            	
              43

            
	
              Section
                4.14.

            	
              Affiliate
                Transactions

            	
              44

            
	
              Section
                4.15.

            	
              Issuance
                or Sale of Capital Stock of Subsidiaries

            	
              45

            
	
              Section
                4.16.

            	
              Maintenance
                of Consolidated Tangible Net Worth

            	
              45

            
	
              Section
                4.17.

            	
              Repurchase
                at the Option of Holders Following a Change of Control

            	
              46

            
	
              Section
                4.18.

            	
              Future
                Guarantors

            	
              46

            
	
              Section
                4.19.

            	
              Business
                Activities

            	
              46

            
	
              Section
                4.20.

            	
              Sale
                and Leaseback Transactions

            	
              46

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	 	 
	
              Section
                4.21.

            	
              Impairment
                of Security Interest

            	
              46

            
	
              Section
                4.22.

            	
              Amendments
                to Security Documents

            	
              46

            
	
              Section
                4.23.

            	
              Use
                of Proceeds

            	
              47

            
	
              Section
                4.24.

            	
              Maintenance
                of Insurance

            	
              47

            
	
              Section
                4.25.

            	
              Qualifying
                IPO

            	
              47

            
	
              Section
                4.26.

            	
              Repurchase
                Upon Designated Event

            	
              47

            
	
              Section
                4.27.

            	
              Government
                Approvals and Licenses; Compliance with Law

            	
              47

            
	
              Section
                4.28.

            	
              Minimum
                Fixed Charge Coverage Ratio and Leverage Ratio

            	
              47

            
	
              Section
                4.29.

            	
              Notes
                to Rank Senior

            	
              48

            
	
              Section
                4.30.

            	
              Calculation
                of Original Issue Discount

            	
              48

            
	 	 	 
	
              ARTICLE
                5.

            	
              SUCCESSORS

            	
              48

            
	 	 	 
	
              Section
                5.01.

            	
              Merger,
                Consolidation and Sale of Assets.

            	
              48

            
	
              Section
                5.02.

            	
              Successor
                Corporation Substituted

            	
              50

            
	 	 	 
	
              ARTICLE
                6.

            	
              DEFAULTS
                AND REMEDIES

            	
              50

            
	 	 	 
	
              Section
                6.01.

            	
              Events
                of Default

            	
              50

            
	
              Section
                6.02.

            	
              Acceleration

            	
              53

            
	
              Section
                6.03.

            	
              Other
                Remedies

            	
              53

            
	
              Section
                6.04.

            	
              Waiver
                of Defaults

            	
              53

            
	
              Section
                6.05.

            	
              Control
                by Majority

            	
              54

            
	
              Section
                6.06.

            	
              Limitation
                on Suits

            	
              54

            
	
              Section
                6.07.

            	
              Rights
                of Holders to Receive Payment

            	
              54

            
	
              Section
                6.08.

            	
              Collection
                Suit by Trustee

            	
              54

            
	
              Section
                6.09.

            	
              Trustee
                May File Proofs of Claim

            	
              55

            
	
              Section
                6.10.

            	
              Priorities

            	
              55

            
	
              Section
                6.11.

            	
              Undertaking
                for Costs

            	
              56

            
	 	 	 
	
              ARTICLE
                7.

            	
              TRUSTEE

            	
              56

            
	 	 	 
	
              Section
                7.01.

            	
              Duties
                of Trustee

            	
              56

            
	
              Section
                7.02.

            	
              Rights
                of Trustee

            	
              57

            
	
              Section
                7.03.

            	
              Individual
                Rights of Trustee

            	
              58

            
	
              Section
                7.04.

            	
              Trustee’s
                Disclaimer

            	
              58

            
	
              Section
                7.05.

            	
              Notice
                of Defaults

            	
              59

            
	
              Section
                7.06.

            	
              Reports
                by Trustee to Holders

            	
              59

            
	
              Section
                7.07.

            	
              Compensation
                and Indemnity

            	
              59

            
	
              Section
                7.08.

            	
              Replacement
                of Trustee

            	
              60

            
	
              Section
                7.09.

            	
              Successor
                Trustee by Merger, etc.

            	
              61

            
	
              Section
                7.10.

            	
              Eligibility;
                Disqualification

            	
              61

            
	
              Section
                7.11.

            	
              Certain
                Provisions

            	
              61

            
	 	 	 
	
              ARTICLE
                8.

            	
              AMENDMENT,
                SUPPLEMENT AND WAIVER

            	
              63

            
	 	 	 
	
              Section
                8.01.

            	
              Without
                Consent of Holders

            	
              63

            
	
              Section
                8.02.

            	
              With
                Consent of Holders

            	
              63

            
	
              Section
                8.03.

            	
              Revocation
                and Effect of Consents

            	
              64

            
	
              Section
                8.04.

            	
              Notation
                on or Exchange of Notes

            	
              65

            
	
              Section
                8.05.

            	
              Trustee
                to Sign Amendments, etc.

            	
              65

            
	 	 	 
	
              ARTICLE
                9.

            	
              GUARANTEES

            	
              65

            
	 	 	 
	
              Section
                9.01.

            	
              Guarantee

            	
              65

            
	
              Section
                9.02.

            	
              Limitation
                on Guarantor Liability

            	
              66

            
	
              Section
                9.03.

            	
              Execution
                and Delivery of Guarantee

            	
              67

            
	
              Section
                9.04.

            	
              Guarantors
                May Consolidate, etc., on Certain Terms

            	
              67

            
	
              Section
                9.05.

            	
              Releases
                Following Merger, Consolidation or Sale of Assets, Etc.

            	
              68

            
	 	 	 
	
              ARTICLE
                10.

            	
              COLLATERAL
                AND SECURITY

            	
              68

            

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

     

    
      	
              Section
                10.01.

            	
              Security
                Documents.

            	
              68

            
	
              Section
                10.02.

            	
              Future
                Guarantor Pledgors

            	
              69

            
	
              Section
                10.03.

            	
              Recording
                and Opinions

            	
              70

            
	
              Section
                10.04.

            	
              Release
                of Collateral

            	
              71

            
	
              Section
                10.05.

            	
              Authorization
                of Actions to Be Taken by the Trustee Under the Security
                Documents

            	
              71

            
	
              Section
                10.06.

            	
              Authorization
                of Receipt of Funds by the Trustee Under the Security
                Documents

            	
              72

            
	
              Section
                10.07.

            	
              Termination
                of Security Interest

            	
              72

            
	 	 	 
	
              ARTICLE
                11.

            	
              SATISFACTION
                AND DISCHARGE

            	
              72

            
	 	 	 
	
              Section
                11.01.

            	
              Satisfaction
                and Discharge

            	
              72

            
	
              Section
                11.02.

            	
              Deposited
                Cash to be Held in Trust; Other Miscellaneous Provisions

            	
              72

            
	
              Section
                11.03.

            	
              Repayment
                to Company

            	
              73

            
	 	 	 
	
              ARTICLE
                12.

            	
              MISCELLANEOUS

            	
              73

            
	 	 	 
	
              Section
                12.01.

            	
              Notices

            	
              73

            
	
              Section
                12.02.

            	
              Communication
                by Holders of Notes with Other Holders of Notes

            	
              74

            
	
              Section
                12.03.

            	
              Certificate
                and Opinion as to Conditions Precedent

            	
              74

            
	
              Section
                12.04.

            	
              Statements
                Required in Certificate or Opinion

            	
              74

            
	
              Section
                12.05.

            	
              Legal
                Holidays

            	
              75

            
	
              Section
                12.06.

            	
              Rules
                by Trustee and Agents

            	
              75

            
	
              Section
                12.07.

            	
              No
                Personal Liability of Directors, Officers, Employees and
                Stockholders

            	
              75

            
	
              Section
                12.08.

            	
              Governing
                Law

            	
              75

            
	
              Section
                12.09.

            	
              No
                Adverse Interpretation of Other Agreements

            	
              75

            
	
              Section
                12.10.

            	
              Successors

            	
              76

            
	
              Section
                12.11.

            	
              Severability

            	
              76

            
	
              Section
                12.12.

            	
              Counterpart
                Originals

            	
              76

            
	
              Section
                12.13.

            	
              Table
                of Contents, Headings, etc.

            	
              76

            

    

     

    EXHIBIT
      A

    EXHIBIT
      B

    EXHIBIT
      C

    EXHIBIT
      D

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    This
      INDENTURE dated January 25, 2007 is by and among FUSHI INTERNATIONAL, INC.,
      a
      Nevada corporation (the “Company”),
      the
      Guarantor listed on the signature pages hereto, and THE BANK OF NEW YORK, a
      New
      York banking corporation, as trustee (the “Trustee”).

     

    The
      Company has duly authorized the creation of an issue of Guaranteed Senior
      Secured Floating Rate Notes due 2012 (the “Notes”)
      of the
      amount and substantially the tenor hereinafter set forth and, to provide
      therefor, the Company has duly authorized the execution and delivery of this
      Indenture. All things necessary to make the Notes, when duly issued and executed
      by the Company, and authenticated and delivered hereunder, the valid obligations
      of the Company, and to make this Indenture a valid and binding agreement of
      the
      Company, have been done. The Company, the Guarantor and the Trustee agree as
      follows for the benefit of each other and for the equal and ratable benefit
      of
      the Holders of the Notes issued under this Indenture:

     

    ARTICLE
      1.

     

    DEFINITIONS
      AND INCORPORATION BY REFERENCE

     

    Section
      1.01. Definitions

     

    For
      all
      purposes of this Indenture, except as otherwise expressly provided or unless
      the
      context otherwise requires:

     

    “Additional
      Amounts”
means,
      with respect to any Note, an amount equal to 3.3% of the principal amount of
      such Note due and payable by the Company to the holder thereof if a listing
      of
      the Common Stock on the Nasdaq Global Market, Nasdaq Global Select Market or
      Nasdaq Capital Market has not been completed on or before, or such listing
      has
      not been maintained as of, July 24, 2008, such Additional Amounts being due
      and
      payable no later than July 31, 2008. For all purposes of this Indenture, the
      term “premium” shall include Additional Amounts, if any, with respect to the
      Notes.

     

    “Additional
      Assets”
      means:

     

    (a) any
      Property (other than cash, Cash Equivalent and securities) to be owned by the
      Company or any of its Subsidiaries and used in a Related Business; or

     

    (b) Capital
      Stock of a Person that becomes a Subsidiary of the Company as a result of the
      acquisition of such Capital Stock by the Company or another Subsidiary of the
      Company from any Person other than the Company or an Affiliate of the Company;
      provided,
      however,
      that,
      in the case of clause (b), such Subsidiary is primarily engaged in a
      Related Business.

     

    “Affiliate”
of
      any
      specified Person means:

     

    (a) any
      other Person directly or indirectly controlling or controlled by or under direct
      or indirect common control with such specified Person, or 

     

    (b) any
      other Person who is a director or officer of:

     

    (1) such
      specified Person, 

     

    (2) any
      Subsidiary of such specified Person, or

    

    (3) any
      Person described in clause (a) above. 

     

    For
      the
      purposes of this definition, “control,” when used with respect to any Person,
      means the power to direct the management and policies of such Person, directly
      or indirectly, whether through the ownership of voting securities, by contract
      or otherwise; and the terms “controlling” and “controlled” have meanings
      correlative to the foregoing. For purposes of Section
      4.12
      and Section
      4.14
      and the
      definition of “Additional Assets” only, “Affiliate” shall also mean any
      Beneficial Owner of shares representing 5% or more of the total voting power
      of
      the Voting Stock (on a fully diluted basis) of the Company or of rights or
      warrants to purchase such Voting Stock (whether or not currently exercisable)
      and any Person who would be an Affiliate of any such Beneficial Owner pursuant
      to the first sentence hereof. Notwithstanding the foregoing, in no event shall
      Citadel Equity Fund Ltd. or any of its Affiliates be considered an Affiliate
      of
      the Company.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

     

    “Agent”
means
      any Registrar, co-registrar, Paying Agent or additional paying agent or
      Calculation Agent.

     

    “Applicable
      Procedures”
means,
      with respect to any transfer, redemption or exchange of or for beneficial
      interests in any Global Note, the rules and procedures of Euroclear and
      Clearstream that apply to such transfer, redemption or exchange.

     

    “Asset
      Sale”
means
      any sale, lease, transfer, issuance or other disposition (or series of related
      sales, leases, transfers, issuances or dispositions) by the Company or any
      of
      its Subsidiaries, including any disposition by means of a merger, consolidation
      or similar transaction (each referred to for the purposes of this definition
      as
      a “disposition”), of 

     

    (a) any
      shares of Capital Stock of a Subsidiary of the Company (other than directors’
qualifying shares), or

     

    (b) any
      other Property of the Company or any of its Subsidiaries outside of the ordinary
      course of business of the Company or such Subsidiary, 

     

    other
      than, in the case of clause (a) or (b) above, 

     

    (1) any
      disposition by a Subsidiary of the Company to the Company or by the Company
      or
      one of its Subsidiaries to a Wholly Owned Subsidiary, 

     

    (2) any
      disposition that constitutes a Permitted Investment or Restricted Payment
      permitted by Section
      4.10,

     

    (3) any
      disposition effected in compliance with the first paragraph of Section
      5.01,
      

     

    (4)
      any
      disposition of inventory of the Company or any of its Subsidiaries in the
      ordinary course of business, or inventory or other property that in the
      reasonable judgment of the Company have become uneconomic, obsolete or worn
      out,

     

    (5)
      the
      sale or discount of accounts receivable in connection with the compromise or
      collection thereof in the ordinary course of business, and

     

    (6)
      any
      disposition in a single transaction or a series of related transactions of
      assets for aggregate consideration of less than $1.0 million.

     

    “Attributable
      Debt”
in
      respect of a Sale and Leaseback Transaction means, at any date of determination,
      

     

    (a) if
      such Sale and Leaseback Transaction is a Capital Lease Obligation, the amount
      of
      Debt represented thereby according to the definition of “Capital Lease
      Obligations,” and 

     

    (b) in
      all other instances, the present value (discounted at the weighted average
      interest rate borne by the Notes, compounded annually in the most recently
      completed twelve months) of the total obligations of the lessee for rental
      payments during the remaining term of the lease included in such Sale and
      Leaseback Transaction (including any period for which such lease has been
      extended).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

     

    “Average
      Life”
means,
      as of any date of determination, with respect to any Debt or Preferred Stock,
      the quotient obtained by dividing:

     

    (a) the
      sum of the product of the numbers of years (rounded to the nearest one-twelfth
      of one year) from the date of determination to the dates of each successive
      scheduled principal payment of such Debt or redemption or similar payment with
      respect to such Preferred Stock multiplied by the amount of such payment by
      

     

    (b)
      the
      sum of all such payments.

     

    “Bankruptcy
      Law”
means
      Title 11, U.S. Code or any similar federal or state law for the relief of
      debtors, or the law of any other jurisdiction relating to bankruptcy,
      insolvency, winding up, liquidation, reorganization or relief of
      debtors.

     

    “Beneficial
      Owner”
has
      the
      meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange
      Act, except that in calculating the beneficial ownership of any particular
      “person” (as such term is used in Section 13(d)(3) of the Exchange Act), such
“person” shall be deemed to have beneficial ownership of all securities that
      such “person” has the right to acquire by conversion or exercise of other
      securities, whether such right is currently exercisable or is exercisable only
      upon the occurrence of a subsequent condition or passage of time. The terms
      “Beneficially Owns” and “Beneficially Owned” have a corresponding
      meaning.

     

    “Board
      of Directors”
means
      (1) in respect of a corporation, the board of directors of the corporation,
      or
      (except if used in the definition of “Change of Control”) any duly authorized
      committee thereof; and (2) in respect of any other Person, the board or
      committee of that Person serving an equivalent function.

     

    “Board
      Resolution”
of
      a
      Person means a copy of a resolution (in form and substance satisfactory to
      the
      Trustee) certified by the secretary or an assistant secretary (or individual
      performing comparable duties) of the applicable Person to have been duly adopted
      by the Board of Directors of such Person and to be in full force and effect
      on
      the date of such certification, and delivered to the Trustee.

     

    “Business
      Day”
means
      any day other than a Legal Holiday.

     

    “Calculation
      Agent”
means
      initially The Bank of New York, a New York banking corporation, until a
      successor replaces The Bank of New York in accordance with Section
      2.03
      hereof
      and thereafter means the successor serving hereunder.

     

    “Capital
      Expenditures”
means
      expenditures (whether paid in cash or other consideration or accrued as a
      liability and including that portion of Capital Lease Obligations which is
      capitalized on the consolidated balance sheet of the Company and its
      Subsidiaries) by the Company and its Subsidiaries that, in conformity with
      GAAP,
      are included in “additions to property, plant and equipment” or as capitalized
      internally developed software or comparable items reflected in the consolidated
      balance sheet of the Company and its Subsidiaries.

     

    “Capital
      Lease Obligations”
means
      any obligation under a lease that is required to be capitalized for financial
      reporting purposes in accordance with GAAP; and the amount of Debt represented
      by such obligation shall be the capitalized amount of such obligations
      determined in accordance with GAAP; and the Stated Maturity thereof shall be
      the
      date of the last payment of rent or any other amount due under such lease prior
      to the first date upon which such lease may be terminated by the lessee without
      payment of a penalty. For purposes of Section
      4.11
      a
      Capital Lease Obligation shall be deemed secured by a Lien on the Property
      being
      leased.

     

    “Capital
      Stock”
means,
      with respect to any Person, any shares or other equivalents (however designated)
      of any class of corporate stock or partnership interests or any other
      participations, rights, warrants, options or other interests in the nature
      of an
      equity interest in such Person, including Preferred Stock, but excluding any
      debt security convertible or exchangeable into such equity
      interest.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

     

    “Capital
      Stock Sale Proceeds”
means
      the aggregate cash proceeds received by the Company from the issuance or sale
      (other than to a Subsidiary of the Company or an employee stock ownership plan
      or trust established by the Company or any such Subsidiary for the benefit
      of
      their employees) by the Company of its Capital Stock (other than Disqualified
      Stock) after the Issue Date, net of attorneys’ fees, accountants’ fees,
      underwriters’ or placement agents’ fees, discounts or commissions and brokerage,
      consultant and other fees actually incurred in connection with such issuance
      or
      sale and net of taxes paid or payable as a result thereof.

     

    “Cash
      Equivalents”
means
      any of the following: 

     

    (a) Investments
      in U.S. Government Securities maturing within 365 days of the date of
      acquisition thereof; 

     

    (b) Investments
      in time deposit accounts, certificates of deposit and money market deposits
      maturing within 90 days of the date of acquisition thereof issued by a bank
      or trust company organized under the laws of the United States of America
      or any state thereof having capital, surplus and undivided profits aggregating
      in excess of $500 million and whose long-term debt is rated “A-3” or “A-”
or higher according to Moody’s or S&P (or such similar equivalent rating by
      at least one “nationally recognized statistical rating organization” (as defined
      in Rule 436 under the Securities Act)); 

     

    (c) repurchase
      obligations with a term of not more than 30 days for underlying securities
      of the types described in clause (a) entered into with:

     

    (1) a
      bank meeting the qualifications described in clause (b) above, or

     

    (2) any
      primary government securities dealer reporting to the Market Reports Division
      of
      the Federal Reserve Bank of New York; 

     

    (d) Investments
      in commercial paper, maturing not more than 90 days after the date of
      acquisition, issued by a corporation (other than an Affiliate of the Company)
      organized and in existence under the laws of the United States of America
      with a rating at the time as of which any Investment therein is made of “P-1”
(or higher) according to Moody’s or “A-1” (or higher) according to S&P (or
      such similar equivalent rating by at least one “nationally recognized
      statistical rating organization” (as defined in Rule 436 under the
      Securities Act));

     

    (e)
      direct obligations (or certificates representing an ownership interest in such
      obligations) of any state of the United States of America (including any agency
      or instrumentality thereof) for the payment of which the full faith and credit
      of such state are pledged and which are not callable or redeemable at the
      issuer’s option, provided
      that:

     

    (1) the
      long-term debt of such state is rated “A-3” or “A-” or higher according to
      Moody’s or S&P (or such similar equivalent rating by at least one
“nationally recognized statistical rating organization” (as defined in
      Rule 436 under the Securities Act)), and

     

    (2) such
      obligations mature within 180 days of the date of acquisition thereof;
      and

     

    (f)
      time
      deposit accounts, certificates of deposit and money market deposits with (i)
      Bank of China, Industrial and Commercial Bank of China, China Construction
      Bank
      and China Merchants Bank or (ii) any other bank or trust company organized
      under
      the laws of the PRC whose long-term debt is rated as high or higher than any
      of
      those banks.

     

    “Change
      of Control”
means
      the occurrence of any of the following events: 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

     

    (a) 
      the Permitted Holders cease to be the “beneficial owners” (as defined in
      Rule 13d-3 under the Exchange Act, except that a Person will be deemed to
      have “beneficial ownership” of all shares that any such Person has the right to
      acquire, whether such right is exercisable immediately or only after the passage
      of time), directly or indirectly, of at least 35% of the total voting power
      of
      the Voting Stock of the Company, whether as a result of the issuance of
      securities of the Company, any merger, consolidation, liquidation or dissolution
      of the Company, any direct or indirect transfer of securities by the Permitted
      Holders or otherwise (for purposes of this clause (a), the Permitted Holders
      will be deemed to beneficially own any Voting Stock of a specified corporation
      held by a parent corporation so long as the Permitted Holders beneficially
      own,
      directly or indirectly, in the aggregate a majority of the total voting power
      of
      the Voting Stock of such parent corporation); or

     

    (b) the
      sale, transfer, assignment, lease, conveyance or other disposition, directly
      or
      indirectly, of all or substantially all the Property of the Company and its
      Subsidiaries, considered as a whole (other than a disposition of such Property
      as an entirety or virtually as an entirety to a Wholly Owned Subsidiary or
      one
      or more Permitted Holders), shall have occurred, or the Company merges,
      consolidates or amalgamates with or into any other Person (other than one or
      more Permitted Holders) or any other Person (other than one or more Permitted
      Holders) merges, consolidates or amalgamates with or into the Company, in any
      such event pursuant to a transaction in which the outstanding Voting Stock
      of
      the Company is reclassified into or exchanged for cash, securities or other
      Property, other than any such transaction where: 

     

    (1) the
      outstanding Voting Stock of the Company is reclassified into or exchanged for
      other Voting Stock of the Company or for Voting Stock of the Surviving Person,
      and 

     

    (2) the
      holders of the Voting Stock of the Company immediately prior to such transaction
      own, directly or indirectly, not less than a majority of the Voting Stock of
      the
      Company or the Surviving Person immediately after such transaction and in
      substantially the same proportion as before the transaction; or

     

    (c) Continuing
      Directors cease for any reason to constitute a majority of the Board of
      Directors then in office; or 

     

    (d) the
      shareholders of the Company shall have approved any plan of liquidation or
      dissolution of the Company.

     

    “Clearstream” means
      Clearstream Banking, société
      anonyme,
      and any
      successor thereto.

     

    “Closing
      Sale Price”
of
      the
      shares of Common Stock on any date means (i)
      if Common Stock is primarily traded on a securities exchange, the last sale
      price on such securities exchange on the applicable day, or if no sale occurred
      on such day, the mean between the closing “bid” and “asked” prices on such day,
      (ii) if the principal market for Common Stock is in the over-the-counter market,
      the closing sale price on the applicable day as published by The NASDAQ Stock
      Market, Inc. or similar organization, or if such price is not so published
      on
      such day, the mean between the closing “bid” and “asked” prices, if available,
      on such day, which prices may be obtained from any reputable pricing service,
      broker or dealer, and (iii) if neither clause (i) nor clause (ii) is applicable,
      the Fair Market Value as determined in good faith by the Board of Directors
      of
      the Company or an Independent Financial Advisor, as applicable.
      The
      Closing Sale Price shall be determined based on regular market hours without
      reference to extended after hours trading or pre-market trading.

     

    “Code”
means
      the U.S. Internal Revenue Code of 1986, as amended.

     

    “Collateral”
means
      all the collateral described in the Security Documents.

     

    “Collateral
      Agent”
means
      The Bank of New York, and any successor collateral agent appointed pursuant
      to
      the terms of this Indenture.

     

    “Commission”
means
      the U.S. Securities and Exchange Commission. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

     

    “Commodity
      Price Protection Agreement”
means,
      in respect of a Person, any forward contract, commodity swap agreement,
      commodity option agreement or other similar agreement or arrangement designed
      to
      protect such Person against fluctuations in commodity prices.

     

    “Common
      Depositary”
means,
      with respect to the Notes issuable or issued in global form, the Person
      specified in Section
      2.03(b)
      hereof
      as the Common Depositary to Euroclear and Clearstream with respect to the Notes,
      and any and all successors thereto appointed as depositary hereunder and having
      become such pursuant to the applicable provisions of this
      Indenture.

     

    “Common
      Stock”
means
      any stock of any class of the Company which has no preference in respect of
      dividends or of amounts payable in the event of any voluntary or involuntary
      liquidation, dissolution or winding up of the Company and which is not subject
      to redemption by the Company.

     

    “Company”
is
      defined in the preamble.

     

    “Consolidated
      Interest Expense”
means,
      for any period, the total interest expense of the Company and its consolidated
      Subsidiaries, plus, to the extent not included in such total interest expense,
      and to the extent Incurred by the Company or its Subsidiaries, without
      duplication,

     

    (a) interest
      expense attributable to leases constituting part of a Sale and Leaseback
      Transaction and to Capital Lease Obligations, 

     

    (b) amortization
      of debt discount and debt issuance cost, including commitment fees,

     

    (c) capitalized
      interest, 

     

    (d) non-cash
      interest expense, 

     

    (e) commissions,
      discounts and other fees and charges owed with respect to letters of credit
      and
      banker’s acceptance financing, 

     

    (f) net
      costs associated with Hedging Obligations (including amortization of fees),
      

     

    (g) Disqualified
      Stock Dividends (other than dividends payable in Capital Stock other than
      Disqualified Stock), 

     

    (h) Preferred
      Stock Dividends (other than dividends payable in Capital Stock other than
      Disqualified Stock) of Subsidiaries, 

     

    (i) interest
      accruing on any Debt of any other Person to the extent such Debt is guaranteed
      by the Company or any of its Subsidiaries, and 

     

    (j) the
      cash contributions to any employee stock ownership plan or similar trust, if
      any
      and to the extent such contributions are used by such plan or trust to pay
      interest or fees to any Person (other than the Company) in connection with
      Debt
      Incurred by such plan or trust.

     

    “Consolidated
      Net Income”
means,
      for any period, the net income (loss) of the Company and its consolidated
      Subsidiaries; provided,
      however,
      that
      there shall not be included in such Consolidated Net Income:

     

    (a) any
      net income (loss) of any Person (other than the Company) if such Person is
      not a
      Subsidiary of the Company, except that:

     

    (1) subject
      to the exclusions contained in clauses (c), (d) and (e) below, equity of
      the Company and its consolidated Subsidiaries in the net income of any such
      Person for such period shall be included in such Consolidated Net Income up
      to
      the aggregate amount of cash distributed by such Person during such period
      to
      the Company or any of its Subsidiaries as a dividend or other distribution
      (subject, in the case of a dividend or other distribution to such Subsidiary,
      to
      the limitations contained in clause (b) below), and 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

     

    (2) the
      equity of the Company and its consolidated Subsidiaries in a net loss of any
      such Person for such period shall be included in determining such Consolidated
      Net Income, 

     

    (b) any
      net income (loss) of any Subsidiary of the Company if such Subsidiary is subject
      to restrictions, directly or indirectly, on the payment of dividends or the
      making of distributions, directly or indirectly, to the Company, except
      that:

     

    (1)
      subject to the exclusions contained in clauses (c), (d) and (e) below, the
      equity of the Company and its consolidated Subsidiaries in the net income of
      any
      such Subsidiary for such period shall be included in such Consolidated Net
      Income up to the aggregate amount of cash distributed by such Subsidiary during
      such period to the Company or another of its Subsidiaries as a dividend or
      other
      distribution (subject, in the case of a dividend or other distribution to
      another Subsidiary of the Company, to the limitation contained in this clause),
      and

     

    (2)
      the
      equity of the Company and its consolidated Subsidiaries in a net loss of any
      such Subsidiary for such period shall be included in determining such
      Consolidated Net Income, 

     

    (c) any
      gain (but not loss) realized upon the sale or other disposition of any Property
      of the Company or any of its consolidated Subsidiaries (including pursuant
      to
      any Sale and Leaseback Transaction) that is not sold or otherwise disposed
      of in
      the ordinary course of business,

     

    (d)
      any
      extraordinary gain or loss, and

     

    (e)
      the
      cumulative effect of a change in accounting principles. 

     

    “Consolidated
      Net Worth”
means
      the total of the amounts shown on the consolidated balance sheet of the Company
      and its Subsidiaries as of the end of the most recent Fiscal Quarter of the
      Company ending prior to the taking of any action for the purpose of which the
      determination is being made, as:

     

    (a) the
      par or stated value of all outstanding Capital Stock of the Company, plus

     

    (b) paid-in
      capital or capital surplus relating to such Capital Stock, plus 

     

    (c) any
      retained earnings or earned surplus, less:

     

    (1) any
      accumulated deficit, and 

     

    (2) any
      amounts attributable to Disqualified Stock or any equity security convertible
      into or exchangeable for Debt, the cost of treasury stock and the principal
      amount of any promissory notes receivable from the sale of Capital Stock of
      the
      Company or any of its Subsidiaries, each item to be determined in conformity
      with GAAP.

     

    “Consolidated
      Tangible Net Worth”
means,
      as of any date of determination, the Consolidated Net Worth less the Intangible
      Assets. 

     

    “Continuing
      Directors”
means,
      as of any date of determination, any member of the Board of Directors who (a)
      was a member of the Board of Directors on the date of this Indenture or (b)
      was
      nominated for election to the Board of Directors by, or whose election was
      ratified with the approval of, a majority of the Continuing Directors who were
      members of the Board of Directors at the time of such nomination or
      election.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

     

    “Convertible
      Note Guarantees”
means
      the guarantee by one or more of the Company’s Subsidiaries of the Convertible
      Notes pursuant to the terms of the indenture governing the terms of the
      Convertible Notes.

     

    “Convertible
      Notes”
means
      the Company’s 3.0% Guaranteed Senior Secured Convertible Notes due 2012 issued
      pursuant to that certain indenture dated January 25, 2007 by and among the
      Company, FHI, as Guarantor, and The Bank of New York, a New York banking
      corporation, as Trustee.

     

    “Corporate
      Trust Office of the Trustee”
shall
      be at the address of the Trustee specified in Section
      12.01
      hereof,
      or such other address as to which the Trustee may give notice to the
      Company.

     

    “Credit
      Facilities”
means,
      with respect to the WFOE, one or more debt or commercial paper facilities with
      banks or other institutional lenders in the PRC providing for revolving credit
      loans, term loans, receivables or inventory financing (including through the
      sale of receivables or inventory to such lenders or to special purpose,
      bankruptcy remote entities formed to borrow from such lenders against such
      receivables or inventory) or trade letters of credit, in each case together
      with
      any Refinancings thereof by any lender or syndicate of lenders.

     

    “Currency
      Exchange Protection Agreement”
means,
      in respect of a Person, any foreign exchange contract, currency swap agreement,
      currency option or other similar agreement or arrangement designed to protect
      such Person against fluctuations in currency exchange rates. 

     

    “Custodian”
means,
      with respect to the Notes issuable or issued in global form, the Person
      specified in Section
      2.03(c)
      as
      Custodian with respect to the Notes, and any and all successors thereto
      appointed as custodian hereunder and having become such pursuant to the
      applicable provisions of this Indenture.

     

    “Dalian
      Fushi”
means
      Dalian Fushi Bimetallic Manufacturing Company Limited, a limited liability
      company organized and existing under the laws of the PRC.

     

    “Debt”
means,
      with respect to any Person on any date of determination (without
      duplication):

     

    (a) the
      principal of and premium (if any) in respect of:

     

    (1) debt
      of such Person for money borrowed, and

     

    (2) debt
      evidenced by notes, debentures, bonds or other similar instruments for the
      payment of which such Person is responsible or liable; 

     

    (b)
      all
      Capital Lease Obligations of such Person and all Attributable Debt in respect
      of
      Sale and Leaseback Transactions entered into by such Person; 

     

    (c)
      all
      obligations of such Person representing the deferred purchase price of Property,
      all conditional sale obligations of such Person and all obligations of such
      Person under any title retention agreement (but excluding trade accounts payable
      arising in the ordinary course of business); 

     

    (d) all
      obligations of such Person for the reimbursement of any obligor on any letter
      of
      credit, banker’s acceptance or similar credit transaction (other than
      obligations with respect to letters of credit securing obligations (other than
      obligations described in (a) through (c) above) entered into in the ordinary
      course of business of such Person to the extent such letters of credit are
      not
      drawn upon or, if and to the extent drawn upon, such drawing is reimbursed
      no
      later than the third Business Day following receipt by such Person of a demand
      for reimbursement following payment on the letter of credit); 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

     

    (e)
      the
      amount of all obligations of such Person with respect to the Repayment of any
      Disqualified Stock or, with respect to any Subsidiary of such Person, any
      Preferred Stock (but excluding, in each case, any accrued dividends);

     

    (f)
      all
      obligations of the type referred to in clauses (a) through (e) above of
      other Persons and all dividends of other Persons for the payment of which,
      in
      either case, such Person is responsible or liable, directly or indirectly,
      as
      obligor, guarantor or otherwise, including by means of any guarantee;

     

    (g)
      all
      obligations of the type referred to in clauses (a) through (f) above of
      other Persons secured by any Lien on any Property of such Person (whether or
      not
      such obligation is assumed by such Person), the amount of such obligation being
      deemed to be the lesser of the Fair Market Value of such Property and the amount
      of the obligation so secured; and 

     

    (h) to
      the extent not otherwise included in this definition, Hedging Obligations of
      such Person. 

     

    The
      amount of Debt of any Person at any date shall be the outstanding balance,
      or
      the accreted value of such Debt in the case of Debt issued with original issue
      discount, at such date of all unconditional obligations as described above
      and
      the maximum liability, upon the occurrence of the contingency giving rise to
      the
      obligation, of any contingent obligations at such date. The amount of Debt
      represented by a Hedging Obligation shall be equal to:

     

    (1) zero
      if such Hedging Obligation has been Incurred pursuant to clause (e), (f) or
      (g)
      of the second paragraph of Section
      4.09
      or

     

    (2) the
      notional amount of such Hedging Obligation if not Incurred pursuant to such
      clauses. 

     

    “Default”
means
      any event which is, or after notice or passage of time or both would be, an
      Event of Default.

     

    “Definitive
      Note”
means
      a
      certificated Note registered in the name of the Holder thereof and issued in
      accordance with Section
      2.06
      or
2.10
      hereof,
      in substantially the form of Exhibit
      A
      hereto
      except that such Note shall not bear the Global Note Legend and shall not have
      the “Schedule of Exchanges of Interests in the Global Note” attached
      thereto.

     

    “Designated
      Event”
shall
      mean any Fundamental Change or a Termination of Trading.

     

    “Determination
      Date”
means,
      with respect to any Interest Period, the second London Banking Day preceding
      the
      first day of the Interest Period.

     

    “Disqualified
      Stock”
means
      any Capital Stock of the Company or any of its Subsidiaries that by its terms
      (or by the terms of any security into which it is convertible or for which
      it is
      exchangeable, in either case at the option of the holder thereof) or
      otherwise:

     

    (a) matures
      or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise,
      

     

    (b) is
      or may become redeemable or repurchaseable at the option of the holder thereof
      (except that any Capital Stock that would constitute Disqualified Stock solely
      because the holders of such Capital Stock have the right to require the Company
      to repurchase such Capital Stock upon the occurrence of a Change of Control
      or
      an Asset Sale shall not constitute Disqualified Stock if the terms of such
      Capital Stock provide that the Company may not repurchase or redeem any such
      Capital Stock pursuant to such provisions unless such repurchase or redemption
      complies with Section 4.10
      hereof),
      in whole or in part, or 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

     

    (c) is
      convertible or exchangeable at the option of the holder thereof for Debt or
      Disqualified Stock,

     

    on
      or
      prior to, in the case of clause (a), (b) or (c), the first anniversary of
      the Stated Maturity of the Notes.

     

    “Disqualified
      Stock Dividends”
means
      all dividends with respect to Disqualified Stock of the Company held by Persons
      other than a Wholly Owned Subsidiary. The amount of any such dividend shall
      be
      equal to the quotient of such dividend divided by the difference between one
      and
      the maximum statutory federal income tax rate (expressed as a decimal number
      between 1 and 0) then applicable to the Company.

     

    “Distribution
      Compliance Expiration Date”
means
      the 41st day after the after the later of (i) the day on which the Notes were
      first offered to persons other than distributors (as defined in Regulation
      S
      under the Securities Act) and (ii) the Issue Date.

     

    “Domestic
      Subsidiary”
means
      any Subsidiary of the Company other than (a) a Foreign Subsidiary or
      (b) a Subsidiary of a Foreign Subsidiary.

     

    “EBITDA”
means,
      for any period, an amount equal to, for the Company and its consolidated
      Subsidiaries:

     

    (a)
      the
      sum of Consolidated Net Income for such period, plus the following to the extent
      reducing Consolidated Net Income for such period: 

     

    (1) the
      provision for taxes based on income or profits or utilized in computing net
      loss,

     

    (2) Consolidated
      Interest Expense,

     

    (3) depreciation,
      

     

    (4)
      amortization of intangibles, and 

     

    (5) any
      other non-cash items (other than any such non-cash item to the extent that
      it
      represents an accrual of, or reserve for, cash expenditures in any future period
      or amortization of a prepaid cash expense paid in a period prior to the period
      that is subject to calculation), minus 

     

    (b) all
      non-cash items increasing Consolidated Net Income for such period. 

     

    Notwithstanding
      the foregoing clause (a), the provision for taxes and the depreciation,
      amortization and non-cash items of a Subsidiary of the Company shall be added
      to
      Consolidated Net Income to compute EBITDA only to the extent (and in the same
      proportion) that the net income of such Subsidiary was included in calculating
      Consolidated Net Income and only if a corresponding amount would be permitted
      at
      the date of determination to be dividended to the Company by such Subsidiary
      without prior approval (that has not been obtained), pursuant to the terms
      of
      its charter and all agreements, instruments, judgments, decrees, orders,
      statutes, rules and governmental regulations applicable to such Subsidiary
      or
      its shareholders. 

     

    “Escrow
      Agreement”
means
      either of (i) that certain Escrow Agreement dated as of the Issue Date by and
      among the WFOE, Shenzhen Development Bank Co., Ltd. and Citadel Equity Fund
      Ltd.
      or (ii) that certain escrow agreement dated as of the Issue Date by and among
      the Company, Citadel Equity Fund Ltd. and Guzov Ofsink, LLC.

     

    “Euroclear”
means
      Euroclear Bank, S.A./N.V., and any successor thereto.

     

    “Exchange
      Act”
means
      the U.S. Securities Exchange Act of 1934, as amended, and the rules and
      regulations promulgated thereunder, as in effect from time to time.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

     

    “Fair
      Market Value”
means,
      with respect to any Property at the time of determination, the price that could
      be negotiated in an arm’s-length free market transaction, for cash, between a
      willing seller and a willing buyer, neither of whom is under undue pressure
      or
      compulsion to complete the transaction. Fair Market Value shall be determined,
      except as otherwise provided,

     

    (a)
      if
      such Property has a Fair Market Value equal to or less than $1.0 million,
      by any Officer of the Company,

     

    (b)
      if
      such Property has a Fair Market Value in excess of $1.0 million, by a
      majority of the Board of Directors and evidenced by a Board Resolution delivered
      to the Trustee, or 

     

    (c)
      if
      such Property has a Fair Market Value in excess of $5.0 million, by an
      Independent Financial Advisor and evidenced by a written opinion from such
      Independent Financial Advisor dated within 30 days of the relevant transaction
      delivered to the Trustee.

     

    “Fiscal
      Quarter”
means
      each of the three month periods ending on March 31, June 30, September 30 and
      December 31.

     

    “Fixed
      Charge Coverage Ratio”
means,
      as of any date of determination, the ratio of:

     

    (a) the
      aggregate amount of EBITDA for the most recent four consecutive Fiscal Quarters
      ending prior to such determination date to 

     

    (b) Consolidated
      Interest Expense for such four Fiscal Quarters; 

     

    provided,
      however,
      that:

     

    (1) if
      

     

    (A) since
      the beginning of such period the Company or any of its Subsidiaries has Incurred
      any Debt that remains outstanding or Repaid any Debt, or 

     

    (B) the
      transaction giving rise to the need to calculate the Fixed Charge Coverage
      Ratio
      is an Incurrence or Repayment of Debt, 

     

    Consolidated
      Interest Expense for such period shall be calculated after giving effect on
      a
pro
      forma basis
      to
      such Incurrence or Repayment as if such Debt was Incurred or Repaid on the
      first
      day of such period, provided
      that,
      in
      the event of any such Repayment of Debt, EBITDA for such period shall be
      calculated as if the Company or such Subsidiary had not earned any interest
      income actually earned during such period in respect of the funds used to Repay
      such Debt, and provided
      further
      that the
      amount of Debt Incurred under revolving credit facilities shall be deemed to
      be
      the average daily balance of such Debt during such period (or any shorter period
      in which such facilities are in effect) and

     

    (2) if
      

     

    (A) since
      the beginning of such period the Company or any of its Subsidiaries shall have
      made any Asset Sale or an Investment (by merger or otherwise) in any Subsidiary
      of the Company (or any Person which becomes a Subsidiary of the Company) or
      an
      acquisition of Property which constitutes all or substantially all of an
      operating unit of a business, 

     

    (B) the
      transaction giving rise to the need to calculate the Fixed Charge Coverage
      Ratio
      is such an Asset Sale, Investment or acquisition, or 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

     

    (C) since
      the beginning of such period any Person (that subsequently became a Subsidiary
      of the Company or was merged with or into the Company or any Subsidiary of
      the
      Company since the beginning of such period) shall have made such an Asset Sale,
      Investment or acquisition, 

     

    then
      EBITDA for such period shall be calculated after giving pro
      forma
      effect
      to such Asset Sale, Investment or acquisition as if such Asset Sale, Investment
      or acquisition had occurred on the first day of such period. 

     

    If
      any
      Debt bears a floating rate of interest and is being given pro
      forma
      effect,
      the interest expense on such Debt shall be calculated as if the base interest
      rate in effect for such floating rate of interest on the date of determination
      had been the applicable base interest rate for the entire period (taking into
      account any Interest Rate Agreement applicable to such Debt if such Interest
      Rate Agreement has a remaining term in excess of 12 months). In the event
      the Capital Stock of any Subsidiary of the Company is sold during the period,
      the Company shall be deemed, for purposes of clause (1) above, to have
      Repaid during such period the Debt of such Subsidiary to the extent the Company
      and its continuing Subsidiaries are no longer liable for such Debt after such
      sale.

     

    “Foreign
      Subsidiary”
means
      any Subsidiary of the Company which is not organized under the laws of the
      United States of America or any State thereof or the District of
      Columbia.

     

    “Fundamental
      Change”
means
      the occurrence, at any time after a Qualifying IPO, of any transaction or event
      (whether by means of an exchange offer, liquidation, tender offer,
      consolidation, merger, combination, reclassification, recapitalization or
      otherwise) in connection with which all or substantially all of the Common
      Stock
      shall be exchanged for, converted into, acquired for or constitutes solely
      the
      right to receive, consideration which is not all or substantially all common
      stock, depositary receipts, ordinary shares or other certificates representing
      common equity interests that are (or, upon consummation of or immediately
      following such transaction or event, will be) listed on a United States national
      securities exchange or approved (or, upon consummation of or immediately
      following such transaction or event, will be approved) for quotation on the
      Nasdaq Capital Market, Nasdaq Global Market, Nasdaq Global Select Market or
      any
      similar United States system of automated dissemination of quotations of
      securities prices.

     

    “GAAP”
means
      United States generally accepted accounting principles as in effect on the
      Issue
      Date, including those set forth in:

     

    (a)
      the
      opinions and pronouncements of the Accounting Principles Board of the American
      Institute of Certified Public Accountants, 

     

    (b)
      the
      statements and pronouncements of the Financial Accounting Standards Board,
      

     

    (c)
      such
      other statements by such other entity as approved by a significant segment
      of
      the accounting profession, and 

     

    (d)
      the
      rules and regulations of the Commission governing the inclusion of financial
      statements (including pro
      forma financial
      statements) in periodic reports required to be filed pursuant to Section 13
      of
      the Exchange Act, including opinions and pronouncements in staff accounting
      bulletins and similar written statements from the accounting staff of the
      Commission. 

     

    All
      ratios and computations based on GAAP contained in this Indenture will be
      computed in conformity with GAAP.

     

    “Global
      Note Legend”
means
      the legend set forth on all Global Notes issued under this
      Indenture.

     

    “Global
      Notes”
means
      the global Notes in the form of Exhibit
      A
      hereto
      issued in accordance with Article
      2
      hereof.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

     

    “Governmental
      Approval”
means
      any authorization of or by, consent of, approval of, license from, ruling of,
      permit from, tariff by, rate of, certification by, exemption from, filing with
      (except any filing relating to the perfection of security interests), variance
      from, claim of, order from, judgment from, decree of, publication to or by,
      notice to, declaration of or with or registration by or with any Governmental
      Authority, whether tacit or express.

     

    “Governmental
      Authority”
means
      any federal, state, national, provincial, municipal, local, territorial or
      other
      government department, ministry (including local counterparts thereof),
      commission, board, agency, regulatory authority, instrumentality, judicial
      or
      administrative body, domestic or foreign.

     

    “guarantee”
means
      any obligation, contingent or otherwise, of any Person directly or indirectly
      guaranteeing any Debt of any other Person and any obligation, direct or
      indirect, contingent or otherwise, of such Person:

     

    (a)
      to
      purchase or pay (or advance or supply funds for the purchase or payment of)
      such
      Debt of such other Person (whether arising by virtue of partnership
      arrangements, or by agreements to keep-well, to purchase assets, goods,
      securities or services, to take-or-pay or to maintain financial statement
      conditions or otherwise), or 

     

    (b) entered
      into for the purpose of assuring in any other manner the obligee against loss
      in
      respect thereof (in whole or in part); 

     

    provided,
      however,
      that the
      term “guarantee” shall not include:

     

    (1) endorsements
      for collection or deposit in the ordinary course of business, or 

     

    (2)
      a
      contractual commitment by one Person to invest in another Person for so long
      as
      such Investment is reasonably expected to constitute a Permitted Investment
      under clause (a), (b) or (c) of the definition of “Permitted Investment.”

     

    The
      term
“guarantee” used as a verb has a corresponding meaning. The term “guarantor”
shall mean any Person Guaranteeing any obligation. 

     

    “Guarantee”
means
      the Guarantee of the Notes by each of the Guarantors pursuant to Article
      9
      and in
      the form of the Guarantee attached as Exhibit
      B
      and any
      additional Guarantee of the Notes to be executed by any Subsidiary of the
      Company pursuant to Section
      4.18.

     

    “Guarantor”
means
      each Domestic Subsidiary and any other Subsidiary of the Company that becomes
      a
      Guarantor pursuant to Section
      4.18
      or who
      otherwise executes and delivers a supplemental indenture (in form satisfactory
      to the Trustee) to the Trustee providing for a Guarantee; provided
      that any
      Person constituting a Guarantor as described above shall cease to constitute
      a
      Guarantor when its respective Guarantee is released in accordance with the
      terms
      of this Indenture.

     

    “Hedging
      Obligation”
of
      any
      Person means any obligation of such Person pursuant to any Interest Rate
      Agreement, Currency Exchange Protection Agreement, Commodity Price Protection
      Agreement or any other similar agreement or arrangement. 

     

    “Holder”
or
      “holder”
means
      a
      Person in whose name a Note is registered in the Security Register.

     

    “Incur”
means,
      with respect to any Debt or other obligation of any Person, to create, issue,
      incur (by merger, conversion, exchange or otherwise), extend, assume, Guarantee
      or become liable in respect of such Debt or other obligation or the recording,
      as required pursuant to GAAP or otherwise, of any such Debt or obligation on
      the
      balance sheet of such Person (and “Incurrence” and “Incurred” shall have
      meanings correlative to the foregoing); provided,
      however,
      that a
      change in GAAP that results in an obligation of such Person that exists at
      such
      time, and is not theretofore classified as Debt, becoming Debt shall not be
      deemed an Incurrence of such Debt; provided
      further,
      however,
      that
      any Debt or other obligations of a Person existing at the time such Person
      becomes a Subsidiary (whether by merger, consolidation, acquisition or
      otherwise) shall be deemed to be Incurred by such Subsidiary at the time it
      becomes a Subsidiary; and provided
      further, however,
      that
      solely for purposes of determining compliance with Section
      4.09,
      amortization of debt discount shall not be deemed to be the Incurrence of Debt,
      provided
      that in
      the case of Debt sold at a discount, the amount of such Debt Incurred shall
      at
      all times be the aggregate principal amount at Stated Maturity. 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

     

    “Indenture”
means
      this instrument, as originally executed or as it may from time to time be
      supplemented or amended in accordance with Article
      8
      hereof.

     

    “Independent
      Financial Advisor”
means
      an investment banking firm of international standing or any third party
      appraiser of international standing, provided
      that
      such firm or appraiser is not an Affiliate of the Company. 

     

    “Intangible
      Assets” shall
      mean as of the date of any determination thereof the total amount of all assets
      of the Company and its Subsidiaries classified as goodwill, patents, trade
      names, trademarks, copyrights, franchises, experimental expense, organization
      expense, unamortized debt discount and expense, deferred assets other than
      prepaid insurance and prepaid taxes, the excess of cost of shares acquired
      over
      book value of related assets and such other assets as are properly classified
      as
“intangible
      assets”
in
      accordance with GAAP. 

     

    “Interest”,
      when
      used with reference to the Notes, means any interest payable under the terms
      of
      the Notes, including initially a rate of interest equal to LIBOR (as determined
      by the Calculation Agent from the Issue Date) plus the Margin. 

     

    “Interest
      Payment Dates”
shall
      have the meaning set forth in paragraph 1 of each Note.

     

    “Interest
      Period”
means
      the period commencing on and including an Interest Payment Date and ending
      on
      and excluding the next succeeding Interest Payment Date, with the exception
      that
      the first Interest Period shall commence on and include the Issue Date and
      end
      on and exclude July 24, 2007.

     

    “Interest
      Rate Agreement”
means,
      for any Person, any interest rate swap agreement, interest rate cap agreement,
      interest rate collar agreement or other similar agreement designed to protect
      against fluctuations in interest rates.

     

    “Investment”
by
      any
      Person means any direct or indirect loan (other than advances to customers
      in
      the ordinary course of business that are recorded as accounts receivable on
      the
      balance sheet of such Person), advance or other extension of credit or capital
      contribution (by means of transfers of cash or other Property to others or
      payments for Property or services for the account or use of others, or
      otherwise) to, or Incurrence of a Guarantee of any obligation of, or purchase
      or
      acquisition of Capital Stock, bonds, notes, debentures or other securities
      or
      evidence of Debt issued by, any other Person. 

     

    In
      determining the amount of any Investment made by transfer of any Property other
      than cash, such Property shall be valued at its Fair Market Value at the time
      of
      such Investment.

     

    “Issue
      Date”
means
      January 25, 2007.

     

    “Legal
      Holiday”
means
      a
      Saturday, a Sunday or a day on which banking institutions in the City of New
      York, the PRC, the city in which the Corporate Trust Office of the Trustee
      is
      located or any other place of payment on the Notes are authorized by law,
      regulation or executive order to remain closed. 

     

    “Leverage
      Ratio”
means
      the ratio of:

     

    (a) the
      outstanding Debt of the Company and its Subsidiaries on a consolidated basis,
      to

     

    (b) 
      EBITDA for the most recently completed four Fiscal Quarters;

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

     

    if:

     

     (1)

     

    (A) since
      the beginning of such period the Company or any of its Subsidiaries has Incurred
      any Debt that remains outstanding or Repaid any Debt, or 

     

    (B) the
      transaction giving rise to the need to calculate the Leverage Ratio is an
      Incurrence or Repayment of Debt, 

     

    Consolidated
      Interest Expense for such period shall be calculated after giving effect on
      a
pro
      forma basis
      to
      such Incurrence or Repayment as if such Debt was Incurred or Repaid on the
      first
      day of such period, provided
      that,
      in
      the event of any such Repayment of Debt, EBITDA for such period shall be
      calculated as if the Company or such Subsidiary had not earned any interest
      income actually earned during such period in respect of the funds used to Repay
      such Debt, and provided
      further
      that the
      amount of Debt Incurred under revolving credit facilities shall be deemed to
      be
      the average daily balance of such Debt during such period (or any shorter period
      in which such facilities are in effect) and

     

    (2) if
      

     

    (a) since
      the beginning of such period, the Company or any of its Subsidiaries shall
      have
      made any Asset Sale or an Investment (by merger or otherwise) in any Subsidiary
      of the Company (or any Person that becomes such a Subsidiary) or an acquisition
      of Property, 

     

    (b) the
      transaction giving rise to the need to calculate the Leverage Ratio is such
      an
      Asset Sale, Investment or acquisition, or 

     

    (c) since
      the beginning of such period any Person (that subsequently became a Subsidiary
      of the Company or was merged with or into the Company or any of its Subsidiaries
      since the beginning of such period) shall have made such an Asset Sale,
      Investment or acquisition, 

     

    EBITDA
      for such period shall be calculated after giving pro
      forma
      effect
      to such Asset Sale, Investment or acquisition as if such Asset Sale, Investment
      or acquisition occurred on the first day of such period.

     

    If
      any
      Debt bears a floating rate of interest and is being given pro
      forma
      effect,
      the interest expense on such Debt shall be calculated as if the base interest
      rate in effect for such floating rate of interest on the date of determination
      had been the applicable base interest rate for the entire period (taking into
      account any Interest Rate Agreement applicable to such Debt if such Interest
      Rate Agreement has a remaining term in excess of 12 months). In the event
      the Capital Stock of any Subsidiary of the Company is sold during the period,
      the Company shall be deemed, for purposes of clause (1) above, to have
      Repaid during such period the Debt of such Subsidiary to the extent the Company
      and its continuing Subsidiaries are no longer liable for such Debt after such
      sale.

     

    “LIBOR”
means,
      with respect to an Interest Period, the rate (expressed as a percentage per
      annum) for deposits in United States dollars for a six-month period beginning
      on
      the second London Banking Day after the Determination Date that appears on
      either Telerate Page 3750 or Bloomberg page BBAM 1 as of 11:00 a.m., London
      time, on the Determination Date. If Telerate Page 3750 and Bloomberg page BBAM
      1
      do not include such a rate or are unavailable on a Determination Date, the
      Calculation Agent will request the principal London office of each of four
      major
      banks in the London interbank market, as selected by the Calculation Agent
      (after consultation with the Company), to provide such bank’s offered quotation
      (expressed as a percentage per annum), as of approximately 11:00 a.m., London
      time, on such Determination Date, to prime banks in the London interbank market
      for deposits in a Representative Amount in United States dollars for a six-month
      period beginning on the second London Banking Day after the Determination Date.
      If at least two such offered quotations are so provided, LIBOR for the Interest
      Period will be the arithmetic mean of such quotations. If fewer than two such
      quotations are so provided, the Calculation Agent will request each of three
      major banks in New York City, as selected by the Calculation Agent (after
      consultation with the Company), to provide such bank’s rate (expressed as a
      percentage per annum), as of approximately 11:00 a.m., New York City time,
      on
      such Determination Date, for loans in a Representative Amount in United States
      dollars to leading European banks for a six-month period beginning on the second
      London Banking Day after the Determination Date. If at least two such rates
      are
      so provided, LIBOR for the Interest Period will be the arithmetic mean of such
      rates. If fewer than two such rates are so provided, then LIBOR for the Interest
      Period will be LIBOR in effect with respect to the immediately preceding
      Interest Period. 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

     

    “Lien”
means,
      with respect to any Property of any Person, any mortgage or deed of trust,
      pledge, hypothecation, assignment, deposit arrangement, security interest,
      lien,
      charge, easement (other than any easement not materially impairing usefulness
      or
      marketability), encumbrance, preference, priority or other security agreement
      or
      preferential arrangement of any kind or nature whatsoever on or with respect
      to
      such Property (including any Capital Lease Obligation, conditional sale or
      other
      title retention agreement having substantially the same economic effect as
      any
      of the foregoing or any Sale and Leaseback Transaction). 

     

    “London
      Banking Day”
means
      any day in which dealings in United States dollars are transacted or, with
      respect to any future date, are expected to be transacted in the London
      interbank market. 

     

    “Margin”
means
      an annual rate of interest initially equal to 7.00% and which shall be changed
      to 5.60% from and after the date of completion of a Qualifying IPO that occurs
      on or before July 24, 2008.

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (a) the property, business, operations, financial
      condition, liabilities or capitalization of the Company or any of its
      Subsidiaries, (b) the ability of any such Person to perform its payment
      obligations or any of its material obligations under any of the Security
      Documents or the Restructuring Agreements to which such Person is a party,
      (c)
      the validity or enforceability of any of the Security Documents or the
      Restructuring Agreements, (d) the material rights and remedies of the Trustee
      or
      the Collateral Agent under any of the Security Documents or (e) the timely
      payment of any principal or premium of, or interest on, any of the
      Notes.

     

    “Moody’s”
means
      Moody’s Investors Service, Inc. or any successor to the rating agency business
      thereof.

     

    “Net
      Available Cash”
from
      any Asset Sale means cash payments received therefrom (including any cash
      payments received by way of deferred payment of principal pursuant to a note
      or
      installment receivable or otherwise, but only as and when received, but
      excluding any other consideration received in the form of assumption by the
      acquiring Person of Debt or other obligations relating to the Property that
      is
      the subject of such Asset Sale or received in any other non-cash form), in
      each
      case net of: 

     

    (a) all
      legal, title and recording tax expenses, commissions and other fees and expenses
      incurred, and all U.S. federal, state, national, provincial, foreign and local
      taxes required to be accrued as a liability under GAAP, as a consequence of
      such
      Asset Sale, 

     

    (b) all
      payments made on or in respect of any Debt that is secured by any Property
      subject to such Asset Sale, in accordance with the terms of any Lien upon such
      Property, or which must by its terms, or in order to obtain a necessary consent
      to such Asset Sale, or by applicable law, be repaid out of the proceeds from
      such Asset Sale, 

     

    (c) all
      distributions and other payments required to be made to minority interest
      holders in Subsidiaries or joint ventures as a result of such Asset Sale, and
      

     

    (d) the
      deduction of appropriate amounts provided by the seller as a reserve, in
      accordance with GAAP, against any liabilities associated with the Property
      disposed of in such Asset Sale and retained by the Company or any of its
      Subsidiaries after such Asset Sale.

     

    “Note
      Obligations”
means
      the Notes, the Guarantees and all other obligations of any obligor under this
      Indenture, the Notes, the Guarantees and the Security Documents. 

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    

     

    “Notes”
is
      defined in the preamble.

     

    “Obligations”
means
      all obligations for principal, premium, interest, penalties, fees,
      indemnifications, reimbursements, damages and other liabilities payable under
      the documentation governing any Debt.

     

    “Officer”
means,
      with respect to the Company, its Chairman of the Board, the Chief Executive
      Officer, the President or any Vice President (whether or not designated by
      a
      number or numbers or word or words added before or after the title “Vice
      President”) and the Treasurer or any Assistant Treasurer, or the Secretary or
      Assistant Secretary.

     

    “Officers’
      Certificate”
means
      a
      certificate, in form and substance satisfactory to the Trustee, signed by two
      Officers of the Company, at least one of whom shall be the principal executive
      officer or principal financial officer of the Company, and which certificate
      meets the requirements of Section
      12.04
      hereof
      and is delivered to the Trustee.

     

    “Opinion
      of Counsel”
means
      a
      written opinion, in form and substance satisfactory to the Trustee, from legal
      counsel who is acceptable to the Trustee and which meets the requirements of
      Section
      12.04
      hereof.

     

    “Participant”
means,
      with respect to Euroclear or Clearstream, a Person who has an account with
      Euroclear or Clearstream, respectively.

     

    “Permitted
      Holders”
means
      Mr. FU Li, a resident of the City of Dalian in the PRC, and his estate, spouse,
      ancestors and lineal descendants, the legal representatives of any of the
      foregoing and the trustees of any bona fide trusts of which the foregoing are
      the sole beneficiaries or the grantors, or any Person of which the foregoing
      “beneficially owns” (as defined in Rule 13d-3 under the Exchange Act),
      individually or collectively with any of the foregoing, at least 80% of the
      total voting power of the Voting Stock of such Person.

     

    “Permitted
      Investment”
means
      any Investment by the Company or any of its Subsidiaries in: 

     

    (a) the
      Company or any of its Subsidiaries engaged in a Related Business;

     

    (b) any
      Person that will, upon the making of such Investment, become a Subsidiary of
      the
      Company, provided
      that the
      primary business of such Subsidiary is a Related Business; 

     

    (c) any
      Person if as a result of such Investment such Person is merged or consolidated
      with or into, or transfers or conveys all or substantially all its Property
      to,
      the Company or a Subsidiary of the Company, provided
      that
      such Person’s primary business is a Related Business;

     

    (d) cash
      and Cash Equivalents; 

     

    (e) receivables
      owing to the Company or any of its Subsidiaries, if created or acquired in
      the
      ordinary course of business and payable or dischargeable in accordance with
      customary trade terms; provided,
      however,
      that
      such trade terms may include such concessionary trade terms as the Company
      or
      such Subsidiary deems reasonable under the circumstances; 

     

    (f) payroll,
      travel and similar advances to cover matters that are expected at the time
      of
      such advances ultimately to be treated as expenses under GAAP and that are
      made
      in the ordinary course of business;

     

    (g) stock,
      obligations or other securities received in settlement of debts created in
      the
      ordinary course of business and owing to the Company or one of its Subsidiaries
      or in satisfaction of judgments; 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    

     

    (h) any
      Person to the extent such Investment represents the non-cash portion of the
      consideration received in connection with (A) an Asset Sale consummated in
      compliance with Section
      4.12
      or (B)
      any disposition of Property not constituting an Asset Sale;

     

    (i) Hedging
      Obligations by the Company or any Guarantor that are otherwise permitted to
      be
      incurred under this Indenture, and which were entered into for financial
      management of interest rates, foreign currency exchange rates or commodity
      prices and are directly related to transactions entered into by such Person
      in
      the ordinary course of its business, and not for speculative purposes;
      and

     

    (j)
      other
      Investments made for Fair Market Value that do not exceed 10% of the aggregate
      amount of Consolidated Net Income accrued during the period (treated as one
      accounting period) from the beginning of the Fiscal Quarter after the Issue
      Date
      to the end of the most recent Fiscal Quarter ending prior to the date of such
      Investment (or if the aggregate amount of Consolidated Net Income for such
      period shall be a deficit, minus 100% of such deficit).

     

    “Permitted
      Liens”
      means:

     

    (a)
      Liens
      in favor of the Company or the Guarantors;

     

    (b) Liens
      securing, or created for the benefit of securing, the Notes, the Guarantees,
      the
      Convertible Notes and the Convertible Note Guarantees;

     

    (c) Liens
      to secure Debt permitted to be Incurred under clause (b) of the second
      paragraph of Section
      4.09
      and
      other obligations thereunder, provided
      that any
      such Lien is limited to the Property of the WFOE;

     

    (d)
      Liens
      for taxes, assessments or governmental charges or levies on the Property of
      the
      Company or any of its Subsidiaries if the same shall not at the time be
      delinquent or thereafter can be paid without penalty, or are being contested
      in
      good faith and by appropriate proceedings promptly instituted and diligently
      concluded, provided
      that any
      reserve or other appropriate provision that shall be required in conformity
      with
      GAAP shall have been made therefor; 

     

    (e) Liens
      imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and other
      similar Liens, on the Property of the Company or any of its Subsidiaries arising
      in the ordinary course of business and securing payment of obligations that
      are
      not more than 60 days past due or are being contested in good faith and by
      appropriate proceedings;

     

    (f) Liens
      on the Property of the Company or any of its Subsidiaries Incurred in the
      ordinary course of business to secure performance of obligations with respect
      to
      statutory or regulatory requirements, performance or return-of-money bonds,
      surety bonds or other obligations of a like nature and Incurred in a manner
      consistent with industry practice, in each case which are not Incurred in
      connection with the borrowing of money, the obtaining of advances or credit
      or
      the payment of the deferred purchase price of Property and which do not in
      the
      aggregate impair in any material respect the use of Property in the operation
      of
      the business of the Company and its Subsidiaries taken as a whole;

     

    (g) Liens
      on Property at the time the Company or any of its Subsidiaries acquired such
      Property, including any acquisition by means of a merger or consolidation with
      or into the Company or any of its Subsidiaries; provided,
      however,
      that
      any such Lien may not extend to any other Property of the Company or any of
      its
      Subsidiaries; provided
      further, that
      such
      Liens shall not have been Incurred in anticipation of or in connection with
      the
      transaction or series of transactions pursuant to which such Property was
      acquired by the Company or any of its Subsidiaries; 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    

     

    (h) Liens
      on the Property of a Person at the time such Person becomes a Subsidiary of
      the
      Company; provided,
      however,
      that
      any such Lien may not extend to any other Property of the Company or any other
      Subsidiary of the Company that is not a direct Subsidiary of such Person;
provided
      further, that
      any
      such Lien was not Incurred in anticipation of or in connection with the
      transaction or series of transactions pursuant to which such Person became
      a
      Subsidiary of the Company; 

     

    (i) pledges
      or deposits by the Company or any of its Subsidiaries under workers’
compensation laws, unemployment insurance laws or similar legislation, or good
      faith deposits in connection with bids, tenders, contracts (other than for
      the
      payment of Debt) or leases to which the Company or any of its Subsidiaries
      is
      party, or deposits to secure public or statutory obligations of the Company,
      or
      deposits for the payment of rent, in each case Incurred in the ordinary course
      of business; 

     

    (j) utility
      easements, building restrictions and such other encumbrances or charges against
      real Property as are of a nature generally existing with respect to properties
      of a similar character;

     

    (k) Liens
      existing on the Issue Date not otherwise described in clauses (a) through
      (h) above;

     

    (l) Liens
      on the Property of the Company or any of its Subsidiaries to secure any
      Refinancing, in whole or in part, of any Debt secured by Liens referred to
      in
      clause (g), (h) or (k) above; provided,
      however,
      that
      any such Lien shall be limited to all or part of the same Property that secured
      the original Lien (together with improvements and accessions to such Property),
      and the aggregate principal amount of Debt (and other obligations thereunder)
      that is secured by such Lien shall not be increased to an amount greater than
      the sum of:

     

    
      	 	
              (1) 

            	
              the
                outstanding principal amount, or, if greater, the committed amount,
                of the
                Debt (and other obligations thereunder) secured by Liens described
                under
                clause (g), (h) or (k) above, as the case may be, at the time
                the original Lien became a Permitted Lien under this Indenture, and
                

            

    

     

    
      	 	
              (2)
                

            	
              an
                amount necessary to pay any fees and expenses, including premiums
                and
                defeasance costs, incurred by the Company or such Subsidiary in connection
                with such Refinancing; and

            

    

     

    (m)
      Liens
      to secure cash collateral in respect of Hedging Obligations pursuant to which
      Merrill Lynch Capital Services, Inc. or any of its Affiliates is the
      counterparty; provided
      that
      such Liens in the aggregate shall not initially exceed $7.0
      million.

     

    “Permitted
      Refinancing Debt”
means
      any Debt that Refinances any other Debt, including any successive Refinancings,
      so long as:

     

    (a) such
      Debt is in an aggregate principal amount (or if Incurred with original issue
      discount, an aggregate issue price) not in excess of the sum of: 

     

    (1)
      the
      aggregate principal amount (or if Incurred with original issue discount, the
      aggregate accreted value) then outstanding of the Debt being Refinanced,
      and

     

    (2)
      an
      amount necessary to pay any fees and expenses, including premiums and defeasance
      costs, related to such Refinancing, 

     

    (b) the
      Average Life of such Debt is equal to or greater than the Average Life of the
      Debt being Refinanced,

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

     

    (c) the
      Stated Maturity of such Debt is no earlier than the Stated Maturity of the
      Debt
      being Refinanced, 

     

    (d) the
      new Debt shall not be senior in right of payment to the Debt that is being
      Refinanced, and

     

    (e)
      the
      new Debt, the proceeds of which are used to Refinance the Notes or any Debt
      that
      is pari
      passu
      with or
      subordinate to the Notes or a Guarantee, shall only be permitted if (A) in
      case
      the Notes are refinanced in part or the Debt to be Refinanced is pari
      passu
      with the
      Notes or a Guarantee, such new Debt, by its terms or by terms of any agreement
      or instrument pursuant to which such new Debt is outstanding, is expressly
      made
pari
      passu
      with, or
      subordinate in right of payment to, the remaining Notes or such Guarantee,
      or
      (B) in case the Debt to be Refinanced is subordinated in right of payment to
      the
      Notes or a Guarantee, such new Debt, by its terms or by the terms of any
      agreement or instrument to which such new Debt is issued or remains outstanding,
      is expressly made subordinate in right of payment to the Notes or such Guarantee
      at least to the extent that the Debt to be Refinanced is subordinated to the
      Notes or the Guarantee;

     

    provided,
      however,
      that
      Permitted Refinancing Debt shall not include the Debt of any Subsidiary that
      is
      not a Guarantor, if such Debt is used to Refinance Debt of the Company or a
      Subsidiary. 

     

    “Person”
means
      a
      corporation, an association, a partnership, a limited liability company, an
      individual, a joint venture, a joint stock company, a trust, an unincorporated
      organization or a government or an agency or a political subdivision
      thereof.

     

    “PRC”
means
      the People’s Republic of China, exclusive of Taiwan, Macau and Hong
      Kong.

     

    “Predecessor
      Note” of
      any
      particular Note means every previous Note evidencing all or a portion of the
      same Debt as that evidenced by such particular Note; and any Note authenticated
      and delivered under Section
      2.07
      in lieu
      of a lost, destroyed or stolen Note shall be deemed to evidence the same Debt
      as
      the lost, destroyed or stolen Note.

     

    “Preferred
      Stock”
means
      any Capital Stock of a Person, however designated, which entitles the holder
      thereof to a preference with respect to the payment of dividends, or as to
      the
      distribution of assets upon any voluntary or involuntary liquidation or
      dissolution of such Person, over shares of any other class of Capital Stock
      issued by such Person.

     

    “Preferred
      Stock Dividends”
means
      all dividends with respect to Preferred Stock of the Company’s Subsidiaries held
      by Persons other than the Company or any of its Wholly Owned Subsidiaries.
      The
      amount of any such dividend shall be equal to the quotient of such dividend
      divided by the difference between one and the maximum statutory federal income
      rate (expressed as a decimal number between 1 and 0) then applicable to the
      issuer of such Preferred Stock.

     

    “pro
      forma”
means,
      with respect to any calculation made or required to be made pursuant to the
      terms hereof, a calculation performed in accordance with Article 11 of
      Regulation S-X promulgated under the Securities Act, as interpreted in good
      faith by the Board of Directors after consultation with the independent
      certified public accountants of the Company, or otherwise a calculation made
      in
      good faith by the Board of Directors after consultation with the independent
      certified public accountants of the Company, as the case may be.

     

    “Property”
means,
      with respect to any Person, any interest of such Person in any kind of property
      or asset, whether real, personal or mixed, or tangible or intangible, including
      intellectual property rights and Capital Stock in, and other securities of,
      any
      other Person. For purposes of any calculation required pursuant to this
      Indenture, the value of any Property shall be its Fair Market
      Value.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    

     

    “Qualifying
      IPO”
means
      a
      public offering of Common Stock of the Company pursuant to an effective
      registration statement under the Securities Act that results in (i) at least
      25%
      of the Company’s issued and outstanding share capital being publicly held by
      Persons other than any Affiliate of the Company, the Permitted Holders or Senior
      Management, (ii) the product of (x) the number of shares of Common Stock of
      the Company (including other securities of the Company that are convertible
      into
      Common Stock of the Company, on an as-converted basis) and (y) the Closing
      Sale Price of the Company’s Common Stock, shall be at least $200,000,000 (unless
      such percentage of dollar amount be otherwise agreed by the holders of a
      majority in aggregate principal amount of Notes and the Convertible Notes then
      outstanding, voting as a single class), (iii) the minimum number of holders
      of
      the Company’s Common Stock as required by the securities exchange on which such
      Common Stock is listed in connection with such Qualifying IPO and (iv) listing
      of the Common Stock on Nasdaq’s Capital Market, Global Market or Global Select
      Market or any other market (1) consented to by the holders of a majority in
      aggregate principal amount of the Notes and the Convertible Notes then
      outstanding, voting as a single class, or (2) approved by the Company’s Board of
      Directors, if any such holders’ consent shall have occurred prior to the meeting
      of the Board of Directors.

     

    “Refinance”
means,
      in respect of any Debt, to refinance, extend, renew, refund or Repay (in whole
      or in part), or to issue other Debt, in exchange or replacement for (in whole
      or
      in part), such Debt. “Refinanced” and “Refinancing” shall have correlative
      meanings. 

     

    “Regular
      Record Date”
for
      the
      interest payable on any Interest Payment Date means the applicable date
      specified as a “Record Date” on the face of the Note.

     

    “Related
      Business”
means
      the manufacture and sale of bimetallic wire used in communications, electrical
      transmission and other electrical products, services ancillary thereto, and
      the
      sourcing and manufacture of raw materials and inputs for such
      products.

     

    “Repay”
means,
      in respect of any Debt, to repay, prepay, repurchase, redeem, legally defease
      or
      otherwise retire such Debt. “Repayment” and “Repaid” shall have correlative
      meanings. For purposes of Section
      4.12
      and the
      definitions of “Fixed Charge Coverage Ratio” and “Leverage Ratio,” Debt shall be
      considered to have been Repaid only to the extent the related loan commitment,
      if any, shall have been permanently reduced in connection therewith.

     

    “Representative
      Amount”
means
      a
      principal amount of not less than $1,000,000 for a single transaction in the
      relevant market at the relevant time. 

     

    “Repurchase
      Amount”
means,
      with respect to the Convertible Notes, the Repurchase Amount as defined in
      the
      indenture governing the Convertible Notes.

     

    “Responsible
      Officer,”
when
      used with respect to the Trustee, means any officer within the Corporate Trust
      Department of the Trustee (or any successor group of the Trustee) with direct
      responsibility for the administration of this Indenture. 

     

    “Restricted
      Payment”
      means:

    

    (a) any
      dividend or distribution (whether made in cash, securities or other Property)
      declared or paid on or with respect to any shares of Capital Stock of the
      Company or any of its Subsidiaries (including any payment in connection with
      any
      merger or consolidation with or into the Company or any of its Subsidiaries),
      except for any dividend or distribution that is made solely to the Company
      or
      any of its Subsidiaries (and, if such Subsidiary is not a Wholly Owned
      Subsidiary, to the other shareholders of such Subsidiary on a pro
      rata basis
      or
      on a basis that results in the receipt by the Company or any of its Subsidiaries
      of dividends or distributions of greater value than it would receive on a
pro
      rata basis)
      or
      any dividend or distribution payable solely in shares of Capital Stock (other
      than Disqualified Stock) of the Company; 

     

    (b) the
      purchase, repurchase, redemption, acquisition or retirement for value of any
      Capital Stock of the Company or any of its Subsidiaries (other than from the
      Company or any of its Subsidiaries) or any securities exchangeable for or
      convertible into any such Capital Stock, including the exercise of any option
      to
      exchange any Capital Stock (other than for or into Capital Stock of the Company
      that is not Disqualified Stock); 

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

     

    (c) the
      purchase, repurchase, redemption, acquisition or retirement for value, prior
      to
      the date for any scheduled maturity, sinking fund or amortization or other
      installment payment, of any Subordinated Obligation (other than the purchase,
      repurchase or other acquisition of any Subordinated Obligation purchased in
      anticipation of satisfying a scheduled maturity, sinking fund or amortization
      or
      other installment obligation, in each case due within one year of the date
      of
      acquisition); or

     

    (d) any
      Investment (other than Permitted Investments) in any Person.

     

    “Restructuring
      Agreements”
means
      each of (a) The Purchase Agreement, dated as of December 13, 2005, between
      the
      WFOE and Dalian Fushi; (b) The Entrusted Management Agreement, dated as of
      December 13, 2005, by and among the WFOE, Dalian Fushi, Dalian Fushi Enterprise
      Group Co., Ltd., Yue Yang, Xishan Yang, and Chunyan Xu; (c) The First Patents
      Transfer Contract, dated as of December 13, 2005, by and between the WFOE and
      Dalian Fushi; (d) The Second Patent Transfer Contract, dated as of December
      13,
      2005, by and between the WFOE and Li Fu; (e) The Voting Proxy Agreement, dated
      as of December 13, 2005, by and among the WFOE, Dalian Fushi Enterprise Group
      Co., Ltd., Yue Yang, Xishan Yang, and Chunyan Xu; (f) The Exclusive Option
      Agreement, dated as of December 13, 2005, by and among the WFOE, Dalian Fushi,
      Dalian Fushi Enterprise Group Co., Ltd., Yue Yang, Xishan Yang, and Chunyan
      Xu;
      and (g) The Shares Pledge Agreement, dated as of December 13, 2005, by and
      among
      the WFOE, Dalian Fushi Enterprise Group Co., Ltd., Yue Yang, Xishan Yang, and
      Chunyan Xu.

     

    “RMB”
means
      the lawful currency of the PRC.

     

    “S&P”
means
      Standard & Poor’s Ratings Services, a division of McGraw Hill, Inc., or any
      successor to the rating agency business thereof.

     

    “Sale
      and Leaseback Transaction”
means
      any direct or indirect arrangement relating to Property now owned or hereafter
      acquired whereby the Company or any of its Subsidiaries transfers such Property
      to another Person and the Company or any of its Subsidiaries leases it from
      such
      Person. 

     

    “Securities
      Act”
means
      the U.S. Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder, as in effect from time to time.

     

    “Security
      Documents”
means
      that certain Share Pledge Agreement dated the date hereof in favor of the
      Collateral Agent for the benefit of the holders of Note Obligations, whenever
      incurred, and also for the benefit of the present and future holders of all
      other Note Obligations and any document perfecting such security interests,
      and
      any one or more security agreements, pledge agreements, collateral assignments,
      mortgages, deeds of trust or other grants or transfers for security executed
      and
      delivered by the Company or any other Obligor creating a Lien upon property
      owned or to be acquired by the Company or such other Obligor in favor of the
      Collateral Agent for the benefit of the holders of Note Obligations, whenever
      incurred, and also for the benefit of the present and future holders of all
      other Note Obligations and any document perfecting such security interests
      pursuant to the terms of Article
      10
      hereof.

     

    “Senior
      Debt”
of
      the
      Company means:

     

    (a) all
      obligations consisting of the principal, premium, if any, and accrued and unpaid
      interest (including interest accruing on or after the filing of any petition
      in
      bankruptcy or for reorganization relating to the Company whether or not such
      post-filing interest is allowed in such proceeding) in respect of:

     

    (1) Debt
      of the Company for borrowed money, and

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    

     

    (2) Debt
      of the Company evidenced by notes, debentures, bonds or other similar
      instruments permitted under this Indenture for the payment of which the Company
      is responsible or liable; 

     

    (b) all
      Capital Lease Obligations of the Company and all Attributable Debt in respect
      of
      Sale and Leaseback Transactions entered into by the Company; 

     

    (c) all
      obligations of the Company 

     

    (1) for
      the reimbursement of any obligor on any letter of credit, banker’s acceptance or
      similar credit transaction, 

     

    (2) under
      Hedging Obligations, or 

     

    (3) issued
      or assumed as the deferred purchase price of Property and all conditional sale
      obligations of the Company and all obligations under any title retention
      agreement permitted under this Indenture; and

     

    (d) all
      obligations of other Persons of the type referred to in clauses (a), (b) and
      (c)
      for the payment of which the Company is responsible or liable as
      Guarantor;

     

     provided,
      however,
      that
      Senior Debt shall not include:

     

    (A) Debt
      of the Company that is by its terms subordinate in right of payment to the
      Notes,
      including any
      Subordinated Obligations; 

     

    (B) any
      Debt Incurred in violation of the provisions of this Indenture; 

     

    (C) accounts
      payable or any other obligations of the Company to trade creditors created
      or
      assumed by the Company in the ordinary course of business in connection with
      the
      obtaining of materials or services (including Guarantees thereof or instruments
      evidencing such liabilities); 

     

    (D) any
      liability for U.S. federal, state, national, provincial, local or other taxes
      owed or owing by the Company; 

     

    (E)
      any
      obligation of the Company to any of its Subsidiaries; or

     

    (F)
      any
      obligations with respect to any Capital Stock of the Company. 

     

    To
      the
      extent that any payment of Senior Debt (whether by or on behalf of the Company
      as proceeds of security or enforcement or any right of setoff or otherwise)
      is
      declared to be fraudulent or preferential, set aside or required to be paid
      to a
      trustee, receiver or other similar party under any bankruptcy, insolvency,
      receivership or similar law, then if such payment is recovered by, or paid
      over
      to, such trustee, receiver or other similar party, the Senior Debt or part
      thereof originally intended to be satisfied shall be deemed to be reinstated
      and
      outstanding as if such payment had not occurred. 

     

    “Senior
      Debt” of any Guarantor has a correlative meaning.

     

    “Senior
      Management”
means
      Mr. Mathus Yang Yue,
      a
      resident of Dalian,
      Liaoning Province
      in the
      PRC, and Mr. Chris Wang Wenbing, a resident of Dalian,
      Liaoning Province
      in the
      PRC.

     

    “Significant
      Subsidiary”
means
      any Subsidiary that would be a “significant subsidiary” of the Company within
      the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission.
      For
      the purposes of this Indenture, Dalian Fushi shall be considered a “Significant
      Subsidiary” of the Company.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    

     

    “Stated
      Maturity”
means,
      with respect to any installment of interest or principal on any series of Debt
      (including, without limitation, a scheduled repayment or a scheduled sinking
      fund payment), the date on which the payment of interest or principal was
      scheduled to be paid in the original documentation governing such Debt, and
      will
      not include any contingent obligations to repay, redeem or repurchase any such
      interest or principal prior to the date originally scheduled for the payment
      hereof.

     

    “Subordinated
      Obligation”
means
      any Debt of the Company or any Guarantor (whether outstanding on the Issue
      Date
      or thereafter Incurred) that is subordinate or junior in right of payment to
      the
      Notes or the applicable Guarantee pursuant to a written agreement to that
      effect. 

     

    “Subsidiary,”
with
      respect to any Person, means (i) any corporation of which the outstanding
      Capital Stock having a majority of the votes entitled to be cast in the election
      of directors under ordinary circumstances shall at the time be owned, directly
      or indirectly, through one or more intermediaries, by such Person or (ii) any
      other Person of which a majority of the voting interest under ordinary
      circumstances is at the time, directly or indirectly, through one or more
      intermediaries, owned by such Person. For the purposes of this Indenture, Dalian
      Fushi shall be considered a “Subsidiary” of the Company. 

     

    “Surviving
      Person”
means
      the surviving Person formed by a merger, consolidation or amalgamation and,
      for
      purposes of Section
      5.01,
      a
      Person to whom all or substantially all of the Property of the Company or a
      Guarantor is sold, transferred, assigned, leased, conveyed or otherwise
      disposed. 

     

    “Tax
      Original Issue Discount”
means
      the amount of ordinary interest income on a Note that must be accrued as
      original issue discount for United States federal income tax
      purposes.

     

    “Termination
      of Trading”
will
      be
      deemed to have occurred if, (i) at any time after a Qualifying IPO, the Common
      Stock (or other common stock, depositary receipts, ordinary shares or other
      certificates representing common equity interests into which the Convertible
      Notes are then convertible) is neither listed for trading on a United States
      national securities exchange, listed for trading on a United States national
      or
      regional securities exchange nor approved for trading on any of the Nasdaq’s
      Capital Market, Global Market or Global Select Market, or (ii) trading in the
      Company’s common stock on any such exchange or market has been suspended for ten
      or more consecutive Trading Days.

     

    “Trading
      Day”
shall
      mean (x) if the applicable security is quoted on the Nasdaq National
      Market, a day on which trades may be made thereon, (y) if the applicable
      security is listed or admitted for trading on the American Stock Exchange,
      New
      York Stock Exchange or another national securities exchange, a day on which
      the
      American Stock Exchange, New York Stock Exchange or another national securities
      exchange is open for business, or (z) if the applicable security is not so
      listed, admitted for trading or quoted, any day other than a Saturday or Sunday
      or a day on which banking institutions in the State of New York are authorized
      or obligated by law or executive order to close.

     

    “Trustee”
means
      the Person named as the “Trustee” in the first paragraph of this instrument
      until a successor Trustee shall have become such pursuant to the applicable
      provisions of this Indenture, and thereafter “Trustee” shall mean such successor
      Trustee.

     

    “U.S.
      Government Securities”
means
      direct obligations (or certificates representing an ownership interest in such
      obligations) of the United States of America (including any agency or
      instrumentality thereof) for the payment of which the full faith and credit
      of
      the United States of America are pledged and which are not callable or
      redeemable at the issuer’s option.

     

    “Voting
      Stock”
of
      any
      Person means all classes of Capital Stock or other interests (including
      partnership interests) of such Person then outstanding and normally entitled
      (without regard to the occurrence of any contingency) to vote in the election
      of
      directors, managers or trustees thereof. 

     

    “WFOE”
means
      Fushi International (Dalian) Bimetallic Cable Co., Ltd., a wholly foreign-owned
      limited liability company organized and existing under the laws of the
      PRC.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    

     

    “Wholly
      Owned Subsidiary”
means,
      at any time, a Subsidiary all the Voting Stock of which (except directors’
qualifying shares) is at such time owned, directly or indirectly, by the Company
      and its other Wholly Owned Subsidiaries.

     

    Section
      1.02. Other
      Definitions.

     

    
      	 	
              Defined
                in

            
	
              Term

            	
               Section

            
	
              “Acceleration
                Notice”

            	
              6.02

            
	
              “Affiliate
                Transaction”

            	
              4.14

            
	
              “Allocable
                Excess Proceeds”

            	
              4.12

            
	
              “Asset
                Sale Offer”

            	
              4.12

            
	
              “Authentication
                Order”

            	
              2.02

            
	
              “Benefited
                Party”

            	
              9.01

            
	
              “Change
                of Control Offer”

            	
              4.17

            
	
              “Designated
                Event Offer”

            	
              4.26

            
	
              “Event
                of Default”

            	
              6.01

            
	
              “Excess
                Proceeds”

            	
              4.12

            
	
              “Future
                Guarantor”

            	
              9.03

            
	
              “Future
                Guarantor Pledgor”

            	
              10.02

            
	
              “Guarantor
                Pledgor”

            	
              10.02
                

            
	
              “losses”

            	
              7.07

            
	
              “Offer
                Amount”

            	
              3.07

            
	
              “Offer
                Period”

            	
              3.07

            
	
              “Offer
                to Purchase”

            	
              3.07

            
	
              “Paying
                Agent”

            	
              2.03

            
	
              “Purchase
                Date”

            	
              3.07

            
	
              “Purchase
                Price”

            	
              3.07

            
	
              “Registrar”

            	
              2.03

            
	
              “Secured
                Party”

            	
              10.01

            
	
              “Security
                Register”

            	
              2.03

            

    

    

    

    

    Section
      1.03. Rules
      of Construction.

     

    (a) Unless
      the context otherwise requires:

     

    (i) a
      term
      has the meaning assigned to it;

     

    (ii) an
      accounting term not otherwise defined herein has the meaning assigned to it
      in
      accordance with GAAP;

     

    (iii) “or”
is
      not exclusive;

     

    (iv) words
      in
      the singular include the plural, and in the plural include the
      singular;

     

    (v) all
      references in this instrument to “Articles,” “Sections” and other subdivisions
      are to the designated Articles, Sections and subdivisions of this instrument
      as
      originally executed;

     

    (vi) the
      words
“herein,” “hereof” and “hereunder” and other words of similar import refer to
      this Indenture as a whole and not to any particular Article, Section or other
      subdivision.

     

    (vii) “including”
      means “including without limitation;”

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    

     

    (viii) provisions
      apply to successive events and transactions; 

     

    (ix) “$”
means
      the lawful currency of the United States of America; and

     

    (x) references
      to sections of or rules under the Securities Act or the Exchange Act shall
      be
      deemed to include substitute, replacement or successor sections or rules adopted
      by the Commission from time to time thereunder.

     

    ARTICLE
      2.

     

    THE
      NOTES

     

    Section
      2.01. Form
      and Dating.

     

    (a) General.
      The
      Notes and the Trustee’s certificate of authentication shall be substantially in
      the form included in Exhibit
      A
      hereto,
      which is hereby incorporated in and expressly made part of this Indenture.
      The
      Notes may have notations, legends or endorsements required by law, exchange
      rule
      or usage in addition to those set forth on Exhibit
      A.
      Each
      Note shall be dated the date of its authentication. The Notes shall be in
      denominations of $100,000 and integral multiples thereof. The terms and
      provisions contained in the Notes shall constitute a part of this Indenture
      and
      the Company, the Guarantors and the Trustee, by their execution and delivery
      of
      this Indenture, expressly agree to such terms and provisions and to be bound
      thereby. To the extent any provision of any Note conflicts with the express
      provisions of this Indenture, the provisions of this Indenture shall govern
      and
      be controlling.

     

    (b) Form
      of Notes.
      Notes
      shall be issued initially in global form and shall be substantially in the
      form
      of Exhibit
      A
      attached
      hereto (including the Global Note Legend thereon and the “Schedule of Exchanges
      of Interests in the Global Note” attached thereto). Notes issued in definitive
      form shall be substantially in the form of Exhibit
      A
      attached
      hereto (but without the Global Note Legend thereon and without the “Schedule of
      Exchanges of Interests in the Global Note” attached thereto). Each Global Note
      shall represent such aggregate principal amount of the outstanding Notes as
      shall be specified therein and each shall provide that it shall represent the
      aggregate principal amount of outstanding Notes from time to time endorsed
      thereon and that the aggregate principal amount of outstanding Notes represented
      thereby may from time to time be reduced or increased, as appropriate, to
      reflect exchanges and redemptions and transfers of interests therein. Any
      endorsement of a Global Note to reflect the amount of any increase or decrease
      in the aggregate principal amount of outstanding Notes represented thereby
      shall
      be made by the Trustee or the Registrar, at the direction of the Trustee, in
      accordance with instructions given by the Holder thereof as required by
Section
      2.06
      hereof.

     

    (c) Book-Entry
      Provisions.
      This
Section
      2.01(c)
      shall
      apply only to Global Notes deposited with the Trustee, as custodian for the
      Common Depositary. Participants shall have no rights under this Indenture or
      any
      Global Note with respect to any Global Note held on their behalf by the Common
      Depositary or by the Trustee as custodian for the Common Depositary, and the
      Common Depositary shall be treated by the Company, the Trustee and any agent
      of
      the Company or the Trustee as the absolute owner of such Global Note for all
      purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
      the Company, the Trustee or any agent of the Company or the Trustee from giving
      effect to any written certification, proxy or other authorization furnished
      by
      the Common Depositary or impair, as between the Common Depositary and its
      Participants, the Applicable Procedures or the operation of customary practices
      of the Common Depositary governing the exercise of the rights of a holder of
      a
      beneficial interest in any Global Note.

     

    (d) Euroclear
      and Clearstream Procedures Applicable.
      The
      provisions of “Terms and Conditions Governing Use of Euroclear” and the “General
      Terms and Conditions of Clearstream” and “Customer Handbook” of Clearstream
      shall be applicable to transfers of beneficial interests in Global Notes that
      are held by Participants through Euroclear or Clearstream.

     

    
      
        
        

      

      
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    (e) Certificated
      Securities.
      The
      Company shall exchange Global Notes for Definitive Notes if: (1) at any time
      either Euroclear or Clearstream or any alternative clearing agency on behalf
      of
      which the Notes evidenced by the Global Note may be held is closed for business
      for a continuous period of 14 days (other than reason of holidays, statutory
      or
      otherwise) or announces an intention permanently to cease business or does
      in
      fact do so, and, in either case, the Company shall not have appointed a
      successor Common Depositary within 90 days after the Company receives such
      notice or becomes aware of such ineligibility, or (2) upon written request
      of a
      Holder or the Trustee if a Default or Event of Default shall have occurred
      and
      be continuing. 

     

    Upon
      the
      occurrence of any of the events set forth in clauses (1) or (2) above, the
      Company shall execute, and, upon receipt of an Authentication Order in
      accordance with Section
      2.02
      hereof,
      the Trustee shall authenticate and deliver, Definitive Notes, in authorized
      denominations, in an aggregate principal amount equal to the principal amount
      of
      the Global Notes in exchange for such Global Notes.

     

    Upon
      the
      exchange of a Global Note for Definitive Notes, such Global Note shall be
      cancelled by the Trustee or an agent of the Company or the Trustee. Definitive
      Notes issued in exchange for a Global Note pursuant to this Section
      2.01
      shall be
      registered in such names and in such authorized denominations as the Common
      Depositary, pursuant to instructions from its Participants or its Applicable
      Procedures, shall instruct the Trustee or an agent of the Company or the Trustee
      in writing. The Trustee or such agent shall deliver such Definitive Notes to
      or
      as directed by the Persons in whose names such Definitive Notes are so
      registered or to the Common Depositary.

     

    Section
      2.02. Execution
      and Authentication.

     

    (a) The
      chief
      executive officer of the Company shall execute the Notes on behalf of the
      Company by manual or facsimile signature. 

     

    (b) If
      an
      Officer whose signature is on a Note no longer holds that office at the time
      a
      Note is authenticated by the Trustee, the Note shall nevertheless be
      valid.

     

    (c) A
      Note
      shall not be valid until authenticated by the manual signature of the Trustee.
      The signature shall be conclusive evidence that the Note has been authenticated
      under this Indenture.

     

    (d) The
      Trustee shall, upon a written order of the Company signed by an Officer (an
      “Authentication
      Order”),
      authenticate (i) one Global Note evidencing Notes for issuance on the Issue
      Date
      in the aggregate principal amount not to exceed $40,000,000 and (ii) any other
      Notes that have been executed by the Company in order to effect any registration
      of transfer or exchange in accordance with the provisions of Section
      2.06.

     

    (e) The
      Trustee may appoint an authenticating agent acceptable to the Company to
      authenticate Notes. Unless otherwise provided in such appointment, an
      authenticating agent may authenticate Notes whenever the Trustee may do so.
      Each
      reference in this Indenture to authentication by the Trustee includes
      authentication by such agent. An authenticating agent shall have the same rights
      as the Trustee to deal with Holders, the Company or an Affiliate of the
      Company.

     

    Section
      2.03. Registrar,
      Paying Agent and Calculation Agent.

     

    (a) The
      Company shall maintain an office or agency where Notes may be presented for
      registration of transfer or for exchange (“Registrar”)
      and an
      office or agency where Notes may be presented for payment (“Paying
      Agent”).
      The
      Registrar shall keep a register (the “Security
      Register”)
      of the
      Notes and of their transfer and exchange. The Company shall maintain the
      services of a duly-appointed calculation agent in accordance with Section
      7A.01
      hereof
      (the “Calculation
      Agent”).
      The
      Company may appoint one or more co-registrars, one or more additional paying
      agents and one or more calculation agents. The term “Registrar” includes any
      co-registrar and the term “Paying Agent” includes any additional paying agent.
      The Company may change any Paying Agent, Registrar or Calculation Agent without
      notice to any Holder. The Company shall notify the Trustee in writing of the
      name and address of any Agent not a party to this Indenture. If the Company
      fails to appoint or maintain another entity as Registrar, Paying Agent or
      Calculation Agent, the Trustee shall act as such. The Company or any of its
      Subsidiaries may act as Paying Agent or Registrar.

     

    
      
        
        

      

      
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    (b) The
      Company initially appoints The Bank of New York, a New York banking corporation,
      to act as Common Depositary with respect to the Global Notes.

     

    (c) The
      Company initially appoints the Trustee to act as Registrar and Paying Agent
      and
      to act as Custodian with respect to the Global Notes, and the Trustee hereby
      agrees so to initially act.

     

    Section
      2.04. Paying
      Agent to Hold Money in Trust.

     

    The
      Company shall require each Paying Agent other than the Trustee to agree in
      writing that the Paying Agent shall hold in trust for the benefit of Holders
      or
      the Trustee all money held by the Paying Agent for the payment of principal,
      premium, if any, or interest on the Notes, and shall notify the Trustee of
      any
      default by the Company in making any such payment. While any such default
      continues, the Trustee may require a Paying Agent to pay all funds held by
      it
      relating to the Notes to the Trustee. The Company at any time may require a
      Paying Agent to pay all funds held by it to the Trustee. Upon payment over
      to
      the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall
      have no further liability for such funds. If the Company or a Subsidiary acts
      as
      Paying Agent, it shall segregate and hold in a separate trust fund for the
      benefit of the Holders all funds held by it as Paying Agent. Upon any Event
      of
      Default under Sections
      6.01(h)
      and
(i)
      hereof
      relating to the Company, the Trustee shall serve as Paying Agent for the
      Notes.

     

    Section
      2.05. Holder
      Lists.

     

    The
      Trustee shall preserve in as current a form as is reasonably practicable the
      most recent list available to it of the names and addresses of all Holders.
      If
      the Trustee is not the Registrar, the Company shall furnish or cause to be
      furnished to the Trustee at least seven Business Days before each Interest
      Payment Date and at such other times as the Trustee may request in writing,
      a
      list in such form and as of such date or such shorter time as the Trustee may
      allow, as the Trustee may reasonably require of the names and addresses of
      the
      Holders.

     

    Section
      2.06. Transfer
      and Exchange.

     

    (a) As
      provided herein, interests in a Global Note will be exchanged, upon 45 days’
notice by a holder of an interest in such Global Note for Definitive Notes.
      Each
      Global Note shall be deposited with the Common Depositary, which shall hold
      such
      Global Note in safe custody for the account of Euroclear and/or Clearstream
      and
      instruct Euroclear or Clearstream or both of them, as the case may be, to credit
      the principal amounts of the Notes represented by such Global Note to the
      holder’s distribution account with Euroclear or Clearstream. Each relevant
      Global Note shall be exchangeable for an interest, equal to the principal amount
      of such Global Note being exchanged, for Definitive Notes in the same principal
      amount, upon request of Euroclear or Clearstream to the Registrar, but only
      upon
      delivery by Euroclear or Clearstream, acting on behalf of the beneficial owners
      of such interests, to the Registrar at its principal office in New York, of
      certificates substantially in the form of Exhibit
      C
      hereto.
      The delivery to the Registrar of any certificate in the form referred to above
      may be relied upon by the Company, the Trustee and the Registrar as conclusive
      evidence that related certificates have been delivered to Euroclear or
      Clearstream as contemplated by the terms of this Section
      2.06.

     

    (b) In
      accordance with the terms of a Global Note and this Indenture, the Registrar
      shall deliver at the cost of the Company, upon not less than 45 days’ notice to
      the Registrar by Euroclear or Clearstream, the relevant Definitive Notes in
      exchange for interests in such Global Note. For this purpose, the Registrar
      is
      authorized and it shall (A) authenticate each such Definitive Note and (B)
      deliver each such Definitive Note to or to the order of Euroclear or
      Clearstream, in exchange for interests in such Global Note. The Registrar shall
      promptly notify the Company upon receipt of a request for issue of Definitive
      Notes the aggregate principal amount of the relevant Global Note to be exchanged
      in connection therewith. The Company undertakes to deliver to, or to the order
      of, the Registrar sufficient numbers of duly executed Definitive Notes to enable
      the Registrar to comply with its obligations under this Section
      2.06(b).
      Such
      exchange shall be made free of charge to the holder and the beneficial owners
      of
      the relevant Global Note and to the holders of the Definitive Notes issued
      in
      exchange as provided above, except that a Person receiving Definitive Notes
      must
      bear the cost of insurance, postage, transportation and the like in the event
      that such Person does not receive such Definitive Notes in person at the offices
      of a Registrar. Notwithstanding the above, interests in a Global Note shall
      be
      exchangeable in whole (but not in part) at the cost of the Company for
      Definitive Notes under the conditions described in Section
      2.01(e).

     

    
      
        
        

      

      
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    (c) Upon
      any
      exchange of an interest in a Global Note for Definitive Notes, the relevant
      Global Note shall be endorsed by the Trustee or the Registrar to reflect the
      reduction of its principal amount by the aggregate principal amount so
      exchanged. Until exchanged in full, the holder of any interest in any Global
      Note shall in all respects be entitled to the same benefits under this Indenture
      as Definitive Notes authenticated and delivered hereunder. Once exchanged in
      full, a Global Note shall be canceled and disposed of by the Trustee in
      accordance with its customary procedures and a certificate of disposition will
      be sent to the Company.

     

    (d) The
      Trustee or the Registrar shall cause all Global Notes and Definitive Notes
      delivered to it and held by it hereunder to be maintained in safe custody in
      accordance with this Section
      2.06.

     

    (e) The
      Security Register shall be in written form in the English language and shall
      include a record of the certificate number of each Note that has been issued,
      and shall show the amount of such Notes, the date of issue, all subsequent
      transfers and changes in ownership in respect thereof and the names, tax
      identifying numbers (if relevant to a specific holder), addresses of the holders
      of the Notes and any payment instructions with respect thereto (if different
      from a holder’s registered address).

     

    (f) The
      Registrar shall at all reasonable times during office hours make the Security
      Register available to the Trustee, the Paying Agent, the Company and the holders
      of such Notes or any person authorized by the Company in writing for inspection
      and for taking of copies thereof or extracts therefrom, and at the expense
      of
      the Company, the Registrar shall deliver to such persons all lists of holders
      of
      such Notes, their addresses, amounts of such holdings and other details as
      they
      may request.

     

    (g) the
      Registrar shall handle all requests for the registration of transfer of Notes
      and receive certificates for the Notes deposited with the transfer agent for
      transfer or exchange, and in doing so, shall ensure that every Note presented
      or
      surrendered for registration of transfer or exchange (if so required by the
      Company, the Trustee, the Paying Agent or the Registrar) be duly endorsed by,
      or
      be accompanied by a written instrument of transfer (in form satisfactory to
      the
      Company and the Registrar) duly executed by the holder thereof or by such
      holder’s attorney duly authorized in writing.

     

    (h) Prior
      to
      the Distribution Compliance Expiration Date, no beneficial interest in a Global
      Note may be transferred to any U.S. person (as defined in Regulation S under
      the
      Securities Act) or inside the United States as evidenced by a certification
      in
      the form of Exhibit
      C
      hereto
      received by the Registrar. Unless determined otherwise by the Company in
      accordance with applicable law, in the event prior to the Distribution
      Compliance Expiration Date a Definitive Note is issued in exchange for a
      beneficial interest in a Global Note, such Definitive Note shall bear the
      Regulation S Legend shown on the form of Note attached hereto as Exhibit
      A.
      On and
      after the Distribution Compliance Expiration Date, no such certification shall
      be required with respect to such transfers and the Trustee is hereby authorized
      to remove such Regulation S Legend from the applicable Notes.

     

    (i) The
      Trustee and the Registrar shall be entitled to treat a telephone, telex or
      facsimile communication from a person purporting to be (and who the Trustee
      or
      the Registrar believe in good faith to be) the authorized representative of
      the
      Company, named in a list furnished to the Trustee and the Registrar from time
      to
      time, as sufficient instructions and authority of the Company for the Trustee
      and the Registrar to act in accordance with this Section
      2.06.

     

    (j) Title
      to
      the Notes shall pass by delivery. However, title to Notes issued in the form
      of
      Global Notes held through Euroclear and Clearstream shall be transferable only
      in accordance with the rules and procedures of Euroclear and Clearstream, as
      appropriate.

     

    
      
        
        

      

      
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    Section
      2.07. Replacement
      Notes.

     

    If
      any
      mutilated Note is surrendered to the Trustee or the Company or if the Trustee
      receives evidence to its satisfaction of the destruction, loss or theft of
      any
      Note, the Company shall issue and, upon receipt of an Authentication Order
      in
      accordance with Section
      2.02
      hereof,
      the Trustee shall authenticate a replacement Note. If required by the Trustee
      or
      the Company, the Holder of such Note shall provide indemnity that is sufficient,
      in the judgment of the Trustee or the Company, to protect the Company, the
      Trustee, any Agent and any authenticating agent from any loss that any of them
      may suffer in connection with such replacement. If required by the Company,
      such
      Holder shall reimburse the Company or the Trustee, as the case may be, for
      its
      reasonable expenses in connection with such replacement. 

     

    If,
      after
      the delivery of such replacement Note, a protected purchaser of the original
      Note in lieu of which such replacement Note was issued presents for payment
      or
      registration such original Note, the Trustee shall be entitled to recover such
      replacement Note from the Person to whom it was delivered or any Person taking
      therefrom, except a protected purchaser, and shall be entitled to recover upon
      the security or indemnity provided therefor to the extent of any loss, damage,
      cost or expense incurred by the Company, the Trustee, any Agent and any
      authenticating agent in connection therewith.

     

    Every
      replacement Note issued in accordance with this Section shall be the valid
      obligation of the Company, evidencing the same debt as the mutilated, destroyed,
      lost or stolen Note, and shall be entitled to all of the benefits of this
      Indenture equally and proportionately with all other Notes duly issued
      hereunder.

     

    Section
      2.08. Outstanding
      Notes.

     

    (a) The
      Notes
      outstanding at any time shall be the entire principal amount of Notes
      represented by all of the Global Notes and Definitive Notes authenticated by
      the
      Trustee except for those cancelled by it, those delivered to it for
      cancellation, those subject to reductions in beneficial interests effected
      by
      the Trustee in accordance with Section
      2.06
      hereof,
      and those described in this Section as not outstanding. Except as set forth
      in
Section
      2.09
      hereof,
      a Note shall not cease to be outstanding because the Company or an Affiliate
      of
      the Company holds the Note.

     

    (b) If
      a Note
      is replaced pursuant to Section
      2.07
      hereof,
      it shall cease to be outstanding unless the Trustee receives proof satisfactory
      to it that the replaced note is held by a protected purchaser in whose hands
      such Note is a legal, valid and binding obligation of the Company.

     

    (c) If
      the
      principal amount of any Note is considered paid under Section
      4.01
      hereof,
      it shall cease to be outstanding and interest on it shall cease to
      accrue.

     

    (d) If
      the
      Paying Agent (other than the Company, a Subsidiary or an Affiliate of any
      thereof) holds, on a redemption date, a Purchase Date, or a maturity date,
      funds
      sufficient to pay Notes payable on that date, then on and after that date such
      Notes shall be deemed to be no longer outstanding and shall cease to accrue
      interest.

     

    Section
      2.09. Treasury
      Notes.

     

    In
      determining whether the Holders of the required principal amount of Notes have
      concurred in any direction, waiver or consent, Notes owned by the Company,
      or by
      any Affiliate of the Company, shall be considered as though not outstanding,
      except that for the purposes of determining whether the Trustee shall be
      protected in relying on any such direction, waiver or consent, only Notes that
      the Trustee knows are so owned shall be so disregarded.

     

    Section
      2.10. Temporary
      Notes.

     

    Until
      certificates representing Notes are ready for delivery, the Company may prepare
      and, upon receipt of an Authentication Order in accordance with Section
      2.02
      hereof,
      the Trustee shall authenticate temporary Notes. Such temporary Notes shall
      be
      substantially in the form of Definitive Notes but may have variations that
      the
      Company considers appropriate for temporary Notes and as shall be reasonably
      acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
      and the Trustee shall authenticate Global Notes or Definitive Notes in exchange
      for temporary Notes, as applicable. After preparation of Definitive Notes,
      the
      temporary Note will be exchangeable for Definitive Notes upon surrender of
      the
      temporary Notes.

     

    
      
        
        

      

      
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    Holders
      of temporary Notes shall be entitled to all of the benefits of this Indenture
      equally and proportionately with all other Notes duly issued
      hereunder.

     

    Section
      2.11. Cancellation.

     

    The
      Company at any time may deliver Notes to the Trustee for cancellation. The
      Registrar and Paying Agent shall forward to the Trustee any Notes surrendered
      to
      them for registration of transfer, exchange or payment. Upon sole direction
      of
      the Company, the Trustee and no one else shall cancel all Notes surrendered
      for
      registration of transfer, exchange, payment, replacement or cancellation and
      shall destroy cancelled Notes (subject to the record retention requirements
      of
      the Exchange Act or other applicable laws) unless by written order, signed
      by an
      Officer of the Company, the Company directs them to be returned to it.
      Certification of the destruction of all cancelled Notes shall be delivered
      to
      the Company from time to time upon request. The Company may not issue new Notes
      to replace Notes that it has paid or that have been delivered to the Trustee
      for
      cancellation.

     

    Section
      2.12. Payment
      of Interest; Defaulted Interest.

     

    If
      the
      Company defaults in a payment of interest on the Notes, it shall pay the
      defaulted interest in any lawful manner plus, to the extent lawful, interest
      payable on the defaulted interest, to the Persons who are Holders on a
      subsequent special record date, in each case at the rate provided in the Notes
      and in Section
      4.01
      hereof.
      The Company shall notify the Trustee in writing of the amount of defaulted
      interest proposed to be paid on each Note and the date of the proposed payment.
      The Company shall fix or cause to be fixed each such special record date and
      payment date; provided
      that no
      such special record date shall be less than 10 days prior to the related
      Interest Payment Date for such defaulted interest. At least 15 days before
      the
      special record date, the Company (or, upon the written request of the Company,
      the Trustee in the name and at the expense of the Company) shall mail or cause
      to be mailed to Holders a notice that states the special record date, the
      related Interest Payment Date and the amount of such interest to be
      paid.

     

    Section
      2.13. ISIN
      Numbers.

     

    The
      Company in issuing the Notes may use “ISIN” numbers (if then generally in use),
      and, if so, the Trustee shall use “ISIN” numbers in notices of redemption or
      Offers to Purchase as a convenience to Holders; provided,
      however,
      that any
      such notice may state that no representation is made as to the correctness
      of
      such numbers either as printed on the Notes or as contained in any notice of
      a
      redemption or notice of an Offer to Purchase and that reliance may be placed
      only on the other identification numbers printed on the Notes, and any such
      redemption or Offer to Purchase shall not be affected by any defect in or
      omission of such numbers. The Company shall promptly notify the Trustee in
      writing of any change in the “ISIN” numbers.

     

    Section
      2.14. Record
      Date.

     

    The
      record date for purposes of determining the identity of Holders of Notes
      entitled to vote or consent to any action by vote or consent or permitted under
      this Indenture shall be 15 days prior to the date of such vote, consent or
      action.

     

    
      
        
        

      

      
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    ARTICLE
      3.

     

    REDEMPTION
      AND PREPAYMENT

     

    Section
      3.01. Notices
      to Trustee.

     

    If
      the
      Company elects to redeem Notes pursuant to the optional redemption provisions
      of
Section
      3.05
      hereof,
      it shall furnish to the Trustee, at least 45 days but not more than 60 days
      before a redemption date (or such shorter period as allowed by the Trustee),
      an
      Officers’ Certificate setting forth (a) the applicable Section of this Indenture
      pursuant to which the redemption shall occur, (b) the redemption date and (c)
      the redemption price. 

     

    Section
      3.02. Notice
      of Redemption.

     

    Upon
      prior written notice to the Trustee, at least 30 days but not more than
      60 days prior to a redemption date, the Company shall mail or cause to be
      mailed, by first class mail, a notice of redemption to each Holder at such
      Holder’s registered address appearing in the Security Register, except that
      redemption notices may be mailed more than 60 days prior to a redemption date
      if
      the notice is issued in connection with a satisfaction and discharge pursuant
      to
Article
      11
      hereof.

     

    The
      notice shall identify the Notes to be redeemed and shall state:

     

    (a) the
      redemption date;

     

    (b) the
      redemption price;

     

    (c) the
      name
      and address of the Company for purposes of tendering Notes for
      redemption;

     

    (d) that
      Notes called for redemption must be surrendered to the Company to collect the
      redemption price;

     

    (e) that,
      unless the Company defaults in making such redemption payment, interest on
      Notes
      called for redemption ceases to accrue on and after the redemption
      date;

     

    (f) the
      applicable Section of this Indenture pursuant to which the Notes called for
      redemption are being redeemed; and

     

    (g) that
      no
      representation is made as to the correctness of the ISIN number, if any, listed
      in such notice or printed on the Notes.

     

    At
      the
      Company’s request, the Trustee shall give the notice of redemption in the
      Company’s name and at its expense; provided,
      however,
      that
      the Company shall have delivered to the Trustee, at least 45 days (or such
      shorter period allowed by the Trustee), prior to the redemption date, an
      Officers’ Certificate requesting that the Trustee give such notice (in the name
      and at the expense of the Company) and setting forth the information to be
      stated in such notice as provided in this Section
      3.02.

     

    Section
      3.03. Effect
      of Notice of Redemption.

     

    Once
      notice of redemption is mailed in accordance with Section
      3.02
      hereof,
      Notes called for redemption shall become irrevocably due and payable on the
      redemption date at the redemption price. A notice of redemption may not be
      conditional.

     

    
      
        
        

      

      
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    Section
      3.04. Deposit
      of Redemption Price.

     

    Prior
      to
      11:00 a.m. New York time on the Business Day prior to any redemption date and
      subject to Section
      3.07(f)
      hereof,
      the Company shall deliver to each tendering Holder the redemption price of
      and,
      if applicable, accrued and unpaid interest on the Notes to the redemption
      date.

     

    If
      the
      Company complies with the provisions of the preceding paragraph, on and after
      the redemption date, interest shall cease to accrue on the Notes called for
      purchase or redemption in accordance with Section
      2.08(d)
      hereof,
      whether or not such Notes are presented for payment. If a Note is redeemed
      on or
      after a Regular Record Date but on or prior to the related Interest Payment
      Date, then any accrued and unpaid interest, if any, shall be paid to the Person
      in whose name such Note was registered at the close of business on such Regular
      Record Date. If any Note called for redemption shall not be so paid upon
      surrender for redemption because of the failure of the Company to comply with
      the preceding paragraph, interest shall be paid on the unpaid principal from
      the
      redemption date until such principal is paid, and to the extent lawful on any
      interest not paid on such unpaid principal, in each case at the rate provided
      in
      the Notes and in Section
      4.01
      hereof.

     

    Section
      3.05. Optional
      Redemption.

     

    (a) The
      Notes
      shall not be redeemable at the option of the Company prior to January 24, 2008.
      Beginning on January 24, 2008, the Company may redeem all (but not less than
      all) of the Notes, after giving the notice required pursuant to Section
      3.02
      hereof,
      at the redemption prices set forth below (expressed as a percentage of principal
      amount), plus accrued and unpaid interest, to but excluding the redemption
      date
      (subject to the right of Holders of record on the relevant Regular Record Date
      to receive interest due on the relevant Interest Payment Date), if redeemed
      during the twelve-month period commencing on January 24 of the years set forth
      below:

     

    
      	
              Year

            	
              Percentage

            
	
              2008

            	
              106.0%

            
	
              2009

            	
              104.0%

            
	
              2010

            	
              102.0%

            
	
              2011
                and thereafter

            	
              100.0%

            

    

    

     

    Unless
      the Company defaults in the payment of the redemption price, interest will
      cease
      to accrue on the Notes on the applicable redemption date.

     

    (b) Any
      prepayment pursuant to this Section
      3.05
      shall be
      made pursuant to the provisions of Sections
      3.01
      through
3.04
      hereof.

     

    Section
      3.06. Mandatory
      Redemption.

     

    The
      Company agrees that on the dates indicated in the following table, the Company
      will prepay and there shall become due and payable the corresponding principal
      amount (or such lesser principal amount as shall then be outstanding) in respect
      of the aggregate principal Debt evidenced by the Notes. 

     

    
      	
              Date

            	
              Principal
                Amount

            
	
              July
                24, 2009

            	
              $5,000,000

            
	
              January
                24, 2010

            	
              $5,000,000

            
	
              July
                24, 2010

            	
              $5,000,000

            
	
              January
                24, 2011

            	
              $5,000,000

            
	
              July
                24, 2011

            	
              $10,000,000

            

    

    

    The
      entire remaining principal amount of the Notes shall become due and payable
      on
      January 24, 2012. Each required prepayment made pursuant to this Section shall
      be made at 100% of principal amount and without payment of any premium and
      allocated among all of the Notes in proportion, as nearly as practicable, to
      the
      respective unpaid principal amounts thereof. Upon any repurchase of the Notes
      pursuant to Section
      4.12,
      Section
      4.17
      or
Section
      4.26,
      the
      principal amount of each required prepayment of the Notes becoming due under
      this Section on and after the date of such prepayment or purchase shall be
      reduced in the same proportion as the aggregate unpaid principal amount of
      the
      Notes is reduced as a result of such prepayment or purchase.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    

     

    In
      the
      case of each prepayment of Notes pursuant to this Section, the principal amount
      of each Note to be prepaid shall mature and become due and payable on the date
      fixed for such prepayment, together with interest on such principal amount
      accrued to such date. From and after such date, unless the Company shall fail
      to
      pay such principal amount when so due and payable, together with the interest
      as
      aforesaid, interest on such principal amount shall cease to accrue. Any Note
      paid or prepaid in full shall be surrendered to the Company and cancelled and
      shall not be reissued, and no Note shall be issued in lieu of any prepaid
      principal amount of any Note.

     

    Section
      3.07. Offer
      To Purchase.

     

    (a) In
      the
      event that, pursuant to Section
      4.12,
      Section
      4.17
      or
Section
      4.26
      hereof,
      the Company shall be required to commence an Asset Sale Offer, a Change of
      Control Offer or a Designated Event Offer (each of the foregoing, an
“Offer
      to Purchase”),
      respectively, it shall follow the procedures specified below.

     

    (b) The
      Company shall cause a notice of the Offer to Purchase to be sent at least once
      to the Dow
      Jones News Service
      or
      similar business news service in the United States.

     

    (c) The
      Company shall commence the Offer to Purchase by sending, by first-class mail,
      with a copy to the Trustee, to each Holder at such Holder’s address appearing in
      the Security Register, a notice the terms of which shall govern the Offer to
      Purchase stating:

     

    (i) that
      the
      Offer to Purchase is being made pursuant to this Section and Section
      4.12,
      Section
      4.17
      or
Section
      4.26,
      as the
      case may be, and, in the case of a Change of Control Offer or Designated Event
      Offer, that such event has occurred, the circumstances and relevant facts
      regarding such event, and that a Change of Control Offer or Designated Event
      Offer, as the case may be, is being made pursuant to Section
      4.17
      or
Section
      4.26,
      respectively;

     

    (ii) the
      principal amount of Notes required to be purchased pursuant to Section
      4.12,
      Section
      4.17
      or
Section
      4.26,
      as the
      case may be (the “Offer
      Amount”),
      the
      purchase price set forth in Section
      4.12,
      Section
      4.17
      or
Section
      4.26,
      as
      applicable (the “Purchase
      Price”),
      the
      Offer Period and the Purchase Date (each as defined below);

     

    (iii) except
      as
      provided in clause (ix), that all Notes timely tendered and not withdrawn shall
      be accepted for payment;

     

    (iv) that
      any
      Note not tendered or accepted for payment shall continue to accrue
      interest;

     

    (v) that,
      unless the Company defaults in making such payment, any Note accepted for
      payment pursuant to the Offer to Purchase shall cease to accrue interest after
      the Purchase Date;

     

    (vi) that
      Holders electing to have a Note purchased pursuant to an Offer to Purchase
      may
      elect to have Notes purchased in integral multiples of $100,000
      only;

     

    (vii) that
      Holders electing to have a Note purchased pursuant to any Offer to Purchase
      shall be required to surrender the Note, with the form entitled “Option of
      Holder to Elect Purchase” on the reverse of the Note completed, or transfer by
      book-entry transfer, to the Company, or the Common Depositary, if appointed
      by
      the Company, before the close of business on the third Business Day before
      the
      Purchase Date;

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    

     

    (viii) that
      Holders shall be entitled to withdraw their election if the Company, the Common
      Depositary, as the case may be, receives, not later than the expiration of
      the
      Offer Period, a telegram, facsimile transmission or letter setting forth the
      name of the Holder, the principal amount of the Note (or portions thereof)
      the
      Holder delivered for purchase and a statement that such Holder is withdrawing
      his election to have such Note purchased;

     

    (ix) that,
      in
      the case of an Asset Sale Offer, if the aggregate principal amount of Notes
      surrendered by Holders exceeds the Offer Amount, the Company shall select the
      Notes to be purchased on a pro
      rata
      basis
      (with such adjustments as may be deemed appropriate by the Company so that
      only
      Notes in denominations of $100,000 or integral multiples thereof shall be
      purchased); 

     

    (x) that
      Holders whose Notes were purchased in part shall be issued new Notes equal
      in
      principal amount to the unpurchased portion of the Notes surrendered (or
      transferred by book-entry transfer); and

     

    (xi) any
      other
      procedures the Holders must follow in order to tender their Notes (or portions
      thereof) for payment and the procedures that Holders must follow in order to
      withdraw an election to tender Notes (or portions thereof) for
      payment.

     

    (d) The
      Offer
      to Purchase shall remain open for a period of at least 30 days but no more
      than
      60 days following its commencement, except to the extent that a longer period
      is
      required by applicable law (the “Offer
      Period”).
      No
      later than five (5) Business Days (and in any event no later than the 60th
      day
      following any Change of Control or Designated Event) after the termination
      of
      the Offer Period (the “Purchase
      Date”),
      the
      Company shall purchase the Offer Amount or, if less than the Offer Amount has
      been tendered, all Notes tendered in response to the Offer to Purchase. Payment
      for any Notes so purchased shall be made in the same manner as interest payments
      are made. The Company shall publicly announce the results of the Offer to
      Purchase on the Purchase Date.

     

    (e) On
      or
      prior to the Purchase Date, the Company shall, to the extent
      lawful:

     

    (i) accept
      for payment (on a pro
      rata
      basis to
      the extent necessary in connection with an Asset Sale Offer) from each tendering
      Holder, the Offer Amount of Notes or portions of Notes properly tendered and
      not
      withdrawn pursuant to the Offer to Purchase, or if less than the Offer Amount
      has been tendered, all Notes tendered; and

     

    (ii) surrender
      to the Trustee the Notes properly accepted to be cancelled by the Trustee in
      accordance with Section
      2.11
      together
      with an Officers’ Certificate stating the aggregate principal amount of Notes or
      portions of Notes being purchased by the Company and that such Notes or portions
      thereof were accepted for payment by the Company in accordance with the terms
      of
      this Section. 

     

    (f) Upon
      receipt of the Notes in accordance with Section
      3.07(e)(i),
      the
      Company shall promptly, and in any event within one (1) Business Day after
      the
      Purchase Date, deliver to each tendering Holder the Purchase Price. In the
      event
      that any portion of the Notes surrendered is not purchased by the Company,
      the
      Company shall promptly execute and issue a new Note in a principal amount equal
      to such unpurchased portion of the Note surrendered, and, upon receipt of an
      Authentication Order in accordance with Section
      2.02
      hereof,
      the Trustee shall authenticate and deliver (or cause to be transferred by
      book-entry) such new Note to such Holder, in a principal amount equal to any
      unpurchased portion of the Note surrendered; provided,
      however,
      that
      each such new Note shall be in a principal amount of $100,000 or an integral
      multiple thereof. Any Note not so accepted shall be promptly mailed or delivered
      by the Company to the Holder thereof.

     

    (g) If
      the
      Purchase Date is on or after a Regular Record Date and on or before the related
      Interest Payment Date, any accrued and unpaid interest shall be paid to the
      Person in whose name a Note is registered at the close of business on such
      Regular Record Date, and no further interest shall be payable to Holders who
      tender Notes pursuant to the Offer to Purchase.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    

     

    (h) The
      Company shall comply, to the extent applicable, with the requirements of Rule
      14e-1 under the Exchange Act and any other securities laws and regulations
      thereunder to the extent those laws and regulations are applicable in connection
      with the Offer to Purchase. To the extent that the provisions of any securities
      laws or regulations conflict with Section
      4.12,
      Section
      4.17
      or
Section
      4.26,
      as
      applicable, this Section or other provisions of this Indenture, the Company
      shall comply with applicable securities laws and regulations and shall not
      be
      deemed to have breached its obligations under Section
      4.12,
      Section
      4.17
      or
Section
      4.26,
      as
      applicable, this Section or such other provision by virtue of such
      compliance.

     

    (i) Other
      than as specifically provided in this Section, any purchase pursuant to this
      Section shall be made in accordance with the provisions of Section
      3.01
      through
3.06
      hereof.

     

    ARTICLE
      4.

     

    COVENANTS

     

    Section
      4.01. Payment
      of Notes.

     

    The
      Company shall pay or cause to be paid the principal of, premium, if any, and
      interest on, the Notes on the dates and in the manner provided in this Indenture
      and the Notes. The Company shall pay Additional Amounts upon the occurrence
      of
      any events, in the amounts and at the times specified in the definition of
      “Additional Amounts” in Section
      1.01
      hereof.
      Principal, premium, if any, and interest shall be considered paid on the date
      due if the Paying Agent, if other than the Company or a Subsidiary thereof,
      holds as of 11:00 a.m. New York Time on the due date money deposited by the
      Company in immediately available funds and designated for and sufficient to
      pay
      all principal, premium, if any, and interest then due. Such
      Paying Agent shall return to the Company promptly, and in any event, no later
      than five (5) Business Days following the date of payment, any money (including
      accrued interest) that exceeds such amount of principal, premium, if any, and
      interest paid on the Notes. If a payment date is a Legal Holiday at a place
      of
      payment, payment may be made at that place on the next succeeding day that
      is
      not a Legal Holiday, and no interest shall accrue on such payment for the
      intervening period.

     

    The
      Company shall pay, from time to time on demand, interest (including
      post-petition interest in any proceeding under any Bankruptcy Law) accrued
      on
      overdue principal and premium, if any, at a rate that is 5% per annum in excess
      of the rate then in effect from five Business Days following the due date and
      ending on the date on which payment is made to the Holders of the Notes in
      respect thereof; it shall pay interest (including post-petition interest in
      any
      proceeding under any Bankruptcy Law) on overdue installments of interest
      (without regard to any applicable grace periods), from time to time on demand
      at
      the same rate to the extent lawful.

     

    Interest
      shall be computed on the basis of a 360-day year for the actual number of days
      elapsed.

     

    Section
      4.02. Maintenance
      of Office or Agency.

     

    (a) The
      Company shall maintain in the Borough of Manhattan, The City of New York, an
      office or agency (which may be an office of the Trustee or an affiliate of
      the
      Trustee, Registrar or co-registrar) where Notes may be presented or surrendered
      for registration of transfer or for exchange and where notices and demands
      to or
      upon the Company in respect of the Notes and this Indenture may be served.
      The
      Company shall give prompt written notice to the Trustee of the location, and
      any
      change in the location, of such office or agency.  If at any time the
      Company shall fail to maintain any such required office or agency or shall
      fail
      to furnish the Trustee with the address thereof, such presentations, surrenders,
      notices and demands may be made or served at the Corporate Trust Office of
      the
      Trustee, and the Company hereby appoints the Trustee as its agent to receive
      all
      such presentations, surrenders, notices and demands.

     

    (b) The
      Company may also from time to time designate one or more other offices or
      agencies where the Notes may be presented or surrendered for any or all such
      purposes and may from time to time rescind such designations. The Company shall
      give prompt written notice to the Trustee of any such designation or rescission
      and of any change in the location of any such other office or
      agency.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    

     

    (c) The
      Company hereby designates the Corporate Trust Office of the Trustee, as one
      such
      office, drop facility or agency of the Company in accordance with Section
      2.03
      hereof.

     

    Section
      4.03. Reports.

     

    (a) Whether
      or not required by the Commission’s rules and regulations, so long as any of the
      Notes remain outstanding, the Company shall file with the Trustee and furnish
      to
      the Holders (or promptly provide notice thereof to the Trustee and to the
      Holders in case of documents described below that are publicly available) within
      the time periods specified in the Commission’s rules and
      regulations:

     

    (i) all
      quarterly and annual reports that would be required to be filed with the
      Commission on Forms 10-QSB and 10-KSB if the Company were required to file
      such
      reports (or Forms 10-Q and 10-K if the Company is not eligible to file Forms
      10-QSB or 10-KSB, as the case may be); and

     

    (ii) all
      current reports that would be required to be filed with the Commission on Form
      8-K if the Company were required to file such reports. 

     

    All
      such
      reports shall be prepared in all material respects in accordance with all of
      the
      rules and regulations of the Commission applicable to such reports. Each annual
      report on Form 10-KSB (or 10-K, as the case may be) shall include a report
      on
      the Company’s consolidated financial statements by a firm of independent
      certified accountants. Delivery of such reports, information and documents
      to
      the Trustee is for informational purposes only and the Trustee’s receipt of such
      shall not constitute constructive notice of any information contained therein,
      including the Company’s compliance with any of its covenants hereunder (as to
      which the Trustee shall be entitled to rely exclusively on Officers’
Certificates).

     

    (b) So
      long
      as any of the Notes remains outstanding, the Company will provide to the Trustee
      (i) within 90 days after the close of each fiscal year of the Company, an
      Officers’ Certificate stating the Fixed Charge Coverage Ratio with respect to
      the four most recent quarterly periods and showing in reasonable detail the
      calculation of the Fixed Charge Coverage Ratio, including the arithmetic
      computations of each component of the Fixed Charge Coverage Ratio; and (ii)
      as
      soon as possible and in any event within 14 days after the Company becomes
      aware
      of the occurrence of a Default, an Officers’ Certificate setting forth the
      details of the Default, and the action that the Company proposes to take with
      respect thereto.

     

    (c) For
      as
      long as any Notes are “restricted securities” within the meaning of Rule
      144(a)(3) under the Securities Act, during any period in which the Company
      is
      neither subject to Section 13 or 15(d) of the Exchange Act, nor exempt from
      reporting pursuant to Rule 12g3-2(b) thereunder, the Company shall supply (i)
      to
      any holder or beneficial owner of a Note or (ii) upon their request to a
      prospective purchaser of a Note or beneficial interest therein designated by
      such holder or owner, the information specified in, and meeting the requirements
      of Rule 144A(d)(4) under the Securities Act.

     

    Section
      4.04. Compliance
      Certificate.

     

    (a) The
      Company shall deliver to the Trustee, within 90 days after the end of each
      fiscal year of the Company, an Officers’ Certificate stating that a review of
      the activities of the Company, the Guarantors and their respective Subsidiaries
      during the preceding fiscal year has been made under the supervision of the
      signing Officers with a view to determining whether the Company, the Guarantors
      and their respective Subsidiaries have kept, observed, performed and fulfilled
      their obligations under this Indenture, and further stating, as to each such
      Officer signing such certificate, that to the best of his or her knowledge
      the
      Company, the Guarantors and their respective Subsidiaries have kept, observed,
      performed and fulfilled each and every covenant contained in this Indenture
      and
      are not in default in the performance or observance of any of the terms,
      provisions and conditions of this Indenture (or, if a Default or Event of
      Default shall have occurred, describing all such Defaults or Events of Default
      of which he or she may have knowledge and what action the Company is taking
      or
      proposes to take with respect thereto) and that to the best of his or her
      knowledge no event has occurred and remains in existence by reason of which
      payments on account of the principal of, premium, if any, or interest on the
      Notes is prohibited or if such event has occurred, a description of the event
      and what action the Company is taking or proposes to take with respect
      thereto.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    

     

    Section
      4.05. Taxes.

     

    The
      Company shall pay, and shall cause each of its Subsidiaries to pay, prior to
      delinquency, all material taxes, assessments and governmental levies, except
      such as are being contested in good faith and by appropriate proceedings or
      where the failure to effect such payment is not adverse in any material respect
      to the Holders.

     

    Section
      4.06. Stay,
      Extension and Usury Laws.

     

    The
      Company covenants (to the extent that it may lawfully do so) that it shall
      not
      at any time insist upon, plead, or in any manner whatsoever claim or take the
      benefit or advantage of, any stay, extension or usury law wherever enacted,
      now
      or at any time hereafter in force, that may affect the covenants or the
      performance of this Indenture; and the Company (to the extent that it may
      lawfully do so) hereby expressly waives all benefit or advantage of any such
      law, and covenants that it shall not, by resort to any such law, hinder, delay
      or impede the execution of any power herein granted to the Trustee, but shall
      suffer and permit the execution of every such power as though no such law has
      been enacted.

     

    Section
      4.07. Corporate
      Existence.

     

    Subject
      to Section
      5.01
      hereof,
      the Company shall do or cause to be done all things necessary to preserve and
      keep in full force and effect (i) its corporate existence, and the corporate,
      partnership or other existence of each of its Subsidiaries, in accordance with
      the respective organizational documents (as the same may be amended from time
      to
      time) of the Company or any such Subsidiary and (ii) the rights (charter and
      statutory), licenses and franchises of the Company and its Subsidiaries;
provided,
      however,
      that
      the Company shall not be required to preserve any such right, license or
      franchise, or the corporate, partnership or other existence of any of its
      Subsidiaries, if the Board of Directors shall determine that the preservation
      thereof is no longer desirable in the conduct of the business of the Company
      and
      its Subsidiaries, taken as a whole, and that the loss thereof is not adverse
      in
      any material respect to the Holders of the Notes, or that such preservation
      is
      not necessary in connection with any transaction not prohibited by this
      Indenture.

     

    Section
      4.08. Payments
      for Consent.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, directly
      or
      indirectly, pay or cause to be paid any consideration, whether by way of
      interest, fee or otherwise, to or for the benefit of any Holder for or as an
      inducement to any consent, waiver or amendment of any of the terms or provisions
      of this Indenture or the Notes unless such consideration is offered to be paid
      and is paid to all Holders that consent, waive or agree to amend in the time
      frame set forth in the solicitation documents relating to such consent, waiver
      or agreement.

     

    Section
      4.09. Incurrence
      of Additional Debt.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, Incur,
      directly or indirectly, any Debt unless, after giving effect to the application
      of the proceeds thereof, no Default or Event of Default would occur as a
      consequence of such Incurrence or be continuing following such Incurrence and
      either:

     

    
      	 	
              (1)

            	
              such
                Debt is Debt of the Company or a Guarantor and, after giving effect
                to the
                Incurrence of such Debt and the application of the proceeds thereof,
                (x)
                the Fixed Charge Coverage Ratio would be greater than 3.5 to 1.00
                and (y)
                the Leverage Ratio would not exceed 3.75 to 1.00, or
                

            

    

     

    
      	 	
              (2)

            	
              such
                Debt is Permitted Debt. 

            

    

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    

     

    The
      term
“Permitted Debt” is defined to include the following:

     

    (a) (i)
      Debt of the Company evidenced by the Notes and the Convertible Notes and (ii)
      Debt of the Guarantors evidenced by Guarantees and the Convertible Note
      Guarantees;

     

    (b)
      Debt
      of the WFOE under Credit Facilities, provided
      that
      the
      aggregate principal amount of all such Debt under Credit Facilities at any
      one time outstanding shall not exceed

     

    (x)
       $15.0 million
      (or its equivalent in another currency; provided
      that the
      amount of Debt so Incurred shall not be deemed to exceed such amount as a result
      of changes in foreign currency exchange rates) or 

     

    (y)
       subject
      to the approval of the Company’s Board of Directors, $25.0 million (or its
      equivalent in another currency; provided
      that the
      amount of Debt so Incurred shall not be deemed to exceed such amount as a result
      of changes in foreign currency exchange rates), only after eighteen (18) months
      following the Issue Date,

     

    which
      amount shall be permanently reduced by the amount of Net Available Cash used
      to
      Repay Debt under Credit Facilities and not subsequently reinvested in Additional
      Assets or used to purchase Notes or Repay other Debt, pursuant to Section
      4.12;

     

    (c) 
      Debt of the Company owing to and held by any Wholly Owned Subsidiary and Debt
      of
      any Subsidiary of the Company owing to and held by the Company or any Wholly
      Owned Subsidiary; provided,
      however,
      that
      any subsequent issue or transfer of Capital Stock or other event that results
      in
      any such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or
      any
      subsequent transfer of any such Debt (except to the Company or a Wholly Owned
      Subsidiary) shall be deemed, in each case, to constitute the Incurrence of
      such
      Debt by the issuer thereof;

     

    (d) Debt
      of any Subsidiary of the Company outstanding on the date on which such
      Subsidiary is acquired by the Company or otherwise becomes a Subsidiary of
      the
      Company (other than Debt Incurred as consideration in, or to provide all or
      any
      portion of the funds or credit support utilized to consummate, the transaction
      or series of transactions pursuant to which such Subsidiary became a Subsidiary
      of the Company or was otherwise acquired by the Company), provided
      that
      at
      the time such Subsidiary is acquired by the Company or otherwise becomes a
      Subsidiary of the Company and after giving effect to the Incurrence of such
      Debt, the Company would have been able to Incur $1.00 of additional Debt
      pursuant to clause (1) of the first paragraph of this
      covenant;

     

    (e) Debt
      under Interest Rate Agreements entered into by the Company or a Guarantor for
      the purpose of limiting interest rate risk in the ordinary course of the
      financial management of the Company or such Guarantor and not for speculative
      purposes, provided
      that
      the
      obligations under such agreements are directly related to payment obligations
      on
      Debt otherwise permitted by the terms of this Section; 

     

    (f)
      Debt
      under Currency Exchange Protection Agreements entered into by the Company or
      any
      of its Subsidiaries for the purpose of limiting currency exchange rate risks
      directly related to transactions entered into by the Company or such Subsidiary
      in the ordinary course of business and not for speculative
      purposes;

     

    (g)
      Debt
      under Commodity Price Protection Agreements entered into by the Company or
      any
      of its Subsidiaries in the ordinary course of the financial management of the
      Company or such Subsidiary and not for speculative purposes;

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    

     

    (h) Debt
      in connection with one or more standby letters of credit or performance bonds
      issued by the Company or a Guarantor in the ordinary course of business or
      pursuant to self-insurance obligations and not in connection with the borrowing
      of money or the obtaining of advances or credit;

     

    (i) Debt
      of the Company or any of its Subsidiaries outstanding on the Issue Date not
      otherwise described in clauses (a) through (h) above; and

     

    (j) Permitted
      Refinancing Debt Incurred in respect of Debt Incurred pursuant to clause
      (1) of the first paragraph of this covenant and clauses (a), (b), (d)
      and (i) above.

     

    Notwithstanding
      anything to the contrary contained in this Section,

     

    (a) the
      Company shall not, and
      shall
      not permit any Guarantor to, Incur any Debt pursuant to this covenant if the
      proceeds thereof are used, directly or indirectly, to Refinance any
      Subordinated Obligations unless such Debt shall be subordinated to the Notes
      or
      the applicable Guarantee, as the case may be, to at least the same extent as
      such Subordinated Debt;

     

    (b) the
      Company shall not permit any of its Subsidiaries that
      is
      not a Guarantor to Incur any Debt pursuant to this covenant if the proceeds
      thereof are used, directly or indirectly, to Refinance any Debt of the Company
      or any Guarantor;
      and

     

    (c)
      accrual of interest, accretion or amortization of original issue discount and
      the payment of interest or dividends in the form of additional Debt, will be
      deemed not to be an Incurrence of Debt for purposes of this
      Section.

     

    For
      purposes of determining compliance with this Section, in the event that an
      item
      of Debt meets the criteria of more than one of the categories of Permitted
      Debt
      described in clauses (a) through (j) above or is entitled to be incurred
      pursuant to clause (l) of the first paragraph of this Section, the Company
      shall, in its sole discretion, classify (or later reclassify in whole or in
      part, in its sole discretion) such item of Debt in any manner that complies
      with
      this Section.

     

    Section
      4.10. Restricted
      Payments.

     

    The
      Company shall not make, and shall not permit any of its Subsidiaries to make,
      directly or indirectly, any Restricted Payment if at the time of, and after
      giving effect to, such proposed Restricted Payment,

     

    (a) a
      Default or Event of Default shall have occurred and be continuing,
      or

     

    (b) the
      Company could not Incur at least $1.00 of additional Debt pursuant to clause
      (1)
      of the first paragraph of Section
      4.09,
      or

     

    (c) the
      aggregate amount of such Restricted Payment and all other Restricted Payments
      declared or made since the Issue Date (the amount of any Restricted Payment,
      if
      made other than in cash, to be based upon Fair Market Value at the time of
      such
      Restricted Payment) would exceed an amount equal to the sum of:

     

    (1) 10%
      of the aggregate amount of Consolidated Net Income accrued during the period
      (treated as one accounting period) from the beginning of the Fiscal Quarter
      after the Issue Date to the end of the most recent Fiscal Quarter ending prior
      to the date of such Restricted Payment (or if the aggregate amount of
      Consolidated Net Income for such period shall be a deficit, minus 100% of such
      deficit), plus

     

    (2) 100%
      of the Capital Stock Sale Proceeds, plus

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    

     

    (3) the
      sum of:

     

    (A) the
      aggregate net cash proceeds received by the Company or any Guarantor from the
      issuance or sale after the Issue Date of convertible or exchangeable Debt that
      has been converted into or exchanged for Capital Stock (other than Disqualified
      Stock) of the Company, and 

     

    (B) the
      aggregate amount by which Debt (other than Subordinated Obligations) of the
      Company or any Guarantor is reduced on the Company’s consolidated balance sheet
      on or after the Issue Date upon the conversion or exchange of any Debt issued
      or
      sold on or prior to the Issue Date that is convertible or exchangeable for
      Capital Stock (other than Disqualified Stock) of the Company,

     

    excluding,
      in the case of clause (A) or (B):

     

    (x) any
      such Debt issued or sold to the Company or a Subsidiary of the Company or an
      employee stock ownership plan or trust established by the Company or any such
      Subsidiary for the benefit of their employees, and 

     

    (y) the
      aggregate amount of any cash or other Property distributed by the Company or
      any
      of its Subsidiaries upon any such conversion or exchange, plus

     

    (4) an
      amount equal to the net reduction in Investments in any Person other than the
      Company or any of its Subsidiaries resulting from dividends, repayments of
      loans
      or advances or other transfers of Property, in each case to the Company or
      any
      of its Subsidiaries from such Person.

     

    Notwithstanding
      the foregoing limitation, the Company may:

     

    (a) pay
      dividends on its Capital Stock within 60 days of the declaration thereof
      if, on the declaration date, such dividends could have been paid in compliance
      with the Indenture; provided,
      however,
      that at
      the time of such payment of such dividend, no other Default or Event of Default
      shall have occurred and be continuing (or result therefrom); provided
      further,
      however,
      that
      such dividend shall be included in the calculation of the amount of Restricted
      Payments;

     

    (b) purchase,
      repurchase, redeem, legally defease, acquire or retire for value Capital Stock
      of the Company or Subordinated Obligations in exchange for, or out of the
      proceeds of the substantially concurrent sale of, Capital Stock of the Company
      (other than Disqualified Stock and other than Capital Stock issued or sold
      to a
      Subsidiary of the Company or an employee stock ownership plan or trust
      established by the Company or any such Subsidiary for the benefit of their
      employees); provided,
      however,
      that

     

    (1) such
      purchase, repurchase, redemption, legal defeasance, acquisition or retirement
      shall be excluded in the calculation of the amount of Restricted Payments
      and

     

    (2) the
      Capital Stock Sale Proceeds from such exchange or sale shall be excluded from
      the calculation pursuant to clause (c)(2) above; and

     

    (c)
      purchase, repurchase, redeem, legally defease, acquire or retire for value
      any
      Subordinated Obligations in exchange for, or out of the proceeds of the
      substantially concurrent sale of, Permitted Refinancing Debt; provided,
      however,
      that
      such purchase, repurchase, redemption, legal defeasance, acquisition or
      retirement shall be excluded in the calculation of the amount of Restricted
      Payments.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    

     

    Section
      4.11. Liens.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, directly
      or
      indirectly, Incur or suffer to exist, any Lien (other than Permitted Liens)
      upon
      any of its Property (including Capital Stock of any of its Subsidiaries),
      whether owned at the Issue Date or thereafter acquired, or any interest therein
      or any income or profits therefrom, unless it has made or will make
      effective provision whereby the Notes or the applicable Guarantee will be
      secured by such Lien equally and ratably with (or, if such other Debt
      constitutes Subordinated Debt, prior to) all other Debt of the Company or any
      of
      its Subsidiaries secured by such Lien for so long as such other Debt is secured
      by such Lien.

     

    Section
      4.12. Asset
      Sales.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, directly
      or
      indirectly, consummate any Asset Sale unless: 

     

    (a) the
      Company or such Subsidiary receives consideration at the time of such Asset
      Sale
      at least equal to the Fair Market Value of the Property subject to such Asset
      Sale;

     

    (b) at
      least 75% of the consideration paid to the Company or such Subsidiary in
      connection with such Asset Sale is in the form of cash or Cash Equivalents
      or
      the assumption by the purchaser of liabilities of the Company or any of its
      Subsidiaries (other than contingent liabilities or liabilities that are by
      their
      terms subordinated to the Notes or the applicable Guarantee) as a result of
      which the Company and its Subsidiaries are no longer obligated with respect
      to
      such liabilities; and 

     

    (c)
      the
      Company delivers an Officers’ Certificate to the Trustee certifying that such
      Asset Sale complies with the foregoing clauses (a) and (b).

     

    The
      Net
      Available Cash (or any portion thereof) from Asset Sales may be applied by
      the
      Company or any of its Subsidiaries, to the extent the Company or such Subsidiary
      elects (or is required by the terms of any Debt) to reinvest in Additional
      Assets (including by means of an Investment in Additional Assets by any
      Subsidiary of the Company with Net Available Cash received by the Company or
      another Subsidiary of the Company).

     

    Any
      Net
      Available Cash from an Asset Sale not applied in accordance with the preceding
      paragraph within 120 days from the date of the receipt of such Net
      Available Cash shall constitute “Excess
      Proceeds”.
      

     

    When
      the
      aggregate amount of Excess Proceeds exceeds $5.0 million (taking into account
      income earned on such Excess Proceeds, if any), the Company will be required
      to
      make an offer to repurchase (the “Asset
      Sale Offer”)
      the
      Notes, which offer shall be in the amount of the Allocable Excess Proceeds
      (rounded to the nearest $100,000), on a pro
      rata
      basis
      according to principal amount, at a purchase price equal to 100% of the
      principal amount thereof, plus accrued and unpaid interest if any to the
      Purchase Date (subject to the right of holders of record on the relevant Regular
      Record Date to receive interest due on the relevant Interest Payment Date),
      in
      accordance with the procedures (including prorating in the event of
      oversubscription) set forth in Section
      3.07.
      To the
      extent that any portion of the amount of Net Available Cash remains after
      compliance with the preceding sentence and provided
      that
      all
      holders of Notes have been given the opportunity to tender their Notes for
      repurchase in accordance with Section
      3.07,
      the
      Company or such Subsidiary may use such remaining amount first to Repay the
      Credit Facilities or any other Senior Debt of the Company or any Guarantor
      or
      Debt of any Subsidiary of the Company that is not a Guarantor (excluding, in
      any
      such case, any Debt owed to the Company or an Affiliate of the Company), and
      only thereafter, for any purpose permitted by this Indenture, and the amount
      of
      Excess Proceeds will be reset to zero. 

     

    The
      term
“Allocable
      Excess Proceeds”
shall
      mean the product of: 

     

    (a) the
      Excess Proceeds and 

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    

     

    (b) a
      fraction, 

    

    (1)
      the
      numerator of which is the aggregate principal amount of the Notes outstanding
      on
      the date of the Asset Sale Offer, and 

     

    (2)
      the
      denominator of which is the sum of the aggregate principal amount of the Notes
      outstanding on the date of the Asset Sale Offer and the aggregate principal
      amount (or accreted value, if applicable) of other Debt of the Company
      outstanding on the date of the Asset Sale Offer that is pari
      passu in
      right
      of payment with the Notes (including, without limitation, the Repurchase Amount
      in respect of the Convertible Notes) and subject to terms and conditions in
      respect of Asset Sales similar in all material respects to this Section and
      requiring the Company to make an offer to repurchase such Debt at substantially
      the same time as the Asset Sale Offer.

     

    Section
      4.13. Restrictions
      on Distributions from Subsidiaries.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, directly
      or
      indirectly, create or otherwise cause or suffer to exist any consensual
      restriction on the right of any of its Subsidiaries to:

     

    (a)
      pay
      dividends, in cash or otherwise, or make any other distributions on or in
      respect of its Capital Stock owned by, or pay any Debt or other obligation
      owed,
      to, the Company or any other Subsidiary of the Company, 

     

    (b)
      make
      any loans or advances to the Company or any other Subsidiary of the Company,
      or

     

    (c)
      transfer any of its Property to the Company or any other Subsidiary of the
      Company. 

     

    The
      foregoing limitations will not apply:

     

    (1)
      with
      respect to clauses (a), (b) and (c), to restrictions:

     

    (A)
      in
      effect on the Issue Date (including, without limitation, restrictions pursuant
      to the Notes, this Indenture, the Convertible Notes and the indenture relating
      thereto), 

     

    (B)
      relating to Debt of any Subsidiary of the Company and existing at the time
      it
      became a Subsidiary of the Company if such restriction was not created in
      connection with or in anticipation of the transaction or series of transactions
      pursuant to which such Subsidiary became a Subsidiary of the Company or was
      acquired by the Company, or 

     

    (C) that
      result from the Refinancing of Debt Incurred pursuant to an agreement referred
      to in clause (1)(A) or (B) above or in clause (2)(A) or (B) below,
provided
      such
      restrictions are not less favorable to the holders of Notes than those under
      the
      agreement evidencing the Debt so Refinanced, and

     

    (2) with
      respect to clause (c) only, to restrictions:

     

    (A)
      relating to Debt that is permitted to be Incurred and secured without also
      securing the Notes or the applicable Guarantee pursuant
      to Section
      4.09
      and
Section
      4.11
      that
      limit the right of the debtor to dispose of the Property securing such
      Debt,

     

    (B) encumbering
      Property at the time such Property was acquired by the Company or any of its
      Subsidiaries, so long as such restrictions relate solely to the Property so
      acquired and were not created in connection with or in anticipation of such
      acquisition,

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

    

     

    (C) resulting
      from customary provisions restricting subletting or assignment of leases or
      customary provisions in other agreements that restrict assignment of such
      agreements or rights thereunder, or

     

    (D)
      customary restrictions contained in asset sale agreements limiting the transfer
      of such Property pending the closing of such sale.

     

    Section
      4.14. Affiliate
      Transactions.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, directly
      or
      indirectly, conduct any business or enter into or suffer to exist any
      transaction or series of transactions (including the purchase, sale, transfer,
      assignment, lease, conveyance or exchange of any Property or the rendering
      of
      any service) with, or for the benefit of, any Affiliate of the Company (an
      “Affiliate
      Transaction”),
      unless:

     

    (a) the
      terms of such Affiliate Transaction are:

     

    (1) set
      forth in writing, 

     

    (2) in
      the best interest of the Company or such Subsidiary, as the case may
      be, and 

     

    (3) no
      less favorable to the Company or such Subsidiary, as the case may be, than
      those
      that could be obtained in a comparable arm’s-length transaction with a Person
      that is not an Affiliate of the Company,

     

    (b) if
      such Affiliate Transaction involves aggregate payments or value in excess of
      $1.0 million, the Board of Directors (including a majority of the disinterested
      members of the Board of Directors) approves such Affiliate Transaction and,
      in
      its good faith judgment, believes that such Affiliate Transaction complies
      with
      clauses (a)(2) and (3) of this paragraph as evidenced by a Board
      Resolution promptly delivered to the Trustee, and 

     

    (c) if
      such Affiliate Transaction involves aggregate payments or value in excess of
      $5.0 million, the Company obtains a written opinion from an Independent
      Financial Advisor to the effect that the consideration to be paid or received
      in
      connection with such Affiliate Transaction is fair, from a financial point
      of
      view, to the Company and its Subsidiaries.

     

    Notwithstanding
      the foregoing limitation, the Company or any of its Subsidiaries may enter
      into
      or suffer to exist the following:

     

    (a)
      any
      transaction or series of transactions between the Company and one or more of
      its
      Subsidiaries or between two or more of its Subsidiaries in the ordinary course
      of business, provided
      that no
      more than 5% of the total voting power of the Voting Stock (on a fully diluted
      basis) of any such Subsidiary is owned by an Affiliate of the Company (other
      than any Subsidiary of the Company);

     

    (b) any
      Restricted Payment permitted to be made pursuant to Section
      4.10
      or any
      Permitted Investment;

     

    (c) the
      payment of compensation (including amounts paid pursuant to employee benefit
      plans) for the personal services of officers, directors and employees of the
      Company or any of its Subsidiaries, so long as the Board of Directors in good
      faith shall have approved the terms thereof and deemed the services theretofore
      or thereafter to be performed for such compensation to be fair consideration
      therefor; 

     

    (d)
      loans
      and advances to employees made in the ordinary course of business and consistent
      with the past practices of the Company or such Subsidiary, as the case may
      be,
provided
      that
      such
      loans and advances do not exceed $300,000 in the aggregate at any one time
      outstanding; provided,
      however,
      that
      the Company and its Subsidiaries shall comply in all material respects with
      all
      provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
      promulgated in connection therewith that would be applicable to an issuer with
      debt securities registered under the Securities Act relating to such loans
      and
      advances; and

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    

     

    (e)
      the
      following agreements in effect on the Issue Date and any modifications,
      extensions or renewals thereto that are no less favorable to the Company or
      any
      of its Subsidiaries than such agreements as in effect on the Issue Date,
      namely:- 

     

    (1) that
      certain Promissory Note made by the Company to Mr. FU Li dated September 20,
      2006; 

     

    (2) the
      agreements pursuant to which Dalian Fushi on-lends to the WFOE its borrowings
      pursuant to its revolving line of credit with Bank of China and on the same
      terms and conditions as such borrowings are made from the Bank of China;
      and

     

    (3) the
      Restructuring Agreements.

     

    Section
      4.15. Issuance
      or Sale of Capital Stock of Subsidiaries.

     

    The
      Company shall not:

     

    (a) sell,
      pledge, hypothecate or otherwise dispose of any shares of Capital Stock of
      any
      of its Subsidiaries, or 

     

    (b) permit
      any Subsidiary of the Company to, directly or indirectly, issue or sell or
      otherwise dispose of any shares of its Capital Stock, 

     

    other
      than, in the case of either (a) or (b):

     

    (1) directors’
      qualifying shares, 

     

    (2) to
      the Company or a Wholly Owned Subsidiary, or

     

    (3) a
      disposition of 100% of the shares of Capital Stock of such Subsidiary;
provided,
      however,
      that, in
      the case of this clause (3),

     

    (A) such
      disposition is effected in compliance with Section
      4.12,
      and

     

    (B)
      upon
      consummation of such disposition and execution and delivery of a supplemental
      indenture in form satisfactory to the Trustee, such Subsidiary shall be released
      from any Guarantee previously made by such Subsidiary.

     

    Section
      4.16. Maintenance
      of Consolidated Tangible Net Worth.

     

    The
      Company shall not, on the Issue Date (after giving effect to the issuance of
      the
      Notes) or at the end of any Fiscal Quarter thereafter, permit its Consolidated
      Tangible Net Worth to be less than the Consolidated Tangible Net Worth
      Threshold. The “Consolidated Tangible Net Worth Threshold” shall be equal to
      $25.0 million from the Issue Date until the first annual anniversary thereof,
      and at each annual anniversary of the Issue Date shall increase by an amount
      equal to $10.0 million.

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    

     

    Section
      4.17. Repurchase
      at the Option of Holders Following a Change of Control.

     

    (a) Upon
      the
      occurrence of a Change of Control, the Company shall, within 7 days thereafter
      notify the Trustee and the Holders of such Change of Control, and within 30
      days
      of a Change of Control, make an offer (the “Change
      of Control Offer”)
      pursuant to the procedures set forth in Section
      3.07.
      Each
      Holder shall have the right to accept such offer and require the Company to
      repurchase all or any portion (equal to $100,000 or an integral multiple
      thereof) of such Holder’s Notes pursuant to the Change of Control Offer at a
      purchase price, in cash equal to 102% of the aggregate principal amount of
      Notes
      repurchased, plus accrued and unpaid interest on the Notes repurchased, to
      the
      Purchase Date.

     

    (b) The
      Company shall not be required to make a Change of Control Offer following a
      Change of Control if a third party makes the Change of Control Offer in the
      manner, at the times and otherwise in compliance with the requirements set
      forth
      in this Indenture applicable to a Change of Control Offer made by the Company
      and purchases all Notes properly tendered and not withdrawn under such Change
      of
      Control Offer.

     

    Section
      4.18. Future
      Guarantors.

     

    The
      Company shall cause each Person that becomes a Domestic Subsidiary following
      the
      Issue Date to execute and deliver to the Trustee a Guarantee at the time such
      Person becomes a Domestic Subsidiary.

     

    Section
      4.19. Business
      Activities.

     

    The
      Company shall not, and the Company shall not permit any of its Subsidiaries
      to,
      directly or indirectly, engage in any business other than a Related
      Business.

     

    Section
      4.20. Sale
      and Leaseback Transactions.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, enter into
      any Sale and Leaseback Transaction with respect to any Property
      unless:

     

    (a) the
      Company or such Subsidiary would be entitled to:

     

    (1) Incur
      Debt in an amount equal to the Attributable Debt with respect to such Sale
      and
      Leaseback Transaction pursuant to Section
      4.09
      and

     

    (2) create
      a Lien on such Property securing such Attributable Debt without also securing
      the Notes or the applicable Guarantee pursuant
      to Section
      4.11
      and

     

    (b) such
      Sale and Leaseback Transaction is effected in compliance with Section
      4.12.

     

    Section
      4.21. Impairment
      of Security Interest.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, take or
      omit
      to take any action that might or would have the result of materially impairing
      the security interest with respect to the Collateral for the benefit of the
      Trustee and the holders of the Notes, and the Company shall not, and shall
      not
      permit any of its Subsidiaries to, grant to any Person other than the Collateral
      Agent, for the benefit of the Trustee, the holders of the Notes, the trustee
      for
      the Convertible Notes, the holders of the Convertible Notes and the other
      beneficiaries described in the Security Documents, any interest whatsoever
      in
      any of the Collateral.

     

    Section
      4.22. Amendments
      to Security Documents.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, amend,
      waive
      or otherwise modify, or permit or consent to any amendment, waiver or other
      modification, the Security Documents in any way that would be adverse to the
      holders of the Notes.

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    

     

    Section
      4.23. Use
      of Proceeds.

     

    The
      Company will not use the net proceeds from the sale of the Notes, in any amount,
      for any purpose other than to for Capital Expenditures, in particular, the
      installation of additional production lines, acquisitions, working capital
      and
      general corporate purposes, all in accordance with and subject to the Escrow
      Agreement, and pending the application of all of such net proceeds in such
      manner, to invest the portion of such net proceeds not yet so applied in Cash
      Equivalents. Following the application of net proceeds in such manner, any
      remaining net proceeds may be applied for general corporate purposes not
      otherwise prohibited by the terms of this Indenture.

     

    Section
      4.24. Maintenance
      of Insurance.

     

    The
      Company shall, and shall cause its Subsidiaries to, maintain insurance policies
      covering such risks, in such amounts and with such terms as are normally carried
      by similar companies engaged in a similar business to the Related Business
      in
      the PRC.

     

    Section
      4.25. Qualifying
      IPO.

     

    The
      Company shall make such filings, registrations or qualifications and take all
      other necessary action and will use its best efforts to obtain such consents,
      approvals and authorizations, if any, and satisfy all conditions that may be
      required in connection with listing the Company’s common stock in a Qualifying
      IPO and shall use its best efforts to complete a Qualifying IPO by no later
      than
      July 24, 2008 and maintain such listing continuously thereafter.

     

    Upon
      the
      completion of a Qualifying IPO, the Company shall promptly, but in no event
      later than three (3) Business Days after the initial receipt of funds in
      connection with the sale of Common Stock pursuant to the Qualifying IPO, provide
      written notice to the Trustee and the Holders of such event and of the change
      of
      the Margin to 5.60% effective as of such date of receipt of funds.

     

    Section
      4.26. Repurchase
      Upon Designated Event.

     

    Upon
      the
      occurrence of a Designated Event, the Company shall, within 7 days thereafter
      notify the Trustee and the Holders of such Designated Event, and within 30
      days
      of a Designated Event, make an offer (the “Designated
      Event Offer”)
      pursuant to the procedures set forth in Section
      3.07.
      Each
      Holder shall have the right to accept such offer and require the Company to
      repurchase all or any portion (equal to $100,000 or an integral multiple of
      $100,000) of such Holder’s Notes pursuant to the Designated Event Offer at a
      purchase price, in cash equal to 110% of the aggregate principal amount of
      Notes
      repurchased, plus accrued and unpaid interest on the Notes repurchased, to
      the
      Purchase Date.

     

    Section
      4.27. Government
      Approvals and Licenses; Compliance with Law.

     

    The
      Company shall, and shall cause its Subsidiaries to, (a) obtain and maintain
      in
      full force and effect all Governmental Approvals, authorizations, consents,
      permits, concessions and licenses as are necessary to engage in a Related
      Business, (b) preserve and maintain good and valid title to its properties
      and
      assets (including land-use rights) free and clear of any Liens other than
      Permitted Liens and (c) comply with all laws, regulations, orders, judgments
      and
      decrees of any governmental body, except to the extent that failure so to
      obtain, maintain, preserve and comply would reasonably be expected to have
      a
      material adverse effect on (1) the business, results of operations or prospects
      of the Company and its Subsidiaries taken as a whole or (2) the ability of
      the
      Company or any Guarantor to perform its obligations under the Notes, the
      relevant Guarantee of the Notes or this Indenture.

     

    Section
      4.28. Minimum
      Fixed Charge Coverage Ratio and Leverage Ratio.

     

    The
      Company shall maintain: 

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

    

     

    (a) a
      Fixed
      Charge Coverage Ratio, as determined as of the last day of each Fiscal Quarter,
      for the four Fiscal Quarters ending on such day, of at least 2.0 to
      1.00.

     

    (b) a
      Leverage Ratio, as determined as of the last day of each Fiscal Quarter, for
      the
      four Fiscal Quarters ending on such day, not exceeding 5.5 to 1.00 from the
      Issue Date through December 31, 2007, and 5.0 to 1.00 thereafter.

     

    Section
      4.29. Notes
      to Rank Senior.

     

    The
      Notes
      and all other obligations of the Company and the Guarantors under this Indenture
      are and at all times shall remain direct and first-priority secured obligations
      of the Company and each Guarantor ranking pari
      passu
      as
      against the assets of the Company and each Guarantor with (a) all other Notes
      from time to time issued and outstanding hereunder and (b) the Convertible
      Notes
      and the Convertible Note Guarantees, without any preference among themselves
      and
      senior in right and priority of payment to all other present and future
      unsecured Indebtedness (actual or contingent) of the Company and each Guarantor
      (except as otherwise required by law).

     

    Section
      4.30. Calculation
      of Original Issue Discount.

     

    The
      Company shall file with the Trustee, solely for purposes of making such
      information available to the Holders upon request, promptly at the end of each
      calendar year (i) a written notice specifying the amount of Tax Original
      Issue Discount (including daily rates and accrual periods) accrued on
      outstanding Notes as of the end of such year and (ii) such other specific
      information relating to such Tax Original Issue Discount as may then be required
      under the Code, or the Treasury regulations promulgated thereunder.

     

    ARTICLE
      5.

     

    SUCCESSORS

     

    Section
      5.01. Merger,
      Consolidation and Sale of Assets.

     

    (a) The
      Company shall not merge, consolidate or amalgamate with or into any other Person
      (other than a merger of a Wholly Owned Subsidiary into the Company) or sell,
      transfer, assign, lease, convey or otherwise dispose of all or substantially
      all
      of its Property in any one transaction or series of transactions unless:

     

    (i) the
      Company shall be the Surviving Person in such merger, consolidation or
      amalgamation, or the Surviving Person (if other than the Company) formed by
      such
      merger, consolidation or amalgamation or to which such sale, transfer,
      assignment, lease, conveyance or disposition is made shall be a corporation
      organized and existing under the laws of the United States of America, any
      State
      thereof or the District of Columbia;

     

    (ii) the
      Surviving Person (if other than the Company) expressly assumes, by supplemental
      indenture in form satisfactory to the Trustee, executed and delivered to the
      Trustee by such Surviving Person, the due and punctual payment of the principal
      of, and premium, if any, and interest on, all the Notes, according to their
      tenor, and the due and punctual performance and observance of all the covenants
      and conditions of this Indenture to be performed by the Company; 

     

    (iii) in
      the
      case of a sale, transfer, assignment, lease, conveyance or other disposition
      of
      all or substantially all the Property of the Company, such Property shall have
      been transferred as an entirety or virtually as an entirety to one Person;
      

     

    (iv) immediately
      before and after giving effect to such transaction or series of transactions
      on
      a pro forma basis (and treating, for purposes of this clause (iv) and
      clauses (v) and (vi) below, any Debt that becomes, or is anticipated to
      become, an obligation of the Surviving Person or any Subsidiary of the Company
      as a result of such transaction or series of transactions as having been
      Incurred by the Surviving Person or such Subsidiary at the time of such
      transaction or series of transactions), no Default or Event of Default shall
      have occurred and be continuing; 

     

    
      
        
        

      

      
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    (v) immediately
      after giving effect to such transaction or series of transactions on a pro
      forma
      basis: 

     

    (1) the
      Company or the Surviving Person, as the case may be, would be able to Incur
      at
      least $1.00 of additional Debt under clause (1) of Section
      4.09;
      and

     

    (2) the
      Company or the Surviving Person, as the case may be, would have a Fixed Charge
      Coverage Ratio that is not lower than the Fixed Charge Coverage Ratio of the
      Company immediately prior to such transaction; 

     

    (vi) immediately
      after giving effect to such transaction or series of transactions on a pro
      forma
      basis, the Surviving Person shall have a Consolidated Net Worth in an amount
      which is not less than the Consolidated Net Worth of the Company immediately
      prior to such transaction or series of transactions;

     

    (vii) the
      Company shall deliver, or cause to be delivered, to the Trustee, an Officers’
Certificate and an Opinion of Counsel, each stating that such transaction or
      series of transactions and the supplemental indenture, if any, in respect
      thereto comply with this covenant and that all conditions precedent herein
      provided for relating to such transaction or series of transactions have been
      satisfied; and

     

    (viii) the
      Company shall have delivered to the Trustee an Opinion of Counsel to the effect
      that the holders will not recognize income, gain or loss for federal income
      tax
      purposes as a result of such transaction and will be subject to federal income
      tax on the same amounts, in the same manner and at the same times as would
      have
      been the case if such transaction had not occurred.

     

    The
      foregoing provisions (other than clause (iv)) shall not apply to any
      transaction or series of transactions which constitute an Asset Sale if the
      Company has complied with Section
      4.12.

     

    (b) The
      Company shall not permit any Guarantor to merge, consolidate or amalgamate
      with
      or into any other Person (other than a merger of a Wholly Owned Subsidiary
      into
      the Company or such Guarantor) or sell, transfer, assign, lease, convey or
      otherwise dispose of all or substantially all its Property in any one
      transaction or series of transactions unless:

     

    (i) the
      Surviving Person (if not such Guarantor) formed by such merger, consolidation
      or
      amalgamation or to which such sale, transfer, assignment, lease, conveyance
      or
      disposition is made shall be a corporation, company (including a limited
      liability company) or partnership organized and existing under the laws of
      the
      United States of America, any State thereof or the District of Columbia;

     

    (ii) the
      Surviving Person (if other than such Guarantor) expressly assumes, by
      supplemental indenture in form satisfactory to the Trustee, executed and
      delivered to the Trustee by such Surviving Person, the due and punctual
      performance and observance of all the obligations of such Guarantor under its
      Guarantee; 

     

    (iii) in
      the
      case of a sale, transfer, assignment, lease, conveyance or other disposition
      of
      all or substantially all the Property of such Guarantor, such Property shall
      have been transferred as an entirety or virtually as an entirety to one Person;
      

     

    (iv) immediately
      before and after giving effect to such transaction or series of transactions
      on
      a pro forma basis (and treating, for purposes of this clause (iv) and
      clauses (v) and (vi) below, any Debt that becomes, or is anticipated to
      become, an obligation of the Surviving Person, the Company or any of its
      Subsidiaries as a result of such transaction or series of transactions as having
      been Incurred by the Surviving Person, the Company or such Subsidiary at the
      time of such transaction or series of transactions), no Default or Event of
      Default shall have occurred and be continuing; 

     

    
      
        
        

      

      
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    (v) immediately
      after giving effect to such transaction or series of transactions on a pro
      forma
      basis:

     

    (1) the
      Company would be able to Incur at least $1.00 of additional Debt under
      clause (1) of the first paragraph of Section
      4.09
      , and

     

    (2) the
      Company would have a Fixed Charge Coverage Ratio which is not lower than the
      Fixed Charge Coverage Ratio of the Company immediately prior to such
      transaction; and

     

    (vi) immediately
      after giving effect to such transaction or series of transactions on a pro
      forma
      basis, the Company shall have a Consolidated Net Worth in an amount which is
      not
      less than the Consolidated Net Worth of the Company immediately prior to such
      transaction or series of transactions;

     

    (vii) the
      Company shall deliver, or cause to be delivered, to the Trustee, an Officers’
Certificate and an Opinion of Counsel, each stating that such transaction or
      series of transactions and the supplemental indenture, if any, in respect
      thereto comply with this covenant and that all conditions precedent herein
      provided for relating to such transaction or series of transactions have been
      satisfied; and

     

    (viii) the
      Company shall have delivered to the Trustee an Opinion of Counsel to the effect
      that the holders will not recognize income, gain or loss for federal income
      tax
      purposes as a result of such transaction and will be subject to federal income
      tax on the same amounts, in the same manner and at the same times as would
      have
      been the case if such transaction had not occurred.

     

    The
      foregoing provisions (other than clause (iv)) shall not apply to any
      transaction or series of transactions which constitute an Asset Sale if the
      Company has complied with Section
      4.12.

     

    Section
      5.02. Successor
      Corporation Substituted.

     

    The
      Surviving Person shall succeed to, and be substituted for, and may exercise
      every right and power of the Company or a Guarantor, as applicable, under this
      Indenture; provided,
      however,
      that
      the predecessor entity shall not be released from any of the obligations or
      covenants under this Indenture, including with respect to the payment of the
      Notes and obligations under the Guarantee, as the case may be, in the case
      of:

     

    (a) a
      sale,
      transfer, assignment, conveyance or other disposition (unless such sale,
      transfer, assignment, conveyance or other disposition is of all or substantially
      all of the assets of the Company, taken as a whole or, in the case of a
      Guarantor, such sale, transfer, assignment, conveyance or other disposition
      is
      of all or substantially all of the assets of such Guarantor to a Person that
      is
      not (either before or after giving effect to such transaction) a Subsidiary
      of
      the Company, or such portion of the Capital Stock of such Guarantor ceases
      to be
      a Subsidiary of the Company), or

     

    (b) a
      lease.

     

    ARTICLE
      6.

     

    DEFAULTS
      AND REMEDIES

     

    Section
      6.01. Events
      of Default.

     

    Each
      of
      the following constitutes an “Event of Default” with respect to the
      Notes:

     

    (a) failure
      to make the payment of any interest on the Notes when the same becomes due
      and
      payable, and such failure continues for a period of 15 days; 

     

    (b) failure
      to make the payment of any principal of, or premium, if any, on, any of the
      Notes when the same becomes due and payable at its Stated Maturity, upon
      acceleration, mandatory redemption, optional redemption, required repurchase
      or
      otherwise, including payment of Additional Amounts pursuant to Section
      4.01;
      

     

    
      
        
        

      

      
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    (c) failure
      to comply with Section
      5.01;

     

    (d) failure
      to comply with any other covenant or agreement in the Notes or in this Indenture
      (other than a failure that is the subject of the foregoing clause (a), (b)
      or (c), and other than the failure to comply with Section
      4.25,
      for
      which payment of Additional Amounts is provided for hereunder and is governed
      by
Section
      4.01),
      and
      such failure continues for 30 days after written notice is given to the Company
      by the Trustee or the holders of not less than 25% in aggregate principal amount
      of the Notes then outstanding specifying the default, demanding that it be
      remedied and stating that such notice is a “Notice of Default;” 

     

    (e) a
      default
      under any Debt by the Company or any of its Subsidiaries that results in
      acceleration of the maturity of such Debt, or failure to pay any such Debt
      when
      due, in an aggregate amount greater than $3.0 million or its foreign currency
      equivalent at the time;

     

    (f) any
      legal
      proceedings in respect of, or judgment or judgments for, the payment of money
      in
      an aggregate amount potentially in excess of $1.0 million (or its foreign
      currency equivalent at the time) that shall be instituted or rendered against
      the Company or any of its Subsidiaries; 

     

    (g) any
      Guarantee ceases to be in full force and effect (other than in accordance with
      the terms of such Guarantee) or any Guarantor or a group of Guarantors that,
      taken as a whole, would constitute a Significant Subsidiary denies or disaffirms
      its obligations under its Guarantee;

     

    (h) the
      Company, any of its Significant Subsidiaries (or any group of Subsidiaries
      that,
      when taken together, would constitute a Significant Subsidiary) pursuant to
      or
      within the meaning of any Bankruptcy Law:

     

    (A) commences
      a voluntary case or gives notice of intention to make a proposal under any
      Bankruptcy Law;

     

    (B) consents
      to the entry of an order for relief against it in an involuntary case or
      consents to its dissolution or winding up;

     

    (C) consents
      to the appointment of a receiver, interim receiver, receiver and manager,
      liquidator, trustee or custodian of it or for all or substantially all of its
      property;

     

    (D) makes
      a
      general assignment for the benefit of its creditors; or

     

    (E) admits
      in
      writing its inability to pay its debts as they become due or otherwise admits
      its insolvency; 

     

    (i) a
      court
      of competent jurisdiction enters an order or decree under any Bankruptcy Law
      that:

     

    (A) is
      for
      relief against the Company, any of its Significant Subsidiaries (or any group
      of
      Subsidiaries that, when taken together, would constitute a Significant
      Subsidiary) in an involuntary case; or

     

    (B) appoints
      a receiver, interim receiver, receiver and manager, liquidator, trustee or
      custodian of the Company, any of its Significant Subsidiaries (or any group
      of
      Subsidiaries that, when taken together, would constitute a Significant
      Subsidiary) for all or substantially all of the property of the Company, any
      of
      its Significant Subsidiaries (or any group of Subsidiaries that, when taken
      together, would constitute a Significant Subsidiary); or

     

    
      
        
        

      

      
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    (C) orders
      the liquidation of the Company, any of its Significant Subsidiaries (or any
      group of Subsidiaries that, when taken together, would constitute a Significant
      Subsidiary);

     

    and
      such
      order or decree remains unstayed and in effect for 60 consecutive
      days;

     

    (j) any
      default by the Company or Future Guarantor Pledgor in any of its obligations
      under the Security Documents, which adversely affects the enforceability,
      validity, perfection or priority of the applicable Lien on the Collateral or
      which adversely affects the condition or value of the Collateral, taken as
      a
      whole, in any material respect; the security interest under the Security
      Documents shall, at any time, cease to be in full force and effect for any
      reason other than the satisfaction in full of all obligations under the
      Indenture and discharge of the Indenture or any security interest created
      thereunder shall be declared invalid or unenforceable or the Company or any
      Guarantor shall assert, in any pleading in any court of competent jurisdiction,
      that any such security interest is invalid or unenforceable;

     

    (k)
      the
      Company or any Future Guarantor Pledgor denies or disaffirms its obligations
      under any Security Document or, other than in accordance with this Indenture
      and
      the Security Documents, any Security Document ceases to be or is not in full
      force and effect or the Trustee ceases to have a first priority interest in
      the
      Collateral;

     

    (l)
      the
      Company, the WFOE or Dalian Fushi amends or modifies their respective
      constitutive documents in such a manner that would have a Material Adverse
      Effect or engages any business other than a Related Business;

     

    (m)
      either (i) any Restructuring Agreement (or all Restructuring Agreements
      considered as a whole), the Indenture, the Notes, any loan made directly or
      indirectly from the Company to the WFOE, or any Security Document shall be
      (A)
      declared by any Governmental Authority to be illegal or enforceable or (B)
      terminated prior to its scheduled termination date, or (ii) any party to a
      Restructuring Agreement shall deny that it has any liability or obligation
      under
      any such Restructuring Agreement to which it is a party and such party shall
      have ceased performance thereunder prior to its scheduled expiration date;
      

     

    (n)(i)
      the confiscation, expropriation or nationalization by any Governmental Authority
      of any Property of the Company or any of its Subsidiaries or their respective
      interests in any Restructuring Agreement (or all Restructuring Agreements
      considered as a whole); or (ii) the cancellation, or material and substantially
      adverse modification, of the rights of the WFOE pursuant to the Restructuring
      Agreements, or (iii) if such revocation or repudiation could reasonably be
      expected to have a Material Adverse Effect, the revocation or repudiation by
      any
      Governmental Authority of any previously granted Governmental Approval to Dalian
      Fushi or the WFOE that is material to the operation of the Related Business;
      or
      (iv) the imposition or introduction of material and discriminatory taxes,
      tariffs, royalties, customs or excise duties imposed on Dalian Fushi or the
      WFOE, or the material and discriminatory withdrawal or suspension of material
      privileges or specifically granted material rights of a fiscal nature;

     

    (o)
      failure by the Company or any Affiliate thereof (other than any Person who
      is an
      Affiliate solely because such Person is a holder of Notes or Convertible Notes)
      to comply with any of the agreements in that certain Investor Rights Agreement
      dated the Issue Date by and among the Company, the WFOE, Dalian Fushi, certain
      Affiliates of the Company and the other Persons therein named if such failure
      continues for 30 days after written notice is given to the Company by the
      Trustee or the holders of not less than 25% in aggregate principal amount of
      the
      Notes then outstanding specifying the default, demanding that it be remedied
      and
      stating that such notice is a “Notice of Default;” or

     

    (p)
      failure by the Company to comply with the Escrow Agreement if such failure
      continues for 30 days after written notice is given to the Company by the
      Trustee or the holders of not less than 25% in aggregate principal amount of
      the
      Notes then outstanding specifying the default, demanding that it be remedied
      and
      stating that such notice is a “Notice of Default.” 

     

    
      
        
        

      

      
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    Section
      6.02. Acceleration.

     

    If
      any
      Event of Default (other than those of the type described in Section
      6.01(h)
      or
(i),
      or
      resulting from a breach of Section
      4.25,
      for
      which Additional Amounts are provided) occurs and is continuing, the Trustee
      may, and the Trustee upon the request of Holders of 25% in principal amount
      of
      the outstanding Notes shall, or the Holders of at least 25% in principal amount
      of outstanding Notes may, declare the principal of all the Notes, together
      with
      all accrued and unpaid interest, premium, if any, to be due and payable by
      notice in writing to the Company and the Trustee specifying the respective
      Event
      of Default and that such notice is a notice of acceleration (the “Acceleration
      Notice”),
      and
      the same shall become immediately due and payable.

     

    In
      the
      case of an Event of Default specified in Section
      6.01 (h)
      or
(i)
      hereof,
      all outstanding Notes shall become due and payable immediately without any
      further declaration or other act on the part of the Trustee or the Holders.
      Holders may not enforce this Indenture or the Notes except as provided in this
      Indenture. 

     

    In
      the
      case of an Event of Default with respect to the Notes occurring by reason of
      any
      willful action or inaction taken or not taken by the Company or on the Company’s
      behalf with the intention or effect of avoiding payment of the premium that
      the
      Company would have been required to pay if the Company had then elected to
      redeem the Notes pursuant to Section
      3.05
      hereof,
      an equivalent premium shall also become and be immediately due and payable
      to
      the extent permitted by law upon the acceleration of the Notes. If an Event
      of
      Default occurs prior to January 24, 2011 by reason of any willful action or
      inaction taken or not taken by the Company or on the Company’s behalf with the
      intention of avoiding the premium required upon a redemption of the Notes under
      Section
      3.05,
      then
      the premium specified in Section
      3.05
      shall
      also become immediately due and payable to the extent permitted by law upon
      acceleration of the Notes.

     

    Section
      6.03. Other
      Remedies.

     

    If
      an
      Event of Default occurs and is continuing, the Trustee may pursue any available
      remedy to collect the payment of principal, premium, if any, and interest on
      the
      Notes or to enforce the performance of any provision of the Notes or this
      Indenture.

     

    The
      Trustee may maintain a proceeding even if it does not possess any of the Notes
      or does not produce any of them in the proceeding.  A delay or omission by
      the Trustee or any Holder in exercising any right or remedy accruing upon an
      Event of Default shall not impair the right or remedy or constitute a waiver
      of
      or acquiescence in the Event of Default. All remedies shall be cumulative to
      the
      extent permitted by law.

     

    Section
      6.04. Waiver
      of Defaults.

     

    The
      Holders of a majority in aggregate principal amount of the Notes then
      outstanding by notice to the Trustee may on behalf of the Holders of all of
      the
      Notes, waive any existing Default or Event of Default, and its consequences,
      except a continuing Default or Event of Default (i) in the payment of the
      principal of, premium, if any, or interest, on the Notes and (ii) in respect
      of
      a covenant or provision which under this Indenture cannot be modified or amended
      without the consent of the Holder of each Note affected by such modification
      or
      amendment. In the event of any Event of Default specified in Section
      6.01(e),
      such
      Event of Default and all consequences of that Event of Default, including
      without limitation any acceleration or resulting payment default, shall be
      annulled, waived and rescinded, automatically and without any action by the
      Trustee or the Holders of the Notes, if within 60 days after the Event of
      Default arose:

     

    (a) the
      Debt
      that is the basis for the Event of Default has been discharged;

     

    (b) the
      holders of such Debt have rescinded or waived the acceleration, notice or
      action, as the case may be, giving rise to the Event of Default; or

     

    (c) if
      the
      default that is the basis for such Event of Default has been cured.

     

    
      
        
        

      

      
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    Upon
      any
      waiver of a Default or Event of Default, such Default shall cease to exist,
      and
      any Event of Default arising therefrom shall be deemed cured for every purpose
      of this Indenture but no such waiver shall extend to any subsequent or other
      Default or Event of Default or impair any right consequent thereon.

     

    Section
      6.05. Control
      by Majority.

     

    Subject
      to Section
      7.01,
      Section
      7.02(f)
      (including the Trustee’s receipt of the security or indemnification described
      therein) and Section
      7.07
      hereof,
      in case an Event of Default shall occur and be continuing, the Holders of a
      majority in aggregate principal amount of the Notes then outstanding shall
      have
      the right to direct the time, method and place of conducting any proceeding
      for
      any remedy available to the Trustee or exercising any trust or power conferred
      on the Trustee with respect to the Notes.

     

    Section
      6.06. Limitation
      on Suits.

     

    No
      Holder
      shall have any right to institute any proceeding with respect to this Indenture,
      or for the appointment of a receiver or trustee, or for any remedy thereunder,
      unless:

     

    (a) such
      Holder has previously given to the Trustee written notice of a continuing Event
      of Default or the Trustee receives the notice from the Company,

     

    (b) Holders
      of at least 25% in aggregate principal amount of the Notes then outstanding
      have
      made written request to the Trustee to institute such proceeding as trustee
      and
      have provided the Trustee security or indemnity satisfactory to the Trustee
      against any loss, liability or expense but the Trustee has not complied with
      such request within 60 days after the receipt of the request and the
      security or indemnity satisfactory to the Trustee, and

     

    (c) the
      Trustee shall not have received from the Holders of a majority in aggregate
      principal amount of the Notes then outstanding a direction inconsistent with
      such request and shall have failed to institute such proceeding within 60
      days.

     

    The
      preceding limitations shall not apply to a suit instituted by a Holder for
      enforcement of payment of principal of, and premium, if any, or interest on,
      a
      Note on or after the respective due dates for such payments set forth in such
      Note.

     

    A
      Holder
      may not use this Indenture to affect, disturb or prejudice the rights of another
      Holder or to obtain a preference or priority over another Holder.

     

    Section
      6.07. Rights
      of Holders to Receive Payment.

     

    Notwithstanding
      any other provision of this Indenture (including Section
      6.06),
      the
      right of any Holder to receive payment of principal, premium, if any, and
      interest on the Notes held by such Holder, on or after the respective due dates
      expressed in the Notes (including in connection with an offer to purchase),
      or
      to bring suit for the enforcement of any such payment on or after such
      respective dates, shall not be impaired or affected without the consent of
      such
      Holder.

     

    Section
      6.08. Collection
      Suit by Trustee.

     

    If
      an
      Event of Default specified in Section
      6.01 (h)
      or
(i)
      occurs
      and is continuing, the Trustee is authorized to recover judgment in its own
      name
      and as trustee of an express trust against the Company for the whole amount
      of
      principal of, premium, if any, and interest then due and owing (together with
      interest on overdue principal and, to the extent lawful, interest) and such
      further amount as shall be sufficient to cover the costs and expenses of
      collection, including the compensation, expenses, disbursements and advances
      of
      the Trustee, its agents and counsel.

     

    
      
        
        

      

      
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    Section
      6.09. Trustee
      May File Proofs of Claim.

     

    The
      Trustee shall be authorized to file such proofs of claim and other papers or
      documents as may be necessary or advisable in order to have the claims of the
      Trustee (including any claim for the compensation, expenses, disbursements
      and
      advances of the Trustee, its agents and counsel) and the Holders allowed in
      any
      judicial proceedings relative to the Company (or any other obligor upon the
      Notes), its creditors or its property and shall be entitled and empowered to
      collect, receive and distribute any money or other property payable or
      deliverable on any such claims and any custodian in any such judicial proceeding
      is hereby authorized by each Holder to make such payments to the Trustee, and
      in
      the event that the Trustee shall consent to the making of such payments directly
      to the Holders, to pay to the Trustee any amount due to it for the compensation,
      expenses, disbursements and advances of the Trustee, its agents and counsel,
      and
      any other amounts due the Trustee under Section
      7.07
      hereof.
      To the extent that the payment of any such compensation, expenses, disbursements
      and advances of the Trustee and its agents and counsel, and any other amounts
      due the Trustee under Section
      7.07
      hereof
      out of the estate in any such proceeding, shall be denied for any reason,
      payment of the same shall be secured by a Lien on, and shall be paid out of,
      any
      and all distributions, moneys, securities and any other properties that the
      Holders may be entitled to receive in such proceeding whether in liquidation
      or
      under any plan of reorganization or arrangement or otherwise. Nothing herein
      contained shall be deemed to authorize the Trustee to authorize or consent
      to or
      accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
      adjustment or composition affecting the Notes or the rights of any Holder,
      or to
      authorize the Trustee to vote in respect of the claim of any Holder in any
      such
      proceeding.

     

    Section
      6.10. Priorities.

     

    If
      the
      Trustee collects any money pursuant to this Article
      6,
      it
      shall pay out the money in the following order:

     

    First:
      to the
      Trustee, its agents and attorneys for amounts due under Section
      7.07
      hereof,
      including payment of all compensation, expenses and liabilities incurred, and
      all advances made, by the Trustee and the costs and expenses of collection
      in
      connection with this Indenture, the Security Documents or the Notes, including
      the collection or distribution of such amounts held or realized or in connection
      with expenses incurred in enforcing its remedies under the Security Documents
      and preserving the Collateral and all amounts for which the Trustee is entitled
      to indemnification under the Security Documents;

     

    Second:
      in
      case
      the principal of the outstanding Notes shall not have become due and be unpaid,
      to the payment of Interest on the Notes in default in the order of the maturity
      of the installments of such Interest, with interest (to the extent that such
      interest has been collected by the Trustee) upon the overdue installments of
      Interest at the rate specified in the Notes, such payments to be made ratably
      to
      the Persons entitled thereto and pari
      passu
      with all
      such similar amounts due and payable to the holders of the Company’s Convertible
      Notes;

     

    Third:
      in case
      the principal of the outstanding Notes shall have become due, by declaration
      or
      otherwise, and be unpaid to the payment of the whole amount then owing and
      unpaid upon the Notes for principal and Interest, with Interest on the overdue
      principal and (to the extent that such Interest has been collected by the
      Trustee) upon overdue installments of Interest at the rate specified in the
      Notes, and in case such monies shall be insufficient to pay in full the whole
      amounts so due and unpaid upon the Notes, then to the payment of such principal
      and Interest without preference or priority of principal over Interest, or
      of
      Interest over principal, or of any installment of Interest over any other
      installment of Interest, or of any Note over any other Note, ratably to the
      aggregate of such principal and accrued and unpaid Interest, and in all cases
      pari
      passu
      with all
      such similar amounts due and payable to the holders of the Company’s Convertible
      Notes; and

     

    Fourth:
      to the
      Company or the Guarantors or to such party as a court of competent jurisdiction
      shall direct.

     

    The
      Trustee may fix a record date and payment date for any payment to Holders
      pursuant to this Section.

     

    
      
        
        

      

      
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    Section
      6.11. Undertaking
      for Costs.

     

    In
      any
      suit for the enforcement of any right or remedy under this Indenture or in
      any
      suit against the Trustee for any action taken or omitted by it as a Trustee,
      a
      court in its discretion may require the filing by any party litigant in such
      suit of an undertaking to pay the costs of such suit, and the court in its
      discretion may assess reasonable costs, including reasonable attorneys’ fees,
      against any party litigant in such suit, having due regard to the merits and
      good faith of the claims or defenses made by the party litigant.  This
      Section shall not apply to a suit by the Trustee, a suit by the Company, a
      suit
      by a Holder pursuant to Section
      6.07
      hereof,
      or a suit by Holders of more than 10% in principal amount of the then
      outstanding Notes.

     

    ARTICLE
      7.

     

    TRUSTEE

     

    Section
      7.01. Duties
      of Trustee.

     

    (a) If
      an
      Event of Default has occurred and is continuing, the Trustee shall exercise
      such
      of the rights and powers vested in it by this Indenture, and use the same degree
      of care and skill in its exercise, as a prudent Person would exercise or use
      under the circumstances in the conduct of such Person’s own
      affairs.

     

    (b) Except
      during the continuance of an Event of Default:

     

    (1) the
      duties of the Trustee shall be determined solely by the express provisions
      of
      this Indenture and the Trustee need perform only those duties that are
      specifically set forth in this Indenture and no others, and no implied covenants
      or obligations shall be read into this Indenture against the Trustee;
      and

     

    (2) in
      the
      absence of bad faith on its part, the Trustee may conclusively rely, as to
      the
      truth of the statements and the correctness of the opinions expressed therein,
      upon certificates or opinions furnished to the Trustee and conforming to the
      requirements of this Indenture.  However, with respect to certificates or
      opinions specifically required to be furnished to it hereunder, the Trustee
      shall examine the certificates and opinions to determine whether or not they
      conform to the requirements of this Indenture (but need not confirm or
      investigate the accuracy of mathematical calculations or other facts stated
      therein).

     

    (c) The
      Trustee may not be relieved from liabilities for its own negligent action,
      its
      own negligent failure to act, or its own willful misconduct, except
      that:

     

    (1) this
      paragraph does not limit the effect of paragraph (b) of this
      Section;

     

    (2) the
      Trustee shall not be liable for any error of judgment made in good faith by
      a
      Responsible Officer, unless it is proved that the Trustee was negligent in
      ascertaining the pertinent facts; and

     

    (3) the
      Trustee shall not be liable with respect to any action it takes or omits to
      take
      in good faith in accordance with a direction received by it pursuant to
Section
      6.05
      hereof.

     

    (d) Whether
      or not therein expressly so provided, every provision of this Indenture that
      in
      any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of
      this
      Section.

     

    (e) No
      provision of this Indenture shall require the Trustee to expend or risk its
      own
      funds or incur any liability. The Trustee shall be under no obligation to
      exercise any of its rights and powers under this Indenture at the request of
      any
      Holders, unless such Holder shall have offered to the Trustee security and
      indemnity satisfactory to it against any loss, liability or
      expense.

     

    
      
        
        

      

      
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    (f) The
      Trustee shall not be liable for interest on any money received by it except
      as
      the Trustee may agree in writing with the Company. Money held in trust by the
      Trustee need not be segregated from other funds except to the extent required
      by
      law.

     

    Section
      7.02. Rights
      of Trustee.

     

    (a) The
      Trustee may conclusively rely upon any document believed by it to be genuine
      and
      to have been signed or presented by the proper Person.  The Trustee need
      not investigate any fact or matter stated in any such document. The Trustee,
      however, in its discretion, may make such further inquiry or investigation
      into
      such facts or matters as it may see fit, and, if the Trustee shall determine
      to
      make such further inquiry or investigation, it shall be entitled to examine
      the
      books, records and premises of the Company, personally or by agent or attorney
      at the sole expense of the Company and shall incur no liability of any kind
      by
      reason of such inquiry or investigation.

     

    (b) Before
      the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel or both. The Trustee shall not be liable
      for any action it takes or omits to take in good faith in reliance on such
      Officers’ Certificate or Opinion of Counsel. The Trustee shall be entitled
      to accept such opinion and certificate as sufficient and conclusive evidence
      of
      the fulfillment of the applicable conditions precedent, in which event it shall
      be conclusive and binding on the Holders. The Trustee may consult with counsel
      and the written advice of such counsel or any Opinion of Counsel shall be full
      and complete authorization and protection from liability in respect of any
      action taken, suffered or omitted by it hereunder in good faith and in reliance
      thereon.

     

    (c) The
      Trustee shall not be liable for any action it takes or omits to take in good
      faith that it believes to be authorized or within the rights or powers conferred
      upon it by this Indenture.

     

    (d) Unless
      otherwise specifically provided in this Indenture, any demand, request,
      direction or notice from the Company shall be sufficient if signed by an Officer
      of the Company.

     

    (e) The
      Trustee shall not be deemed to have notice of any Default or Event of Default
      unless a Responsible Officer of the Trustee has actual knowledge thereof or
      unless written notice of any event which is in fact such a Default or Event
      of
      Default is received by a Responsible Officer of the Trustee at the Corporate
      Trust Office of the Trustee from the Company or the Holders of 25% in aggregate
      principal amount of the outstanding Notes, and such notice references the
      specific Default or Event of Default, the Notes and this Indenture.

     

    (f) The
      Trustee shall not be required to give any bond or surety in respect of the
      performance of its power and duties hereunder.

     

    (g) The
      Trustee shall have no duty to inquire as to the performance of the Company’s
      covenants herein.

     

    (h) The
      Trustee may execute any of the trusts or powers hereunder or perform any duties
      hereunder either directly or by or through agents or attorneys and the Trustee
      shall not be responsible for any misconduct or negligence on the part of any
      agent or attorney appointed with due care by it hereunder.

     

    (i) Neither
      the Trustee nor any clearing system through which the Notes are traded shall
      have any obligation or duty to monitor, determine or inquire as to compliance,
      and shall not be responsible or liable for compliance, with restrictions on
      transfer, exchange, redemption, purchase or repurchase, as applicable, of
      minimum denominations imposed hereunder or under applicable law or regulation
      with respect of any transfer, exchange, redemption, purchase or repurchase,
      as
      applicable, of interest in any Note.

     

    
      
        
        

      

      
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    (j) In
      the
      event the Trustee receives inconsistent or conflicting requests and indemnity
      from two or more groups of Holders, each representing less than a majority
      in
      aggregate principal amount of the Notes then outstanding, pursuant to the
      provisions of this Indenture, the Trustee, in its sole discretion, may determine
      what action, if any, will be taken.

     

    (k) The
      permissive right of the Trustee to take the actions permitted hereby will not
      be
      construed as an obligation or duty to do so.

     

    (l) The
      rights, privileges, protections, immunities and benefits given to the Trustee,
      including, without limitation, its right to be indemnified, are extended to,
      and
      will be enforceable by, the Trustee in each of its capacities hereunder, and
      each agent, custodian and other Person employed to act hereunder.

     

    (m) The
      Trustee may request that the Company deliver an Officers’ Certificate setting
      forth the names of individuals or titles of officers authorized at such time
      to
      take specified actions pursuant to this Indenture, which Officers’ Certificate
      may be signed by any person authorized to sign an Officers’ Certificate,
      including any person specified as so authorized in any such certificate
      previously delivered and not superseded.

     

    (n) The
      Trustee is entitled to enter into business transactions with the Company, its
      Affiliates or any entity related thereto without accounting for any
      profit.

     

    (o) In
      connection with the exercise of its functions (including but not limited to
      those in relation to any proposed modification, authorization, waiver or
      substitution), the Trustee will have regard to the interests of the Holders
      as a
      class, and will not have regard to the consequences of such exercise for
      individual Holders. The Trustee will not be entitled to require, nor will any
      Holder be entitled to claim, from the Company or any Guarantor, any
      indemnification or payment in respect of any tax consequences of any such
      exercise upon individual Holders.

     

    (p) The
      Trustee may refrain from taking any action in any jurisdiction if the taking
      of
      such action in that jurisdiction would, in its opinion based upon legal advice
      in the relevant jurisdiction, be contrary to any law of that jurisdiction or,
      to
      the extent applicable, of the State of New York. Furthermore, the Trustee may
      also refrain from taking such action if it would otherwise render it liable
      to
      any person in that jurisdiction or the State of New York or if, in its opinion
      based upon such legal advice, it would not have the power to do the relevant
      thing in that jurisdiction by virtue of any applicable law in that jurisdiction
      or in the State of New York or if it is determined by any court or other
      competent authority in that jurisdiction or in the State of New York that it
      does not have such power.

     

    Section
      7.03. Individual
      Rights of Trustee.

     

    The
      Trustee in its individual or any other capacity may become the owner or pledgee
      of Notes and may otherwise deal with the Company or any Affiliate of the Company
      with the same rights it would have if it were not Trustee. However, in the
      event
      that the Trustee acquires any conflicting interest it must eliminate such
      conflict within 90 days, apply to the Commission for permission to continue
      as
      Trustee or resign. Any Agent may do the same with like rights and duties. The
      Trustee shall also be subject to Section
      7.10
      hereof.

     

    Section
      7.04. Trustee’s
      Disclaimer.

     

    The
      Trustee shall not be responsible for and makes no representation as to the
      validity or adequacy of this Indenture or the Notes, it shall not be accountable
      for the Company’s use of the proceeds from the Notes or any money paid to the
      Company or upon the Company’s direction under any provision of this Indenture,
      it shall not be responsible for the use or application of any money received
      by
      any Paying Agent other than the Trustee, and it shall not be responsible for
      any
      statement or recital herein or any statement in the Notes or any other document
      in connection with the sale of the Notes or pursuant to this Indenture other
      than its certificate of authentication.

     

    
      
        
        

      

      
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    Section
      7.05. Notice
      of Defaults.

     

    If
      the
      Trustee receives notice of any Default or Event of Default from the Company,
      the
      Trustee shall mail to Holders a notice of the Default or Event of Default within
      90 days after receipt thereof. Except in the case of a Default or Event of
      Default in payment of principal of, premium, if any, or interest on any Note,
      the Trustee may withhold the notice if and so long as a committee of its
      Responsible Officers in good faith determines that withholding the notice is
      in
      the interests of the Holders.

     

    Section
      7.06. Reports
      by Trustee to Holders.

     

    Within
      60
      days after each May 15 beginning with the May 15 following the date of this
      Indenture, and for so long as Notes remain outstanding, the Trustee shall mail
      to the Holders a brief report dated as of such reporting date with respect
      to
      any of the following events which may have occurred within the previous 12
      months (but if no such event has occurred such date, no report need be
      transmitted).

     

    (a) 
      the
      character and amount of any disbursements made by it, as the Trustee under
      this
      Indenture, which remain unpaid on the date of such report, and for the
      reimbursement of which it claims or may claim a lien or charge, prior to that
      of
      Notes, on property or funds held or collected by it as the Trustee under this
      Indenture, if such disbursements so remaining unpaid aggregate more than
      one-half of 1 per centum of the principal amount of the Notes outstanding on
      such date;

     

    (b) 
      any
      release, or release and substitution, of property subject to the Lien under
      the
      Security Documents (and the consideration therefor, if any) which it has not
      previously reported; and

     

    (c) 
      any
      action taken by it in the performance of its duties under this Indenture which
      it has not previously reported and which in its opinion materially affects
      the
      Notes, except action in respect of a default, notice of which has been or is
      to
      be withheld by it in accordance with this Indenture.

     

    A
      copy of
      each report at the time of its mailing to the Holders shall be mailed to the
      Company.  The Company shall promptly notify the Trustee when the Notes are
      listed on any stock exchange and any delisting thereof.

     

    Section
      7.07. Compensation
      and Indemnity.

     

    The
      Company and each Guarantor, jointly and severally, shall pay to the Trustee
      from
      time to time such compensation for its acceptance of this Indenture and services
      hereunder.  The Trustee’s compensation shall not be limited by any law on
      compensation of a trustee of an express trust. The Company and each Guarantor,
      jointly and severally, shall reimburse the Trustee promptly upon request for
      all
      disbursements, advances and expenses incurred or made by it in addition to
      the
      compensation for its services. Such expenses shall include the compensation,
      disbursements and expenses of the Trustee’s agents and counsel.

     

    The
      Company and each Guarantor, jointly and severally, shall indemnify the Trustee
      (in its capacity as Trustee) or any predecessor Trustee (in its capacity as
      Trustee) against any and all losses, claims, damages, penalties, fines,
      liabilities or expenses, including incidental and out-of-pocket expenses and
      attorneys fees (for purposes of this Article, “losses”)
      incurred by it arising out of or in connection with the acceptance or
      administration of its duties under this Indenture and
      the
      Security Documents (which, for the avoidance of doubt, includes its duties
      as
      Calculation Agent, Collateral Agent, Paying Agent, Common Depositary or
      Registrar if appointed as such), including the costs and expenses of enforcing
      this Indenture and the Security Documents against the Company (including this
      Section) and defending itself against any claim (whether asserted by the Company
      or any Holder or any other Person) or liability in connection with the exercise
      or performance of any of its powers or duties hereunder, except to the extent
      such losses may be attributable to its gross negligence or bad faith. The
      Trustee shall notify the Company promptly of any claim for which it may seek
      indemnity.  Failure by the Trustee to so notify the Company shall not
      relieve the Company of its obligations under this Section. The Company shall
      defend the claim, and the Trustee shall reasonably cooperate in the defense.
      The
      Trustee may have separate counsel if the Trustee has been reasonably advised
      by
      counsel that there may be one or more legal defenses available to it that are
      different from or additional to those available to the Company and in the
      reasonable judgment of such counsel it is advisable for the Trustee to engage
      separate counsel, and the Company shall pay the reasonable fees and expenses
      of
      such counsel.  The Company need not pay for any settlement made without its
      written consent, which consent shall not be unreasonably withheld. The Company
      need not reimburse any expense or indemnify against any loss incurred by the
      Trustee through the Trustee’s own willful misconduct, gross negligence or bad
      faith.

     

    
      
        
        

      

      
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    The
      obligations of the Company under this Section shall survive the satisfaction
      and
      discharge of this Indenture pursuant to Article
      11
      hereof,
      the termination of this Indenture and the Security Documents, the resignation
      or
      removal of the Trustee or payment in full of the Notes through the expiration
      of
      the applicable statute of limitations.

     

    To
      secure
      the Company’s payment obligations in this Section, the Trustee shall have a Lien
      prior to the Notes on all money or property held or collected by the Trustee,
      except that held in trust to pay principal, premium, if any, and interest on
      particular Notes. Such Lien shall survive the satisfaction and discharge of
      this
      Indenture pursuant to Article
      11
      hereof,
      the termination of this Indenture and the Security Documents, the resignation
      or
      removal of the Trustee or payment in full of the Notes through the expiration
      of
      the applicable statute of limitations.

     

    When
      the
      Trustee incurs expenses or renders services after an Event of Default specified
      in Section
      6.01(h)
      or
(i)
      hereof
      occurs, the expenses and the compensation for the services (including the fees
      and expenses of its agents and counsel) are intended to constitute expenses
      of
      administration under any Bankruptcy Law.

     

    Section
      7.08. Replacement
      of Trustee.

     

    A
      resignation or removal of the Trustee and appointment of a successor Trustee
      shall become effective only upon the successor Trustee’s acceptance of
      appointment as provided in this Section.

     

    The
      Trustee may resign in writing at any time upon 30 days’ prior notice to the
      Company and be discharged from the trust hereby created by so notifying the
      Company. The Holders of a majority in aggregate principal amount of the then
      outstanding Notes may remove the Trustee by so notifying the Trustee and the
      Company in writing. The Company may remove the Trustee if:

     

    (a) the
      Trustee fails to comply with Section
      7.10
      hereof;

     

    (b) the
      Trustee is adjudged bankrupt or insolvent or an order for relief is entered
      with
      respect to the Trustee under any Bankruptcy Law;

     

    (c) a
      custodian or public officer takes charge of the Trustee or its property;
      or

     

    (d) the
      Trustee becomes incapable of acting.

     

    If
      the
      Trustee resigns or is removed or if a vacancy exists in the office of Trustee
      for any reason (the Trustee in such event being referred to herein as the
      retiring Trustee), the Company shall promptly appoint a successor Trustee.
      Within one year after the successor Trustee takes office, the Holders of a
      majority in principal amount of the then outstanding Notes may appoint a
      successor Trustee to replace the successor Trustee appointed by the
      Company.

     

    If
      a
      successor Trustee does not take office within 30 days after the retiring Trustee
      resigns or is removed, the retiring Trustee, the Company, or the Holders of
      at
      least 10% in aggregate principal amount of the then outstanding Notes may
      petition at the expense of the Company any court of competent jurisdiction
      for
      the appointment of a successor Trustee.

     

    If
      the
      Trustee, after written request by any Holder who has been a Holder for at least
      six months, fails to comply with Section
      7.10
      hereof,
      such Holder may petition any court of competent jurisdiction for the removal
      of
      the Trustee and the appointment of a successor Trustee.

     

    
      
        
        

      

      
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    A
      successor Trustee shall deliver a written acceptance of its appointment to
      the
      retiring Trustee and to the Company.  Thereupon, the resignation or removal
      of the retiring Trustee shall become effective, and the successor Trustee shall
      have all the rights, powers and duties of the Trustee under this Indenture.
      The
      successor Trustee shall mail a notice of its succession to Holders. 
Subject to the Lien provided for in Section
      7.07
      hereof,
      the retiring Trustee shall promptly transfer all property held by it as Trustee
      to the successor Trustee; provided,
      however,
      that
      all sums owing to the Trustee hereunder shall have been paid. Notwithstanding
      replacement of the Trustee pursuant to this Section, the Company’s obligations
      under Section
      7.07
      hereof
      shall continue for the benefit of the retiring Trustee.

     

    In
      the
      case of an appointment hereunder of a separate or successor Trustee with respect
      to the Notes, the Company, the Guarantors, any retiring Trustee and each
      successor or separate Trustee with respect to the Notes shall execute and
      deliver a supplemental indenture in form satisfactory to the Trustee (1) which
      shall contain such provisions as shall be deemed necessary or desirable to
      confirm that all the rights, powers, trusts and duties of any retiring Trustee
      with respect to the Notes as to which any such retiring Trustee is not retiring
      shall continue to be vested in such retiring Trustee and (2) that shall add
      to
      or change any of the provisions of this Indenture as shall be necessary to
      provide for or facilitate the administration of the trusts hereunder by more
      than one Trustee, it being understood that nothing herein or in such
      supplemental indenture shall constitute such Trustee co-trustees of the same
      trust and that each such separate, retiring or successor Trustee shall be
      Trustee of a trust or trusts hereunder separate and apart from any trust or
      trusts hereunder administered by any such other Trustee.

     

    Section
      7.09. Successor
      Trustee by Merger, etc.

     

    If
      the
      Trustee consolidates, merges or converts into, or transfers all or substantially
      all of its corporate trust business to, another corporation or banking
      association, the successor corporation or banking association without any
      further act shall, if such successor corporation or banking association is
      otherwise eligible hereunder, be the successor Trustee.

     

    In
      case
      at the time such successor or successors by merger, conversion or consolidation
      to the Trustee shall succeed to the trust created by this Indenture any of
      the
      Notes shall have been authenticated but not delivered, any such successor to
      the
      Trustee may adopt the certificate of authentication of any predecessor trustee,
      and deliver such Notes so authenticated; and in case at that time any of the
      Notes shall not have been authenticated, any successor to the Trustee may
      authenticate such Notes either in the name of any predecessor hereunder or
      in
      the name of the successor to the Trustee.

     

    Section
      7.10. Eligibility;
      Disqualification.

     

    There
      shall at all times be a Trustee hereunder that is a Person organized and doing
      business under the laws of the United States of America or of any state thereof
      that is authorized under such laws to exercise corporate trustee power, that
      is
      subject to supervision or examination by U.S. federal or state authorities
      and
      that has a combined capital and surplus of at least $50.0 million (or a
      wholly-owned subsidiary of a bank or trust company, or of a bank holding
      company, the principal subsidiary of which is a bank or trust company having
      a
      combined capital and surplus of at least $50.0 million) as set forth in its
      most
      recent published annual report of condition.

     

    Section
      7.11. Certain
      Provisions.

     

    

    Each
      Holder by accepting a Note authorizes and directs on his or her behalf the
      Trustee to enter into and to take such actions and to make such acknowledgements
      as are set forth in this Indenture or other documents entered into in connection
      therewith.

     

    The
      Trustee shall not be responsible for the legality, validity, effectiveness,
      suitability, adequacy or enforceability of any of the Security Documents or
      any
      obligation or rights created or purported to be created thereby or pursuant
      thereto or any security or the priority thereof constituted or purported to
      be
      constituted thereby or pursuant thereto, nor shall it be responsible or liable
      to any person because of any invalidity of any provision of such documents
      or
      the unenforceability thereof, whether arising from statute, law or decision
      of
      any court. The Trustee shall be under no obligation to monitor or supervise
      the
      functions of the Collateral Agent under the Security Documents and shall be
      entitled to assume that the Collateral Agent is properly performing its
      functions and obligations thereunder and the Trustee shall not be responsible
      for any diminution in the value of or loss occasioned to the assets subject
      thereto by reason of the act or omission by the Collateral Agent in relation
      to
      its functions thereunder. The Trustee shall have no responsibility whatsoever
      to
      the Company, any Guarantor or any Holder as regards any deficiency which might
      arise because the Trustee is subject to any tax in respect of the Security
      Documents, the security created thereby or any part thereof or any income
      therefrom or any proceeds thereof.

     

    
      
        
        

      

      
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    ARTICLE
      7A.

    

    CALCULATION
      AGENT

    

    Section
      7A.01.  Appointment
      of Calculation Agent.

    

    The
      Company will appoint a Calculation Agent for the purpose of calculating the
      rate
      of interest from time to time applicable to the Notes and all matters incidental
      thereto. The Calculation Agent shall in this regard perform the duties expressed
      to be performed by it in paragraph (1) of the Notes.

     

    The
      Company may change the Calculation Agent without notice to any Holder. The
      Company will notify the Trustee in writing the name and address of any
      Calculation Agent not a party to this Indenture. If the Company fails to appoint
      or maintain another entity as Calculation Agent, the Trustee, acting as agent
      of
      the Company solely for this purpose, shall act as such. The Company initially
      appoints the Trustee to act as Calculation Agent with respect to the
      Notes.

     

    

    Section
      7A.02.  Rate
      of Interest.

    

    For
      the
      purposes of Section
      7A.01,
      the
      Calculation Agent shall:

    

    (a) as
      soon
      as practicable after determining the rate of interest applicable to the Notes
      (and of any adjustment thereto in accordance with paragraph (1) thereof), notify
      the Company, the Trustee and, upon request, the Holders thereof;

     

    (b) maintain
      a record of the quotations contained by it and all rates determined and all
      other action taken by it for the purposes of Section
      7A.01
      and
      shall from time to time on request deliver to the Company a copy of such record;
      and

     

    (c) if
      it
      does not for any reason at any material time determine any applicable rate
      of
      interest payable in respect of the Notes, forthwith notify the Company and
      the
      Trustee that such determination has not been made.

     

    

    Section
      7A.03. Continuing
      Obligations.

    

    If
      any
      Notes become due and payable under Section
      6.02,
      the
      rates of interest payable in respect of such Notes thereafter shall nevertheless
      continue to be calculated as previously by the Calculation Agent in accordance
      with the provisions (amended as necessary) of paragraph (1) of the
      Notes.

     

    Section
      7A.04. 
      No Agency or Trust.

    

    In
      acting
      as Calculation Agent hereunder and in connection with the Notes, the Calculation
      Agent shall act solely as bankers for and agents of the Company and will not
      thereby assume any obligations towards or relationship of agency or trust for
      any Holder and need only perform the duties set out specifically under this
      Article
      7A
      and
      paragraph (1) of the Notes, and any duties necessarily incidental to
      them.

     

    
      
        
        

      

      
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    ARTICLE
      8.

     

    AMENDMENT,
      SUPPLEMENT AND WAIVER

     

    Section
      8.01. Without
      Consent of Holders .

     

    Notwithstanding
      Section
      8.02
      of this
      Indenture, the Company and the Trustee may amend or supplement this Indenture,
      the Security Documents or the Notes without consent of any Holder
      to:

     

    (a) cure
      any
      ambiguity, omission, defect or inconsistency;

     

    (b) provide
      for the assumption by a Surviving Person of the obligations of the Company
      under
      this Indenture;

     

    (c) provide
      for uncertificated Notes in addition to or in place of certificated Notes
      (provided
      that the
      uncertificated Notes are issued in registered form for purposes of Section
      163(f) of the Code, or in a manner such that the uncertificated Notes are
      described in Section 163(f)(2)(B) of the Code);

     

    (d) add
      additional Guarantees or additional obligors with respect to the Notes or
      release Guarantors from guarantees as permitted by the terms of this
      Indenture;

     

    (e) further
      secure the Notes, or release all or any portion of the Collateral pursuant
      to
      the terms of the Security Documents;

     

    (f) add
      to
      the covenants of the Company for the benefit of the Holders or to surrender
      any
      right or power conferred upon the Company; or

     

    (g) make
      any
      other change that does not adversely affect the legal rights hereunder of any
      such Holder.

     

    Section
      8.02. With
      Consent of Holders .

     

    Except
      as
      provided below in this Section, the Company and the Trustee may amend or
      supplement this Indenture, the Security Documents and the Notes with the consent
      of the Holders of a majority in aggregate principal amount of the Notes then
      outstanding voting as a single class (including consents obtained in connection
      with a purchase of or tender offer or exchange offer for the Notes), and,
      subject to Sections
      6.04
      and
6.07,
      any
      existing Default or Event of Default (except a continuing Default or Event
      of
      Default in (i) the payment of principal, premium, if any, or interest on the
      Notes and (ii) in respect of a covenant or provision which under this Indenture
      cannot be modified or amended without the consent of the Holder of each Note
      affected by such modification or amendment) or compliance with any provision
      of
      this Indenture or the Notes may be waived with the consent of the Holders of
      a
      majority in aggregate principal amount of the Notes then outstanding voting
      as a
      single class (including consents obtained in connection with a purchase of
      or
      tender offer or exchange offer for the Notes).

     

    Without
      the consent of each Holder, an amendment or waiver under this Section may not
      (with respect to any Notes held by a non-consenting Holder):

     

    (a) reduce
      the amount of Notes whose Holders must consent to an amendment or
      waiver;

     

    (b) reduce
      the rate of, or extend the time for payment of, interest, if any, on, any
      Note;

     

    (c) reduce
      the principal of, or extend the Stated Maturity of, any Note;

     

    (d) make
      any
      Note payable in money other than that stated in the Note;

     

    
      
        
        

      

      
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    (e) impair
      the right of any Holder to receive payment of principal of, premium, if any,
      and
      interest, if any, on, such Holder’s Notes on or after the due dates therefor or
      to institute suit for the enforcement of any payment on or with respect to
      such
      Holder’s Notes or any Guarantee;

     

    (f) subordinate
      the Notes or any Guarantee to any other obligation of the Company or the
      applicable Guarantor;

     

    (g) (A) release
      the security interest granted in favor of the holders of the Notes in the
      Collateral other than pursuant to the terms of the Security Documents, or

     

    (B) release
      any other security interest that may have been granted in favor of the holders
      of the Notes other than pursuant to the terms of such security
      interest;

     

    (h) reduce
      the amount payable as Additional Amounts or upon the redemption of any Note
      or
      change the time at which any Note may be redeemed, as described under
Section
      3.05,
      Section
      4.17
      or
Section
      4.26;

     

    (i) reduce
      the premium payable upon a Change of Control or, at any time after a Change
      of
      Control has occurred, change the time at which the Change of Control Offer
      relating thereto must be made or at which the Notes must be repurchased pursuant
      to such Change of Control Offer;

     

    (j) at
      any
      time after the Company is obligated to make an Asset Sale Offer with the Excess
      Proceeds from Asset Sales, change the time at which such Asset Sale Offer must
      be made or at which the Notes must be repurchased pursuant thereto;
      or

     

    (k) make
      any
      change in any Guarantee that would adversely affect the Holders.

     

    The
      Company may, but shall not be obligated to, fix a record date for the purpose
      of
      determining the Persons entitled to consent to any supplemental indenture.
      If a
      record date is fixed, the Holders on such record date, or their duly designated
      proxies, and only such Persons, shall be entitled to consent to such
      supplemental indenture, whether or not such Holders remain Holders after such
      record date; provided
      that
      unless such consent shall have become effective by virtue of the requisite
      percentage having been obtained prior to the date which is 120 days after such
      record date, any such consent previously given shall automatically and without
      further action by any Holder be cancelled and of no further effect.

     

    It
      shall
      not be necessary for the consent of the Holders under this Section to approve
      the particular form of any proposed amendment or waiver, but it shall be
      sufficient if such consent approves the substance thereof.

     

    After
      an
      amendment, supplement or waiver under this Section becomes effective, the
      Company shall mail to the Holder of each Note affected thereby to such Holder’s
      address appearing in the Security Register a notice briefly describing the
      amendment, supplement or waiver. Any failure of the Company to mail such notice,
      or any defect therein, shall not, however, in any way impair or affect the
      validity of any such amended or supplemental indenture or waiver. 

     

    Upon
      the
      request of the Company, and upon receipt by the Trustee of the documents
      described in Section 12.03
      hereof,
      the Trustee will join with the Company in the execution of any amended or
      supplemental indenture or waiver authorized or permitted by the terms of this
      Indenture and to make any further appropriate agreements and stipulations that
      may be therein contained, but the Trustee will not be obligated to enter into
      such amended or supplemental indenture or waiver that affects its own rights,
      duties or immunities under this Indenture or otherwise.

     

    Section
      8.03. Revocation
      and Effect of Consents.

     

    Until
      an
      amendment, supplement or waiver becomes effective, a consent to it by a Holder
      is a continuing consent by the Holder of a Note and every subsequent Holder
      of a
      Note or portion thereof that evidences the same debt as the consenting Holder’s
      Note, even if notation of the consent is not made on any Note. However, any
      such
      Holder or subsequent Holder may revoke the consent as to its Note or portion
      thereof if the Trustee receives written notice of revocation before the date
      the
      waiver, supplement or amendment becomes effective. An amendment, supplement
      or
      waiver shall become effective in accordance with its terms and thereafter shall
      bind every Holder.

     

    
      
        
        

      

      
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    Section
      8.04. Notation
      on or Exchange of Notes.

     

    The
      Trustee may place an appropriate notation about an amendment, supplement or
      waiver on any Note thereafter authenticated.  The Company in exchange for
      all Notes may issue and, upon receipt of an Authentication Order in accordance
      with Section
      2.02
      hereof,
      the Trustee shall authenticate new Notes that reflect the amendment, supplement
      or waiver.

     

    Failure
      to make the appropriate notation or issue a new Note shall not affect the
      validity and effect of such amendment, supplement or waiver.

     

    Section
      8.05. Trustee
      to Sign Amendments, etc.

     

    The
      Trustee shall sign any amended or supplemental indenture (in form satisfactory
      to the Trustee) authorized pursuant to this Article
      8
      if the
      amendment or supplement does not adversely affect the rights, duties,
      liabilities or immunities of the Trustee.  None of the Company nor any
      Guarantor may sign an amendment or supplemental indenture until its board of
      directors (or committee serving a similar function) approves it. In executing
      any amended or supplemental indenture or any amendment or supplement to the
      Security Documents or Notes, the Trustee shall be entitled to receive in
      addition to the documents required by Section
      12.03,
      and
      (subject to Section
      7.01
      hereof)
      shall be fully protected in relying upon an Officers’ Certificate and an Opinion
      of Counsel stating that the execution of such amended or supplemental indenture
      is authorized or permitted by this Indenture and that such amended or
      supplemental indenture is the legal, valid and binding obligations of the
      Company enforceable against it in accordance with its terms, subject to
      customary exceptions and that such amended or supplemental indenture complies
      with the provisions hereof.

     

    ARTICLE
      9.

     

    GUARANTEES

     

    Section
      9.01. Guarantee.

     

    Subject
      to this Article
      9,
      each
      Guarantor hereby unconditionally guarantees to each Holder of a Note
      authenticated and delivered by the Trustee and to the Trustee and its successors
      and assigns: (a) the due and punctual payment of the principal of, premium,
      if
      any, and interest on the Notes, subject to any applicable grace period, whether
      at Stated Maturity, by acceleration, redemption or otherwise, the due and
      punctual payment of interest on the overdue principal of and premium, if any,
      and, to the extent permitted by law, interest, and the due and punctual
      performance of all other obligations of the Company to the Holders or the
      Trustee under this Indenture or any other agreement with or for the benefit
      of
      the Holders or the Trustee, all in accordance with the terms hereof and thereof;
      and (b) in case of any extension of time of payment or renewal of any Notes
      or
      any of such other obligations, that same shall be promptly paid in full when
      due
      or performed in accordance with the terms of the extension or renewal, whether
      at Stated Maturity, by acceleration pursuant to Section
      6.02,
      redemption or otherwise. Failing payment when due of any amount so guaranteed
      or
      any performance so guaranteed for whatever reason, the Guarantors shall be
      jointly and severally obligated to pay the same immediately. Each Guarantor
      agrees that this is a guarantee of payment and not a guarantee of
      collection.

     

    Each
      Guarantor hereby agrees that its obligations with regard to its Guarantee shall
      be joint and several, unconditional, irrespective of the validity or
      enforceability of the Notes or the obligations of the Company under this
      Indenture, the absence of any action to enforce the same, the recovery of any
      judgment against the Company or any other obligor with respect to this
      Indenture, the Notes or the Obligations of the Company under this Indenture
      or
      the Notes, any action to enforce the same or any other circumstances (other
      than
      complete performance) which might otherwise constitute a legal or equitable
      discharge or defense of a Guarantor. Each Guarantor further, to the extent
      permitted by law, waives and relinquishes all claims, rights and remedies
      accorded by applicable law to guarantors and agrees not to assert or take
      advantage of any such claims, rights or remedies, including but not limited
      to:
      (a) any right to require any of the Trustee, the Holders or the Company (each
      a
“Benefited
      Party”),
      as a
      condition of payment or performance by such Guarantor, to (1) proceed against
      the Company, any other guarantor (including any other Guarantor) of the
      Obligations under the Guarantees or any other Person, (2) proceed against or
      exhaust any security held from the Company, any such other guarantor or any
      other Person, (3) proceed against or have resort to any balance of any deposit
      account or credit on the books of any Benefited Party in favor of the Company
      or
      any other Person, or (4) pursue any other remedy in the power of any Benefited
      Party whatsoever; (b) any defense arising by reason of the incapacity, lack
      of
      authority or any disability or other defense of the Company including any
      defense based on or arising out of the lack of validity or the unenforceability
      of the Obligations under the Guarantees or any agreement or instrument relating
      thereto or by reason of the cessation of the liability of the Company from
      any
      cause other than payment in full of the Obligations under the Guarantees; (c)
      any defense based upon any statute or rule of law which provides that the
      obligation of a surety must be neither larger in amount nor in other respects
      more burdensome than that of the principal; (d) any defense based upon any
      Benefited Party’s errors or omissions in the administration of the Obligations
      under the Guarantees, except behavior which amounts to bad faith; (e)(1) any
      principles or provisions of law, statutory or otherwise, which are or might
      be
      in conflict with the terms of the Guarantees and any legal or equitable
      discharge of such Guarantor’s obligations hereunder, (2) the benefit of any
      statute of limitations affecting such Guarantor’s liability hereunder or the
      enforcement hereof, (3) any rights to set-offs, recoupments and counterclaims
      and (4) promptness, diligence and any requirement that any Benefited Party
      protect, secure, perfect or insure any security interest or lien or any property
      subject thereto; (f) notices, demands, presentations, protests, notices of
      protest, notices of dishonor and notices of any action or inaction, including
      acceptance of the Guarantees, notices of Default under the Notes or any
      agreement or instrument related thereto, notices of any renewal, extension
      or
      modification of the Obligations under the Guarantees or any agreement related
      thereto, and notices of any extension of credit to the Company and any right
      to
      consent to any thereof; (g) to the extent permitted under applicable law, the
      benefits of any “One Action” rule and (h) any defenses or benefits that may be
      derived from or afforded by law which limit the liability of or exonerate
      guarantors or sureties, or which may conflict with the terms of the Guarantees.
      Except to the extent expressly provided herein, including Section
      9.05,
      each
      Guarantor hereby covenants that its Guarantee shall not be discharged except
      by
      complete performance of the obligations contained in its Guarantee and this
      Indenture.

     

    
      
        
        

      

      
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    If
      any
      Holder or the Trustee is required by any court or otherwise to return to the
      Company, the Guarantors or any custodian, trustee, liquidator or other similar
      official acting in relation to either the Company or the Guarantors, any amount
      paid by either to the Trustee or such Holder, the Guarantee of such Guarantor,
      to the extent theretofore discharged, shall be reinstated in full force and
      effect.

     

    Each
      Guarantor agrees that it shall not be entitled to any right of subrogation
      in
      relation to the Holders in respect of any obligations guaranteed hereby until
      payment in full of all obligations guaranteed hereby. Each Guarantor further
      agrees that, as between the Guarantors, on the one hand, and the Holders and
      the
      Trustee, on the other hand, (x) the maturity of the obligations guaranteed
      hereby may be accelerated as provided in Section
      6.02
      hereof
      for the purposes of this Guarantee, notwithstanding any stay, injunction or
      other prohibition preventing such acceleration in respect of the obligations
      guaranteed hereby and (y) in the event of any declaration of acceleration of
      such obligations as provided in Section
      6.02
      hereof,
      such obligations (whether or not due and payable) shall forthwith become due
      and
      payable by the Guarantors for the purpose of this Guarantee. The Guarantors
      shall have the right to seek contribution from any non-paying Guarantor so
      long
      as the exercise of such right does not impair the rights of the Holders under
      the Guarantee.

     

    Section
      9.02. Limitation
      on Guarantor Liability.

     

    (a) Each
      Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that
      it
      is the intention of all such parties that the Guarantee of such Guarantor not
      constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
      the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
      or
      any similar federal or state law to the extent applicable to any guarantee.
      To
      effectuate the foregoing intention, the Trustee, the Holders and the Guarantors
      hereby irrevocably agree that each Guarantor’s liability shall be that amount
      from time to time equal to the aggregate liability of such Guarantor under
      the
      guarantee, but shall be limited to the lesser of (a) the aggregate amount
      of the Company’s obligations under the Notes and this Indenture or (b) the
      amount, if any, which would not have (1) rendered the Guarantor “insolvent”
(as such term is defined in Bankruptcy Law and in the Debtor and Creditor Law
      of
      the State of New York) or (2) left it with unreasonably small capital at
      the time its guarantee with respect to the Notes was entered into, after giving
      effect to the incurrence of existing Debt immediately before such time;
provided,
      however,
      it
      shall be a presumption in any lawsuit or proceeding in which a Guarantor is
      a
      party that the amount guaranteed pursuant to the guarantee with respect to
      the
      Notes is the amount described in clause (a) above unless any creditor,
      or representative of creditors of the Guarantor, or debtor in possession or
      trustee in bankruptcy of the Guarantor, otherwise proves in a lawsuit that
      the
      aggregate liability of the Guarantor is limited to the amount described in
      clause (b). 

     

    
      
        
        

      

      
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    (b) In
      making
      any determination as to the solvency or sufficiency of capital of a Guarantor
      in
      accordance with the proviso of Section
      9.02(a),
      the
      right of each Guarantor to contribution from other Guarantors and any other
      rights such Guarantor may have, contractual or otherwise, shall be taken into
      account.

     

    Section
      9.03. Execution
      and Delivery of Guarantee.

     

    To
      evidence its Guarantee set forth in Section
      9.01,
      each
      Guarantor hereby agrees that a notation of such Guarantee in substantially
      the
      form included in Exhibit
      B
      attached
      hereto shall be endorsed by an Officer of such Guarantor on each Note
      authenticated and delivered by the Trustee and that this Indenture shall be
      executed on behalf of such Guarantor by its President or one of its Vice
      Presidents.

     

    Each
      Guarantor hereby agrees that its Guarantee set forth in Section
      9.01
      shall
      remain in full force and effect notwithstanding any failure to endorse on each
      Note a notation of such Guarantee.

     

    If
      an
      Officer whose signature is on this Indenture or on the Guarantee no longer
      holds
      that office at the time the Trustee authenticates the Note on which a Guarantee
      is endorsed, the Guarantee shall be valid nevertheless.

     

    The
      delivery of any Note by the Trustee, after the authentication thereof hereunder,
      shall constitute due delivery of the Guarantee set forth in this Indenture
      on
      behalf of the Guarantors.

     

    The
      Company hereby agrees that it shall cause each Person that becomes obligated
      to
      provide a Guarantee pursuant to Section
      4.18
      (each, a
“Future
      Guarantor”)
      to
      execute a supplemental indenture in form and substance satisfactory to the
      Trustee, pursuant to which such Person provides the guarantee set forth in
      this
Article
      9
      and
      otherwise assumes the obligations and accepts the rights of a Guarantor under
      this Indenture, in each case with the same effect and to the same extent as
      if
      such Person had been named herein as a Guarantor. The Company also hereby agrees
      to cause each such new Guarantor to evidence its guarantee by endorsing a
      notation of such guarantee on each Note as provided in this
      Section.

     

    Section
      9.04. Guarantors
      May Consolidate, etc., on Certain Terms.

     

    Except
      as
      otherwise provided in Section
      9.05,
      no
      Guarantor may consolidate with or merge with or into (whether or not such
      Guarantor is the Surviving Person) another Person whether or not affiliated
      with
      such Guarantor unless:

     

    (a) subject
      to Section
      9.05,
      the
      Person formed by or surviving any such consolidation or merger (if other than
      a
      Guarantor or the Company) unconditionally assumes all the obligations of such
      Guarantor, pursuant to a supplemental indenture in form and substance
      satisfactory to the Trustee, under this Indenture, the Guarantee on the terms
      set forth herein or therein; and

     

    (b) the
      Guarantor complies with the requirements of Article
      5
      hereof.

     

    
      
        
        

      

      
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    In
      case
      of any such consolidation, merger, sale or conveyance and upon the assumption
      by
      the successor Person, by supplemental indenture, executed and delivered to
      the
      Trustee and satisfactory in form and substance to the Trustee, of the Guarantee
      endorsed upon the Notes and the due and punctual performance of all of the
      covenants and conditions of this Indenture to be performed by the Guarantor,
      such successor Person shall succeed to and be substituted for the Guarantor
      with
      the same effect as if it had been named herein as a Guarantor. Such successor
      Person thereupon may cause to be signed any or all of the Guarantees to be
      endorsed upon all of the Notes issuable hereunder which theretofore shall not
      have been signed by the Company and delivered to the Trustee. All the Guarantees
      so issued shall in all respects have the same legal rank and benefit under
      this
      Indenture as the Guarantees theretofore and thereafter issued in accordance
      with
      the terms of this Indenture as though all of such Guarantees had been issued
      at
      the date of the execution hereof.

     

    Except
      as
      set forth in Articles
      4
      and
5,
      and
      notwithstanding clauses (a) and (b) above, nothing contained in this Indenture
      or in any of the Notes shall prevent any consolidation or merger of a Guarantor
      with or into the Company or another Guarantor, or shall prevent any sale or
      conveyance of the property of a Guarantor as an entirety or substantially as
      an
      entirety to the Company or another Guarantor.

     

    Section
      9.05. Releases
      Following Merger, Consolidation or Sale of Assets, Etc.

     

    In
      the
      event of a sale or other disposition of all or substantially all of the assets
      of any Guarantor, by way of merger, consolidation or otherwise, or a sale or
      other disposition of all of the Capital Stock of any Guarantor, in each case
      to
      a Person that is not (either before or after giving effect to such transactions)
      a Subsidiary of the Company, then such Guarantor (in the event of a sale or
      other disposition, by way of merger, consolidation or otherwise, of all of
      the
      Capital Stock of such Guarantor) or the corporation acquiring the property
      (in
      the event of a sale or other disposition of all or substantially all of the
      assets of such Guarantor) shall be released and relieved of any obligations
      under its Guarantee; provided
      that the
      net proceeds of such sale or other disposition shall be applied in accordance
      with the applicable provisions of this Indenture, including without limitation
      Section
      4.12.
      Upon
      delivery by the Company to the Trustee of an Officers’ Certificate and an
      Opinion of Counsel to the effect that such sale or other disposition was made
      by
      the Company in accordance with the provisions of this Indenture, including
      without limitation Section
      4.12,
      the
      Trustee shall execute any documents reasonably required in order to evidence
      the
      release of any Guarantor from its obligations under its Guarantee.

     

    Any
      Guarantor not released from its obligations under its Guarantee shall remain
      liable for the full amount of principal of and interest on the Notes and for
      the
      other obligations of any Guarantor under this Indenture as provided in this
      Article
      9.

     

    ARTICLE
      10.

     

    COLLATERAL
      AND SECURITY

     

    Section
      10.01. Security
      Documents.

     

    (a) The
      due
      and punctual payment of the principal of and interest on the Notes when and
      as
      the same shall be due and payable, whether on an Interest Payment Date, at
      maturity, by acceleration, repurchase, redemption or otherwise, and interest
      on
      the overdue principal of and interest on the Notes and performance of all other
      obligations of the Company to the Holders or the Trustee under this Indenture
      and the Notes, according to the terms hereunder or thereunder, are secured
      as
      provided in the Security Documents which the Company has entered into
      simultaneously with the execution of this Indenture and which is attached as
      Exhibit
      D
      hereto.
      Each Holder, by its acceptance thereof, consents and agrees to the terms of
      the
      Security Documents (including, without limitation, the provisions providing
      for
      foreclosure and release of Collateral) as the same may be in effect or may
      be
      amended from time to time in accordance with its terms and authorizes and
      directs the Trustee to enter into the Security Documents and to perform its
      obligations and exercise its rights thereunder as a Secured Party in accordance
      therewith. The Company will do or cause to be done all such acts and things
      as
      may be required by applicable law or may be necessary or proper, or as may
      be
      required by the provisions of the Security Documents, to assure and confirm
      to
      the Trustee the security interest in the Collateral contemplated hereby, by
      the
      Security Documents or any part thereof, as from time to time constituted, so
      as
      to render the same available for the security and benefit of this Indenture
      and
      of the Notes secured hereby, according to the intent and purposes herein
      expressed. The Company will take, and will cause its Subsidiaries to take,
      upon
      request of the Trustee, any and all actions reasonably required to cause the
      Security Documents to create and maintain, as security for the Obligations
      of
      the Company hereunder, a valid and enforceable perfected first priority Lien
      in
      and on all the Collateral, in favor of the Trustee, as Secured Party, for the
      benefit of the Holders, superior to and prior to the rights of all third Persons
      and subject to no other Liens than Permitted Liens.

     

    
      
        
        

      

      
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    (b) If
      at any
      time after the Issue Date there is a change in PRC law or interpretation in
      PRC
      law that permits the encumbrance of the WFOE’s assets or Property by a Lien
      without the approval of any governmental body of the PRC, then the Company
      shall
      cause the WFOE to, concurrently:

     

    (i) execute
      and deliver to the Trustee a Security Document upon substantially the same
      terms
      granting a Lien upon such property to the Trustee for the benefit of the holders
      of Notes, which Lien shall be first priority if such assets or Property is
      not
      then encumbered by any other Lien (other than Liens required by law) or a second
      priority Lien if such assets or Property is at that time so
      encumbered;

     

    (ii) cause
      the
      Lien to be granted in such Security Document to be duly perfected in any manner
      permitted by law; and

     

    (iii) deliver
      to the Trustee an Opinion of Counsel confirming as to such Security Document
      the
      matters set forth as to the Security Documents and Liens thereunder in the
      Opinions of Counsel delivered to holders on the Issue Date and, if the property
      subject to such Security Document is an interest in real estate, such local
      counsel opinions, insurance policies, surveys and other supporting documents
      as
      the Trustee may reasonably request.

     

    (c) Notwithstanding
      (i) anything to the contrary contained in this Indenture, the Security
      Documents, the Notes or any other instrument governing, evidencing or relating
      to any Debt, (ii) the time, order or method of attachment of any Liens, (iii)
      the time or order of filing or recording of financing statements or other
      documents filed or recorded to perfect any Lien upon any Collateral, (iv) the
      time of taking possession or control over any Collateral or (v) the rules for
      determining priority under the Uniform Commercial Code as in effect in the
      State
      of Nevada or any other law of any relevant jurisdiction governing relative
      priorities of secured creditors:

     

    (A) the
      Liens
      will rank at least equally and ratably with all valid, enforceable and perfected
      Liens, whenever granted upon any present or future Collateral, but only to
      the
      extent such Liens are permitted under this Indenture to exist and to rank
      equally and ratably with the Notes and the Guarantees; and

     

    (B) all
      proceeds of the Collateral applied under the Security Documents shall be
      allocated and distributed as set forth in Section
      6.10.

    

    Section
      10.02. Future
      Guarantor Pledgors.

     

    (a) The
      Company will use its reasonable best efforts promptly to obtain any necessary
      consents and waivers and to take all other actions necessary to pledge and
      to
      cause each Future Guarantor to pledge the Capital Stock of any future Subsidiary
      (other than any Subsidiary organized under the laws of the PRC) in each case
      owned by the Company or such Future Guarantor, on a first priority basis
      (subject to Permitted Liens) in order to secure the obligations of the Company
      under the Notes and this Indenture and of such Future Guarantor under its
      Guarantee; provided
      that in
      exercising such reasonable best efforts the Company shall not be required to
      take any action that is commercially unreasonable.

     

    (b) The
      Company will, for the benefit of the Holders of the Notes, pledge, or cause
      each
      Guarantor to pledge, the Capital Stock owned by the Company or such Guarantor
      of
      any Person that becomes a Subsidiary (other than Persons organized under the
      laws of the PRC) after the Issue Date, immediately upon such Person becoming
      a
      Subsidiary, to secure the obligations of the Company under the Notes and this
      Indenture, and of such Guarantor under its Guarantee, in the manner described
      above.

     

    (c) Each
      Guarantor that pledges Capital Stock of a Subsidiary after the Issue Date is
      referred to as a “Future
      Guarantor Pledgor”
and,
      upon giving such pledge, will be a “Guarantor
      Pledgor.”

     

    
      
        
        

      

      
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    (d) Upon
      each
      pledge by a Future Guarantor of the Capital Stock of any Other Non-Guarantor
      Subsidiary or any future Subsidiary in accordance with Section
      10.02(a)
      or
Section
      10.02(b),
      the
      Company will deliver to the Trustee an Officers’ Certificate stating that entry
      into the applicable pledge agreement has been duly and validly authorized and
      an
      Opinion of Counsel to the effect that (i) in the opinion of such counsel, such
      action has been taken with respect to the recording, registering and filing
      of
      or with respect to this Indenture and the applicable pledge agreement and all
      other instruments of further assurance as are necessary to make effective the
      first priority lien (subject to Permitted Liens) created by such pledge
      agreement in the Capital Stock referenced in Section
      10.02(a)
      or
Section
      10.02(b),
      and
      referencing the details of such action; or (ii) in the opinion of such counsel,
      no such action is necessary to make such first priority lien (subject to
      Permitted Liens) effective; provided
      that any
      such Opinion of Counsel may rely on an Officers’ Certificate or certificates of
      public officials with respect to matters of fact.

     

    (e) All
      Opinions of Counsel delivered pursuant to Section
      10.02(d)
      may
      contain assumptions, qualifications, exceptions and limitations as are
      appropriate and customary for similar opinions relating to the nature of the
      Capital Stock pledged.

     

    (f) Upon
      each
      pledge by any Future Guarantor of the Capital Stock of any Other Non-Guarantor
      Subsidiary or any future Subsidiary in accordance with Section
      10.02(a)
      or
Section
      10.02(b),
      the
      Company will give notice, file, register or record any supplemental indentures,
      financing statements, continuation statements, pledge agreements or other
      instruments or cause each such Future Guarantor Pledgor to give notice, file,
      register or record any supplemental indentures, financing statements,
      continuation statements, pledge agreements or other instruments and take any
      other actions necessary in order to perfect and protect the first priority
      lien
      (subject to Permitted Liens) thereby created.

     

    Section
      10.03. Recording
      and Opinions.

     

    (a) The
      Company will furnish to the Trustee within three months after each anniversary
      of the Issue Date, an Opinion of Counsel, dated as of such date, stating either
      that (i) in the opinion of such counsel, action has been taken with respect
      to
      the recording, registering, filing, re-recording, re-registering and re-filing
      of all supplemental indentures, financing statements, continuation statements
      or
      other instruments of further assurance as is necessary to maintain the Lien
      of
      the Security Documents and reciting with respect to the security interest in
      the
      Collateral the details of such action or referring to prior Opinions of Counsel
      in which such details are given, and stating that, in the opinion of such
      counsel, based on relevant laws as in effect on the date of such Opinion of
      Counsel, all financing statements and continuation statements have been executed
      and filed that are necessary as of such date and during the succeeding 12 months
      fully to preserve and protect, to the extent such protection and preservation
      are possible by filing, the rights of the Holders and the Trustee hereunder
      and
      under the Security Documents with respect to the security interest in the
      Collateral; or (ii) in the opinion of such counsel, no such action is necessary
      to maintain such Lien and assignment.

     

    (b) So
      long
      as no Default or Event of Default has occurred and is continuing, and subject
      to
      certain terms and conditions, the Company and the Guarantors will be entitled
      to
      receive all cash dividends, interest and other payments made upon or with
      respect to the Collateral pledged by them. 

     

    (c) So
      long
      as there has occurred no Event of Default, then the Company and the Guarantors
      shall have the right to exercise any voting and other consensual rights
      pertaining to the Collateral pledged by them.

     

    (d) Upon
      the
      occurrence and during the continuance of a Default or Event of Default, all
      rights of the Company and the Guarantors to receive all cash dividends, interest
      and other payments made upon or with respect to the Collateral will cease and
      such cash dividends, interest and other payments will be paid to the Collateral
      Agent;

     

    (e) Upon
      the
      occurrence and during the continuance of an Event of Default:

     

    
      
        
        

      

      
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    (i) all
      rights of the Company and the Guarantors to exercise such voting or other
      consensual rights will cease, and all such rights will become vested in the
      Collateral Agent, which, to the extent permitted by law, will have the sole
      right to exercise such voting and other consensual rights; and

     

    (ii) the
      Collateral Agent may sell the Collateral or any part of the Collateral in
      accordance with the terms of the Security Documents. The Collateral Agent,
      in
      accordance with the provisions of this Indenture, will distribute all funds
      distributed under the Security Documents and received by the Collateral Agent
      to
      the Trustee for the benefit of the holders of the Notes.

     

    Section
      10.04. Release
      of Collateral.

     

    (a) Subject
      to subsections (b), (c) and (d) of this Section
      10.04,
      Collateral may be released from the Lien and security interest created by the
      Security Documents at any time or from time to time in accordance with the
      provisions of the Security Documents or as provided hereby. In addition, upon
      the request of the Company pursuant to an Officers’ Certificate certifying that
      all conditions precedent hereunder have been met and stating whether or not
      such
      release is in connection with an Asset Sale and (at the sole cost and expense
      of
      the Company) the Trustee will release Collateral that is sold, conveyed or
      disposed of in compliance with the provisions of this Indenture; provided,
      that
      if such sale, conveyance or disposition constitutes an Asset Sale, the Company
      will apply the Net Available Cash in accordance with Section
      4.12
      hereof.
      Upon receipt of such Officers’ Certificate the Trustee shall execute, deliver or
      acknowledge any necessary or proper instruments of termination, satisfaction
      or
      release to evidence the release of any Collateral permitted to be released
      pursuant to this Indenture or the Security Documents.

     

    (b) No
      Collateral may be released from the Lien and security interest created by the
      Security Documents pursuant to the provisions of the Security Documents unless
      the certificate required by this Section 
      has been
      delivered to the Trustee.

     

    (c) At
      any
      time when a Default or Event of Default has occurred and is continuing and
      the
      maturity of the Notes has been accelerated (whether by declaration or
      otherwise), no release of Collateral pursuant to the provisions of the Security
      Documents will be effective as against the Holders.

     

    (d) The
      release of any Collateral from the terms of this Indenture and the Security
      Documents will not be deemed to impair the security under this Indenture in
      contravention of the provisions hereof if and to the extent the Collateral
      is
      released pursuant to the terms of the Security Documents and
      hereof.

     

    Section
      10.05. Authorization
      of Actions to Be Taken by the Trustee Under the Security
      Documents.

     

    Subject
      to the provisions of Section
      7.01
      and
7.02
      hereof,
      the Trustee may, in its sole discretion and without the consent of the Holders,
      take, on behalf of the Holders, all actions it deems necessary or appropriate
      in
      order to:

     

    (a) enforce
      any of the terms of the Security Documents; and 

     

    (b) collect
      and receive any and all amounts payable in respect of the Obligations of the
      Company hereunder.

     

    The
      Trustee will have power to institute and maintain such suits and proceedings
      as
      it may deem expedient to prevent any impairment of the Collateral by any acts
      that may be unlawful or in violation of the Security Documents or this
      Indenture, and such suits and proceedings as the Trustee may deem expedient
      to
      preserve or protect its interests and the interests of the Holders in the
      Collateral (including power to institute and maintain suits or proceedings
      to
      restrain the enforcement of or compliance with any legislative or other
      governmental enactment, rule or order that may be unconstitutional or otherwise
      invalid if the enforcement of, or compliance with, such enactment, rule or
      order
      would impair the security interest hereunder or be prejudicial to the interests
      of the Holders or of the Trustee).

     

    
      
        
        

      

      
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    Section
      10.06. Authorization
      of Receipt of Funds by the Trustee Under the Security
      Documents.

     

    The
      Trustee is authorized to receive any funds for the benefit of the Holders
      distributed under the Security Documents, and to make further distributions
      of
      such funds to the Holders according to the provisions of this
      Indenture.

     

    Section
      10.07. Termination
      of Security Interest.

     

    Upon
      the
      payment in full of all Obligations of the Company under this Indenture and
      the
      Notes, the Trustee will, at the request of the Company, release the Liens
      pursuant to this Indenture and the Security Documents.

     

    ARTICLE
      11.

     

    SATISFACTION
      AND DISCHARGE

     

    Section
      11.01. Satisfaction
      and Discharge.

     

    This
      Indenture shall be discharged and shall cease to be of further effect, except
      as
      to surviving rights of registration of transfer or exchange of the Notes, as
      to
      all Notes issued hereunder, when:

     

    (a) either:

     

    (i) all
      Notes
      that have been previously authenticated and delivered (except lost, stolen
      or
      destroyed Notes that have been replaced or paid and Notes for whose payment
      money has previously been deposited in trust or segregated and held in trust
      by
      the Company and is thereafter repaid to the Company or discharged from the
      trust) have been delivered to the Trustee for cancellation; or

     

    (ii) (x)
      all
      Notes that have not been previously delivered to the Trustee for cancellation,
      have become due and payable by their terms or have been called for redemption,
      and the Company has irrevocably deposited or caused to be deposited with the
      Trustee as trust funds in trust solely for the benefit of the Holders, cash
      in
      U.S. dollars in such amount as shall be sufficient without consideration of
      any
      reinvestment of interest to pay and discharge the entire Debt on the Notes
      not
      previously delivered to the Trustee for cancellation or redemption for
      principal, premium, if any, and interest on the Notes to the date of deposit,
      in
      the case of Notes that have become due and payable, or to the Stated Maturity
      or
      redemption date, as the case may be; (y) the Company has paid all other sums
      payable by the Company with respect to the Notes under this Indenture; and
      (z)
      the Company has delivered irrevocable instructions to the Trustee to apply
      the
      deposited money toward the payment of the Notes at Stated Maturity or on the
      redemption date, as the case may be.

     

    In
      the
      case of either clause (i) or (ii):

     

    (x) no
      Default or Event of Default shall have occurred and be continuing on the date
      of
      such deposit or shall occur as a result of such deposit and such deposit will
      not result in a breach or violation of, or constitute a default under, any
      other
      instrument to which the Company is a party or by which the Company is bound;
      and

     

    (y) the
      Company shall have delivered to the Trustee an Officers’ Certificate and Opinion
      of Counsel stating that all conditions precedent relating to the satisfaction
      and discharge of this Indenture have been satisfied.

     

    
      
        
        

      

      
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    Section
      11.02. Deposited
      Cash to be Held in Trust; Other Miscellaneous
      Provisions.

     

    Subject
      to Section
      11.03,
      all
      cash deposited with the Trustee (or other qualifying trustee, collectively
      for
      purposes of this Section, the “Trustee”) pursuant to Section
      11.01
      hereof
      in respect of the outstanding Notes shall be held in trust and applied by the
      Trustee, in accordance with the provisions of such Notes and this Indenture,
      to
      the payment, either directly or through any Paying Agent (including the Company
      acting as Paying Agent) as the Trustee may determine, to the Holders of such
      Notes of all sums due and to become due thereon in respect of principal,
      premium, if any, and interest but such cash and securities need not be
      segregated from other funds except to the extent required by law.

     

    Section
      11.03. Repayment
      to Company.

     

    Any
      cash
      deposited with the Trustee or any Paying Agent, or then held by the Company,
      in
      trust for the payment of the principal of, premium, if any, or interest on,
      any
      Note and remaining unclaimed for two years after such principal, and premium,
      if
      any, or interest has become due and payable shall be paid to the Company on
      its
      request or (if then held by the Company) shall be discharged from such trust;
      and the Holder shall thereafter, as an unsecured creditor, look only to the
      Company for payment thereof, and all liability of the Trustee or such Paying
      Agent with respect to such cash and securities, and all liability of the Company
      as trustee thereof, shall thereupon cease; provided,
      however,
      that
      the Trustee or such Paying Agent, before being required to make any such
      repayment, may at the expense of the Company cause to be published once, in
      The
      New York Times and
      The
      Wall Street Journal (national
      edition), notice that such cash remains unclaimed and that, after a date
      specified therein, which shall not be less than 30 days from the date of such
      notification or publication, any unclaimed balance of such cash then remaining
      shall be repaid to the Company.

     

    ARTICLE
      12.

     

    MISCELLANEOUS

     

    Section
      12.01. Notices.

     

    Any
      notice or communication by the Company or the Trustee to the other is duly
      given
      if in writing and delivered in person or mailed by first class mail (registered
      or certified, return receipt requested), facsimile transmission or overnight
      air
      courier guaranteeing next-day delivery, to the other’s address:

     

    If
      to the
      Company:

    

    Fushi
      International, Inc.

    1
      Shuang
      Qiang Road

    Jinzhou,
      Dalian

    People’s
      Republic of China 116100

    

    Attention:
      Mr. Chris Wenbing Wang 

    Facsimile
      No: +86 10 8447 8847

    

    With
      a
      copy to:

    

    Guzov
      Ofsink, LLC

    600
      Madison Avenue

    New
      York,
      NY 10022

    Facsimile
      No: +1 212 688 7273

    Attention:
      Darren L. Ofsink, Esq.

    

    If
      to the
      Trustee:

    

    The
      Bank
      of New York

    101
      Barclay Street

    21st
      Floor West

    New
      York,
      NY 10286

    U.S.A.

    Attention:
      Global Corporate Trust

    Facsimile
      No: +1 212 815 5802/5803 

    
      
        
        

      

      
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    With
      a
      copy to:

    

    The
      Bank
      of New York

    One
      Temasek Avenue

    #02-01
      Millenia Tower

    Singapore
      039192

    Attention:
      Global Corporate Trust

    Facsimile
      No: +65 6883 0338

    

    The
      Company or the Trustee, by notice to the other, may designate additional or
      different addresses for subsequent notices or communications.

     

    All
      notices and communications (other than those sent to the Trustee or Holders)
      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 sent by facsimile
      transmission; and the second Business Day after timely delivery to the courier,
      if sent by overnight air courier guaranteeing next-day delivery. All notices
      and
      communications to the Trustee or Holders shall be deemed duly given and
      effective only upon receipt.

     

    Any
      notice or communication to a Holder shall be mailed by first class mail,
      certified or registered, return receipt requested, or by overnight air courier
      guaranteeing next-day delivery to its address shown on the Security
      Register.  Failure to mail a notice or communication to a Holder or any
      defect in it shall not affect its sufficiency with respect to other
      Holders.

     

    If
      a
      notice or communication is mailed in the manner provided above within the time
      prescribed, it is duly given, whether or not the addressee receives
      it.

     

    If
      the
      Company mails a notice or communication to Holders, it shall mail a copy to
      the
      Trustee and each Agent at the same time.

     

    Section
      12.02. Communication
      by Holders of Notes with Other Holders of Notes.

     

    Holders
      may communicate with other Holders with respect to their rights under this
      Indenture or the Notes. 

     

    Section
      12.03. Certificate
      and Opinion as to Conditions Precedent.

     

    Upon
      any
      request or application by the Company to the Trustee to take any action under
      any provision of this Indenture, the Company shall furnish to the
      Trustee:

     

    (a) an
      Officers’ Certificate (which shall include the statements set forth in
Section
      12.04
      hereof)
      stating that, in the opinion of the signers, all conditions precedent and
      covenants, if any, provided for in this Indenture relating to the proposed
      action have been complied with; and

     

    (b) an
      Opinion of Counsel (which shall include the statements set forth in Section
      12.04
      hereof)
      stating that, in the opinion of such counsel, all such conditions precedent
      and
      covenants have been complied with.

     

    
      
        
        

      

      
        77

        
          

        

      

      
        
        

      

    

    

     

    Section
      12.04. Statements
      Required in Certificate or Opinion.

     

    Each
      certificate or opinion with respect to compliance with a condition or covenant
      provided for in this Indenture shall include:

     

    (a) a
      statement that the Person making such certificate or opinion has read such
      covenant or condition;

     

    (b) a
      brief
      statement as to the nature and scope of the examination or investigation upon
      which the statements or opinions contained in such certificate or opinion are
      based;

     

    (c) a
      statement that, in the opinion of such Person, he or she has made such
      examination or investigation as is necessary to enable such Person to express
      an
      informed opinion as to whether or not such covenant or condition has been
      complied with; and

     

    (d) a
      statement as to whether or not, in the opinion of such Person, such condition
      or
      covenant has been complied with.

     

    With
      respect to matters of fact, an Opinion of Counsel may rely on an Officers’
Certificate, certificates of public officials or reports or opinions of
      experts.

     

    Section
      12.05. Legal
      Holidays.

     

    In
      any
      case where any Interest Payment Date, Purchase Date or Stated Maturity of any
      Note is not a Business Day at the city in which the Corporate Trust Office
      of
      the Trustee is located, then (notwithstanding any other provision of this
      Indenture or of the Notes) payment of Interest or principal (and premium, if
      any) need not be made at such Corporate Trust Office of the Trustee on such
      date, but such payment may be made on the next succeeding Business Day at such
      Corporate Trust Office of the Trustee with the same force and effect as if
      made
      on the Interest Payment Date or Purchase Date, or at the Stated Maturity and
      such extension of time shall in such case be included in the computation of
      Interest accruing on such Note; provided,
      however,
      that if
      such extension would cause payment of Interest to be made in the next following
      calendar month, such payment shall be made on the next preceding Business
      Day.

     

    Section
      12.06. Rules
      by Trustee and Agents.

     

    The
      Trustee may make reasonable rules for action by or at a meeting of Holders.
      The
      Registrar or Paying Agent may make reasonable rules and set reasonable
      requirements for its functions.

     

    Section
      12.07. No
      Personal Liability of Directors, Officers, Employees and
      Stockholders.

     

    No
      past,
      present or future director, officer, employee, incorporator or stockholder
      of
      the Company or any Guarantor, as such, shall have any liability for any
      obligations of the Company or of the Guarantors under the Notes, this Indenture,
      the Guarantees or for any claim based on, in respect of, or by reason of, such
      obligations or their creation. Each Holder of Notes by accepting a Note waives
      and releases all such liability. The waiver and release are part of the
      consideration for issuance of the Notes. The waiver and release may not be
      effective to waive or release liabilities under the U.S. federal securities
      laws.

     

    Section
      12.08. Governing
      Law.

     

    THIS
      INDENTURE, THE GUARANTEE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
      ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

     

    
      
        
        

      

      
        78

        
          

        

      

      
        
        

      

    

    

     

    Section
      12.09. No
      Adverse Interpretation of Other Agreements.

     

    This
      Indenture may not be used to interpret any other indenture, loan or debt
      agreement of the Company or its Subsidiaries or of any other Person.  Any
      such indenture, loan or debt agreement may not be used to interpret this
      Indenture.

     

    Section
      12.10. Successors.

     

    All
      covenants and agreements of the Company in this Indenture and the Notes shall
      bind its successors.  All covenants and agreements of the Trustee in this
      Indenture shall bind its successors.

     

    Section
      12.11. Severability.

     

    In
      case
      any provision in this Indenture, the Guarantee or in the Notes shall be invalid,
      illegal or unenforceable, the validity, legality and enforceability of the
      remaining provisions, to the fullest extent permitted by applicable law, shall
      not in any way be affected or impaired thereby.

     

    Section
      12.12. Counterpart
      Originals.

     

    The
      parties may sign any number of copies of this Indenture.  Each signed copy
      shall be an original, but all of them together represent the same
      agreement.

     

    Section
      12.13. Table
      of Contents, Headings, etc.

     

    The
      Table
      of Contents and Headings in this Indenture have been inserted for convenience
      of
      reference only, are not to be considered a part of this Indenture and shall
      in
      no way modify or restrict any of the terms or provisions hereof.

     

    [Signatures
      on following page]

    

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

        
          

        

      

    

    SIGNATURES

    Dated
      January 25, 2007

     

    

      
        	
                 

              	
                COMPANY:

              
	
                 

              	
                 

              	 
	
                 

              	
                FUSHI
                  INTERNATIONAL, INC.

              
	
                 

              	
                 

              	 
	
                 

              	
                 

              	 
	
                 

              	
                By:
                  

              	 
	
                 

              	 	
                Name:

              
	
                 

              	 	
                Title:

              
	 	 
	 	 
	 	 
	
                 

              	
                GUARANTOR:

              
	 	 
	
                 

              	
                FUSHI
                  HOLDINGS, INC.

              
	
                 

              	
                 

              	 
	 	 	 
	
                 

              	
                By:
                  

              	 
	
                 

              	 	
                Name:

              
	
                 

              	 	
                Title:

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                 

              	
                 

              	 
	
                 

              	
                TRUSTEE:

              
	 	 
	
                 

              	
                THE
                  BANK OF NEW YORK,

              
	
                 

              	
                a
                  New York banking corporation,

              
	
                 

              	
                as
                  Trustee

              
	 	 	 
	 	 	 
	
                 

              	
                By:
                  

              	 
	
                 

              	 	
                Name:

              
	
                 

              	 	
                Title:

              

      

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A 
      
        

      

    

     

    (Face
      of
      Note)

     

    [GLOBAL
      NOTE LEGEND]

    

    UNLESS
      THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR
      BANK
      S.A./N.V. (“EUROCLEAR”), OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME
      (“CLEARSTREAM”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
      EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
      ITS
      AUTHORIZED NOMINEE OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
      REPRESENTATIVE OF EUROCLEAR OR CLEARSTREAM (AND ANY PAYMENT IS MADE TO ITS
      AUTHORIZED NOMINEE, OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
      REPRESENTATIVE OF EUROCLEAR OR CLEARSTREAM), ANY TRANSFER, PLEDGE OR OTHER
      USE
      HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
      REGISTERED OWNER HEREOF, ITS AUTHORIZED NOMINEE, HAS AN INTEREST HEREIN.

     

    TRANSFERS
      OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
      TO
      NOMINEES OF EUROCLEAR OR CLEARSTREAM OR TO A SUCCESSOR THEREOF OR SUCH
      SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
      LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
      THE
      INDENTURE REFERRED TO ON THE REVERSE HEREOF. 

     

    [REGULATION
      S LEGEND]

    

    UNTIL
      40
      DAYS AFTER THE LATER OF THE DAY ON WHICH THE NOTES ARE FIRST OFFERED TO PERSONS
      OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S, AS DEFINED BELOW) AND
      THE
      DATE OF THE CLOSING OF THE OFFERING OF THE NOTES, AN OFFER OR SALE OF THE NOTES
      WITHIN THE UNITED STATES (AS DEFINED IN THE U.S. SECURITIES ACT OF 1933, AS
      AMENDED (THE “U.S. SECURITIES ACT”) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF
      THE U.S. SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN
      ACCORDANCE WITH RULE 144A THEREUNDER. 

     

    THIS
      NOTE
      HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OR OTHER SECURITIES LAWS
      OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR
      PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
      ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS
      THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
      OF THE U.S. SECURITIES ACT. 

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    

     

    THE
      HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS
      A
“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE U.S.
      SECURITIES ACT (“RULE 144A”)) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
      THIS NOTE IN AN “OFFSHORE TRANSACTION” PURSUANT TO RULE 904 OF REGULATION S
      UNDER THE U.S. SECURITIES ACT (“REGULATION S”), (2) AGREES ON ITS OWN BEHALF AND
      ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES THAT
      IT
      WILL NOT PRIOR TO (X) THE DATE WHICH IS 40 DAYS AFTER THE LATER OF THE DATE
      OF
      THE COMMENCEMENT OF THE OFFERING AND THE DATE OF ORIGINAL ISSUANCE (OR OF ANY
      PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED
      BY
      APPLICABLE LAW (THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL OR
      OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUER, (B) PURSUANT TO A
      REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE U.S.
      SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT
      TO
      RULE 144A UNDER THE U.S. SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES
      IS A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
      OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER TO
      WHOM
      NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
      PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
      STATES WITHIN THE MEANING OF REGULATION S OR (E) PURSUANT TO ANY OTHER AVAILABLE
      EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT, AND
      (3)
      AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A
      NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY,
      THE TRUSTEE, THE REGISTRAR AND THE TRANSFER AGENT SHALL HAVE THE RIGHT PRIOR
      TO
      ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) PRIOR TO THE END OF
      THE
      40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S OR
      PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO
      REQUIRE THAT AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
      SATISFACTORY TO THE COMPANY, THE TRUSTEE, THE REGISTRAR AND THE TRANSFER AGENT
      IS COMPLETED AND DELIVERED BY THE TRANSFEROR. THIS LEGEND WILL BE REMOVED UPON
      THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS
      USED
      HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE
      THE MEANINGS GIVEN TO THEM BY REGULATIONS.

     

    THIS
      NOTE
      MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT
      OR
      BENEFIT OF, U.S. PERSONS (I) AS PART OF THEIR DISTRIBUTION AT ANY TIME OR (II)
      OTHERWISE UNTIL 40 DAYS AFTER THE LATER OF THE DATE OF THE COMMENCEMENT OF
      THE
      OFFERING AND THE DATE OF ORIGINAL ISSUANCE, EXCEPT IN EITHER CASE IN ACCORDANCE
      WITH REGULATION S (OR RULE 144A, IF AVAILABLE) UNDER THE SECURITIES ACT.

     

    [IN
      CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
      TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
      MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
      RESTRICTIONS.]1 

     __________

    
      	
              1

            	
              To
                be added to Definitive Notes only. 

            

    

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

    GUARANTEED
      SENIOR SECURED FLOATING RATE NOTES DUE 2012

     

    ISIN:
      XS0280734889

    Common
      Code: 028073488

     

    

    
      	
              No.___

            	
              $_____________

            

    

    

    FUSHI
      INTERNATIONAL, INC.

     

    promises
      to pay to The Bank of New York, a New York banking corporation, or registered
      assigns, as common depositary for Clearstream Banking, sociėtė
      anonyme (“Clearstream”)
      and/or
      Euroclear Bank S.A./N.V. (“Euroclear”),
      or
      registered assigns, the principal sum of _________________ Dollars
      ($______________) on January 24, 2012[, or such greater or lesser principal
      amount at the Stated Maturity hereof as is indicated in the records of the
      Trustee and the Common Depositary]2.

     

    Interest
      Payment Dates: January 24 and July 24, commencing July 24, 2007.

     

    Record
      Dates:  January 10 and July 10.

     

    Dated:
      ______________.

     

    
      	
              2

            	
              To
                be added to Global Notes only. 

            

    

    

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Note to be signed manually or
      by
      facsimile by its duly authorized officer.

     

    

     

    
      	 	FUSHI
              INTERNATIONAL, INC.
	 	 	 
	 	 	 
	 	By:	
               

            
	 	 	
              Name:

            
	 	 	
              Title:

            

    

    

    

    

    CERTIFICATE
      OF AUTHENTICATION

    

    This
      is
      one of the [Global]

    Notes
      referred to in the

    within-mentioned
      Indenture:

    

    THE
      BANK
      OF NEW YORK,

    a
      New
      York banking corporation,

    as
      Trustee

    

    

    By:______________________________ 

    Authorized
      Signatory

    

    Dated
      _____________, 20__

    

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

    (Back
      of
      Note)

     

    GUARANTEED
      SENIOR SECURED FLOATING RATE NOTES DUE 2012

     

    Capitalized
      terms used herein shall have the meanings assigned to them in the Indenture
      referred to below unless otherwise indicated.

     

    1. Interest.  FUSHI
      INTERNATIONAL, INC., a Nevada corporation (the “Company”),
      promises to pay interest on the principal amount of this Note at the rate per
      annum, reset semi-annually, equal to LIBOR (as determined by the Calculation
      Agent from the Issue Date) plus the Margin until maturity. For the avoidance
      of
      doubt, LIBOR will be used for all interest periods without interpolation,
      including the first interest period beginning on the Issue Date and ending
      on
      July 24, 2007. The “Margin”
shall
      initially be 7.00% and shall become 5.60% from and after the date of completion
      of a Qualifying IPO that occurs on or before July 24, 2008. Promptly upon
      determination, the Calculation Agent will inform the Trustee and the Company
      of
      the interest rate for the next interest period. The Company shall pay interest
      semi-annually on January 24 and July 24 of each year, or if any such day is
      not
      a Business Day, on the next succeeding Business Day with the same force and
      effect and such extension of time shall in such case be included in the
      computation of Interest accruing on such Note; provided,
      however,
      that if
      such extension would cause payment of Interest to be made in the next following
      calendar month, such payment shall be made on the next preceding Business Day
      (each an “Interest
      Payment Date”).
      Interest shall accrue from and including the most recent date to which interest
      has been paid on the Notes (or one or more Predecessor Notes) or, if no interest
      has been paid, from the date of issuance, to but excluding the following
      Interest Payment Date; provided,
      however,
      that if
      there is no existing Default in the payment of interest, and if this Note is
      authenticated between a record date referred to on the face hereof and the
      next
      succeeding Interest Payment Date, interest shall accrue from such next
      succeeding Interest Payment Date; provided,
      further,
      that
      the first Interest Payment Date shall be July 24, 2007. The Company shall pay
      interest (including post-petition interest in any proceeding under any
      Bankruptcy Law) on overdue principal and premium, if any, from time to time
      at a
      rate that is 5% per annum in excess of the interest rate then in effect under
      the Indenture and this Note; it shall pay interest (including post-petition
      interest in any proceeding under any Bankruptcy Law) on overdue installments
      of
      interest (without regard to any applicable grace periods), from time to time
      at
      the same rate to the extent lawful.  Interest shall be computed on the
      basis of a 360-day year for the actual number of days elapsed. The amount of
      interest for each day that the Notes are outstanding (the “Daily
      Interest Amount”)
      will
      be calculated by dividing the interest rate in effect for such day by 360 and
      multiplying the result by the principal amount of the Notes. The amount of
      interest to be paid on the Notes for each Interest Period will be calculated
      by
      adding the Daily Interest Amounts for each day in the Interest Period. All
      percentages resulting from any of the above calculations will be rounded, if
      necessary, to the nearest one hundred-thousandth of a percentage point, with
      five one-millionths of a percentage point being rounded upwards and all dollar
      amounts used in or resulting from such calculations will be rounded to the
      nearest cent (with one-half cent being rounded upwards). The interest rate
      on
      the Notes will in no event be higher than the maximum rate permitted by New
      York
      law as such rate may be modified by United States law of general
      application.

     

    2. Method
      of Payment. 
      The Company shall pay interest on the Notes (except defaulted interest) to
      the
      Persons in whose name this Note (or one or more Predecessor Notes) is registered
      at the close of business on the January 10 or July 10 next preceding the
      Interest Payment Date, even if such Notes are cancelled after such record date
      and on or before such Interest Payment Date, except as provided in Section
      2.12
      of the Indenture with respect to defaulted interest.  The Notes shall be
      payable as to principal, premium, if any, and interest at the office or agency
      of the Company maintained for such purpose, or, at the option of the Company,
      payment of interest may be made by check mailed to the Holders at their
      addresses set forth in the Security Register; provided,
      however,
      that
      payment by wire transfer of immediately available funds shall be required with
      respect to principal of and interest and premium, if any, on, all Global Notes
      and all other Notes the Holders of which shall have provided wire transfer
      instructions to the Company or the Paying Agent. Such payment shall be in such
      coin or currency of the United States of America as at the time of payment
      is
      legal tender for payment of public and private debts.

     

    3. Paying
      Agent, Registrar and Calculation Agent.  Initially,
      The Bank of New York, a New York banking corporation, the Trustee under the
      Indenture, shall act as Paying Agent, Registrar and Calculation Agent.  The
      Company may change any Paying Agent, Registrar or Calculation Agent without
      notice to any Holder.  The Company or any of its Subsidiaries may act in
      any such capacity.

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

    

     

    4. Indenture.
      The
      Company issued the Notes under an Indenture dated January 25, 2007
      (“Indenture”)
      among
      the Company, the guarantor party thereto (the “Guarantor”)
      and
      the Trustee.  To the extent any provision of this Note conflicts with the
      express provisions of the Indenture, the provisions of the Indenture shall
      govern and be controlling. 

     

    5. Optional
      Redemption.

     

    The
      Notes
      shall not be redeemable at the option of the Company prior to January 24, 2008.
      Beginning on January 24, 2008, the Company may redeem all (but not less than
      all) of the Notes, after giving the notice required pursuant to Section 3.02
      of
      the Indenture. The Notes may be redeemed at the redemption prices set forth
      below (expressed as a percentage of principal amount), plus accrued and unpaid
      interest to but excluding the redemption date (subject to the right of Holders
      of record on the relevant Regular Record Date to receive interest due on the
      relevant Interest Payment Date), if redeemed during the twelve-month period
      commencing on January 24 of the years set forth below:

     

    
      	
              Year

            	 	
              Percentage

            	 
	
              2008

            	 	 	
              106

            	
              %

            
	
              2009

            	 	 	
              104

            	
              %

            
	
              2010

            	 	 	
              102

            	
              %

            
	
              2011
                and thereafter

            	 	 	
              100

            	
              %

            

    

     

    Unless
      the Company defaults in the payment of the redemption price, interest will
      cease
      to accrue on the Notes or portions thereof called for redemption on the
      applicable redemption date.

     

    Any
      notice to the Holders of Notes of a redemption pursuant to this paragraph 5
      shall include the appropriate calculation of the redemption price, but need
      not
      include the redemption price itself. The actual redemption price, calculated
      as
      described above, shall be set forth in an Officers’ Certificate delivered to the
      Trustee no later than two Business Days prior to the redemption
      date.

     

    Any
      prepayment pursuant to this paragraph shall be made pursuant to the provisions
      of Sections 3.01 through 3.04 of the Indenture.

     

    6.Mandatory
      Redemption.
      

     

    The
      Company agrees that on the dates indicated in the following table, the Company
      will prepay and there shall become due and payable the corresponding principal
      amount (or such lesser principal amount as shall then be outstanding) in respect
      of the aggregate principal Debt evidenced by the Notes. 

     

    
      	
              Date

            	 	
              Principal
                Amount

            	 
	 	 	 	 
	
              July
                24, 2009

            	 	
              $

            	
              5,000,000

            	 
	
              January
                24, 2010

            	 	
              $

            	
              5,000,000

            	 
	
              July
                24, 2010

            	 	
              $

            	
              5,000,000

            	 
	
              January
                24, 2011

            	 	
              $

            	
              5,000,000

            	 
	
              July
                24, 2011

            	 	
              $

            	
              10,000,000

            	 

    

    

    The
      entire remaining principal amount of the Notes shall become due and payable
      on
      January 24, 2012. Each required prepayment made pursuant to this paragraph
      6
      shall be made at 100% of principal amount and without payment of any premium
      and
      allocated among all of the Notes in proportion, as nearly as practicable, to
      the
      respective unpaid principal amounts thereof. Upon any repurchase of the Notes
      pursuant to paragraph 7, the principal amount of each required prepayment of
      the
      Notes becoming due under this paragraph 6 on and after the date of such
      prepayment or purchase shall be reduced in the same proportion as the aggregate
      unpaid principal amount of the Notes is reduced as a result of such prepayment
      or purchase.

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

    

     

    In
      the
      case of each prepayment of Notes pursuant to this paragraph 6, the principal
      amount of each Note to be prepaid shall mature and become due and payable on
      the
      date fixed for such prepayment, together with interest on such principal amount
      accrued to such date. From and after such date, unless the Company shall fail
      to
      pay such principal amount when so due and payable, together with the interest
      as
      aforesaid, interest on such principal amount shall cease to accrue. Any Note
      paid or prepaid in full shall be surrendered to the Company and cancelled and
      shall not be reissued, and no Note shall be issued in lieu of any prepaid
      principal amount of any Note.

     

    7. Repurchase
      at Option of Holder.

     

    (a)
      Upon the
      occurrence of a Change of Control, each Holder shall have the right to require
      the Company to repurchase all or any part (equal to $100,000 or an integral
      multiple of $100,000) of such Holder’s Notes (a “Change
      of Control Offer”)
      at a
      purchase price in cash equal to 102% of the aggregate principal amount of the
      Notes repurchased, plus accrued and unpaid interest on the Notes repurchased
      to
      the purchase date (subject to the right of Holders of record on the relevant
      record date to receive interest to, but excluding, the Purchase
      Date).

     

    (b)
      Upon the
      occurrence of a Designated Event, each Holder shall have the right to require
      the Company to repurchase all or any part (equal to $100,000 or an integral
      multiple of $100,000) of such Holder’s Notes (a “Designated
      Event Offer”)
      at a
      purchase price in cash equal to 110% of the aggregate principal amount of the
      Notes repurchased, plus accrued and unpaid interest on the Notes repurchased
      to
      the purchase date (subject to the right of Holders of record on the relevant
      record date to receive interest to, but excluding, the Designated Event Payment
      Date).

     

    (c) If
      the
      Company or one of its Subsidiaries consummates any Asset Sales, they shall
      not
      be required to apply any Net Available Cash in accordance with the Indenture
      until the aggregate Net Available Cash from all Asset Sales following the date
      the Notes are first issued exceeds $5.0 million. Thereafter, the Company shall,
      after application of the additional aggregate $5.0 million of Net Available
      Cash
      as provided in the second paragraph of Section 4.12 of the Indenture, commence
      an offer for Notes pursuant to the Indenture by applying the Net Available
      Cash
      (an “Asset
      Sale Offer”)
      pursuant to Section 3.07 of the Indenture to purchase the maximum principal
      amount of Notes that may be purchased out of the Net Available Cash at an offer
      price in cash equal to 100% of the principal amount thereof plus accrued and
      unpaid interest to the date fixed for the closing of such offer in accordance
      with the procedures set forth in the Indenture. To the extent that the aggregate
      amount of Notes tendered pursuant to an Asset Sale Offer is less than the Net
      Available Cash, the Company (or such Subsidiary) may use such deficiency first
      to repay certain credit facilities or any other Senior Debt of the Company
      or
      any Guarantor or Debt of any Subsidiary of the Company that is not a Guarantor
      (excluding, in any such case, any Debt owed to the Company or an Affiliate
      of
      the Company), and only thereafter, for any purpose not prohibited by the
      Indenture. If the aggregate principal amount of Notes surrendered by Holders
      thereof exceeds the amount of Net Available Cash, the Trustee shall select
      the
      Notes to be purchased on a pro
      rata
      basis.
      Holders of Notes that are the subject of an offer to purchase will receive
      an
      Asset Sale Offer from the Company prior to any related purchase date and may
      elect to have such Notes purchased by completing the form entitled “Option of
      Holder to Elect Purchase” on the reverse of the Notes.

     

    8. Notice
      of Redemption. 
      Notice of redemption shall be mailed at least 30 days but not more than 60
      days
      before the redemption date to each Holder whose Notes are to be redeemed at
      its
      registered address.  Notes in denominations larger than $100,000 may be
      redeemed in part but only in whole multiples of $100,000, unless all of the
      Notes held by a Holder are to be redeemed.  On and after the redemption
      date interest ceases to accrue on Notes or portions thereof called for
      redemption.

     

    9. Denominations,
      Transfer, Exchange. 
      The Notes are in registered form without coupons in denominations of $100,000
      and integral multiples of $100,000.  [This Note shall represent the
      aggregate principal amount of outstanding Notes from time to time endorsed
      hereon and the aggregate principal amount of Notes represented hereby may from
      time to time be reduced or increased, as appropriate, to reflect exchanges
      and
      redemptions.]1 
      The
      transfer of Notes may be registered and Notes may be exchanged as provided
      in
      the Indenture.  The Registrar and the Trustee may require a Holder, among
      other things, to furnish appropriate endorsements and transfer documents and
      the
      Company may require a Holder to pay any taxes and fees required by law or
      permitted by the Indenture.  The Company need not exchange or register the
      transfer of any Note or portion of a Note selected for redemption, except for
      the unredeemed portion of any Note being redeemed in part.  Also, the
      Company need not exchange or register the transfer of any Notes for a period
      of
      15 days before a selection of Notes to be redeemed or during the period between
      a record date and the corresponding Interest Payment Date.

     

    ________________

    1
      Include only if a global note.

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

    

    

     

    10. Persons
      Deemed Owners. 
      The registered Holder of a Note may be treated as its owner for all
      purposes.

     

    11. Amendment,
      Supplement and Waiver. 
      Subject to certain exceptions, the Company and the Trustee may amend or
      supplement the Indenture or the Notes with the consent of the Holders of a
      majority in principal amount of the then outstanding Notes voting as a single
      class (including consents obtained in connection with a purchase of or tender
      offer or exchange offer for the Notes), and, subject to Sections 6.04 and 6.07
      of the Indenture, any existing Default or Event of Default (except a continuing
      Default or Event of Default in the payment of principal, premium, if any, or
      interest on the Notes) or compliance with any provision of the Indenture or
      the
      Notes (except for certain covenants and provisions of the Indenture which cannot
      be amended without the consent of each Holder) may be waived with the consent
      of
      the Holders of a majority in principal amount of the then outstanding Notes
      voting as a single class (including consents obtained in connection with a
      purchase of or tender offer or exchange offer for the Notes). Without the
      consent of any Holder, the Company and the Trustee may amend or supplement
      the
      Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,
      to provide for the assumption by a successor corporation, partnership or limited
      liability company of the obligations of the Company under the Indenture, to
      provide for uncertificated Notes in addition to or in place of certificated
      Notes, to add additional Guarantees or additional obligors with respect to
      the
      Notes, to secure the Notes, to add to the covenants of the Company for the
      benefit of the Holders of the Notes or to surrender any right or power conferred
      upon the Company, or to make any change that would provide any additional rights
      or benefits to the Holders of Notes or that does not adversely affect the legal
      rights under the Indenture of any such Holder.

     

    12.Defaults
      and Remedies. 
      Each of the following is an Event of Default under the Indenture: (a) failure
      to
      make the payment of any interest on such Notes when the same becomes due and
      payable, and such failure continues for a period of 15 days; (b) failure to
      make
      the payment of any principal of, or premium, if any, on, any of such Notes
      when
      the same becomes due and payable at its Stated Maturity, upon acceleration,
      mandatory redemption, optional redemption, required repurchase or otherwise,
      including payment of Additional Amounts; (c) failure to comply with Section
      5.01
      of the Indenture; (d) failure to comply with any other covenant or agreement
      in
      such Notes or in this Indenture (other than a failure that is the subject of
      the
      foregoing clause (a), (b) or (c) and other than the failure to comply with
      Section 4.25 of the Indenture, for which payment of Additional Amounts is
      provided for under the Indenture and is governed by Section 4.01 thereof),
      and
      such failure continues for 30 days after written notice is given to the Company
      by the Trustee or the holders of not less than 25% in aggregate principal amount
      of such Notes then outstanding specifying the default, demanding that it be
      remedied and stating that such notice is a “Notice of Default;” (e) a default
      under any Debt by the Company or any Subsidiary that results in acceleration
      of
      the maturity of such Debt, or failure to pay any such Debt at maturity, in
      an
      aggregate amount greater than $3.0 million or its foreign currency equivalent
      at
      the time; (f) any legal proceedings in respect of, or judgment or judgments
      for,
      the payment of money in an aggregate amount in excess of $1.0 million (or its
      foreign currency equivalent at the time) that shall be instituted or rendered
      against the Company or any Subsidiary; (g) any Guarantee ceases to be in full
      force and effect (other than in accordance with the terms of such Guarantee)
      or
      any Guarantor denies or disaffirms its obligations under its Guarantee; (h)
      certain events of bankruptcy, insolvency or reorganization affecting the Company
      or any of its Significant Subsidiaries; (i) any default by the Company or Future
      Guarantor Pledgor in any of its obligations under the Security Documents, which
      adversely affects the enforceability, validity, perfection or priority of the
      applicable Lien on the Collateral or which adversely affects the condition
      or
      value of the Collateral, taken as a whole, in any material respect; the security
      interest under the Security Documents shall, at any time, cease to be in full
      force and effect for any reason other than the satisfaction in full of all
      obligations under the Indenture and discharge of the Indenture or any security
      interest created thereunder shall be declared invalid or unenforceable or the
      Company or any Guarantor shall assert, in any pleading in any court of competent
      jurisdiction, that any such security interest is invalid or unenforceable;
      (j)
      the Company or any Future Guarantor Pledgor denies or disaffirms its obligations
      under any Security Document or, other than in accordance with this Indenture
      and
      the Security Documents, any Security Document ceases to be or is not in full
      force and effect or the Trustee ceases to have a first priority interest in
      the
      Collateral; (k) the Company, the WFOE or Dalian Fushi amends or modifies their
      respective constitutive documents in such a manner that would have a Material
      Adverse Effect or engages any business other than a Related Business; (l) either
      (i) any Restructuring Agreement (or all Restructuring Agreements considered
      as a
      whole), the Indenture, the Notes, any loan made directly or indirectly from
      the
      Company to the WFOE, or any Security Document shall be (A) declared by any
      Governmental Authority to be illegal or enforceable or (B) terminated prior
      to
      its scheduled termination date, or (ii) any party to a Restructuring Agreement
      shall deny that it has any liability or obligation under any such Restructuring
      Agreement to which it is a party and such party shall have ceased performance
      thereunder prior to its scheduled expiration date; (m)(i) the confiscation,
      expropriation or nationalization by any Governmental Authority of any Property
      of the Company or any of its Subsidiaries or their respective interests in
      any
      Restructuring Agreement (or all Restructuring Agreements considered as a whole);
      or (ii) the cancellation, or material and substantially adverse modification,
      of
      the rights of the WFOE pursuant to the Restructuring Agreements, or (iii) if
      such revocation or repudiation could reasonably be expected to have a Material
      Adverse Effect, the revocation or repudiation by any Governmental Authority
      of
      any previously granted Governmental Approval to Dalian Fushi or the WFOE that
      is
      material to the operation of the Related Business; or (iv) the imposition or
      introduction of material and discriminatory taxes, tariffs, royalties, customs
      or excise duties imposed on Dalian Fushi or the WFOE, or the material and
      discriminatory withdrawal or suspension of material privileges or specifically
      granted material rights of a fiscal nature; (n) failure by the Company or any
      Affiliate thereof (other than any Person who is an Affiliate solely because
      such
      Person is a holder of Notes or Convertible Notes) to comply with any of the
      agreements in that certain Investor Rights Agreement dated the Issue Date by
      and
      among the Company, the WFOE, Dalian Fushi, certain Affiliates of the Company
      and
      the other Persons therein named if such failure continues for 30 days after
      written notice is given to the Company by the Trustee or the holders of not
      less
      than 25% in aggregate principal amount of the Notes then outstanding specifying
      the default, demanding that it be remedied and stating that such notice is
      a
“Notice of Default;” or (o) failure by the Company to comply with the Escrow
      Agreement if such failure continues for 30 days after written notice is given
      to
      the Company by the Trustee or the holders of not less than 25% in aggregate
      principal amount of the Notes then outstanding specifying the default, demanding
      that it be remedied and stating that such notice is a “Notice of Default.”

    
      
        
        

      

      
        A-8

        
          

        

      

      
        
        

      

    

    

    If
      any
      Event of Default occurs and is continuing, the Trustee or the Holders of at
      least 25% in principal amount of the then outstanding Notes may declare all
      the
      Notes to be due and payable. Notwithstanding the foregoing, in the case of
      an
      Event of Default arising from certain events of bankruptcy or insolvency
      described in the Indenture, all outstanding Notes shall become due and payable
      without further action or notice. Holders may not enforce the Indenture or
      the
      Notes except as provided in the Indenture. Subject to certain limitations,
      Holders of a majority in aggregate principal amount of the then outstanding
      Notes may direct the Trustee in its exercise of any trust or power. The Trustee
      may withhold from Holders notice of any continuing Default or Event of Default
      (except a Default or Event of Default relating to the payment of principal
      or
      interest) if it determines that withholding notice is in their interest. The
      Holders of a majority in aggregate principal amount of the Notes then
      outstanding by notice to the Trustee may on behalf of the Holders of all of
      the
      Notes waive any existing Default or Event of Default and its consequences under
      the Indenture except a continuing Default or Event of Default in the payment
      of
      interest, or the principal of, the Notes. The Company is required to deliver
      to
      the Trustee annually a statement regarding compliance with the Indenture, and
      the Company is required upon becoming aware of any Default or Event of Default,
      to deliver to the Trustee a statement specifying such Default or Event of
      Default.

     

    13. Trustee
      Dealings with Company.
      Subject
      to certain limitations, the Trustee in its individual or any other capacity
      may
      become the owner or pledgee of Notes and may otherwise deal with the Company
      or
      any Affiliate of the Company with the same rights it would have if it were
      not
      Trustee.

     

    14. No
      Recourse Against Others. 
      No past, present or future director, officer, employee, incorporator or
      stockholder of the Company or of any Guarantor, as such, shall have any
      liability for any obligations of the Company or any Guarantor under the
      Indenture, the Notes, the Guarantees or for any claim based on, in respect
      of,
      or by reason of, such obligations or their creation.  Each Holder by
      accepting a Note waives and releases all such liability. 

     

    15. Authentication. 
      This Note shall not be valid until authenticated by the manual signature of
      the
      Trustee or an authenticating agent.

     

    
      
        
        

      

      
        A-9

        
          

        

      

      
        
        

      

    

    16. Abbreviations. 
      Customary abbreviations may be used in the name of a Holder or an assignee,
      such
      as:  TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
      JT TEN (= joint tenants with right of survivorship and not as tenants in
      common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
      Act).

     

    17. Original
      Issue Discount.
      For
      purposes of sections 1272, 1273 and 1275 of the Internal Revenue Code of 1986,
      as amended, this Note is being issued with Tax Original Issue Discount and
      the
      issue date of this Note is January 25, 2007. 

     

    18. Governing
      Law.
      The
      Indenture, the Guarantee and this Note shall be governed by and construed in
      accordance with the law of the state of New York.

     

    
      
        
        

      

      
        A-10

        
          

        

      

      
        
        

      

    

    Option
      of
      Holder to Elect Purchase

     

    If
      you
      want to elect to have this Note purchased by the Company pursuant to Section
      4.12 or 4.17 or 4.26 of the Indenture, check the box below:

     

    Section
      4.12    Purchase
      Date:_______________

     

    Section
      4.17

     

    Section
      4.26

     

    If
      you
      want to elect to have only part of the Note purchased by the Company pursuant
      to
      Section 4.12 or 4.17 or Section 4.26 of the Indenture, state the amount you
      elect to have purchased: $_____________________

     

    
      	
              Date:_______________________________

            	
              Your
                Signature:________________________________

            
	 	
              (Sign
                exactly as your name appears on the Note)

            
	 	 
	 	
              SIGNATURE
                GUARANTEE:

            
	 	 
	 	
              ________________________________________

            
	 	 
	 	
              Signatures
                must be guaranteed by an “eligible guarantor institution” meeting the
                requirements of the Registrar, which requirements include membership
                or
                participation in the Security Transfer Agent Medallion Program (“STAMP”)
                or such other “signature guarantee program” as may be determined by the
                Registrar in addition to, or in substitution for,
                STAMP.

            

    

    

     

    
      
        
        

      

      
        A-11

        
          

        

      

      
        
        

      

    

    Assignment
      Form

     

    To
      assign
      this Note, fill in the form below: 

     

    (I)
      or
      (we) assign and transfer this Note to

     

    
      	 	 
	
              (Insert
                assignee’s social security or other tax I.D. no.)

            
	 	 
	 	 
	 	 
	 	 
	
              (Print
                or type assignee’s name, address and zip code)

            
	 	 	 	 
	
              and
                irrevocably appoint

            	 	 
	
              as
                agent to transfer this Note on the books of the Company.  The agent
                may substitute another to act for him.

            
	 	 	 
	 	 	 
	
              Date:
                ______________

            	 	 
	 	 	
              Your
                Signature:

            	 
	 	 	
              (Sign
                exactly as your name appears on the face of this Note)

            
	 	 	
              Signature
                Guarantee: 

            	 

    

    
      
        
        

      

      
        A-12

        
          

        

      

      
        
        

      

    

    SCHEDULE
      OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

     

    The
      following exchanges of a part of this Global Note for an interest in another
      Global Note or for a Definitive Note, or exchanges of a part of another Global
      Note or Definitive Note for an interest in this Global Note, have been
      made:

     

    
      	
              Date
                of Exchange

            	 	
              Amount
                of

              decrease
                in

              Principal
                Amount

              of
                this Global Note

            	 	
              Amount
                of increase

              in
                Principal Amount

              of
                this Global Note

            	 	
              Principal
                Amount

              of
                this Global Note

              following
                such

              decrease
                (or

              increase)

            	 	
              Signature
                of

              authorized
                signatory

              of
                Trustee or

              Note
                Custodian

            	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	
            	 	 	
            	 	 	
            	 	 	
            	 	 	
            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 

    

    
    

    
      
        
        

      

      
        A-13

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      B

     

    FORM
      OF NOTATION OF GUARANTEE

     

    For
      value
      received, each Guarantor (which term includes any successor Person under the
      Indenture), jointly and severally, unconditionally guarantees, to the extent
      set
      forth in the Indenture and subject to the provisions in the Indenture, dated
      January 25, 2007 (the “Indenture”),
      among
      Fushi International, Inc., as issuer (the “Company”),
      the
      Guarantor listed on the signature pages thereto and The Bank of New York, a
      New
      York banking corporation, as trustee (the “Trustee”),
      (a)
      the due and punctual payment of the principal of, premium, if any, and interest
      on the Notes, whether at maturity, by acceleration, redemption or otherwise,
      the
      due and punctual payment of interest on overdue principal and premium, if any,
      and, to the extent permitted by law, interest and the due and punctual
      performance of all other obligations of the Company to the Holders or the
      Trustee all in accordance with the terms of the Indenture and (b) in case of
      any
      extension of time of payment or renewal of any Notes or any of such other
      obligations, that the same will be promptly paid in full when due or performed
      in accordance with the terms of the extension or renewal, whether at stated
      maturity, by acceleration or otherwise. The obligations of the Guarantors to
      the
      Holders of Notes and to the Trustee pursuant to the Guarantee and the Indenture
      are expressly set forth in Article 9 of the Indenture and reference is hereby
      made to the Indenture for the precise terms of the Guarantee. This Guarantee
      is
      subject to release as and to the extent set forth in Section 9.05 of the
      Indenture. Each Holder of a Note, by accepting the same agrees to and shall
      be
      bound by such provisions. Capitalized terms used herein and not defined are
      used
      herein as so defined in the Indenture.

     

    
      	 	
              [GUARANTOR
                NAME]

            
	 	 
	 	
              By:__________________________

            
	 	
              Name:

            
	 	
              Title:

            

    

    

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      C

     

    FORM
      OF CERTIFICATE OF TRANSFER

     

    Fushi
      International, Inc.

    1
      Shuang
      Qiang Road

    Jinzhou,
      Dalian

    People’s
      Republic of China 116100

    

    The
      Bank
      of New York

    101
      Barclay Street

    21st
      Floor West

    New
      York,
      NY 10286

    U.S.A.

     

    Attention:
      Global Corporate Trust

     

    The
      Bank
      of New York

    One
      Temasek Avenue

    #02-01
      Millenia Tower

    Singapore
      039192

    Attention:
      Global Corporate Trust

     

    

    Re: GUARANTEED
      SENIOR SECURED FLOATING RATE NOTES DUE 2012

     

    Reference
      is hereby made to the Indenture, dated January 25, 2007 (the “Indenture”),
      among
      FUSHI INTERNATIONAL, INC., as issuer (the “Company”),
      the
      Guarantors party thereto and THE BANK OF NEW YORK, a New York banking
      corporation, as trustee. Capitalized terms used but not defined herein shall
      have the meanings given to them in the Indenture.

     

    ___________________,
      (the “Transferor”)
      owns
      and proposes to transfer the Note[s] or interest in such Note[s] in the
      principal amount of $___________ (the “Transfer”),
      to
      ___________________________ (the “Transferee”).
      In
      connection with the Transfer, the Transferor hereby certifies that:

     

    [CHECK
      ALL THAT APPLY]

     

    ࿶ 1. Check
      if Transferee will take delivery of a beneficial interest in the Global Note
      or
      a Definitive Note pursuant to Regulation S.
      The
      Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
      904 under the U.S. Securities Act of 1933, as amended (the “Securities Act”)
      and, accordingly, the Transferor hereby further certifies that (i) the Transfer
      is not being made to a Person in the United States and (x) at the time the
      buy
      order was originated, the Transferee was outside the United States or such
      Transferor and any Person acting on its behalf reasonably believed and believes
      that the Transferee was outside the United States or (y) the transaction was
      executed in, on or through the facilities of a designated offshore securities
      market and neither such Transferor nor any Person acting on its behalf knows
      that the transaction was prearranged with a buyer in the United States, (ii)
      no
      directed selling efforts have been made in contravention of the requirements
      of
      Rule 903(b) or Rule 904(a) of Regulation S under the Securities Act, (iii)
      the
      transaction is not part of a plan or scheme to evade the registration
      requirements of the Securities Act and (iv) if the proposed transfer is being
      made prior to the expiration of the Distribution Compliance Period (as defined
      in Regulation S under the Securities Act), the transfer is not being made to
      a
      U.S. Person or for the account or benefit of a U.S. Person. Upon consummation
      of
      the proposed transfer in accordance with the terms of the Indenture, the
      transferred beneficial interest or Definitive Note will be subject to the
      restrictions on Transfer enumerated in the legend printed on the Global Note
      and/or the Definitive Note and in the Securities Act.

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

    

    

    ࿶ 2. Check
      if Transferee will take delivery of a beneficial interest in the Global Note
      or
      a Definitive Note Pursuant to Rule 144A.
      The
      Transfer is being effected pursuant to and in accordance with Rule 144A under
      the Securities Act, and, accordingly, the Transferor hereby further certifies
      that the beneficial interest or Definitive Note is being transferred to a Person
      that the Transferor reasonably believed and believes is purchasing the
      beneficial interest or Definitive Note for its own account, or for one or more
      accounts with respect to which such Person exercises sole investment discretion,
      and such Person and each such account is a “qualified institutional buyer”
within the meaning of Rule 144A in a transaction meeting the requirements of
      Rule 144A and such Transfer is in compliance with any applicable blue sky
      securities laws of any state of the United States. Upon consummation of the
      proposed Transfer in accordance with the terms of the Indenture, the transferred
      beneficial interest or Definitive Note will be subject to the restrictions
      on
      transfer enumerated in the legend printed on the Global Note or the Definitive
      Note and in the Securities Act.

     

    ࿶ 3. Check
      if Transferee will take delivery of a beneficial interest in the Global Note
      or
      a Definitive Note pursuant to any provision of the Securities Act other than
      Rule 144A or Regulation S.
      The
      Transfer is being effected in compliance with the transfer restrictions
      applicable to beneficial interests in Global Notes and Definitive Notes and
      pursuant to and in accordance with the Securities Act and any applicable blue
      sky securities laws of any state of the United States, and accordingly the
      Transferor hereby further certifies that:

     

    (i) 
      such
      Transfer is being effected pursuant to and in accordance with Rule 144 under
      the
      Securities Act; or

     

    (ii) 
      such
      Transfer is being effected to the Company or a subsidiary thereof; or

     

    (iii) 
      such
      Transfer is being effected pursuant to an effective registration statement
      under
      the Securities Act.

     

    This
      certificate and the statements contained herein are made for your benefit and
      the benefit of the Company.

     

    

    
      
        
        

      

      
        2Unassociated Document

    

    
      

      

    

     

     

    FUSHI
      INTERNATIONAL, INC.,

     

    and

     

    THE
      BANK
      OF NEW YORK,

    a
      New
      York banking corporation

    as
      Trustee

     

    
      
        

      

    INDENTURE

     

    Dated
      January 25, 2007

     

    
      
        

      

     

    3.0%
      Guaranteed Senior Secured Convertible Notes due 2012

     

    

     

    
      

      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    TABLE
      OF CONTENTS

     

    
      	
            	 	
              Page

            
	 
	
              ARTICLE
                1

            
	
              DEFINITIONS

            
	 
	
              Section
                1.01.

            	
              Definitions

            	
              1

            
	
              Section
                1.02.

            	
              Other
                Definitions

            	
              32

            
	
              Section
                1.03.

            	
              Rules
                of Construction

            	
              33

            
	 
	
              ARTICLE
                2

            
	
              ISSUE,
                DESCRIPTION, EXECUTION, REGISTRATION

            
	
              AND
                EXCHANGE OF NOTES

            
	 
	
              Section
                2.01.

            	
              Designation
                Amount and Issue of Notes

            	
              34

            
	
              Section
                2.02.

            	
              Form
                of Notes

            	
              34

            
	
              Section
                2.03.

            	
              Date
                and Denomination of Notes; Payments of Interest

            	
              36

            
	
              Section
                2.04.

            	
              Execution
                of Notes

            	
              37

            
	
              Section
                2.05.

            	
              Exchange
                and Registration of Transfer of Notes; Restrictions on
                Transfer

            	
              37

            
	
              Section
                2.06.

            	
              Mutilated,
                Destroyed, Lost or Stolen Notes

            	
              40

            
	
              Section
                2.07.

            	
              Temporary
                Notes

            	
              41

            
	
              Section
                2.08.

            	
              Cancellation
                of Notes

            	
              41

            
	
              Section
                2.09.

            	
              Defaulted
                Interest

            	
              41

            
	
              Section
                2.10.

            	
              ISIN
                Numbers

            	
              42

            
	 
	
              ARTICLE
                3

            
	
              REDEMPTION
                AND REPURCHASE OF NOTES

            
	 
	
              Section
                3.01.

            	
              Redemption
                at Maturity

            	
              42

            
	
              Section
                3.02.

            	
              Offer
                to Purchase

            	
              42

            
	
              Section
                3.03.

            	
              Repurchase
                of Notes by the Company at Option of the Holder

            	
              44

            
	
              Section
                3.04.

            	
              Company
                Repurchase Notice

            	
              45

            
	
              Section
                3.05.

            	
              Effect
                of Repurchase Notice

            	
              46

            
	
              Section
                3.06.

            	
              Deposit
                of Repurchase Amount

            	
              47

            
	
              Section
                3.07.

            	
              Notes
                Repurchased in Part

            	
              47

            
	 
	
              ARTICLE
                4

            
	
              PARTICULAR
                COVENANTS OF THE COMPANY

            
	 
	
              Section
                4.01.

            	
              Payment
                of Principal and Interest

            	
              48

            
	
              Section
                4.02.

            	
              Maintenance
                of Office or Agency

            	
              48

            
	
              Section
                4.03.

            	
              Provisions
                as to Paying Agent

            	
              49

            
	
              Section
                4.04.

            	
              Existence

            	
              50

            
	
              Section
                4.05.

            	
              Maintenance
                of Properties

            	
              50

            
	
              Section
                4.06.

            	
              Payment
                of Taxes and Other Claims

            	
              50

            
	
              Section
                4.07.

            	
              Stay,
                Extension and Usury Laws

            	
              51

            
	
              Section
                4.08.

            	
              Payments
                for Consent

            	
              51

            
	
              Section
                4.09.

            	
              Incurrence
                of Additional Debt

            	
              51

            

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	
              Section
                4.10.

            	
              Restricted
                Payments

            	
              53

            
	
              Section
                4.11.

            	
              Liens

            	
              55

            
	
              Section
                4.12.

            	
              Asset
                Sales

            	
              55

            
	
              Section
                4.13.

            	
              Restrictions
                on Distributions from Subsidiaries

            	
              56

            
	
              Section
                4.14.

            	
              Affiliate
                Transactions

            	
              57

            
	
              Section
                4.15.

            	
              Issuance
                or Sale of Capital Stock of Subsidiaries

            	
              59

            
	
              Section
                4.16.

            	
              Maintenance
                of Consolidated Tangible Net Worth

            	
              59

            
	
              Section
                4.17.

            	
              Repurchase
                at the Option of Holders Following a Change of Control

            	
              59

            
	
              Section
                4.18.

            	
              Future
                Guarantors

            	
              60

            
	
              Section
                4.19.

            	
              Business
                Activities

            	
              60

            
	
              Section
                4.20.

            	
              Sale
                and Leaseback Transactions

            	
              60

            
	
              Section
                4.21.

            	
              Impairment
                of Security Interest

            	
              60

            
	
              Section
                4.22.

            	
              Amendments
                to Security Documents

            	
              61

            
	
              Section
                4.23.

            	
              Use
                of Proceeds

            	
              61

            
	
              Section
                4.24.

            	
              Maintenance
                of Insurance

            	
              61

            
	
              Section
                4.25.

            	
              Qualifying
                IPO

            	
              61

            
	
              Section
                4.26.

            	
              Repurchase
                Upon Designated Event

            	
              61

            
	
              Section
                4.27.

            	
              Government
                Approvals and Licenses; Compliance with Law

            	
              61

            
	
              Section
                4.28.

            	
              Minimum
                Fixed Charge Coverage Ratio and Leverage Ratio

            	
              62

            
	
              Section
                4.29.

            	
              Notes
                to Rank Senior

            	
              62

            
	
              Section
                4.30.

            	
              Compliance
                Certificate

            	
              62

            
	
              Section
                4.31.

            	
              Additional
                Interest Notice

            	
              63

            
	
              Section
                4.32.

            	
              Calculation
                of Original Issue Discount

            	
              63

            
	 
	
              ARTICLE
                5

            
	
              SUCCESSORS

            
	 
	
              Section
                5.01.

            	
              Merger,
                Consolidation and Sale of Assets.

            	
              63

            
	
              Section
                5.02.

            	
              Successor
                Corporation Substituted

            	
              66

            
	 
	
              ARTICLE
                6

            
	
              REMEDIES
                OF THE TRUSTEE AND NOTEHOLDERS ON

            
	
              AN
                EVENT OF DEFAULT

            
	 
	
              Section
                6.01.

            	
              Events
                of Default

            	
              66

            
	
              Section
                6.02.

            	
              Payments
                of Notes on Default; Suit Therefor

            	
              70

            
	
              Section
                6.03.

            	
              Application
                of Monies Collected by Trustee

            	
              72

            
	
              Section
                6.04.

            	
              Proceedings
                by Noteholder

            	
              73

            
	
              Section
                6.05.

            	
              Proceedings
                by Trustee

            	
              73

            
	
              Section
                6.06.

            	
              Remedies
                Cumulative and Continuing

            	
              74

            
	
              Section
                6.07.

            	
              Direction
                of Proceedings and Waiver of Defaults by Majority of
                Noteholders

            	
              74

            
	
              Section
                6.08.

            	
              Notice
                of Default

            	
              75

            
	
              Section
                6.09.

            	
              Undertaking
                to Pay Costs

            	
              75

            
	 
	
              ARTICLE
                7

            
	
              THE
                TRUSTEE

            
	 
	
              Section
                7.01.

            	
              Duties
                and Responsibilities of Trustee

            	
              75

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      	
              Section
                7.02.

            	
              Rights
                of Trustee

            	
              77

            
	
              Section
                7.03.

            	
              No
                Responsibility for Recitals, Etc

            	
              79

            
	
              Section
                7.04.

            	
              Trustee,
                Paying Agents, Conversion Agents, Collateral Agent, Common Depositary
                or
                Registrar May Own Notes

            	
              79

            
	
              Section
                7.05.

            	
              Monies
                to Be Held in Trust

            	
              79

            
	
              Section
                7.06.

            	
              Compensation
                and Expenses of Trustee

            	
              79

            
	
              Section
                7.07.

            	
              Eligibility
                of Trustee

            	
              80

            
	
              Section
                7.08.

            	
              Resignation
                or Removal of Trustee

            	
              81

            
	
              Section
                7.09.

            	
              Acceptance
                by Successor Trustee

            	
              82

            
	
              Section
                7.10.

            	
              Succession
                by Merger

            	
              83

            
	
              Section
                7.11.

            	
              Trustee’s
                Application for Instructions from the Company

            	
              83

            
	
              Section
                7.12.

            	
              Reports
                by Trustee

            	
              83

            
	
              Section
                7.13.

            	
              Certain
                Provisions

            	
              84

            
	 
	
              ARTICLE
                8

            
	
              SUPPLEMENTAL
                INDENTURES

            
	 
	
              Section
                8.01.

            	
              Supplemental
                Indentures Without Consent of Noteholders

            	
              85

            
	
              Section
                8.02.

            	
              Supplemental
                Indenture with Consent of Noteholders

            	
              86

            
	
              Section
                8.03.

            	
              Effect
                of Supplemental Indenture

            	
              88

            
	
              Section
                8.04.

            	
              Notation
                on Notes

            	
              88

            
	
              Section
                8.05.

            	
              Evidence
                of Compliance of Supplemental Indenture to Be Furnished to
                Trustee

            	
              88

            
	 
	
              ARTICLE
                9

            
	
              GUARANTEES

            
	 
	
              Section
                9.01.

            	
              Guarantee

            	
              88

            
	
              Section
                9.02.

            	
              Limitation
                on Guarantor Liability

            	
              90

            
	
              Section
                9.03.

            	
              Execution
                and Delivery of Guarantee

            	
              91

            
	
              Section
                9.04.

            	
              Guarantors
                May Consolidate, etc., on Certain Terms

            	
              91

            
	
              Section
                9.05.

            	
              Releases
                Following Merger, Consolidation or Sale of Assets, Etc.

            	
              92

            
	 
	
              ARTICLE
                10

            
	
              COLLATERAL
                AND SECURITY

            
	 
	
              Section
                10.01.

            	
              Security
                Documents.

            	
              93

            
	
              Section
                10.02.

            	
              Future
                Guarantor Pledgors

            	
              94

            
	
              Section
                10.03.

            	
              Recording
                and Opinions

            	
              95

            
	
              Section
                10.04.

            	
              Release
                of Collateral

            	
              96

            
	
              Section
                10.05.

            	
              Authorization
                of Actions to Be Taken by the Trustee Under the Security
                Documents

            	
              97

            
	
              Section
                10.06.

            	
              Authorization
                of Receipt of Funds by the Trustee Under the Security
                Documents

            	
              97

            
	
              Section
                10.07.

            	
              Termination
                of Security Interest

            	
              97

            

    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    
      	 
	
              ARTICLE
                11

            
	
              SATISFACTION
                AND DISCHARGE OF INDENTURE

            
	 
	
              Section
                11.01.

            	
              Discharge
                of Indenture

            	
              98

            
	
              Section
                11.02.

            	
              Deposited
                Monies to Be Held in Trust by Trustee

            	
              98

            
	
              Section
                11.03.

            	
              Paying
                Agent to Repay Monies Held

            	
              99

            
	
              Section
                11.04.

            	
              Return
                of Unclaimed Monies

            	
              99

            
	
              Section
                11.05.

            	
              Reinstatement

            	
              99

            
	 
	
              ARTICLE
                12

            
	
              THE
                NOTEHOLDERS

            
	 
	
              Section
                12.01.

            	
              Action
                by Noteholders

            	
              99

            
	
              Section
                12.02.

            	
              Proof
                of Execution by Noteholders

            	
              100

            
	
              Section
                12.03.

            	
              Who
                Are Deemed Absolute Owners

            	
              100

            
	
              Section
                12.04.

            	
              Company-owned
                Notes Disregarded

            	
              100

            
	
              Section
                12.05.

            	
              Revocation
                of Consents; Future Holders Bound

            	
              101

            
	 
	
              ARTICLE
                13

            
	
              MEETINGS
                OF NOTEHOLDERS

            
	 
	
              Section
                13.01.

            	
              Purpose
                of Meetings

            	
              101

            
	
              Section
                13.02.

            	
              Call
                of Meetings by Company or Noteholders

            	
              101

            
	
              Section
                13.03.

            	
              Qualifications
                for Voting

            	
              102

            
	
              Section
                13.04.

            	
              Regulations

            	
              102

            
	
              Section
                13.05.

            	
              Voting

            	
              103

            
	
              Section
                13.06.

            	
              No
                Delay of Rights by Meeting

            	
              103

            
	 
	
              ARTICLE
                14

            
	
              CONVERSION
                OF NOTES

            
	 
	
              Section
                14.01.

            	
              Right
                to Convert

            	
              103

            
	
              Section
                14.02.

            	
              Exercise
                of Conversion Right; Issuance of Common Stock on Conversion; No Adjustment
                for Interest or Dividends

            	
              104

            
	
              Section
                14.03.

            	
              Cash
                Payments in Lieu of Fractional Shares

            	
              105

            
	
              Section
                14.04.

            	
              Conversion
                Rate

            	
              106

            
	
              Section
                14.05.

            	
              Adjustment
                of Conversion Rate

            	
              106

            
	
              Section
                14.06.

            	
              Effect
                of Reclassification, Consolidation, Merger or Sale

            	
              115

            
	
              Section
                14.07.

            	
              Taxes
                on Shares Issued

            	
              116

            
	
              Section
                14.08.

            	
              Reservation
                of Shares; Shares to Be Fully Paid; Compliance with Governmental
                Requirements; Listing of Common Stock

            	
              116

            
	
              Section
                14.09.

            	
              Responsibility
                of Trustee

            	
              117

            
	
              Section
                14.10.

            	
              Notice
                to Holders Prior to Certain Actions

            	
              117

            
	
              Section
                14.11.

            	
              Shareholder
                Rights Plans

            	
              118

            
	 
	
              ARTICLE
                15

            
	
              MISCELLANEOUS
                PROVISIONS

            
	 
	
              Section
                15.01.

            	
              Provisions
                Binding on Company’s Successors

            	
              118

            
	
              Section
                15.02.

            	
              Official
                Acts by Successor Corporation

            	
              119

            

    

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    
      	
              Section
                15.03.

            	
              Addresses
                for Notices, Etc

            	
              119

            
	
              Section
                15.04.

            	
              Governing
                Law

            	
              120

            
	
              Section
                15.05.

            	
              Evidence
                of Compliance with Conditions Precedent; Certificates to
                Trustee

            	
              120

            
	
              Section
                15.06.

            	
              Legal
                Holidays

            	
              120

            
	
              Section
                15.07.

            	
              Company
                Responsible for Making Calculations

            	
              121

            
	
              Section
                15.08.

            	
              Benefits
                of Indenture

            	
              121

            
	
              Section
                15.09.

            	
              Table
                of Contents, Headings, Etc

            	
              121

            
	
              Section
                15.10.

            	
              Authenticating
                Agent

            	
              121

            
	
              Section
                15.11.

            	
              Indenture
                and Notes Solely Corporate Obligations

            	
              122

            
	
              Section
                15.12.

            	
              Execution
                in Counterparts

            	
              122

            
	
              Section
                15.13.

            	
              Severability

            	
              122

            

    

    

    
      	
              Exhibit
                A -

            	
              FORM
                OF NOTE

            
	
              Exhibit
                B -

            	
              FORM
                OF NOTATION OF GUARANTEE

            
	
              Exhibit
                C -

            	
              FORM
                OF CERTIFICATE OF TRANSFER

            
	
              Exhibit
                D -

            	
              FORM
                OF RESTRICTIVE LEGEND FOR COMMON 

            
	 	
              STOCK
                ISSUED UPON CONVERSION

            
	
              Exhibit
                E -

            	
              FORM
                OF SECURITY DOCUMENTS

            

    

     

    Schedule
      1

     

    
      
        
        

      

      
        v

        
          

        

      

      
        
        

      

    

     

    INDENTURE

     

    INDENTURE
      dated January 25, 2007, between FUSHI INTERNATIONAL, INC., a Nevada corporation
      (hereinafter called the “Company”),
      FUSHI
      HOLDINGS, INC., a Delaware corporation (“FHI”)
      as
      Guarantor, and THE BANK OF NEW YORK, a New York banking corporation, as trustee
      hereunder (hereinafter called the “Trustee”).

     

    WITNESSETH:

     

    WHEREAS,
      for its lawful corporate purposes, the Company has duly authorized the issue
      of
      its 3.0% Guaranteed Senior Secured Convertible Notes due 2012 (hereinafter
      called the “Notes”),
      in an
      aggregate principal amount not to exceed $20,000,000 and, to provide the terms
      and conditions upon which the Notes are to be authenticated, issued and
      delivered, the Company has duly authorized the execution and delivery of this
      Indenture; and

     

    WHEREAS,
      for its lawful corporate purposes, FHI has duly authorized the issue of its
      Guarantee of the Notes and, to provide the terms and conditions upon which
      the
      Guarantee is to be issued and delivered, FHI has duly authorized the execution
      and delivery of this Indenture; and

     

    WHEREAS,
      the Notes, the certificate of authentication to be borne by the Notes, a form
      of
      assignment, a form of notation of Guarantee, a form of Designated Event
      Repurchase Notice, a form of Repurchase Notice and a form of Conversion Notice
      to be borne by the Notes are to be substantially in the forms hereinafter
      provided for; and

     

    WHEREAS,
      all acts and things necessary to make the Notes, when executed by the Company
      and authenticated and delivered by the Trustee or a duly authorized
      authenticating agent, as in this Indenture provided, the valid, binding and
      legal obligations of the Company, and to constitute this Indenture a valid
      agreement according to its terms, have been done and performed, and the
      execution of this Indenture and the issue hereunder of the Notes have in all
      respects been duly authorized,

     

    NOW,
      THEREFORE, THIS INDENTURE WITNESSETH:

     

    That
      in
      order to declare the terms and conditions upon which the Notes are, and are
      to
      be, authenticated, issued and delivered, and in consideration of the premises
      and of the purchase and acceptance of the Notes by the holders thereof, the
      Company covenants and agrees with the Trustee for the equal and proportionate
      benefit of the respective holders from time to time of the Notes (except as
      otherwise provided below), as follows:

     

    ARTICLE
      1

     

    DEFINITIONS

     

    Section
      1.01. Definitions.
      

     

    The
      terms
      defined in this Section (except as herein otherwise expressly provided or unless
      the context otherwise requires) for all purposes of this Indenture and of any
      indenture supplemental hereto shall have the respective meanings specified
      in
      this Section. All other terms used in this Indenture that are defined in the
      Securities Act (except as herein otherwise expressly provided or unless the
      context otherwise requires) shall have the meanings assigned to such terms
      in
      the Securities Act as in force at the date of the execution of this Indenture.
      The words “herein”, “hereof”, “hereunder” and words of similar import refer to
      this Indenture as a whole and not to any particular Article, Section or other
      subdivision. The terms defined in this Article include the plural as well as
      the
      singular.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Additional
      Amounts”
means,
      with respect to any Note, an amount equal to 3.3% of the principal amount of
      such Note due and payable by the Company to the holder thereof if a listing
      of
      the Common Stock on the Nasdaq Global Market, Nasdaq Global Select Market or
      Nasdaq Capital Market has not been completed on or before, or such listing
      has
      not been maintained as of, July 24, 2008, such Additional Amounts being due
      and
      payable no later than July 31, 2008. For all purposes of this Indenture, the
      term “premium” shall include Additional Amounts, if any, with respect to the
      Notes.

     

    “Additional
      Assets”
      means:

     

    (a)
      any
      Property (other than cash, Cash Equivalent and securities) to be owned by the
      Company or any of its Subsidiaries and used in a Related Business; or

     

    (b)
      Capital Stock of a Person that becomes a Subsidiary of the Company as a result
      of the acquisition of such Capital Stock by the Company or another Subsidiary
      of
      the Company from any Person other than the Company or an Affiliate of the
      Company; provided,
      however,
      that,
      in the case of clause (b), such Subsidiary is primarily engaged in a Related
      Business.

     

    “Additional
      Interest”
means
      an annual rate of interest equal to 3.0% payable on the outstanding Notes if
      no
      Qualifying IPO has occurred on or before July 24, 2008, such interest accruing
      from and including such date (or, if Interest has been paid since such date,
      from and including the most recent interest payment date thereafter) to but
      excluding each date of payment thereof.

     

    “Affiliate”
of
      any
      specified Person means:

     

    (a)
      any
      other Person directly or indirectly controlling or controlled by or under direct
      or indirect common control with such specified Person, or 

     

    (b)
      any
      other Person who is a director or officer of:

     

    (1)
      such
      specified Person, 

     

    (2)
      any
      Subsidiary of such specified Person, or

     

    (3)
      any
      Person described in clause (a) above. 

     

    For
      the
      purposes of this definition, “control,” when used with respect to any Person,
      means the power to direct the management and policies of such Person, directly
      or indirectly, whether through the ownership of voting securities, by contract
      or otherwise; and the terms “controlling” and “controlled” have meanings
      correlative to the foregoing. For purposes of Section
      4.12
      and
Section
      4.14
      and the
      definition of “Additional Assets” only, “Affiliate” shall also mean any
      Beneficial Owner of shares representing 5% or more of the total voting power
      of
      the Voting Stock (on a fully diluted basis) of the Company or of rights or
      warrants to purchase such Voting Stock (whether or not currently exercisable)
      and any Person who would be an Affiliate of any such Beneficial Owner pursuant
      to the first sentence hereof. Notwithstanding the foregoing, in no event shall
      Citadel Equity Fund Ltd. or any of its Affiliates be considered an Affiliate
      of
      the Company.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Applicable
      Procedures”
means,
      with respect to any transfer, repurchase or exchange of or for beneficial
      interests in any Global Note, the rules and procedures of Euroclear and
      Clearstream that apply to such transfer, repurchase or exchange.

     

    “Asset
      Sale”
means
      any sale, lease, transfer, issuance or other disposition (or series of related
      sales, leases, transfers, issuances or dispositions) by the Company or any
      of
      its Subsidiaries, including any disposition by means of a merger, consolidation
      or similar transaction (each referred to for the purposes of this definition
      as
      a “disposition”), of 

     

    (a)
      any
      shares of Capital Stock of a Subsidiary of the Company (other than directors’
qualifying shares), or

     

    (b)
      any
      other Property of the Company or any of its Subsidiaries outside of the ordinary
      course of business of the Company or such Subsidiary, 

     

    other
      than, in the case of clause (a) or (b) above, 

     

    (1)
      any
      disposition by a Subsidiary of the Company to the Company or by the Company
      or
      one of its Subsidiaries to a Wholly Owned Subsidiary, 

     

    (2)
      any
      disposition that constitutes a Permitted Investment or Restricted Payment
      permitted by Section
      4.10,

     

    (3)
      any
      disposition effected in compliance with the first paragraph of Section
      5.01,
      

     

    (4)
      any
      disposition of inventory of the Company or any of its Subsidiaries in the
      ordinary course of business, or inventory or other property that in the
      reasonable judgment of the Company have become uneconomic, obsolete or worn
      out,

     

    (5)
      the
      sale or discount of accounts receivable in connection with the compromise or
      collection thereof in the ordinary course of business, and

     

    (6)
      any
      disposition in a single transaction or a series of related transactions of
      assets for aggregate consideration of less than $1.0 million.

     

    “Attributable
      Debt”
in
      respect of a Sale and Leaseback Transaction means, at any date of determination,
      

     

    (a)
      if
      such Sale and Leaseback Transaction is a Capital Lease Obligation, the amount
      of
      Debt represented thereby according to the definition of “Capital Lease
      Obligations,” and 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (b)
      in
      all other instances, the present value (discounted at the weighted average
      interest rate borne by the Notes, compounded annually in the most recently
      completed twelve months) of the total obligations of the lessee for rental
      payments during the remaining term of the lease included in such Sale and
      Leaseback Transaction (including any period for which such lease has been
      extended).

     

    “Average
      Life”
means,
      as of any date of determination, with respect to any Debt or Preferred Stock,
      the quotient obtained by dividing:

     

    (a)
      the
      sum of the product of the numbers of years (rounded to the nearest one-twelfth
      of one year) from the date of determination to the dates of each successive
      scheduled principal payment of such Debt or redemption or similar payment with
      respect to such Preferred Stock multiplied by the amount of such payment by
      

     

    (b)
      the
      sum of all such payments.

     

    “Bankruptcy
      Law”
means
      Title 11, U.S. Code or any similar federal or state law for the relief of
      debtors, or the law of any other jurisdiction relating to bankruptcy,
      insolvency, winding up, liquidation, reorganization or relief of
      debtors.

     

    “Beneficial
      Owner”
has
      the
      meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange
      Act, except that in calculating the beneficial ownership of any particular
      “person” (as such term is used in Section 13(d)(3) of the Exchange Act), such
“person” shall be deemed to have beneficial ownership of all securities that
      such “person” has the right to acquire by conversion or exercise of other
      securities, whether such right is currently exercisable or is exercisable only
      upon the occurrence of a subsequent condition or passage of time. The terms
      “Beneficially Owns” and “Beneficially Owned” have a corresponding
      meaning.

     

    “Board
      of Directors”
means
      (1) in respect of a corporation, the board of directors of the corporation,
      or
      (except if used in the definition of “Change of Control”) any duly authorized
      committee thereof; and (2) in respect of any other Person, the board or
      committee of that Person serving an equivalent function.

     

    “Board
      Resolution”
of
      a
      Person means a copy of a resolution (in form and substance satisfactory to
      the
      Trustee) certified by the secretary or an assistant secretary (or individual
      performing comparable duties) of the applicable Person to have been duly adopted
      by the Board of Directors of such Person and to be in full force and effect
      on
      the date of such certification, and delivered to the Trustee.

     

    “Business
      Day”
means
      any day other than a Legal Holiday.

     

    “Capital
      Expenditures”
means
      expenditures (whether paid in cash or other consideration or accrued as a
      liability and including that portion of Capital Lease Obligations which is
      capitalized on the consolidated balance sheet of the Company and its
      Subsidiaries) by the Company and its Subsidiaries that, in conformity with
      GAAP,
      are included in “additions to property, plant and equipment” or as capitalized
      internally developed software or comparable items reflected in the consolidated
      balance sheet of the Company and its Subsidiaries.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Capital
      Lease Obligations”
means
      any obligation under a lease that is required to be capitalized for financial
      reporting purposes in accordance with GAAP; and the amount of Debt represented
      by such obligation shall be the capitalized amount of such obligations
      determined in accordance with GAAP; and the Stated Maturity thereof shall be
      the
      date of the last payment of rent or any other amount due under such lease prior
      to the first date upon which such lease may be terminated by the lessee without
      payment of a penalty. For purposes of Section
      4.11
      a
      Capital Lease Obligation shall be deemed secured by a Lien on the Property
      being
      leased.

     

    “Capital
      Stock”
means,
      with respect to any Person, any shares or other equivalents (however designated)
      of any class of corporate stock or partnership interests or any other
      participations, rights, warrants, options or other interests in the nature
      of an
      equity interest in such Person, including Preferred Stock, but excluding any
      debt security convertible or exchangeable into such equity
      interest.

     

    “Capital
      Stock Sale Proceeds”
means
      the aggregate cash proceeds received by the Company from the issuance or sale
      (other than to a Subsidiary of the Company or an employee stock ownership plan
      or trust established by the Company or any such Subsidiary for the benefit
      of
      their employees) by the Company of its Capital Stock (other than Disqualified
      Stock) after the Issue Date, net of attorneys’ fees, accountants’ fees,
      underwriters’ or placement agents’ fees, discounts or commissions and brokerage,
      consultant and other fees actually incurred in connection with such issuance
      or
      sale and net of taxes paid or payable as a result thereof.

     

    “Cash
      Equivalents”
means
      any of the following: 

     

    (a)
      Investments in U.S. Government Securities maturing within 365 days of the date
      of acquisition thereof; 

     

    (b)
      Investments in time deposit accounts, certificates of deposit and money market
      deposits maturing within 90 days of the date of acquisition thereof issued
      by a
      bank or trust company organized under the laws of the United States of America
      or any state thereof having capital, surplus and undivided profits aggregating
      in excess of $500 million and whose long-term debt is rated “A-3” or “A-” or
      higher according to Moody’s or S&P (or such similar equivalent rating by at
      least one “nationally recognized statistical rating organization” (as defined in
      Rule 436 under the Securities Act)); 

     

    (c)
      repurchase obligations with a term of not more than 30 days for underlying
      securities of the types described in clause (a) entered into with:

     

    (1)
      a
      bank meeting the qualifications described in clause (b) above, or 

     

    (2)
      any
      primary government securities dealer reporting to the Market Reports Division
      of
      the Federal Reserve Bank of New York; 

     

    (d)
      Investments in commercial paper, maturing not more than 90 days after the date
      of acquisition, issued by a corporation (other than an Affiliate of the Company)
      organized and in existence under the laws of the United States of America with
      a
      rating at the time as of which any Investment therein is made of “P-1” (or
      higher) according to Moody’s or “A-1” (or higher) according to S&P (or such
      similar equivalent rating by at least one “nationally recognized statistical
      rating organization” (as defined in Rule 436 under the Securities
      Act));

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (e)
      direct obligations (or certificates representing an ownership interest in such
      obligations) of any state of the United States of America (including any agency
      or instrumentality thereof) for the payment of which the full faith and credit
      of such state are pledged and which are not callable or redeemable at the
      issuer’s option, provided
      that:

     

    (1)
      the
      long-term debt of such state is rated “A-3” or “A-” or higher according to
      Moody’s or S&P (or such similar equivalent rating by at least one
“nationally recognized statistical rating organization” (as defined in Rule 436
      under the Securities Act)), and

     

    (2)
      such
      obligations mature within 180 days of the date of acquisition thereof;
      and

     

    (f)
      time
      deposit accounts, certificates of deposit and money market deposits with (i)
      Bank of China, Industrial and Commercial Bank of China, China Construction
      Bank
      and China Merchants Bank or (ii) any other bank or trust company organized
      under
      the laws of the PRC whose long-term debt is rated as high or higher than any
      of
      those banks.

     

    “Change
      of Control”
means
      the occurrence of any of the following events: 

     

    (a)
      the
      Permitted Holders cease to be the “beneficial owners” (as defined in Rule 13d-3
      under the Exchange Act, except that a Person will be deemed to have “beneficial
      ownership” of all shares that any such Person has the right to acquire, whether
      such right is exercisable immediately or only after the passage of time),
      directly or indirectly, of at least 35% of the total voting power of the Voting
      Stock of the Company, whether as a result of the issuance of securities of
      the
      Company, any merger, consolidation, liquidation or dissolution of the Company,
      any direct or indirect transfer of securities by the Permitted Holders or
      otherwise (for purposes of this clause (a), the Permitted Holders will be deemed
      to beneficially own any Voting Stock of a specified corporation held by a parent
      corporation so long as the Permitted Holders beneficially own, directly or
      indirectly, in the aggregate a majority of the total voting power of the Voting
      Stock of such parent corporation); or

     

    (b)
      the
      sale, transfer, assignment, lease, conveyance or other disposition, directly
      or
      indirectly, of all or substantially all the Property of the Company and its
      Subsidiaries, considered as a whole (other than a disposition of such Property
      as an entirety or virtually as an entirety to a Wholly Owned Subsidiary or
      one
      or more Permitted Holders), shall have occurred, or the Company merges,
      consolidates or amalgamates with or into any other Person (other than one or
      more Permitted Holders) or any other Person (other than one or more Permitted
      Holders) merges, consolidates or amalgamates with or into the Company, in any
      such event pursuant to a transaction in which the outstanding Voting Stock
      of
      the Company is reclassified into or exchanged for cash, securities or other
      Property, other than any such transaction where: 

     

    (1)
      the
      outstanding Voting Stock of the Company is reclassified into or exchanged for
      other Voting Stock of the Company or for Voting Stock of the Surviving Person,
      and 

     

    (2)
      the
      holders of the Voting Stock of the Company immediately prior to such transaction
      own, directly or indirectly, not less than a majority of the Voting Stock of
      the
      Company or the Surviving Person immediately after such transaction and in
      substantially the same proportion as before the transaction; or

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (c)
       Continuing
      Directors cease for any reason to constitute a majority of the Board of
      Directors then in office; or 

     

    (d)
       the
      shareholders of the Company shall have approved any plan of liquidation or
      dissolution of the Company.

     

    “Clearstream” means
      Clearstream Banking, société
      anonyme,
      and any
      successor thereto.

     

    “Closing
      Sale Price”
of
      the
      shares of Common Stock on any date means (i) if Common Stock is primarily traded
      on a securities exchange, the last sale price on such securities exchange on
      the
      applicable day, or if no sale occurred on such day, the mean between the closing
      “bid” and “asked” prices on such day, (ii) if the principal market for Common
      Stock is in the over-the-counter market, the closing sale price on the
      applicable day as published by The NASDAQ Stock Market, Inc. or similar
      organization, or if such price is not so published on such day, the mean between
      the closing “bid” and “asked” prices, if available, on such day, which prices
      may be obtained from any reputable pricing service, broker or dealer, and (iii)
      if neither clause (i) nor clause (ii) is applicable, the Fair Market Value
      as
      determined in good faith by the Board of Directors of the Company or an
      Independent Financial Advisor, as applicable. The Closing Sale Price shall
      be
      determined based on regular market hours without reference to extended after
      hours trading or pre-market trading.

     

    “Code”
means
      the U.S. Internal Revenue Code of 1986, as amended.

     

    “Collateral”
means
      all the collateral described in the Security Documents.

     

    “Collateral
      Agent”
means
      The Bank of New York, and any successor collateral agent appointed pursuant
      to
      the terms of this Indenture.

     

    “Commission”
means
      the U.S. Securities and Exchange Commission.

     

    “Commodity
      Price Protection Agreement”
means,
      in respect of a Person, any forward contract, commodity swap agreement,
      commodity option agreement or other similar agreement or arrangement designed
      to
      protect such Person against fluctuations in commodity prices.

     

    “Common
      Depositary”
means,
      with respect to the Notes issuable or issued in global form, The Bank of New
      York, a New York banking corporation, as the Common Depositary to Euroclear
      and
      Clearstream with respect to the Notes, and any and all successors thereto
      appointed as depositary hereunder and having become such pursuant to the
      applicable provisions of this Indenture.

     

    “Common
      Stock”
means
      any stock of any class of the Company which has no preference in respect of
      dividends or of amounts payable in the event of any voluntary or involuntary
      liquidation, dissolution or winding up of the Company and which is not subject
      to redemption by the Company. Subject to the provisions of Section
      14.06,
      however, shares issuable on conversion of Notes shall include only shares of
      the
      class designated as common stock of the Company at the date of this Indenture
      (namely, the Common Stock, par value $0.006) or shares of any class or classes
      resulting from any reclassification or reclassifications thereof and which
      have
      no preference in respect of dividends or of amounts payable in the event of
      any
      voluntary or involuntary liquidation, dissolution or winding up of the Company
      and which are not subject to redemption by the Company; provided
      that, if
      at any time there shall be more than one such resulting class, the shares of
      each such class then so issuable on conversion shall be substantially in the
      proportion which the total number of shares of such class resulting from all
      such reclassifications bears to the total number of shares of all such classes
      resulting from all such reclassifications.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    “Company”
means
      the corporation named as the “Company” in the first paragraph of this Indenture,
      and, subject to the provisions of Article
      5
      and
Section
      14.06,
      shall
      include its successors and assigns.

     

    “Consolidated
      Interest Expense”
means,
      for any period, the total interest expense of the Company and its consolidated
      Subsidiaries, plus, to the extent not included in such total interest expense,
      and to the extent Incurred by the Company or its Subsidiaries, without
      duplication,

     

    (a)
      interest expense attributable to leases constituting part of a Sale and
      Leaseback Transaction and to Capital Lease Obligations, 

     

    (b)
      amortization of debt discount and debt issuance cost, including commitment
      fees,

     

    (c)
      capitalized interest, 

     

    (d)
      non-cash interest expense, 

     

    (e)
      commissions, discounts and other fees and charges owed with respect to letters
      of credit and banker’s acceptance financing, 

     

    (f)
      net
      costs associated with Hedging Obligations (including amortization of fees),
      

     

    (g)
      Disqualified Stock Dividends (other than dividends payable in Capital Stock
      other than Disqualified Stock), 

     

    (h)
      Preferred Stock Dividends (other than dividends payable in Capital Stock other
      than Disqualified Stock) of Subsidiaries, 

     

    (i)
      interest accruing on any Debt of any other Person to the extent such Debt is
      guaranteed by the Company or any of its Subsidiaries, and 

     

    (j)
      the
      cash contributions to any employee stock ownership plan or similar trust, if
      any
      and to the extent such contributions are used by such plan or trust to pay
      interest or fees to any Person (other than the Company) in connection with
      Debt
      Incurred by such plan or trust.

     

    “Consolidated
      Net Income”
means,
      for any period, the net income (loss) of the Company and its consolidated
      Subsidiaries; provided,
      however,
      that
      there shall not be included in such Consolidated Net Income:

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (a)
      any
      net income (loss) of any Person (other than the Company) if such Person is
      not a
      Subsidiary of the Company, except that:

     

    (1)
      subject to the exclusions contained in clauses (c), (d) and (e) below, equity
      of
      the Company and its consolidated Subsidiaries in the net income of any such
      Person for such period shall be included in such Consolidated Net Income up
      to
      the aggregate amount of cash distributed by such Person during such period
      to
      the Company or any of its Subsidiaries as a dividend or other distribution
      (subject, in the case of a dividend or other distribution to such Subsidiary,
      to
      the limitations contained in clause (b) below), and 

     

    (2)
      the
      equity of the Company and its consolidated Subsidiaries in a net loss of any
      such Person for such period shall be included in determining such Consolidated
      Net Income, 

     

    (b)
      any
      net income (loss) of any Subsidiary of the Company if such Subsidiary is subject
      to restrictions, directly or indirectly, on the payment of dividends or the
      making of distributions, directly or indirectly, to the Company, except
      that:

     

    (1)
      subject to the exclusions contained in clauses (c), (d) and (e) below, the
      equity of the Company and its consolidated Subsidiaries in the net income of
      any
      such Subsidiary for such period shall be included in such Consolidated Net
      Income up to the aggregate amount of cash distributed by such Subsidiary during
      such period to the Company or another of its Subsidiaries as a dividend or
      other
      distribution (subject, in the case of a dividend or other distribution to
      another Subsidiary of the Company, to the limitation contained in this clause),
      and

     

    (2)
      the
      equity of the Company and its consolidated Subsidiaries in a net loss of any
      such Subsidiary for such period shall be included in determining such
      Consolidated Net Income, 

     

    (c)
      any
      gain (but not loss) realized upon the sale or other disposition of any Property
      of the Company or any of its consolidated Subsidiaries (including pursuant
      to
      any Sale and Leaseback Transaction) that is not sold or otherwise disposed
      of in
      the ordinary course of business,

     

    (d)
      any
      extraordinary gain or loss, and

     

    (e)
      the
      cumulative effect of a change in accounting principles. 

     

    “Consolidated
      Net Worth”
means
      the total of the amounts shown on the consolidated balance sheet of the Company
      and its Subsidiaries as of the end of the most recent Fiscal Quarter of the
      Company ending prior to the taking of any action for the purpose of which the
      determination is being made, as:

     

    (a)
      the
      par or stated value of all outstanding Capital Stock of the Company, plus

     

    (b)
      paid-in capital or capital surplus relating to such Capital Stock, plus

     

    (c)
      any
      retained earnings or earned surplus, less:

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (1)
      any
      accumulated deficit, and 

     

    (2)
      any
      amounts attributable to Disqualified Stock or any equity security convertible
      into or exchangeable for Debt, the cost of treasury stock and the principal
      amount of any promissory notes receivable from the sale of Capital Stock of
      the
      Company or any of its Subsidiaries, each item to be determined in conformity
      with GAAP.

     

    “Consolidated
      Tangible Net Worth”
means,
      as of any date of determination, the Consolidated Net Worth less the Intangible
      Assets.

     

    “Continuing
      Directors”
means,
      as of any date of determination, any member of the Board of Directors who (a)
      was a member of the Board of Directors on the date of this Indenture or (b)
      was
      nominated for election to the Board of Directors by, or whose election was
      ratified with the approval of, a majority of the Continuing Directors who were
      members of the Board of Directors at the time of such nomination or
      election.

     

    “Conversion
      Price”
as
      of
      any day will equal $100,000 divided by the Conversion Rate as of such
      date.

     

    “Corporate
      Trust Office”
shall
      be the address of the Trustee specified in Section
      15.03
      hereof,
      or such other address as to which the Trustee may give notice to the
      Company.

     

    “Credit
      Facilities”
means,
      with respect to the WFOE, one or more debt or commercial paper facilities with
      banks or other institutional lenders in the PRC providing for revolving credit
      loans, term loans, receivables or inventory financing (including through the
      sale of receivables or inventory to such lenders or to special purpose,
      bankruptcy remote entities formed to borrow from such lenders against such
      receivables or inventory) or trade letters of credit, in each case together
      with
      any Refinancings thereof by any lender or syndicate of lenders. 

     

    “Currency
      Exchange Protection Agreement”
means,
      in respect of a Person, any foreign exchange contract, currency swap agreement,
      currency option or other similar agreement or arrangement designed to protect
      such Person against fluctuations in currency exchange rates. 

     

    “Custodian”
means,
      with respect to the Notes issuable or issued in global form, the Person
      specified in Section
      2.02(e)
      as
      Custodian with respect to the Notes, and any and all successors thereto
      appointed as custodian hereunder and having become such pursuant to the
      applicable provisions of this Indenture.

     

    “Dalian
      Fushi”
means
      Dalian Fushi Bimetallic Manufacturing Company Limited, a limited liability
      company organized and existing under the laws of the PRC.

     

    “Debt”
means,
      with respect to any Person on any date of determination (without
      duplication):

     

    (a)
      the
      principal of and premium (if any) in respect of:

     

    (1)
      debt
      of such Person for money borrowed, and

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (2)
      debt
      evidenced by notes, debentures, bonds or other similar instruments for the
      payment of which such Person is responsible or liable; 

     

    (b)
      all
      Capital Lease Obligations of such Person and all Attributable Debt in respect
      of
      Sale and Leaseback Transactions entered into by such Person; 

     

    (c)
      all
      obligations of such Person representing the deferred purchase price of Property,
      all conditional sale obligations of such Person and all obligations of such
      Person under any title retention agreement (but excluding trade accounts payable
      arising in the ordinary course of business); 

     

    (d)
      all
      obligations of such Person for the reimbursement of any obligor on any letter
      of
      credit, banker’s acceptance or similar credit transaction (other than
      obligations with respect to letters of credit securing obligations (other than
      obligations described in (a) through (c) above) entered into in the ordinary
      course of business of such Person to the extent such letters of credit are
      not
      drawn upon or, if and to the extent drawn upon, such drawing is reimbursed
      no
      later than the third Business Day following receipt by such Person of a demand
      for reimbursement following payment on the letter of credit); 

     

    (e)
      the
      amount of all obligations of such Person with respect to the Repayment of any
      Disqualified Stock or, with respect to any Subsidiary of such Person, any
      Preferred Stock (but excluding, in each case, any accrued dividends);

     

    (f)
      all
      obligations of the type referred to in clauses (a) through (e) above of other
      Persons and all dividends of other Persons for the payment of which, in either
      case, such Person is responsible or liable, directly or indirectly, as obligor,
      guarantor or otherwise, including by means of any guarantee; 

     

    (g)
      all
      obligations of the type referred to in clauses (a) through (f) above of other
      Persons secured by any Lien on any Property of such Person (whether or not
      such
      obligation is assumed by such Person), the amount of such obligation being
      deemed to be the lesser of the Fair Market Value of such Property and the amount
      of the obligation so secured; and 

     

    (h)
      to
      the extent not otherwise included in this definition, Hedging Obligations of
      such Person. 

     

    The
      amount of Debt of any Person at any date shall be the outstanding balance,
      or
      the accreted value of such Debt in the case of Debt issued with original issue
      discount, at such date of all unconditional obligations as described above
      and
      the maximum liability, upon the occurrence of the contingency giving rise to
      the
      obligation, of any contingent obligations at such date. The amount of Debt
      represented by a Hedging Obligation shall be equal to:

     

    (1)
      zero
      if such Hedging Obligation has been Incurred pursuant to clause (e), (f) or
      (g)
      of the second paragraph of Section
      4.09
      or

     

    (2)
      the
      notional amount of such Hedging Obligation if not Incurred pursuant to such
      clauses. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    “Default”
means
      any event which is, or after notice or passage of time or both would be, an
      Event of Default.

     

    “Definitive
      Note”
means
      a
      certificated Note registered in the name of the holder thereof and issued in
      accordance with Section
      2.05
      or
2.07
      hereof,
      in substantially the form of Exhibit
      A
      hereto
      except that such Note shall not bear the Global Note Legend and shall not have
      the “Schedule of Exchanges of Interests in the Global Note” attached
      thereto.

     

    “Designated
      Event”
shall
      mean any Fundamental Change or a Termination of Trading.

     

    “Disqualified
      Stock”
means
      any Capital Stock of the Company or any of its Subsidiaries that by its terms
      (or by the terms of any security into which it is convertible or for which
      it is
      exchangeable, in either case at the option of the holder thereof) or
      otherwise:

     

    (a)
      matures or is mandatorily redeemable pursuant to a sinking fund obligation
      or
      otherwise, 

     

    (b)
      is or
      may become redeemable or repurchaseable at the option of the holder thereof
      (except that any Capital Stock that would constitute Disqualified Stock solely
      because the holders of such Capital Stock have the right to require the Company
      to repurchase such Capital Stock upon the occurrence of a Change of Control
      or
      an Asset Sale shall not constitute Disqualified Stock if the terms of such
      Capital Stock provide that the Company may not repurchase or redeem any such
      Capital Stock pursuant to such provisions unless such repurchase or redemption
      complies with Section
      4.10
      hereof),
      in whole or in part, or 

     

    (c)
      is
      convertible or exchangeable at the option of the holder thereof for Debt or
      Disqualified Stock,

     

    on
      or
      prior to, in the case of clause (a), (b) or (c), the first anniversary of the
      Stated Maturity of the Notes.

     

    “Disqualified
      Stock Dividends”
means
      all dividends with respect to Disqualified Stock of the Company held by Persons
      other than a Wholly Owned Subsidiary. The amount of any such dividend shall
      be
      equal to the quotient of such dividend divided by the difference between one
      and
      the maximum statutory federal income tax rate (expressed as a decimal number
      between 1 and 0) then applicable to the Company.

     

    “Domestic
      Subsidiary”
means
      any Subsidiary of the Company other than (a) a Foreign Subsidiary or (b) a
      Subsidiary of a Foreign Subsidiary.

     

    “EBITDA”
means,
      for any period, an amount equal to, for the Company and its consolidated
      Subsidiaries:

     

    (a)
      the
      sum of Consolidated Net Income for such period, plus the following to the extent
      reducing Consolidated Net Income for such period: 

     

    (1)
      the
      provision for taxes based on income or profits or utilized in computing net
      loss,

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (2)
      Consolidated Interest Expense,

     

    (3)
      depreciation, 

     

    (4)
      amortization of intangibles, and 

     

    (5)
      any
      other non-cash items (other than any such non-cash item to the extent that
      it
      represents an accrual of, or reserve for, cash expenditures in any future period
      or amortization of a prepaid cash expense paid in a period prior to the period
      that is subject to calculation), minus 

     

    (b)
      all
      non-cash items increasing Consolidated Net Income for such period. 

     

    Notwithstanding
      the foregoing clause (a), the provision for taxes and the depreciation,
      amortization and non-cash items of a Subsidiary of the Company shall be added
      to
      Consolidated Net Income to compute EBITDA only to the extent (and in the same
      proportion) that the net income of such Subsidiary was included in calculating
      Consolidated Net Income and only if a corresponding amount would be permitted
      at
      the date of determination to be dividended to the Company by such Subsidiary
      without prior approval (that has not been obtained), pursuant to the terms
      of
      its charter and all agreements, instruments, judgments, decrees, orders,
      statutes, rules and governmental regulations applicable to such Subsidiary
      or
      its shareholders. 

     

    “Escrow
      Agreement”
means
      either of (i) that certain Escrow Agreement dated as of the Issue Date by and
      among the WFOE, Shenzhen Development Bank Co., Ltd. and Citadel Equity Fund
      Ltd.
      or (ii) that certain escrow agreement dated as of the Issue Date by and among
      the Company, Citadel Equity Fund Ltd. and Guzov Ofsink, LLC.

     

    “Euroclear”
means
      Euroclear Bank, S.A./N.V., and any successor thereto.

     

    “Exchange
      Act”
means
      the U.S. Securities Exchange Act of 1934, as amended, and the rules and
      regulations promulgated thereunder, as in effect from time to time.

     

    “Ex-Dividend
      Time”
means,
      with respect to any distribution on shares of Common Stock, the first date
      on
      which the shares of Common Stock trade regular way on the principal securities
      market on which the shares of Common Stock are then traded without the right
      to
      receive such distribution.

     

    “Fair
      Market Value”
means,
      with respect to any Property at the time of determination, the price that could
      be negotiated in an arm’s-length free market transaction, for cash, between a
      willing seller and a willing buyer, neither of whom is under undue pressure
      or
      compulsion to complete the transaction. Fair Market Value shall be determined,
      except as otherwise provided,

     

    (a)
      if
      such Property has a Fair Market Value equal to or less than $1.0 million, by
      any
      Officer of the Company,

     

    (b)
      if
      such Property has a Fair Market Value in excess of $1.0 million, by a majority
      of the Board of Directors and evidenced by a Board Resolution delivered to
      the
      Trustee, or 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (c)
      if
      such Property has a Fair Market Value in excess of $5.0 million, by an
      Independent Financial Advisor and evidenced by a written opinion from such
      Independent Financial Advisor dated within 30 days of the relevant transaction
      delivered to the Trustee.

     

    “Financial
      and Operational Trigger”
means,
      for the Company and its Subsidiaries on a consolidated basis, that net income
      for a Fiscal Quarter shall be less than the US dollar amount (or its equivalent
      in RMB, calculated at the exchange rate for conversion of US dollars into RMB
      quoted by the People’s Bank of China on the last Business Day of such Fiscal
      Quarter) indicated in the table below opposite such Fiscal Quarter:

     

    
      
        	
                Fiscal
                  Quarter Ending

              	 	
                Net
                  Income

              	 
	
                June
                  30, 2007

              	 	
                $

              	
                5.0
                  million

              	 
	
                September
                  30, 2007

              	 	
                $

              	
                5.0
                  million

              	 
	
                December
                  31, 2007

              	 	
                $

              	
                5.0
                  million

              	 
	
                March
                  31, 2008

              	 	
                $

              	
                6.0
                  million

              	 
	
                June
                  30, 2008

              	 	
                $

              	
                6.0
                  million

              	 
	
                September
                  30, 2008

              	 	
                $

              	
                6.0
                  million

              	 
	
                December
                  31, 2008

              	 	
                $

              	
                6.0
                  million

              	 
	
                March
                  31, 2009

              	 	
                $

              	
                7.2
                  million

              	 
	
                June
                  30, 2009

              	 	
                $

              	
                7.2
                  million

              	 
	
                September
                  30, 2009

              	 	
                $

              	
                7.2
                  million

              	 
	
                December
                  31, 2009

              	 	
                $

              	
                7.2
                  million

              	 

      

    

     

    The
      calculation of “net income” for the purposes of this definition shall be as
      reported in the Company’s unaudited financial statements for the applicable
      Fiscal Quarter which shall be reviewed by the Company’s independent public
      accountants in accordance with Statement on Auditing Standards 72 (or, in the
      case of any period ending on December 31, as reported for such Fiscal Quarter
      in
      the Company’s audited financial statements for the applicable fiscal year (or as
      derived therefrom if not separately reported)), and shall be made in accordance
      with GAAP consistently applied and as determined by the Company’s regular
      independent public accountants in the Company’s fiscal year ending December 31,
      2005, after deducting “income tax expense” and the amount, if any, for minority
      interest that may arise, but without adding any “other comprehensive income” or
      any extraordinary income; provided
      that the
      calculation of “net income” for the purposes of this definition shall not
      include any non-cash expense incurred at any time in connection with the
      issuance of shares of Common Stock pursuant
      to (x) Section 14.05(i) and (y) the Company’s stock option plans and employee
      stock purchase plans and which have been approved by the Company’s Board of
      Directors so long as such issuances in the aggregate do not exceed five percent
      (5%) of the Common Stock of the Company issued and outstanding immediately
      prior
      to such issuance or grants.

     

    “Fiscal
      Quarter”
means
      each of the three month periods ending on March 31, June 30, September 30 and
      December 31.

     

    “Fixed
      Charge Coverage Ratio”
means,
      as of any date of determination, the ratio of:

     

    (a)
       the
      aggregate amount of EBITDA for the most recent four consecutive Fiscal Quarters
      ending prior to such determination date to 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (b) Consolidated
      Interest Expense for such four Fiscal Quarters; 

     

    provided,
      however,
      that:

     

    (1)
      if

     

    (A)
      since
      the beginning of such period the Company or any of its Subsidiaries has Incurred
      any Debt that remains outstanding or Repaid any Debt, or 

     

    (B)
      the
      transaction giving rise to the need to calculate the Fixed Charge Coverage
      Ratio
      is an Incurrence or Repayment of Debt, 

     

    Consolidated
      Interest Expense for such period shall be calculated after giving effect on
      a
pro
      forma basis
      to
      such Incurrence or Repayment as if such Debt was Incurred or Repaid on the
      first
      day of such period, provided
      that,
      in
      the event of any such Repayment of Debt, EBITDA for such period shall be
      calculated as if the Company or such Subsidiary had not earned any interest
      income actually earned during such period in respect of the funds used to Repay
      such Debt, and provided
      further
      that the
      amount of Debt Incurred under revolving credit facilities shall be deemed to
      be
      the average daily balance of such Debt during such period (or any shorter period
      in which such facilities are in effect) and

     

    (2)
      if

     

    (A)
      since
      the beginning of such period the Company or any of its Subsidiaries shall have
      made any Asset Sale or an Investment (by merger or otherwise) in any Subsidiary
      of the Company (or any Person which becomes a Subsidiary of the Company) or
      an
      acquisition of Property which constitutes all or substantially all of an
      operating unit of a business, 

     

    (B)
      the
      transaction giving rise to the need to calculate the Fixed Charge Coverage
      Ratio
      is such an Asset Sale, Investment or acquisition, or 

     

    (C)
      since
      the beginning of such period any Person (that subsequently became a Subsidiary
      of the Company or was merged with or into the Company or any Subsidiary of
      the
      Company since the beginning of such period) shall have made such an Asset Sale,
      Investment or acquisition, 

     

    then
      EBITDA for such period shall be calculated after giving pro
      forma
      effect
      to such Asset Sale, Investment or acquisition as if such Asset Sale, Investment
      or acquisition had occurred on the first day of such period. 

     

    If
      any
      Debt bears a floating rate of interest and is being given pro
      forma
      effect,
      the interest expense on such Debt shall be calculated as if the base interest
      rate in effect for such floating rate of interest on the date of determination
      had been the applicable base interest rate for the entire period (taking into
      account any Interest Rate Agreement applicable to such Debt if such Interest
      Rate Agreement has a remaining term in excess of 12 months). In the event the
      Capital Stock of any Subsidiary of the Company is sold during the period, the
      Company shall be deemed, for purposes of clause (1) above, to have Repaid during
      such period the Debt of such Subsidiary to the extent the Company and its
      continuing Subsidiaries are no longer liable for such Debt after such
      sale.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    “Floating
      Rate Note Guarantees”
means
      the guarantee by one or more of the Company’s Subsidiaries of the Floating Rate
      Notes pursuant to the terms of the indenture governing the terms of the Floating
      Rate Notes.

     

    “Floating
      Rate Notes”
means
      the Company’s Guaranteed Senior Secured Floating Rate Notes due 2012 issued
      pursuant to that certain indenture dated January 25, 2007 by and among the
      Company, FHI, as Guarantor, and The Bank of New York, a New York banking
      corporation, as Trustee.

     

    “Foreign
      Subsidiary”
means
      any Subsidiary of the Company which is not organized under the laws of the
      United States of America or any State thereof or the District of
      Columbia.

     

    “Fundamental
      Change”
means
      the occurrence, at any time after a Qualifying IPO, of any transaction or event
      (whether by means of an exchange offer, liquidation, tender offer,
      consolidation, merger, combination, reclassification, recapitalization or
      otherwise) in connection with which all or substantially all of the Common
      Stock
      shall be exchanged for, converted into, acquired for or constitutes solely
      the
      right to receive, consideration which is not all or substantially all common
      stock, depositary receipts, ordinary shares or other certificates representing
      common equity interests that are (or, upon consummation of or immediately
      following such transaction or event, will be) listed on a United States national
      securities exchange or approved (or, upon consummation of or immediately
      following such transaction or event, will be approved) for quotation on the
      Nasdaq Capital Market, Nasdaq Global Market, Nasdaq Global Select Market or
      any
      similar United States system of automated dissemination of quotations of
      securities prices.

     

    “GAAP”
means
      United States generally accepted accounting principles as in effect on the
      Issue
      Date, including those set forth in:

     

    (a)
      the
      opinions and pronouncements of the Accounting Principles Board of the American
      Institute of Certified Public Accountants, 

     

    (b)
      the
      statements and pronouncements of the Financial Accounting Standards Board,
      

     

    (c)
      such
      other statements by such other entity as approved by a significant segment
      of
      the accounting profession, and 

     

    (d)
      the
      rules and regulations of the Commission governing the inclusion of financial
      statements (including pro
      forma financial
      statements) in periodic reports required to be filed pursuant to Section 13
      of
      the Exchange Act, including opinions and pronouncements in staff accounting
      bulletins and similar written statements from the accounting staff of the
      Commission. 

     

    All
      ratios and computations based on GAAP contained in this Indenture will be
      computed in conformity with GAAP.

     

    “Global
      Note Legend”
means
      the legend set forth on all Global Notes issued under this
      Indenture.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    “Global
      Notes”
means
      the global Notes in the form of Exhibit
      A
      hereto
      issued in accordance with Article
      2
      hereof.

     

    “Governmental
      Approval”
means
      any authorization of or by, consent of, approval of, license from, ruling of,
      permit from, tariff by, rate of, certification by, exemption from, filing with
      (except any filing relating to the perfection of security interests), variance
      from, claim of, order from, judgment from, decree of, publication to or by,
      notice to, declaration of or with or registration by or with any Governmental
      Authority, whether tacit or express.

     

    “Governmental
      Authority”
means
      any federal, state, national, provincial, municipal, local, territorial or
      other
      government department, ministry (including local counterparts thereof),
      commission, board, agency, regulatory authority, instrumentality, judicial
      or
      administrative body, domestic or foreign.

     

    “guarantee”
means
      any obligation, contingent or otherwise, of any Person directly or indirectly
      guaranteeing any Debt of any other Person and any obligation, direct or
      indirect, contingent or otherwise, of such Person:

     

    (a)
       to
      purchase or pay (or advance or supply funds for the purchase or payment of)
      such
      Debt of such other Person (whether arising by virtue of partnership
      arrangements, or by agreements to keep-well, to purchase assets, goods,
      securities or services, to take-or-pay or to maintain financial statement
      conditions or otherwise), or 

     

    (b)
       entered
      into for the purpose of assuring in any other manner the obligee against loss
      in
      respect thereof (in whole or in part); 

     

    provided,
      however,
      that the
      term “guarantee” shall not include:

     

    (1)
      endorsements for collection or deposit in the ordinary course of business,
      or

     

    (2)
      a
      contractual commitment by one Person to invest in another Person for so long
      as
      such Investment is reasonably expected to constitute a Permitted Investment
      under clause (a), (b) or (c) of the definition of “Permitted Investment.”

     

    The
      term
“guarantee” used as a verb has a corresponding meaning. The term “guarantor”
shall mean any Person Guaranteeing any obligation.

     

    “Guarantee”
means
      the Guarantee of the Notes by each of the Guarantors pursuant to Article
      9
      and in
      the form of the Guarantee attached as Exhibit
      B
      and any
      additional Guarantee of the Notes to be executed by any Subsidiary of the
      Company pursuant to Section
      4.18.

     

    “Guarantor”
means
      each Domestic Subsidiary and any other Subsidiary of the Company that becomes
      a
      Guarantor pursuant to Section
      4.18
      or who
      otherwise executes and delivers a supplemental indenture (in form satisfactory
      to the Trustee) to the Trustee providing for a Guarantee; provided
      that any
      Person constituting a Guarantor as described above shall cease to constitute
      a
      Guarantor when its respective Guarantee is released in accordance with the
      terms
      of this Indenture.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    “Hedging
      Obligation”
of
      any
      Person means any obligation of such Person pursuant to any Interest Rate
      Agreement, Currency Exchange Protection Agreement, Commodity Price Protection
      Agreement or any other similar agreement or arrangement

     

    “Incur”
means,
      with respect to any Debt or other obligation of any Person, to create, issue,
      incur (by merger, conversion, exchange or otherwise), extend, assume, Guarantee
      or become liable in respect of such Debt or other obligation or the recording,
      as required pursuant to GAAP or otherwise, of any such Debt or obligation on
      the
      balance sheet of such Person (and “Incurrence” and “Incurred” shall have
      meanings correlative to the foregoing); provided,
      however,
      that a
      change in GAAP that results in an obligation of such Person that exists at
      such
      time, and is not theretofore classified as Debt, becoming Debt shall not be
      deemed an Incurrence of such Debt; provided
      further,
      however,
      that
      any Debt or other obligations of a Person existing at the time such Person
      becomes a Subsidiary (whether by merger, consolidation, acquisition or
      otherwise) shall be deemed to be Incurred by such Subsidiary at the time it
      becomes a Subsidiary; and provided
      further, however,
      that
      solely for purposes of determining compliance with Section
      4.09,
      amortization of debt discount shall not be deemed to be the Incurrence of Debt,
      provided
      that in
      the case of Debt sold at a discount, the amount of such Debt Incurred shall
      at
      all times be the aggregate principal amount at Stated Maturity.

     

    “Indenture”
means
      this instrument as originally executed or, if amended or supplemented as herein
      provided, as so amended or supplemented.

     

    “Independent
      Financial Advisor”
means
      an investment banking firm of international standing or any third party
      appraiser of international standing, provided
      that
      such firm or appraiser is not an Affiliate of the Company. 

     

    “Intangible
      Assets” shall
      mean as of the date of any determination thereof the total amount of all assets
      of the Company and its Subsidiaries classified as goodwill, patents, trade
      names, trademarks, copyrights, franchises, experimental expense, organization
      expense, unamortized debt discount and expense, deferred assets other than
      prepaid insurance and prepaid taxes, the excess of cost of shares acquired
      over
      book value of related assets and such other assets as are properly classified
      as
“intangible
      assets”
in
      accordance with GAAP.

     

    “Interest”
means,
      when used with reference to the Notes, any interest payable under the terms
      of
      the Notes, including Additional Interest, if any.

     

    “Interest
      Rate Agreement”
means,
      for any Person, any interest rate swap agreement, interest rate cap agreement,
      interest rate collar agreement or other similar agreement designed to protect
      against fluctuations in interest rates.

     

    “Investment”
by
      any
      Person means any direct or indirect loan (other than advances to customers
      in
      the ordinary course of business that are recorded as accounts receivable on
      the
      balance sheet of such Person), advance or other extension of credit or capital
      contribution (by means of transfers of cash or other Property to others or
      payments for Property or services for the account or use of others, or
      otherwise) to, or Incurrence of a Guarantee of any obligation of, or purchase
      or
      acquisition of Capital Stock, bonds, notes, debentures or other securities
      or
      evidence of Debt issued by, any other Person. 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    In
      determining the amount of any Investment made by transfer of any Property other
      than cash, such Property shall be valued at its Fair Market Value at the time
      of
      such Investment.

     

    “Issue
      Date”
means
      January 25, 2007.

     

    “Legal
      Holiday”
means
      a
      Saturday, a Sunday or a day on which banking institutions in the City of New
      York, the PRC, the city in which the Corporate Trust Office of the Trustee
      is
      located or any other place of payment on the Notes are authorized by law,
      regulation or executive order to remain closed. 

     

    “Leverage
      Ratio”
means
      the ratio of:

     

    (a)
      the
      outstanding Debt of the Company and its Subsidiaries on a consolidated basis,
      to

     

    (b)
      EBITDA for the most recently completed four Fiscal Quarters;

     

    if:

     

    (1)

     

    (A)
       since
      the
      beginning of such period the Company or any of its Subsidiaries has Incurred
      any
      Debt that remains outstanding or Repaid any Debt, or 

     

    (B) the
      transaction giving rise to the need to calculate the Leverage Ratio is an
      Incurrence or Repayment of Debt, 

     

    Consolidated
      Interest Expense for such period shall be calculated after giving effect on
      a
pro
      forma basis
      to
      such Incurrence or Repayment as if such Debt was Incurred or Repaid on the
      first
      day of such period, provided
      that,
      in
      the event of any such Repayment of Debt, EBITDA for such period shall be
      calculated as if the Company or such Subsidiary had not earned any interest
      income actually earned during such period in respect of the funds used to Repay
      such Debt, and provided
      further
      that the
      amount of Debt Incurred under revolving credit facilities shall be deemed to
      be
      the average daily balance of such Debt during such period (or any shorter period
      in which such facilities are in effect) and

     

    (2)
      if

     

    (A)
      since
      the beginning of such period, the Company or any of its Subsidiaries shall
      have
      made any Asset Sale or an Investment (by merger or otherwise) in any Subsidiary
      of the Company (or any Person that becomes such a Subsidiary) or an acquisition
      of Property, 

     

    (B)
      the
      transaction giving rise to the need to calculate the Leverage Ratio is such
      an
      Asset Sale, Investment or acquisition, or 

     

    (C)
      since
      the beginning of such period any Person (that subsequently became a Subsidiary
      of the Company or was merged with or into the Company or any of its Subsidiaries
      since the beginning of such period) shall have made such an Asset Sale,
      Investment or acquisition, 

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    EBITDA
      for such period shall be calculated after giving pro
      forma
      effect
      to such Asset Sale, Investment or acquisition as if such Asset Sale, Investment
      or acquisition occurred on the first day of such period.

     

    If
      any
      Debt bears a floating rate of interest and is being given pro
      forma
      effect,
      the interest expense on such Debt shall be calculated as if the base interest
      rate in effect for such floating rate of interest on the date of determination
      had been the applicable base interest rate for the entire period (taking into
      account any Interest Rate Agreement applicable to such Debt if such Interest
      Rate Agreement has a remaining term in excess of 12 months). In the event the
      Capital Stock of any Subsidiary of the Company is sold during the period, the
      Company shall be deemed, for purposes of clause (1) above, to have Repaid during
      such period the Debt of such Subsidiary to the extent the Company and its
      continuing Subsidiaries are no longer liable for such Debt after such
      sale.

     

    “Lien”
means,
      with respect to any Property of any Person, any mortgage or deed of trust,
      pledge, hypothecation, assignment, deposit arrangement, security interest,
      lien,
      charge, easement (other than any easement not materially impairing usefulness
      or
      marketability), encumbrance, preference, priority or other security agreement
      or
      preferential arrangement of any kind or nature whatsoever on or with respect
      to
      such Property (including any Capital Lease Obligation, conditional sale or
      other
      title retention agreement having substantially the same economic effect as
      any
      of the foregoing or any Sale and Leaseback Transaction). 

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (a) the property, business, operations, financial
      condition, liabilities or capitalization of the Company or any of its
      Subsidiaries, (b) the ability of any such Person to perform its payment
      obligations or any of its material obligations under any of the Security
      Documents or the Restructuring Agreements to which such Person is a party,
      (c)
      the validity or enforceability of any of the Security Documents or the
      Restructuring Agreements, (d) the material rights and remedies of the Trustee
      or
      the Collateral Agent under any of the Security Documents or (e) the timely
      payment of any principal or premium of, or interest on, any of the
      Notes.

     

    “Moody’s”
means
      Moody’s Investors Service, Inc. or any successor to the rating agency business
      thereof.

     

    “Net
      Available Cash”
from
      any Asset Sale means cash payments received therefrom (including any cash
      payments received by way of deferred payment of principal pursuant to a note
      or
      installment receivable or otherwise, but only as and when received, but
      excluding any other consideration received in the form of assumption by the
      acquiring Person of Debt or other obligations relating to the Property that
      is
      the subject of such Asset Sale or received in any other non-cash form), in
      each
      case net of: 

     

    (a)
      all
      legal, title and recording tax expenses, commissions and other fees and expenses
      incurred, and all U.S. federal, state, national, provincial, foreign and local
      taxes required to be accrued as a liability under GAAP, as a consequence of
      such
      Asset Sale, 

     

    (b)
      all
      payments made on or in respect of any Debt that is secured by any Property
      subject to such Asset Sale, in accordance with the terms of any Lien upon such
      Property, or which must by its terms, or in order to obtain a necessary consent
      to such Asset Sale, or by applicable law, be repaid out of the proceeds from
      such Asset Sale, 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    (c)
      all
      distributions and other payments required to be made to minority interest
      holders in Subsidiaries or joint ventures as a result of such Asset Sale, and
      

     

    (d)
      the
      deduction of appropriate amounts provided by the seller as a reserve, in
      accordance with GAAP, against any liabilities associated with the Property
      disposed of in such Asset Sale and retained by the Company or any of its
      Subsidiaries after such Asset Sale.

     

    “Note
      Obligations”
means
      the Notes, the Guarantees and all other obligations of any obligor under this
      Indenture, the Notes, the Guarantees and the Security Documents. 

     

    “Notes”
is
      defined in the preamble.

     

    “Noteholder”
or
      “holder”
as
      applied to any Note, or other similar terms (but excluding the term “Beneficial
      Holder”), means any Person in whose name at the time a particular Note is
      registered on the Security Registrar’s books.

     

    “Notice
      Date”
means
      the date of mailing of the notice pursuant to Section
      3.02(c).

     

    “Obligations”
means
      all obligations for principal, premium, interest, penalties, fees,
      indemnifications, reimbursements, damages and other liabilities payable under
      the documentation governing any Debt.

     

    “Officer”
means,
      with respect to the Company, its Chairman of the Board, the Chief Executive
      Officer, the President or any Vice President (whether or not designated by
      a
      number or numbers or word or words added before or after the title “Vice
      President”) and the Treasurer or any Assistant Treasurer, or the Secretary or
      Assistant Secretary.

     

    “Officers’
      Certificate”
means
      a
      certificate, in form and substance satisfactory to the Trustee, signed by two
      Officers of the Company, at least one of whom shall be the principal executive
      officer or principal financial officer of the Company, and which certificate
      meets the requirements of Section
      15.05
      hereof
      and is delivered to the Trustee.

     

    “Opinion
      of Counsel”
means
      a
      written opinion, in form and substance satisfactory to the Trustee, from legal
      counsel who is acceptable to the Trustee and which meets the requirements of
      Section
      15.05
      hereof.

     

    “Outstanding”,
      when
      used with reference to Notes and subject to the provisions of Section
      12.04,
      means,
      as of any particular time, all Notes authenticated and delivered by the Trustee
      under this Indenture, except:

     

    (a) Notes
      theretofore canceled by the Trustee or delivered to the Trustee for
      cancellation;

     

    (b) Notes,
      or
      portions thereof, (i) for the redemption of which monies in the necessary amount
      shall have been deposited in trust with the Trustee or with any paying agent
      (other than the Company) or (ii) which shall have been otherwise discharged
      in
      accordance with Article
      11;

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (c) Notes
      in
      lieu of which, or in substitution for which, other Notes shall have been
      authenticated and delivered pursuant to the terms of Section
      2.06;
      and

     

    (d) Notes
      converted into Common Stock pursuant to Article
      14
      and
      Notes deemed not outstanding pursuant to Article
      3.

     

    “Permitted
      Holders”
means
      Mr. FU Li, a resident of the City of Dalian in the PRC, and his estate, spouse,
      ancestors and lineal descendants, the legal representatives of any of the
      foregoing and the trustees of any bona fide trusts of which the foregoing are
      the sole beneficiaries or the grantors, or any Person of which the foregoing
      “beneficially owns” (as defined in Rule 13d-3 under the Exchange Act),
      individually or collectively with any of the foregoing, at least 80% of the
      total voting power of the Voting Stock of such Person.

     

    “Permitted
      Investment”
means
      any Investment by the Company or any of its Subsidiaries in: 

     

    (a) the
      Company or any of its Subsidiaries engaged in a Related Business;

     

    (b)
       any
      Person that will, upon the making of such Investment, become a Subsidiary of
      the
      Company, provided
      that the
      primary business of such Subsidiary is a Related Business; 

     

    (c)
       any
      Person if as a result of such Investment such Person is merged or consolidated
      with or into, or transfers or conveys all or substantially all its Property
      to,
      the Company or a Subsidiary of the Company, provided
      that
      such Person’s primary business is a Related Business;

     

    (d)
       cash
      and
      Cash Equivalents; 

     

    (e)
       receivables
      owing to the Company or any of its Subsidiaries, if created or acquired in
      the
      ordinary course of business and payable or dischargeable in accordance with
      customary trade terms; provided,
      however,
      that
      such trade terms may include such concessionary trade terms as the Company
      or
      such Subsidiary deems reasonable under the circumstances; 

     

    (f)
       payroll,
      travel and similar advances to cover matters that are expected at the time
      of
      such advances ultimately to be treated as expenses under GAAP and that are
      made
      in the ordinary course of business;

     

    (g)
       stock,
      obligations or other securities received in settlement of debts created in
      the
      ordinary course of business and owing to the Company or one of its Subsidiaries
      or in satisfaction of judgments; 

     

    (h)
       any
      Person to the extent such Investment represents the non-cash portion of the
      consideration received in connection with (A) an Asset Sale consummated in
      compliance with Section
      4.12
      or (B)
      any disposition of Property not constituting an Asset Sale;

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (i)
       Hedging
      Obligations by the Company or any Guarantor that are otherwise permitted to
      be
      incurred under this Indenture, and which were entered into for financial
      management of interest rates, foreign currency exchange rates or commodity
      prices and are directly related to transactions entered into by such Person
      in
      the ordinary course of its business, and not for speculative purposes;
      and

     

    (j)
       other
      Investments made for Fair Market Value that do not exceed 10% of the aggregate
      amount of Consolidated Net Income accrued during the period (treated as one
      accounting period) from the beginning of the Fiscal Quarter after the Issue
      Date
      to the end of the most recent Fiscal Quarter ending prior to the date of such
      Investment (or if the aggregate amount of Consolidated Net Income for such
      period shall be a deficit, minus 100% of such deficit).

     

    “Permitted
      Liens”
      means:

     

    (a)
       Liens
      in
      favor of the Company or the Guarantors;

     

    (b)
       Liens
      securing, or created for the benefit of securing, the Notes, the Guarantees,
      the
      Floating Rate Notes and the Floating Rate Note Guarantees;

     

    (c)
       Liens
      to
      secure Debt permitted to be Incurred under clause (b) of the second paragraph
      of
Section
      4.09
      and
      other obligations thereunder, provided
      that any
      such Lien is limited to the Property of the WFOE;

     

    (d)
       Liens
      for
      taxes, assessments or governmental charges or levies on the Property of the
      Company or any of its Subsidiaries if the same shall not at the time be
      delinquent or thereafter can be paid without penalty, or are being contested
      in
      good faith and by appropriate proceedings promptly instituted and diligently
      concluded, provided
      that any
      reserve or other appropriate provision that shall be required in conformity
      with
      GAAP shall have been made therefor; 

     

    (e)
       Liens
      imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and other
      similar Liens, on the Property of the Company or any of its Subsidiaries arising
      in the ordinary course of business and securing payment of obligations that
      are
      not more than 60 days past due or are being contested in good faith and by
      appropriate proceedings;

     

    (f)
       Liens
      on
      the Property of the Company or any of its Subsidiaries Incurred in the ordinary
      course of business to secure performance of obligations with respect to
      statutory or regulatory requirements, performance or return-of-money bonds,
      surety bonds or other obligations of a like nature and Incurred in a manner
      consistent with industry practice, in each case which are not Incurred in
      connection with the borrowing of money, the obtaining of advances or credit
      or
      the payment of the deferred purchase price of Property and which do not in
      the
      aggregate impair in any material respect the use of Property in the operation
      of
      the business of the Company and its Subsidiaries taken as a whole;

     

    (g)
       Liens
      on
      Property at the time the Company or any of its Subsidiaries acquired such
      Property, including any acquisition by means of a merger or consolidation with
      or into the Company or any of its Subsidiaries; provided,
      however,
      that
      any such Lien may not extend to any other Property of the Company or any of
      its
      Subsidiaries; provided
      further, that
      such
      Liens shall not have been Incurred in anticipation of or in connection with
      the
      transaction or series of transactions pursuant to which such Property was
      acquired by the Company or any of its Subsidiaries; 

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (h)
       Liens
      on
      the Property of a Person at the time such Person becomes a Subsidiary of the
      Company; provided,
      however,
      that
      any such Lien may not extend to any other Property of the Company or any other
      Subsidiary of the Company that is not a direct Subsidiary of such Person;
provided
      further, that
      any
      such Lien was not Incurred in anticipation of or in connection with the
      transaction or series of transactions pursuant to which such Person became
      a
      Subsidiary of the Company; 

     

    (i)
       pledges
      or deposits by the Company or any of its Subsidiaries under workers’
compensation laws, unemployment insurance laws or similar legislation, or good
      faith deposits in connection with bids, tenders, contracts (other than for
      the
      payment of Debt) or leases to which the Company or any of its Subsidiaries
      is
      party, or deposits to secure public or statutory obligations of the Company,
      or
      deposits for the payment of rent, in each case Incurred in the ordinary course
      of business; 

     

    (j)
       utility
      easements, building restrictions and such other encumbrances or charges against
      real Property as are of a nature generally existing with respect to properties
      of a similar character;

     

    (k)
       Liens
      existing on the Issue Date not otherwise described in clauses (a) through (h)
      above;

     

    (l)
       Liens
      on
      the Property of the Company or any of its Subsidiaries to secure any
      Refinancing, in whole or in part, of any Debt secured by Liens referred to
      in
      clause (g), (h) or (k) above; provided,
      however,
      that
      any such Lien shall be limited to all or part of the same Property that secured
      the original Lien (together with improvements and accessions to such Property),
      and the aggregate principal amount of Debt (and other obligations thereunder)
      that is secured by such Lien shall not be increased to an amount greater than
      the sum of:

     

    (1)
       the
      outstanding principal amount, or, if greater, the committed amount, of the
      Debt
      (and other obligations thereunder) secured by Liens described under clause
      (g),
      (h) or (k) above, as the case may be, at the time the original Lien became
      a
      Permitted Lien under this Indenture, and 

     

    (2)
       an
      amount
      necessary to pay any fees and expenses, including premiums and defeasance costs,
      incurred by the Company or such Subsidiary in connection with such Refinancing;
      and

     

    (m)
       Liens
      to
      secure cash collateral in respect of Hedging Obligations pursuant to which
      Merrill Lynch Capital Services, Inc. or any of its Affiliates is the
      counterparty; provided
      that
      such Liens in the aggregate shall not initially exceed $7.0
      million.

     

    “Permitted
      Refinancing Debt”
means
      any Debt that Refinances any other Debt, including any successive Refinancings,
      so long as:

     

    (a)
       such
      Debt
      is in an aggregate principal amount (or if Incurred with original issue
      discount, an aggregate issue price) not in excess of the sum of: 

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (1)
      the
      aggregate principal amount (or if Incurred with original issue discount, the
      aggregate accreted value) then outstanding of the Debt being Refinanced,
      and

     

    (2)
      an
      amount necessary to pay any fees and expenses, including premiums and defeasance
      costs, related to such Refinancing, 

     

    (b)
       the
      Average Life of such Debt is equal to or greater than the Average Life of the
      Debt being Refinanced,

     

    (c)
       the
      Stated Maturity of such Debt is no earlier than the Stated Maturity of the
      Debt
      being Refinanced, 

     

    (d)
       the
      new
      Debt shall not be senior in right of payment to the Debt that is being
      Refinanced, and

     

    (e)
       the
      new
      Debt, the proceeds of which are used to Refinance the Notes or any Debt that
      is
pari
      passu
      with or
      subordinate to the Notes or a Guarantee, shall only be permitted if (A) in
      case
      the Notes are refinanced in part or the Debt to be Refinanced is pari
      passu
      with the
      Notes or a Guarantee, such new Debt, by its terms or by terms of any agreement
      or instrument pursuant to which such new Debt is outstanding, is expressly
      made
pari
      passu
      with, or
      subordinate in right of payment to, the remaining Notes or such Guarantee,
      or
      (B) in case the Debt to be Refinanced is subordinated in right of payment to
      the
      Notes or a Guarantee, such new Debt, by its terms or by the terms of any
      agreement or instrument to which such new Debt is issued or remains outstanding,
      is expressly made subordinate in right of payment to the Notes or such Guarantee
      at least to the extent that the Debt to be Refinanced is subordinated to the
      Notes or the Guarantee;

     

    provided,
      however,
      that
      Permitted Refinancing Debt shall not include the Debt of any Subsidiary that
      is
      not a Guarantor, if such Debt is used to Refinance Debt of the Company or a
      Subsidiary.

     

    “Person”
means
      a
      corporation, an association, a partnership, a limited liability company, an
      individual, a joint venture, a joint stock company, a trust, an unincorporated
      organization or a government or an agency or a political subdivision
      thereof.

     

    “PRC”
means
      the People’s Republic of China, exclusive of Taiwan, Macau and Hong
      Kong.

     

    “Predecessor
      Note” of
      any
      particular Note means every previous Note evidencing all or a portion of the
      same Debt as that evidenced by such particular Note; and any Note authenticated
      and delivered under Section
      2.06
      in lieu
      of a lost, destroyed or stolen Note shall be deemed to evidence the same Debt
      as
      the lost, destroyed or stolen Note.

     

    “Preferred
      Stock”
means
      any Capital Stock of a Person, however designated, which entitles the holder
      thereof to a preference with respect to the payment of dividends, or as to
      the
      distribution of assets upon any voluntary or involuntary liquidation or
      dissolution of such Person, over shares of any other class of Capital Stock
      issued by such Person.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    “Preferred
      Stock Dividends”
means
      all dividends with respect to Preferred Stock of the Company’s Subsidiaries held
      by Persons other than the Company or any of its Wholly Owned Subsidiaries.
      The
      amount of any such dividend shall be equal to the quotient of such dividend
      divided by the difference between one and the maximum statutory federal income
      rate (expressed as a decimal number between 1 and 0) then applicable to the
      issuer of such Preferred Stock.

     

    “pro
      forma”
means,
      with respect to any calculation made or required to be made pursuant to the
      terms hereof, a calculation performed in accordance with Article 11 of
      Regulation S-X promulgated under the Securities Act, as interpreted in good
      faith by the Board of Directors after consultation with the independent
      certified public accountants of the Company, or otherwise a calculation made
      in
      good faith by the Board of Directors after consultation with the independent
      certified public accountants of the Company, as the case may be.

     

    “Property”
means,
      with respect to any Person, any interest of such Person in any kind of property
      or asset, whether real, personal or mixed, or tangible or intangible, including
      intellectual property rights and Capital Stock in, and other securities of,
      any
      other Person. For purposes of any calculation required pursuant to this
      Indenture, the value of any Property shall be its Fair Market
      Value.

     

    “Qualifying
      IPO”
means
      a
      public offering of Common Stock of the Company pursuant to an effective
      registration statement under the Securities Act that results in (i) at least
      25%
      of the Company’s issued and outstanding share capital being publicly held by
      Persons other than any Affiliate of the Company, the Permitted Holders or Senior
      Management, (ii) the product of (x) the number of shares of Common Stock of
      the
      Company (including other securities of the Company that are convertible into
      Common Stock of the Company, on an as-converted basis) and (y) the Closing
      Sale
      Price of the Company’s Common Stock, shall be at least $200,000,000 (unless such
      percentage of dollar amount be otherwise agreed by the holders of a majority
      in
      aggregate principal amount of Notes and Floating Rate Notes then outstanding,
      voting as a single class), (iii) the minimum number of holders of the Company’s
      Common Stock as required by the securities exchange on which such Common Stock
      is listed in connection with such Qualifying IPO and (iv) listing of the Common
      Stock on Nasdaq’s Capital Market, Global Market or Global Select Market or any
      other market (1) consented to by the holders of a majority in aggregate
      principal amount of the Notes and the Floating Rate Notes then outstanding,
      voting as a single class, or (2) approved by the Company’s Board of Directors,
      if any such holders’ consent shall have occurred prior to the meeting of the
      Board of Directors.

     

    “Redemption
      Price”
means
      the amount calculated in accordance with the following formula, rounded (if
      necessary) to two decimal places with 0.005 being rounded upwards:

     

    
      	
              Redemption
                Price = I x (1 + r/2)d/180

            
	
              Where:

            	 	 
	
              I

            	
              =

            	
              Issue
                price (100% of principal amount) of the Notes;

            
	 	 	 
	
              r

            	
              =

            	
              15.0%
                expressed as a decimal; and

            
	 	 	 
	
              d

            	
              =

            	
              number
                of days from and including the Issue Date to but excluding, the date
                for
                redemption or repurchase, calculated on the basis of a 360-day year
                consisting of 12 months of 30 days each, and in the case of an incomplete
                month, the actual number of days
                elapsed.

            

    

    

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    “Refinance”
means,
      in respect of any Debt, to refinance, extend, renew, refund or Repay (in whole
      or in part), or to issue other Debt, in exchange or replacement for (in whole
      or
      in part), such Debt. “Refinanced” and “Refinancing” shall have correlative
      meanings.

     

    “Related
      Business”
means
      the manufacture and sale of bimetallic wire used in communications, electrical
      transmission and other electrical products, services ancillary thereto, and
      the
      sourcing and manufacture of raw materials and inputs for such
      products.

     

    “Repay”
means,
      in respect of any Debt, to repay, prepay, repurchase, redeem, legally defease
      or
      otherwise retire such Debt. “Repayment” and “Repaid” shall have correlative
      meanings. For purposes of Section
      4.12
      , the
      definitions of “Fixed Charge Coverage Ratio” and “Leverage Ratio,” Debt shall be
      considered to have been Repaid only to the extent the related loan commitment,
      if any, shall have been permanently reduced in connection therewith.

     

    “Repurchase
      Amount”
means,
      with respect to any Note, the Redemption Price plus
      any
      accrued and unpaid Interest on such Note (including post-petition interest
      in
      any proceeding under any Bankruptcy Law) and interest accrued on overdue
      principal (and, to the extent lawful, on overdue installments of interest)
      and
      premium, if any, at a rate that is 5% per annum in excess of the rate of
      Interest then in effect.

     

    “Responsible
      Officer”
shall
      mean, when used with respect to the Trustee, any officer within the corporate
      trust department of the Trustee with direct responsibility for the
      administration of this Indenture.

     

    “Restricted
      Payment”
      means:

     

    (a)
       any
      dividend or distribution (whether made in cash, securities or other Property)
      declared or paid on or with respect to any shares of Capital Stock of the
      Company or any of its Subsidiaries (including any payment in connection with
      any
      merger or consolidation with or into the Company or any of its Subsidiaries),
      except for any dividend or distribution that is made solely to the Company
      or
      any of its Subsidiaries (and, if such Subsidiary is not a Wholly Owned
      Subsidiary, to the other shareholders of such Subsidiary on a pro
      rata basis
      or
      on a basis that results in the receipt by the Company or any of its Subsidiaries
      of dividends or distributions of greater value than it would receive on a
pro
      rata basis)
      or
      any dividend or distribution payable solely in shares of Capital Stock (other
      than Disqualified Stock) of the Company; 

     

    (b)
       the
      purchase, repurchase, redemption, acquisition or retirement for value of any
      Capital Stock of the Company or any of its Subsidiaries (other than from the
      Company or any of its Subsidiaries) or any securities exchangeable for or
      convertible into any such Capital Stock, including the exercise of any option
      to
      exchange any Capital Stock (other than for or into Capital Stock of the Company
      that is not Disqualified Stock); 

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    (c)
       the
      purchase, repurchase, redemption, acquisition or retirement for value, prior
      to
      the date for any scheduled maturity, sinking fund or amortization or other
      installment payment, of any Subordinated Obligation (other than the purchase,
      repurchase or other acquisition of any Subordinated Obligation purchased in
      anticipation of satisfying a scheduled maturity, sinking fund or amortization
      or
      other installment obligation, in each case due within one year of the date
      of
      acquisition); or

     

    (d)
       any
      Investment (other than Permitted Investments) in any Person.

     

    “Restructuring
      Agreements”
means
      each of (a) The Purchase Agreement, dated as of December 13, 2005, between
      the
      WFOE and Dalian Fushi; (b) The Entrusted Management Agreement, dated as of
      December 13, 2005, by and among the WFOE, Dalian Fushi, Dalian Fushi Enterprise
      Group Co., Ltd., Yue Yang, Xishan Yang, and Chunyan Xu; (c) The First Patents
      Transfer Contract, dated as of December 13, 2005, by and between the WFOE and
      Dalian Fushi; (d) The Second Patent Transfer Contract, dated as of December
      13,
      2005, by and between the WFOE and Li Fu; (e) The Voting Proxy Agreement, dated
      as of December 13, 2005, by and among the WFOE, Dalian Fushi Enterprise Group
      Co., Ltd., Yue Yang, Xishan Yang, and Chunyan Xu; (f) The Exclusive Option
      Agreement, dated as of December 13, 2005, by and among the WFOE, Dalian Fushi,
      Dalian Fushi Enterprise Group Co., Ltd., Yue Yang, Xishan Yang, and Chunyan
      Xu;
      and (g) The Shares Pledge Agreement, dated as of December 13, 2005, by and
      among
      the WFOE, Dalian Fushi Enterprise Group Co., Ltd., Yue Yang, Xishan Yang, and
      Chunyan Xu.

     

    “RMB”
means
      the lawful currency of the PRC.

     

    “S&P”
means
      Standard & Poor’s Ratings Services, a division of McGraw Hill, Inc., or any
      successor to the rating agency business thereof.

     

    “Sale
      and Leaseback Transaction”
means
      any direct or indirect arrangement relating to Property now owned or hereafter
      acquired whereby the Company or any of its Subsidiaries transfers such Property
      to another Person and the Company or any of its Subsidiaries leases it from
      such
      Person. 

     

    “Securities
      Act”
means
      the U.S. Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder, as in effect from time to time.

     

    “Security
      Documents”
means
      that certain Share Pledge Agreement dated the date hereof in favor of the
      Collateral Agent for the benefit of the holders of Note Obligations, whenever
      incurred, and also for the benefit of the present and future holders of all
      other Note Obligations and any document perfecting such security interests,
      and
      any one or more security agreements, pledge agreements, collateral assignments,
      mortgages, deeds of trust or other grants or transfers for security executed
      and
      delivered by the Company or any other Obligor creating a Lien upon property
      owned or to be acquired by the Company or such other Obligor in favor of the
      Collateral Agent for the benefit of the holders of Note Obligations, whenever
      incurred, and also for the benefit of the present and future holders of all
      other Note Obligations and any document perfecting such security interests
      pursuant to the terms of Article
      10
      hereof.

     

    “Senior
      Debt”
of
      the
      Company means:

     

    (a)
       all
      obligations consisting of the principal, premium, if any, and accrued and unpaid
      interest (including interest accruing on or after the filing of any petition
      in
      bankruptcy or for reorganization relating to the Company whether or not such
      post-filing interest is allowed in such proceeding) in respect of:

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    (1)
      Debt
      of the Company for borrowed money, and

     

    (2)
      Debt
      of the Company evidenced by notes, debentures, bonds or other similar
      instruments permitted under this Indenture for the payment of which the Company
      is responsible or liable; 

     

    (b)
       all
      Capital Lease Obligations of the Company and all Attributable Debt in respect
      of
      Sale and Leaseback Transactions entered into by the Company; 

     

    (c)
       all
      obligations of the Company 

     

    (1)
      for
      the reimbursement of any obligor on any letter of credit, banker’s acceptance or
      similar credit transaction, 

     

    (2)
      under
      Hedging Obligations, or 

     

    (3)
      issued or assumed as the deferred purchase price of Property and all conditional
      sale obligations of the Company and all obligations under any title retention
      agreement permitted under this Indenture; and

     

    (d)
       all
      obligations of other Persons of the type referred to in clauses (a), (b) and
      (c)
      for the payment of which the Company is responsible or liable as
      Guarantor;

     

     provided,
      however,
      that
      Senior Debt shall not include:

     

    (A)
       Debt
      of
      the Company that is by its terms subordinate in right of payment to the
      Notes,
      including any
      Subordinated Obligations; 

     

    (B)
       any
      Debt
      Incurred in violation of the provisions of this Indenture; 

     

    (C)
       accounts
      payable or any other obligations of the Company to trade creditors created
      or
      assumed by the Company in the ordinary course of business in connection with
      the
      obtaining of materials or services (including Guarantees thereof or instruments
      evidencing such liabilities); 

     

    (D)
       any
      liability for U.S. federal, state, national, provincial, local or other taxes
      owed or owing by the Company; 

     

    (E)
       any
      obligation of the Company to any of its Subsidiaries; or

     

    (F)
       any
      obligations with respect to any Capital Stock of the Company. 

     

    To
      the
      extent that any payment of Senior Debt (whether by or on behalf of the Company
      as proceeds of security or enforcement or any right of setoff or otherwise)
      is
      declared to be fraudulent or preferential, set aside or required to be paid
      to a
      trustee, receiver or other similar party under any bankruptcy, insolvency,
      receivership or similar law, then if such payment is recovered by, or paid
      over
      to, such trustee, receiver or other similar party, the Senior Debt or part
      thereof originally intended to be satisfied shall be deemed to be reinstated
      and
      outstanding as if such payment had not occurred. 

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    “Senior
      Debt” of any Guarantor has a correlative meaning.

     

    “Senior
      Management”
means
      Mr. Mathus Yang Yue, a resident of Dalian, Liaoning Province
      in the
      PRC, and Mr. Chris Wang Wenbing, a resident of Dalian, Liaoning
      Province
      in the
      PRC.

     

    “Significant
      Subsidiary”
means
      any Subsidiary that would be a “significant subsidiary” of the Company within
      the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission.
      For
      the purposes of this Indenture, Dalian Fushi shall be considered a “Significant
      Subsidiary” of the Company.

     

    “Stated
      Maturity”
means,
      with respect to any installment of interest or principal on any series of Debt
      (including, without limitation, a scheduled repayment or a scheduled sinking
      fund payment), the date on which the payment of interest or principal was
      scheduled to be paid in the original documentation governing such Debt, and
      will
      not include any contingent obligations to repay, redeem or repurchase any such
      interest or principal prior to the date originally scheduled for the payment
      hereof.

     

    “Subordinated
      Obligation”
means
      any Debt of the Company or any Guarantor (whether outstanding on the Issue
      Date
      or thereafter Incurred) that is subordinate or junior in right of payment to
      the
      Notes or the applicable Guarantee pursuant to a written agreement to that
      effect. 

     

    “Subsidiary,”
with
      respect to any Person, means (i) any corporation of which the outstanding
      Capital Stock having a majority of the votes entitled to be cast in the election
      of directors under ordinary circumstances shall at the time be owned, directly
      or indirectly, through one or more intermediaries, by such Person or (ii) any
      other Person of which a majority of the voting interest under ordinary
      circumstances is at the time, directly or indirectly, through one or more
      intermediaries, owned by such Person. For the purposes of this Indenture, Dalian
      Fushi shall be considered a “Subsidiary” of the Company. 

     

    “Surviving
      Person”
means
      the surviving Person formed by a merger, consolidation or amalgamation and,
      for
      purposes of Section
      5.01,
      a
      Person to whom all or substantially all of the Property of the Company or a
      Guarantor is sold, transferred, assigned, leased, conveyed or otherwise
      disposed. 

     

    “Tax
      Original Issue Discount”
means
      the amount of ordinary interest income on a Note that must be accrued as
      original issue discount for United States federal income tax
      purposes.

     

    “Termination
      of Trading”
will
      be
      deemed to have occurred if, (i) at any time after a Qualifying IPO, the Common
      Stock (or other common stock, depositary receipts, ordinary shares or other
      certificates representing common equity interests into which the Notes are
      then
      convertible) is neither listed for trading on a United States national
      securities exchange, listed for trading on a United States national or regional
      securities exchange nor approved for trading on any of the Nasdaq’s Capital
      Market, Global Market or Global Select Market, or (ii) trading in the Company’s
      common stock on any such exchange or market has been suspended for ten or more
      consecutive Trading Days.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    “Trading
      Day”
shall
      mean (x) if the applicable security is quoted on the Nasdaq National Market,
      a
      day on which trades may be made thereon, (y) if the applicable security is
      listed or admitted for trading on the American Stock Exchange, New York Stock
      Exchange or another national securities exchange, a day on which the American
      Stock Exchange, New York Stock Exchange or another national securities exchange
      is open for business, or (z) if the applicable security is not so listed,
      admitted for trading or quoted, any day other than a Saturday or Sunday or
      a day
      on which banking institutions in the State of New York are authorized or
      obligated by law or executive order to close.

     

    “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the Nasdaq Capital Market, the American
      Stock Exchange, the New York Stock Exchange, the Nasdaq Global Market, the
      Nasdaq Global Select Market or the OTC Bulletin Board.

     

    “Trading
      Reference VWAP”
means,
      as of March 1 or September 1 of each year, the simple arithmetic average of
      the
      VWAPs as shown on Bloomberg for the fifteen Trading Days preceding such March
      1
      or September 1, as the case may be, as proportionally adjusted for any
      subdivision, consolidation, reclassification or similar event of the Shares;
      provided
      that if
      the actual Trading Reference VWAP be less than $4.50, the Trading Reference
      VWAP
      shall be deemed to be exactly $4.50.

     

    “Trustee”
means
      the Person named as the “Trustee” in the first paragraph of this instrument
      until a successor Trustee shall have become such pursuant to the applicable
      provisions of this Indenture, and thereafter “Trustee” shall mean such successor
      Trustee.

     

    “U.S.
      Government Securities”
means
      direct obligations (or certificates representing an ownership interest in such
      obligations) of the United States of America (including any agency or
      instrumentality thereof) for the payment of which the full faith and credit
      of
      the United States of America are pledged and which are not callable or
      redeemable at the issuer’s option.

     

    “Voting
      Stock”
of
      any
      Person means all classes of Capital Stock or other interests (including
      partnership interests) of such Person then outstanding and normally entitled
      (without regard to the occurrence of any contingency) to vote in the election
      of
      directors, managers or trustees thereof. 

     

    “VWAP”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
      the daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the Trading Market on which the Common Stock
      is
      then listed or quoted for trading as reported by Bloomberg Financial L.P.
      through its “Volume at Price” functions (based on a Trading Day from 9:30 a.m.
      (New York City time) to 4:02 p.m. (New York City time); (b) if the OTC Bulletin
      Board is not a Trading Market, the volume weighted average price of the Common
      Stock for such date (or the nearest preceding date) on the OTC Bulletin Board;
      or (c) if the Common Stock is not then quoted for trading on the OTC Bulletin
      Board and if prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency succeeding
      to
      its functions of reporting prices), the average of the highest closing bid
      price
      and lowest closing ask price of any of the market makers for such security
      as
      reported, and in each of the foregoing clauses ignoring any block trade (which
      for purposes of this definition means any transfer of more than 100,000 shares).
      If the VWAP cannot be calculated for such security on such date on any of the
      foregoing bases, the VWAP
      of such
      security on such date shall be the fair market value as mutually determined
      by
      the Company and the Noteholders of at least a majority in aggregate principal
      amount of the Notes then outstanding.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    “WFOE”
means
      Fushi International (Dalian) Bimetallic Cable Co., Ltd., a wholly foreign-owned
      limited liability company organized and existing under the laws of the
      PRC.

     

    “Wholly
      Owned Subsidiary”
means,
      at any time, a Subsidiary all the Voting Stock of which (except directors’
qualifying shares) is at such time owned, directly or indirectly, by the Company
      and its other Wholly Owned Subsidiaries.

     

    Section
      1.02. Other
      Definitions.

     

    
      
        	 	
                Defined
                  in

              
	
                Term

              	
                Section

              
	
                “Additional
                  Interest Notice”

              	
                4.31

              
	
                “Adjustment
                  Event”

              	
                14.05

              
	
                “Affiliate
                  Transaction”

              	
                4.14

              
	
                “Allocable
                  Excess Proceeds”

              	
                4.12

              
	
                “Asset
                  Sale Offer”

              	
                4.12

              
	
                “Authentication
                  Order”

              	
                2.04

              
	
                “Benefited
                  Party”

              	
                9.01

              
	
                “Change
                  of Control Offer”

              	
                4.17

              
	
                “Company
                  Repurchase Notice”

              	
                3.04

              
	
                “Company
                  Repurchase Notice Date”

              	
                3.04

              
	
                “Conversion
                  Date”

              	
                14.02

              
	
                “Conversion
                  Notice”

              	
                14.02

              
	
                “Conversion
                  Rate”

              	
                14.04

              
	
                “Current
                  Market Price”

              	
                14.05

              
	
                “Designated
                  Event Offer”

              	
                4.26

              
	
                “Determination
                  Date”

              	
                14.05

              
	
                “Event
                  of Default”

              	
                6.01

              
	
                “Excess
                  Proceeds”

              	
                4.12

              
	
                “Expiration
                  Time”

              	
                14.05

              
	
                “Future
                  Guarantor”

              	
                9.03

              
	
                “Future
                  Subsidiary Pledgor”

              	
                10.02

              
	
                “Guarantor
                  Pledgor”

              	
                10.02
                  

              
	
                “Non-electing
                  share”

              	
                14.06

              
	
                “Offer
                  Amount”

              	
                3.02

              
	
                “Offer
                  Period”

              	
                3.02

              
	
                “Offer
                  to Purchase”

              	
                3.02

              

      

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

       

      
        	
                “Paying
                  Agent”

              	
                4.02

              
	
                “Purchase
                  Date”

              	
                3.02

              
	
                “Purchase
                  Price”

              	
                3.02

              
	
                “Purchased
                  Shares”

              	
                14.05

              
	
                “Record
                  Date”

              	
                14.05

              
	
                “Repurchase
                  Date”

              	
                3.03

              
	
                “Repurchase
                  Notice”

              	
                3.03

              
	
                “Secured
                  Party”

              	
                10.01

              
	
                “Securities”

              	
                14.05

              
	
                “Security
                  Register”

              	
                4.02

              
	
                “Security
                  Registrar”

              	
                4.02

              
	
                “Trading
                  Day”

              	
                14.05

              
	
                “Trigger
                  Event”

              	
                14.05

              

      

       

    

    Section
      1.03. Rules
      of Construction.

     

    (a) Unless
      the context otherwise requires:

     

    (i) a
      term
      has the meaning assigned to it;

     

    (ii) an
      accounting term not otherwise defined herein has the meaning assigned to it
      in
      accordance with GAAP;

     

    (iii) “or”
is
      not exclusive;

     

    (iv) words
      in
      the singular include the plural, and in the plural include the
      singular;

     

    (v) all
      references in this instrument to “Articles,” “Sections” and other subdivisions
      are to the designated Articles, Sections and subdivisions of this instrument
      as
      originally executed;

     

    (vi) the
      words
“herein,” “hereof” and “hereunder” and other words of similar import refer to
      this Indenture as a whole and not to any particular Article, Section or other
      subdivision.

     

    (vii) “including”
      means “including without limitation;”

     

    (viii) provisions
      apply to successive events and transactions; 

     

    (ix) “$”
means
      the lawful currency of the United States of America; and

     

    (x) references
      to sections of or rules under the Securities Act or the Exchange Act shall
      be
      deemed to include substitute, replacement or successor sections or rules adopted
      by the Commission from time to time thereunder.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      2

     

    ISSUE,
      DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

     

    Section
      2.01. Designation
      Amount and Issue of Notes.
      

     

    The
      Notes
      shall be designated as “3.0% Guaranteed Senior Secured Convertible Notes due
      2012”. Notes not to exceed the aggregate principal amount of $20,000,000 (except
      pursuant to Sections
      2.05,
      2.06,
      and
3.07
      hereof)
      upon the execution of this Indenture, or from time to time thereafter, may
      be
      executed by the Company and delivered to the Trustee for authentication, and
      the
      Trustee shall thereupon authenticate and deliver said Notes to or upon the
      written order of the Company, signed by its Chairman of the Board, Chief
      Executive Officer, President or any Vice President (whether or not designated
      by
      a number or numbers or word or words added before or after the title “Vice
      President”), the Treasurer or any Assistant Treasurer or the Secretary or
      Assistant Secretary, without any further action by the Company hereunder.

     

    Section
      2.02. Form
      of Notes.
      

     

    (a) The
      Notes
      and the Trustee’s certificate of authentication to be borne by such Notes shall
      be substantially in the form set forth in Exhibit
      A.
      The
      terms and provisions contained in the form of Note attached as Exhibit
      A
      hereto
      shall constitute, and are hereby expressly made, a part of this Indenture and,
      to the extent applicable, the Company, the Guarantor and the Trustee, by their
      execution and delivery of this Indenture, expressly agree to such terms and
      provisions and to be bound thereby.

     

    (b) Any
      of
      the Notes may have such letters, numbers or other marks of identification and
      such notations, legends, endorsements or changes as the officers executing
      the
      same may approve (execution thereof to be conclusive evidence of such approval)
      and as are not inconsistent with the provisions of this Indenture, or as may
      be
      required by the Custodian, the Common Depositary or as may be required to comply
      with any applicable law or with any rule or regulation made pursuant thereto
      or
      with any rule or regulation of any securities exchange or automated quotation
      system on which the Notes may be listed, or to conform to usage, or to indicate
      any special limitations or restrictions to which any particular Notes are
      subject.

     

    (c) So
      long
      as the Notes are eligible for book-entry settlement with the Common Depositary,
      or unless otherwise required by law, or otherwise contemplated by Section
      2.05(a),
      all of
      the Notes will be represented by one or more Notes in global form registered
      in
      the name of the Common Depositary or the nominee of the Common Depositary (a
      “Global
      Note”).
      The
      transfer and exchange of beneficial interests in any such Global Note shall
      be
      effected through the Common Depositary in accordance with this Indenture and
      the
      applicable procedures of the Common Depositary. Except as provided in
Section
      2.05(a),
      beneficial owners of a Global Note shall not be entitled to have certificates
      registered in their names, will not receive or be entitled to receive physical
      delivery of certificates in definitive form and will not be considered holders
      of such Global Note.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    (d) Any
      Global Note shall represent such of the outstanding Notes as shall be specified
      therein and shall provide that it shall represent the aggregate amount of
      outstanding Notes from time to time endorsed thereon and that the aggregate
      amount of outstanding Notes represented thereby may from time to time be
      increased or reduced to reflect redemptions, repurchases, conversions, transfers
      or exchanges permitted hereby. Any endorsement of a Global Note to reflect
      the
      amount of any increase or decrease in the amount of outstanding Notes
      represented thereby shall be made by the Trustee or the Custodian, at the
      direction of the Trustee, in such manner and upon instructions given by the
      holder of such Notes in accordance with this Indenture. Payment of principal
      of,
      premium, if any, and Interest on any Global Note shall be made to the holder
      of
      such Note.

     

    (e) This
      Section
      2.02(e)
      shall
      apply only to Global Notes deposited with the Trustee, as custodian for the
      Common Depositary. Participants shall have no rights under this Indenture or
      any
      Global Note with respect to any Global Note held on their behalf by the Common
      Depositary or by the Trustee as custodian for the Common Depositary, and the
      Common Depositary shall be treated by the Company, the Trustee and any agent
      of
      the Company or the Trustee as the absolute owner of such Global Note for all
      purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
      the Company, the Trustee or any agent of the Company or the Trustee from giving
      effect to any written certification, proxy or other authorization furnished
      by
      the Common Depositary or impair, as between the Common Depositary and its
      Participants, the Applicable Procedures or the operation of customary practices
      of the Common Depositary governing the exercise of the rights of a holder of
      a
      beneficial interest in any Global Note.

     

    The
      provisions of the “Terms and Conditions Governing Use of Euroclear” and the
“General Terms and Conditions of Clearstream” and “Customer Handbook” of
      Clearstream shall be applicable to transfers of beneficial interests in Global
      Notes that are held by Participants through Euroclear or
      Clearstream.

     

    The
      Company shall exchange Global Notes for Definitive Notes if: (1) at any time
      either Euroclear or Clearstream or any alternative clearing agency on behalf
      of
      which the Notes evidenced by the Global Note may be held is closed for business
      for a continuous period of 14 days (other than reason of holidays, statutory
      or
      otherwise) or announces an intention permanently to cease business or does
      in
      fact do so, and, in either case, the Company shall not have appointed a
      successor Common Depositary within 90 days after the Company receives such
      notice or becomes aware of such ineligibility, or (2) upon written request
      of a
      holder or the Trustee if a Default or Event of Default shall have occurred
      and
      be continuing. 

     

    Upon
      the
      occurrence of any of the events set forth in clauses (1) or (2) of the
      immediately preceding paragraph, the Company shall execute, and, upon receipt
      of
      an Authentication Order in accordance with Section
      2.04
      hereof,
      the Trustee shall authenticate and deliver, Definitive Notes, in authorized
      denominations, in an aggregate principal amount equal to the principal amount
      of
      the Global Notes in exchange for such Global Notes.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    Upon
      the
      exchange of a Global Note for Definitive Notes, such Global Note shall be
      cancelled by the Trustee or an agent of the Company or the Trustee. Definitive
      Notes issued in exchange for a Global Note pursuant to this Section shall be
      registered in such names and in such authorized denominations as the Common
      Depositary, pursuant to instructions from its Participants or its Applicable
      Procedures, shall instruct the Trustee or an agent of the Company or the Trustee
      in writing. The Trustee or such agent shall deliver such Definitive Notes to
      or
      as directed by the Persons in whose names such Definitive Notes are so
      registered or to the Common Depositary.

     

    Section
      2.03. Date
      and Denomination of Notes; Payments of Interest.
      

     

    The
      Notes
      shall be issuable in registered form without coupons in denominations of
      $100,000 principal amount and integral multiples thereof. Each Note shall be
      dated the date of its authentication and shall bear Interest from the date
      specified on the face of the form of Note attached as Exhibit
      A
      hereto.
      Interest on the Notes shall be computed on the basis of a 360-day year comprised
      of twelve 30-day months.

     

    The
      Person in whose name any Note (or its Predecessor Note) is registered on the
      Security Register at the close of business on any record date with respect
      to
      any interest payment date shall be entitled to receive the Interest payable
      on
      such interest payment date, except that the Interest payable upon redemption
      or
      repurchase will be payable to the Person to whom principal is payable pursuant
      to such redemption or repurchase (unless the redemption date or the repurchase
      date, as the case may be, falls after a record date and on or prior to the
      corresponding interest payment date, in which case accrued and unpaid Interest
      to, but excluding, such redemption date or repurchase date shall be payable
      on
      such interest payment date to the holders of such Notes registered as such
      on
      the applicable record date).

     

    Notwithstanding
      the foregoing, if any Note (or portion thereof) is converted into Common Stock
      during the period after a record date for the payment of Interest to, but
      excluding, the next succeeding interest payment date and such Note (or portion
      thereof) has been called or tendered for redemption on a redemption date which
      occurs during such period, the Company shall not be required to pay interest
      on
      such interest payment date in respect of any such Note (or portion thereof).
      Interest shall be payable at the office of the Company maintained by the Company
      for such purposes in the City of New York, which shall initially be an office
      or
      agency of the Trustee. The Company shall pay Interest (i) on any Notes in
      certificated form by (x) check mailed to the address of the Person entitled
      thereto as it appears in the Security Register (or upon written notice, by
      wire
      transfer in immediately available funds, if such Person is entitled to Interest
      on aggregate principal in excess of $1 million) or (y) by transfer to an account
      maintained by such person in the City of New York or
      (ii)
      on any Global Note by wire transfer of immediately available funds to the
      account of the Common Depositary or its nominee. The term “record date” with
      respect to any interest payment date shall mean the January 10 or July 10
      preceding the applicable January 24 or July 24 interest payment date,
      respectively.

     

    Section
      2.04. Execution
      of Notes.
      

     

    The
      Notes
      shall be signed in the name and on behalf of the Company by the manual or
      facsimile signature of its Chairman of the Board, Chief Executive Officer,
      President or any Vice President (whether or not designated by a number or
      numbers or word or words added before or after the title “Vice President”) and
      attested by the manual or facsimile signature of its Secretary or any of its
      Assistant Secretaries or its Treasurer or any of its Assistant Treasurers (which
      may be printed, engraved or otherwise reproduced thereon, by facsimile or
      otherwise). Only such Notes as shall bear thereon a certificate of
      authentication substantially in the form set forth on the form of Note attached
      as Exhibit
      A
      hereto upon
      a
      written order of the Company signed by an Officer (an “Authentication
      Order”),
      manually executed by the Trustee (or an authenticating agent appointed by the
      Trustee as provided by Section
      15.10),
      shall
      be entitled to the benefits of this Indenture or be valid or obligatory for
      any
      purpose. Such certificate by the Trustee (or such an authenticating agent)
      upon
      any Note executed by the Company shall be conclusive evidence that the Note
      so
      authenticated has been duly authenticated and delivered hereunder and that
      the
      holder is entitled to the benefits of this Indenture.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    In
      case
      any officer of the Company who shall have signed any of the Notes shall cease
      to
      be such officer before the Notes so signed shall have been authenticated and
      delivered by the Trustee, or disposed of by the Company, such Notes nevertheless
      may be authenticated and delivered or disposed of as though the person who
      signed such Notes had not ceased to be such officer of the Company, and any
      Note
      may be signed on behalf of the Company by such persons as, at the actual date
      of
      the execution of such Note, shall be the proper officers of the Company,
      although at the date of the execution of this Indenture any such person was
      not
      such an officer.

     

    Section
      2.05. Exchange
      and Registration of Transfer of Notes; Restrictions on Transfer.
      

     

    (a) As
      provided herein, interests in a Global Note will be exchanged, upon 45 days’
notice by a holder of an interest in such Global Note for Definitive Notes.
      Each
      Global Note shall be deposited with the Common Depositary, which shall hold
      such
      Global Note in safe custody for the account of Euroclear and/or Clearstream
      and
      instruct Euroclear or Clearstream or both of them, as the case may be, to credit
      the principal amounts of the Notes represented by such Global Note to the
      holder’s distribution account with Euroclear or Clearstream. Each relevant
      Global Note shall be exchangeable in whole for an interest, equal to the
      principal amount of such Global Note being exchanged, for Definitive Notes
      in
      the same principal amount, upon request of Euroclear or Clearstream to the
      Registrar, but only upon delivery by Euroclear or Clearstream, acting on behalf
      of the beneficial owners of such interests, to the Registrar at its principal
      office in the City of New York, of certificates substantially in the form of
      Exhibit
      C
      hereto.
      The delivery to the Registrar of any certificate in the form referred to above
      may be relied upon by the Company, the Trustee and the Registrar as conclusive
      evidence that related certificates have been delivered to Euroclear or
      Clearstream as contemplated by the terms of this Section.

     

    (b) In
      accordance with the terms of a Global Note and this Indenture, the Registrar
      shall deliver at the cost of the Company, upon not less than 45 days’ notice to
      the Registrar by Euroclear or Clearstream, the relevant Definitive Notes in
      exchange for interests in such Global Note. For this purpose, the Registrar
      is
      authorized and it shall (A) authenticate each such Definitive Note and (B)
      deliver each such Definitive Note to or to the order of Euroclear or
      Clearstream, in exchange for interests in such Global Note. The Registrar shall
      promptly notify the Company upon receipt of a request for issue of Definitive
      Notes the aggregate principal amount of the relevant Global Note to be exchanged
      in connection therewith. The Company undertakes to deliver to, or to the order
      of, the Registrar sufficient numbers of duly executed Definitive Notes to enable
      the Registrar to comply with its obligations under this Section
      2.05(b).
      Such
      exchange shall be made free of charge to the holder and the beneficial owners
      of
      the relevant Global Note and to the holders of the Definitive Notes issued
      in
      exchange as provided above, except that a Person receiving Definitive Notes
      must
      bear the cost of insurance, postage, transportation and the like in the event
      that such Person does not receive such Definitive Notes in person at the offices
      of a Registrar. Notwithstanding the above, interests in a Global Note shall
      be
      exchangeable in whole (but not in part) at the cost of the Company for
      Definitive Notes under the conditions described in Section
      2.02(e).

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    (c) Upon
      any
      exchange of an interest in a Global Note for Definitive Notes, the relevant
      Global Note shall be endorsed by the Trustee or the Registrar to reflect the
      reduction of its principal amount by the aggregate principal amount so
      exchanged. Until exchanged in full, the holder of any interest in any Global
      Note shall in all respects be entitled to the same benefits under this Indenture
      as Definitive Notes authenticated and delivered hereunder. Once exchanged in
      full, a Global Note shall be canceled and disposed of by the Trustee in
      accordance with its customary procedures and a certificate of disposition will
      be sent to the Company.

     

    (d) The
      Trustee or the Registrar shall cause all Global Notes and Definitive Notes
      delivered to it and held by it hereunder to be maintained in safe custody in
      accordance with this Section.

     

    (e) The
      Security Register shall be in written form in the English language and shall
      include a record of the certificate number of each Note that has been issued,
      and shall show the amount of such Notes, the date of issue, all subsequent
      transfers and changes in ownership in respect thereof and the names, tax
      identifying numbers (if relevant to a specific holder), addresses of the holders
      of the Notes and any payment instructions with respect thereto (if different
      from a holder’s registered address).

     

    (f) The
      Registrar shall at all reasonable times during office hours make the Security
      Register available to the Trustee, the Paying Agent, the Company and the holders
      of such Notes or any person authorized by the Company in writing for inspection
      and for taking of copies thereof or extracts therefrom, and at the expense
      of
      the Company, the Registrar shall deliver to such persons all lists of holders
      of
      such Notes, their addresses, amounts of such holdings and other details as
      they
      may request.

     

    (g) the
      Registrar shall handle all requests for the registration of transfer, or
      exchange, repurchase or conversion, of Notes and receive certificates for the
      Notes deposited with the transfer agent for transfer, or exchange, repurchase
      or
      conversion, and in doing so, shall ensure that every Note presented or
      surrendered for registration of transfer, or exchange, repurchase or conversion,
      (if so required by the Company, the Trustee, the Paying Agent or the Registrar)
      be duly endorsed by, or be accompanied by a written instrument or instruments
      of
      transfer (in form satisfactory to the Company and the Registrar) duly executed
      by the holder thereof or by such holder’s attorney duly authorized in
      writing.

     

    (h) Neither
      the Company nor the Trustee nor any Security Registrar shall be required to
      exchange or register a transfer of (a) any Notes or portions thereof surrendered
      for conversion pursuant to Article
      14
      or (b)
      any Notes or portions thereof tendered for purchase pursuant to Section
      3.02
      (and not
      withdrawn) or tendered for repurchase (and not withdrawn) pursuant to
Section
      3.03.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    (i) Until
      the
      expiration of the holding period applicable to sales thereof under Rule 144(k)
      under the Securities Act (or any successor provision), any certificate
      evidencing such Note (and all securities issued in exchange therefor or
      substitution thereof, other than Common Stock, if any, issued upon conversion
      thereof, which shall bear the legend set forth in Exhibit
      D,
      if
      applicable) shall bear a legend set forth in Exhibit
      A,
      unless
      such Note has been sold pursuant to a registration statement that has been
      declared effective under the Securities Act (and which continues to be effective
      at the time of such transfer) or pursuant to Rule 144 under the Securities
      Act
      or any similar provision then in force, or unless otherwise agreed by the
      Company in writing, with written notice thereof to the Trustee.

     

    (j) Any
      stock
      certificate representing Common Stock issued upon conversion of such Note shall
      bear a legend substantially in the form of Exhibit
      D.

     

    (k) The
      Trustee and the Registrar shall be entitled to treat a telephone, telex or
      facsimile communication from a person purporting to be (and who the Trustee
      or
      the Registrar believe in good faith to be) the authorized representative of
      the
      Company, named in a list furnished to the Trustee and the Registrar from time
      to
      time, as sufficient instructions and authority of the Company for the Trustee
      and the Registrar to act in accordance with this Section.

     

    (l) Title
      to
      the Notes shall pass by delivery. However, title to Notes issued in the form
      of
      Global Notes held through Euroclear and Clearstream shall be transferable only
      in accordance with the rules and procedures of Euroclear and Clearstream, as
      appropriate.

     

    Section
      2.06. Mutilated,
      Destroyed, Lost or Stolen Notes.
      

     

    In
      case
      any Note shall become mutilated or be destroyed, lost or stolen, the Company
      in
      its discretion may execute, and upon its written request the Trustee or an
      authenticating agent appointed by the Trustee shall authenticate and make
      available for delivery, a new Note, bearing a number not contemporaneously
      outstanding, in exchange and substitution for the mutilated Note, or in lieu
      of
      and in substitution for the Note so destroyed, lost or stolen. In every case,
      the applicant for a substituted Note shall furnish to the Company, to the
      Trustee and, if applicable, to such authenticating agent such security or
      indemnity as may be required by them to save each of them harmless for any
      loss,
      liability, cost or expense caused by or connected with such substitution, and,
      in every case of destruction, loss or theft, the applicant shall also furnish
      to
      the Company, to the Trustee and, if applicable, to such authenticating agent
      evidence to their satisfaction of the destruction, loss or theft of such Note
      and of the ownership thereof.

     

    Following
      receipt by the Trustee or such authenticating agent, as the case may be, of
      satisfactory security or indemnity and evidence, as described in the preceding
      paragraph, the Trustee or such authenticating agent may authenticate any such
      substituted Note and make available for delivery such Note. Upon the issuance
      of
      any substituted Note, the Company or the Trustee, as the case may be, may
      require the payment by the holder of a sum sufficient to cover any tax,
      assessment or other governmental charge that may be imposed in relation thereto
      and any other expenses connected therewith. In case any Note which has matured
      or is about to mature or has been called for redemption or has been tendered
      for
      repurchase upon a Designated Event (and not withdrawn) or has been surrendered
      for repurchase on a Repurchase Date (and not withdrawn) or is to be converted
      into Common Stock shall become mutilated or be destroyed, lost or stolen, the
      Company may, instead of issuing a substitute Note, pay or authorize the payment
      of or convert or authorize the conversion of the same (without surrender thereof
      except in the case of a mutilated Note), as the case may be, if the applicant
      for such payment or conversion shall furnish to the Company, to the Trustee
      and,
      if applicable, to such authenticating agent such security or indemnity as may
      be
      required by them to save each of them harmless for any loss, liability, cost
      or
      expense caused by or in connection with such substitution, and, in every case
      of
      destruction, loss or theft, the applicant shall also furnish to the Company,
      the
      Trustee and, if applicable, any paying agent or conversion agent evidence to
      their satisfaction of the destruction, loss or theft of such Note and of the
      ownership thereof.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    Every
      substitute Note issued pursuant to the provisions of this Section by virtue
      of
      the fact that any Note is destroyed, lost or stolen shall constitute an
      additional contractual obligation of the Company, whether or not the destroyed,
      lost or stolen Note shall be found at any time, and shall be entitled to all
      the
      benefits of (but shall be subject to all the limitations set forth in) this
      Indenture equally and proportionately with any and all other Notes duly issued
      hereunder. If, after the delivery of such replacement Note, a protected
      purchaser of the original Note in lieu of which such replacement Note was issued
      presents for payment, registration or conversion of such original Note, the
      Trustee shall be entitled to recover such replacement Note from the Person
      to
      whom it was delivered or any Person taking therefrom, except a protected
      purchaser, and shall be entitled to recover upon the security or indemnity
      provided therefor to the extent of any loss, damage, cost or expense incurred
      by
      the Company, the Trustee and any authenticating agent in connection
      therewith.

     

    Section
      2.07. Temporary
      Notes.
      

     

    Pending
      the preparation of Notes in certificated form, the Company may execute and
      the
      Trustee or an authenticating agent appointed by the Trustee shall, upon the
      written request of the Company, authenticate and deliver temporary Notes
      (printed or lithographed). Temporary Notes shall be issuable in any authorized
      denomination, and substantially in the form of the Notes in certificated form,
      but with such omissions, insertions and variations as may be appropriate for
      temporary Notes, all as may be determined by the Company. Every such temporary
      Note shall be executed by the Company and authenticated by the Trustee or such
      authenticating agent upon the same conditions and in substantially the same
      manner, and with the same effect, as the Notes in certificated form. Without
      unreasonable delay, the Company will execute and deliver to the Trustee or
      such
      authenticating agent Notes in certificated form and thereupon any or all
      temporary Notes may be surrendered in exchange therefor, at each office or
      agency maintained by the Company pursuant to Section
      4.02
      and the
      Trustee or such authenticating agent shall authenticate and make available
      for
      delivery in exchange for such temporary Notes an equal aggregate principal
      amount of Notes in certificated form. Such exchange shall be made by the Company
      at its own expense and without any charge therefor. Until so exchanged, the
      temporary Notes shall in all respects be entitled to the same benefits and
      subject to the same limitations under this Indenture as Notes in certificated
      form authenticated and delivered hereunder.

     

    
      
        
        

      

      
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    Section
      2.08. Cancellation
      of Notes.
      

     

    All
      Notes
      surrendered for the purpose of payment, redemption, repurchase, conversion,
      exchange or registration of transfer shall, if surrendered to the Company or
      any
      paying agent or any Security Registrar or any conversion agent, be surrendered
      to the Trustee and promptly canceled by it, or, if surrendered to the Trustee,
      shall be promptly canceled by it, and no Notes shall be issued in lieu thereof
      except as expressly permitted by any of the provisions of this Indenture. The
      Trustee shall dispose of such canceled Notes in accordance with its customary
      procedures. If the Company shall acquire any of the Notes, such acquisition
      shall not operate as a redemption, repurchase or satisfaction of the
      indebtedness represented by such Notes unless and until the same are delivered
      to the Trustee for cancellation.

     

    Section
      2.09. Defaulted
      Interest.
      

     

    If
      the
      Company defaults in a payment of interest on the Notes, it shall pay the
      defaulted interest in any lawful manner plus, to the extent lawful, interest
      payable on the defaulted interest, to the Persons who are holders on a
      subsequent special record date, in each case at the rate provided in the Notes
      and in Section
      4.01
      hereof.
      The Company shall notify the Trustee in writing of the amount of defaulted
      interest proposed to be paid on each Note and the date of the proposed payment.
      The Company shall fix or cause to be fixed each such special record date and
      payment date; provided
      that no
      such special record date shall be less than 10 days prior to the related
      Interest Payment Date for such defaulted interest. At least 15 days before
      the
      special record date, the Company (or, upon the written request of the Company,
      the Trustee in the name and at the expense of the Company) shall mail or cause
      to be mailed to holders a notice that states the special record date, the
      related Interest Payment Date and the amount of such interest to be
      paid.

     

    Section
      2.10. ISIN
      Numbers.
      

     

    The
      Company in issuing the Notes may use ISIN numbers (if then generally in use),
      and, if so, the Trustee shall use ISIN numbers in notices of redemption or
      repurchases as a convenience to Noteholders; provided
      that any
      such notice may state that no representation is made as to the correctness
      of
      such numbers either as printed on the Notes or as contained in any notice of
      a
      redemption or a repurchase and that reliance may be placed only on the other
      identification numbers printed on the Notes, and any such redemption or
      repurchase shall not be affected by any defect in or omission of such numbers.
      The Company will promptly notify the Trustee in writing of any change in the
      ISIN numbers.

     

    ARTICLE
      3

     

    REDEMPTION
      AND REPURCHASE OF NOTES

     

    Section
      3.01. Redemption
      at Maturity.
      

     

    Unless
      previously redeemed or converted or purchased and cancelled, the Company shall
      redeem the Notes at the Repurchase Amount on January 24, 2012.

     

    The
      Notes
      may not be redeemed at the election of the Company, in whole or in part at
      any
      time prior to January 24, 2012.

     

    
      
        
        

      

      
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    Section
      3.02. Offer
      to Purchase.

     

    (a) In
      the
      event that, pursuant to Section
      4.12,
      Section
      4.17
      or
Section
      4.26
      hereof,
      the Company shall be required to commence an Asset Sale Offer, a Change of
      Control Offer or a Designated Event Offer (each of the foregoing, an
“Offer
      to Purchase”),
      respectively, it shall follow the procedures specified below.

     

    (b) The
      Company shall cause a notice of the Offer to Purchase to be sent at least once
      to the Dow
      Jones News Service
      or
      similar business news service in the United States.

     

    (c) The
      Company shall commence the Offer to Purchase by sending, by first-class mail,
      with a copy to the Trustee, to each holder at such holder’s address appearing in
      the Security Register, a notice the terms of which shall govern the Offer to
      Purchase stating:

     

    (i) that
      the
      Offer to Purchase is being made pursuant to this Section and Section
      4.12,
      Section
      4.17
      or
Section
      4.26,
      as the
      case may be, and, in the case of a Change of Control Offer or Designated Event
      Offer, that such event has occurred, the circumstances and relevant facts
      regarding such event and that a Change of Control Offer or Designated Event
      Offer is being made pursuant to Section
      4.17
      or
Section
      4.26,
      respectively;

     

    (ii) the
      principal amount of Notes required to be purchased pursuant to Section
      4.12,
      Section
      4.17
      or
Section
      4.26,
      as the
      case may be (the “Offer
      Amount”),
      the
      purchase price set forth in Section
      4.12,
      Section
      4.17
      or
Section
      4.26,
      as
      applicable (the “Purchase
      Price”),
      the
      Offer Period and the Purchase Date (each as defined below);

     

    (iii) except
      as
      provided in clause (ix), that all Notes timely tendered and not withdrawn shall
      be accepted for payment;

     

    (iv) that
      any
      Note not tendered or accepted for payment shall continue to accrue
      interest;

     

    (v) that,
      unless the Company defaults in making such payment, any Note accepted for
      payment pursuant to the Offer to Purchase shall cease to accrue interest after
      the Purchase Date;

     

    (vi) that
      holders electing to have a Note purchased pursuant to an Offer to Purchase
      may
      elect to have Notes purchased in integral multiples of $100,000
      only;

     

    (vii) that
      holders electing to have a Note purchased pursuant to any Offer to Purchase
      shall be required to surrender the Note, with the form entitled “Option of
      Holder to Elect Purchase” on the reverse of the Note completed, or transfer by
      book-entry transfer, to the Company, the Common Depositary, if appointed by
      the
      Company, or a Paying Agent at the address specified in the notice before the
      close of business on the third Business Day before the Purchase
      Date;

     

    (viii) that
      holders shall be entitled to withdraw their election if the Company, the Common
      Depositary or the Paying Agent, as the case may be, receives, not later than
      the
      expiration of the Offer Period, a telegram, facsimile transmission or letter
      setting forth the name of the holder, the principal amount of the Note (or
      portions thereof) the holder delivered for purchase and a statement that such
      holder is withdrawing his election to have such Note purchased;

     

    
      
        
        

      

      
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    (ix) that,
      in
      the case of an Asset Sale Offer, if the aggregate principal amount of Notes
      surrendered by holders exceeds the Offer Amount, the Company shall select the
      Notes to be purchased on a pro
      rata
      basis
      (with such adjustments as may be deemed appropriate by the Company so that
      only
      Notes in denominations of $100,000 or integral multiples thereof shall be
      purchased); 

     

    (x) that
      holders whose Notes were purchased in part shall be issued new Notes equal
      in
      principal amount to the unpurchased portion of the Notes surrendered (or
      transferred by book-entry transfer); and

     

    (xi) any
      other
      procedures the holders must follow in order to tender their Notes (or portions
      thereof) for payment and the procedures that holders must follow in order to
      withdraw an election to tender Notes (or portions thereof) for
      payment.

     

    (d) The
      Offer
      to Purchase shall remain open for a period of at least 30 days but no more
      than
      60 days following its commencement, except to the extent that a longer period
      is
      required by applicable law (the “Offer
      Period”).
      No
      later than five (5) Business Days (and in any event no later than the 60th
      day
      following any Change of Control or Designated Event) after the termination
      of
      the Offer Period (the “Purchase
      Date”),
      the
      Company shall purchase the Offer Amount or, if less than the Offer Amount has
      been tendered, all Notes tendered in response to the Offer to Purchase. Payment
      for any Notes so purchased shall be made in the same manner as interest payments
      are made. The Company shall publicly announce the results of the Offer to
      Purchase on the Purchase Date.

     

    (e) On
      or
      prior to the Purchase Date, the Company shall, to the extent
      lawful:

     

    (i) accept
      for payment (on a pro
      rata
      basis to
      the extent necessary in connection with an Asset Sale Offer) from each tendering
      holder, the Offer Amount of Notes or portions of Notes properly tendered and
      not
      withdrawn pursuant to the Offer to Purchase, or if less than the Offer Amount
      has been tendered, all Notes tendered; and

     

    (ii) surrender
      to the Trustee the Notes properly accepted to be cancelled by the Trustee in
      accordance Section
      2.08
      hereof,
      together with an Officers’ Certificate stating the aggregate principal amount of
      Notes or portions of Notes being purchased by the Company and that such Notes
      or
      portions thereof were accepted for payment by the Company in accordance with
      the
      terms of this Section. 

     

    (f) Upon
      receipt of the Notes in accordance with Section
      3.02(e)(i),
      the
      Company shall promptly, and in any event within one (1) Business Day after
      the
      Purchase Date, deliver to each tendering holder the Purchase Price. In the
      event
      that any portion of the Notes surrendered is not purchased by the Company,
      the
      Company shall promptly execute and issue a new Note in a principal amount equal
      to such unpurchased portion of the Note surrendered, and, upon receipt of an
      Authentication Order in accordance with Section
      2.04
      hereof,
      the Trustee shall authenticate and deliver (or cause to be transferred by
      book-entry) such new Note to such holder, in a principal amount equal to any
      unpurchased portion of the Note surrendered; provided,
      however,
      that
      each such new Note shall be in a principal amount of $100,000 or an integral
      multiple thereof. Any Note not so accepted shall be promptly mailed or delivered
      by the Company to the holder thereof.

     

    
      
        
        

      

      
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    (g) If
      the
      Purchase Date is on or after a record date for the payment of interest and
      on or
      before the related Interest Payment Date, any accrued and unpaid Interest shall
      be paid to the Person in whose name a Note is registered at the close of
      business on such record date for the payment of interest, and no further
      Interest shall be payable to holders who tender Notes pursuant to the Offer
      to
      Purchase.

     

    (h) The
      Company shall comply, to the extent applicable, with the requirements of Rule
      14e-1 under the Exchange Act and any other securities laws and regulations
      thereunder to the extent those laws and regulations are applicable in connection
      with the Offer to Purchase. To the extent that the provisions of any securities
      laws or regulations conflict with Section
      4.12,
      Section
      4.17
      or
Section
      4.26,
      as
      applicable, this Section or other provisions of this Indenture, the Company
      shall comply with applicable securities laws and regulations and shall not
      be
      deemed to have breached its obligations under Section
      4.12,
      Section
      4.17
      or
Section
      4.26,
      as
      applicable, this Section or such other provision by virtue of such
      compliance.

     

    Section
      3.03. Repurchase
      of Notes by the Company at Option of the Holder.
      

     

    Notes
      shall be purchased by the Company pursuant to the terms of the Notes at the
      option of the holder thereof on January 24, 2010 (the “Repurchase
      Date”),
      for
      cash, at a repurchase price equal to the Repurchase Amount, subject to the
      provisions of Section
      3.04(a);
      provided
      that no
      Notes may be repurchased by the Company pursuant to this Section if the
      principal amount of the Notes has been accelerated and such acceleration has
      not
      been rescinded on or prior to the Repurchase Date. Repurchases of Notes under
      this Section shall be made, at the option of the holder thereof,
      upon:

     

    (a) delivery
      to the Company with a copy to the Trustee (or other paying agent appointed
      by
      the Company) by a holder of a duly completed notice (the “Repurchase
      Notice”)
      in the
      form set forth on the reverse of the Note during the period beginning at any
      time from the opening of business on the date that is 20 Business Days prior
      to
      the Repurchase Date until the close of business on the date that is two Business
      Days prior to the Repurchase Date; and

     

    (b) delivery
      or book-entry transfer of the Notes to the Company or the Company’s designated
      brokerage account at any time after delivery of the Repurchase Notice (together
      with all necessary endorsements), such delivery being a condition to receipt
      by
      the holder of the repurchase price therefor; provided
      that
      such repurchase price shall be so paid pursuant to this Section only if the
      Note
      so delivered to the Company or the Company’s designated brokerage account shall
      conform in all respects to the description thereof in the related Repurchase
      Notice.

     

    The
      Company shall purchase from the holder thereof, pursuant to this Section, a
      portion of a Note, only if the principal amount of such portion is $100,000
      or a
      whole multiple thereof. Provisions of this Indenture that apply to the purchase
      of all of a Note also apply to the purchase of such portion of such
      Note.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    Any
      purchase by the Company contemplated pursuant to the provisions of this Section
      shall be consummated by the delivery of the consideration to be received by
      the
      holder promptly following the later of the Repurchase Date and the time of
      the
      book-entry transfer or delivery of the Note.

     

    Notwithstanding
      anything herein to the contrary, any holder delivering to the Company with
      a
      copy to the Trustee (or other paying agent appointed by the Company) a
      Repurchase Notice contemplated by this Section shall have the right to withdraw
      such Repurchase Notice at any time prior to the close of business on the
      Business Day immediately preceding the Repurchase Date by delivery of a written
      notice of withdrawal to the Company with a copy to the Trustee (or other paying
      agent appointed by the Company) in accordance with Section
      3.05.
      The
      Company is not obligated under this Section to repurchase notes listed in such
      written notice of withdrawal.

     

    Section
      3.04. Company
      Repurchase Notice.

     

    (a) The
      Notes
      to be repurchased on any Repurchase Date pursuant to Section
      3.03
      will be
      paid for in cash.

     

    At
      least
      three Business Days before the Company Repurchase Notice Date, the Company
      shall
      deliver an Officers’ Certificate to the Trustee specifying:

     

    (i) the
      information required by Section
      3.04(b)
      in the
      Company Repurchase Notice, and

     

    (ii) whether
      the Company desires the Trustee to give the Company Repurchase Notice in the
      Company’s name in accordance with Section
      3.04(b).

     

    (b) In
      connection with any repurchase of Notes, the Company shall, no less than 20
      Business Days prior to the Repurchase Date (the “Company
      Repurchase Notice Date”),
      give
      notice to holders at their addresses shown in the Security Register with a
      copy
      to the Trustee setting forth information specified in this Section
      3.04(b)
      (the
“Company
      Repurchase Notice”).
      The
      Company will also give notice to beneficial owners as required by applicable
      law.

     

    The
      Company Repurchase Notice shall:

     

    (1) state
      the
      Repurchase Amount and the Repurchase Date to which the Company Repurchase Notice
      relates;

     

    (2) include
      a
      form of Repurchase Notice;

     

    (3) state
      the
      name and address of the Company (or the Company’s designated brokerage
      account);

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    (4) state
      that Notes must be delivered to the Company (or the Company’s designated
      brokerage account) to collect the repurchase price;

     

    (5) state
      that Notes as to which a Repurchase Notice has been given may be converted
      only
      if the Repurchase Notice is withdrawn in accordance with the terms of this
      Indenture; and

     

    (6) state
      the
      ISIN number of the Notes.

     

    The
      Company Repurchase Notice may be given by the Company or, at the Company’s
      request, the Trustee shall give such Company Repurchase Notice in the Company’s
      name and at the Company’s expense.

     

    (c) The
      Company will comply with the provisions of Rule 13e-4 and any other tender
      offer
      rules under the Exchange Act (including, without limitation, filing a Schedule
      TO or other schedule) to the extent then applicable in connection with the
      repurchase rights of the holders of Notes.

     

    Section
      3.05. Effect
      of Repurchase Notice.
      

     

    Upon
      receipt by the Company of the Repurchase Notice specified in Section
      3.03,
      the
      holder of the Note in respect of which such Repurchase Notice was given shall
      (unless such Repurchase Notice is validly withdrawn) thereafter be entitled
      to
      receive solely the repurchase price with respect to such Note. Such repurchase
      price shall be paid to such holder, subject to receipt of funds or Notes by
      the
      Company, promptly following the later of (x) the Repurchase Date with respect
      to
      such Note (provided
      the
      holder has satisfied the conditions in Section
      3.03)
      and (y)
      the time of delivery of such Note to the Company by the holder thereof in the
      manner required by Section
      3.03.
      Notes
      in respect of which a Repurchase Notice has been given by the holder thereof
      may
      not be converted pursuant to Article
      14
      hereof
      on or after the date of the delivery of such Repurchase Notice unless such
      Repurchase Notice has first been validly withdrawn.

     

    A
      Repurchase Notice may be withdrawn by means of a written notice of withdrawal
      delivered to the office of the Company, with a copy to the Trustee (or other
      paying agent appointed by the Company) in accordance with the Repurchase Notice
      at any time prior to the close of business on the Business Day immediately
      preceding the Repurchase Date, specifying:

     

    (a) the
      certificate number, if any, of the Note in respect of which such notice of
      withdrawal is being submitted, or the appropriate Common Depositary information
      if the Note in respect of which such notice of withdrawal is being submitted
      is
      represented by a Global Note,

     

    (b) the
      principal amount of the Note with respect to which such notice of withdrawal
      is
      being submitted, and

     

    (c) the
      principal amount, if any, of such Note which remains subject to the original
      Repurchase Notice and which has been or will be delivered for repurchase by
      the
      Company.

     

    
      
        
        

      

      
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    Section
      3.06. Deposit
      of Repurchase Amount.
      

     

    (a) Prior
      to
      10:00 a.m. (New York City Time) on the Repurchase Date, the Company shall
      deliver to the holders in respect of which each Repurchase Notice given, the
      Repurchase Amount (in immediately available funds if deposited on such Business
      Day).

     

    (b) Upon
      delivery of the Repurchase Amount, with respect to such Notes (i) the Notes
      will
      cease to be outstanding, (ii) Interest on the Notes will cease to accrue, and
      (iii) all other rights of the holders of such Notes will terminate, whether or
      not book-entry transfer of the Notes has been made or the Notes have been
      delivered to the Trustee or paying agent, other than the right to receive the
      repurchase price upon delivery of the Notes.

     

    Section
      3.07. Notes
      Repurchased in Part.
      

     

    Upon
      presentation of any Note repurchased pursuant to Section
      3.03
      only in
      part, the Company shall execute and the Trustee shall authenticate and make
      available for delivery to the holder thereof, at the expense of the Company,
      a
      new Note or Notes, of any authorized denomination, in aggregate principal amount
      equal to the unrepurchased portion of the Notes presented.

     

    ARTICLE
      4

     

    PARTICULAR
      COVENANTS OF THE COMPANY

     

    Section
      4.01. Payment
      of Principal and Interest.
      

     

    The
      Company covenants and agrees that it will duly and punctually pay or cause
      to be
      paid the principal of (including the purchase price upon an Offer to Purchase
      or
      the repurchase price upon repurchase, in each case pursuant to Article
      3)
      and
      Interest, on each of the Notes at the places, at the respective times and in
      the
      manner provided herein and in the Notes. The Company shall pay Additional
      Amounts upon the occurrence of any events, in the amounts and at the times
      specified in the definition of “Additional Amounts” in Section
      1.01
      hereof.

     

    The
      Company shall pay, from time to time on demand, interest (including
      post-petition interest in any proceeding under any Bankruptcy Law) accrued
      on
      overdue principal and premium, if any, at a rate that is 5% per annum in excess
      of the rate then in effect from five Business Days following the due date and
      ending on the date immediately preceding the related Interest Payment Date;
      it
      shall pay interest (including post-petition interest in any proceeding under
      any
      Bankruptcy Law) on overdue installments of interest (without regard to any
      applicable grace periods), from time to time on demand at the same rate to
      the
      extent lawful.

     

    Interest
      shall be computed on the basis of a 360-day year of twelve 30-day
      months.

     

    Section
      4.02. Maintenance
      of Office or Agency.
      

     

    The
      Company will maintain an office or agency in the City of New York, where the
      Notes may be surrendered for registration of transfer or exchange (“Security
      Registrar”)
      or for
      presentation for payment or for conversion, redemption or repurchase
      (“Paying
      Agent”)
      and
      where notices and demands to or upon the Company in respect of the Notes and
      this Indenture may be served. The Registrar shall keep a register (the
“Security
      Register”)
      of the
      Notes and of their transfer and exchange. The Company will give prompt written
      notice to the Trustee of the location, and any change in the location, of such
      office or agency not designated or appointed by the Trustee. If at any time
      the
      Company shall fail to maintain any such required office or agency or shall
      fail
      to furnish the Trustee with the address thereof, such presentations, surrenders,
      notices and demands may be made or served at the Corporate Trust
      Office.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    The
      Company may also from time to time designate co-registrars and one or more
      offices or agencies where the Notes may be presented or surrendered for any
      or
      all such purposes and may from time to time rescind such designations. The
      Company will give prompt written notice of any such designation or rescission
      and of any change in the location of any such other office or
      agency.

     

    The
      Company hereby initially designates the Trustee as paying agent, Security
      Registrar, Custodian and conversion agent and each of the Corporate Trust Office
      and the office of agency of the Trustee in City of New York, shall be considered
      as one such office or agency of the Company for each of the aforesaid
      purposes.

     

    So
      long
      as the Trustee is the Security Registrar, the Trustee agrees to mail, or cause
      to be mailed, the notices set forth in Section
      7.08(a)
      and the
      third paragraph of Section
      7.09.
      If
      co-registrars have been appointed in accordance with this Section, the Trustee
      shall mail such notices only to the Company and the holders of Notes it can
      identify from its records.

     

    Section
      4.03. Provisions
      as to Paying Agent.
      

     

    (a) If
      the
      Company shall appoint a paying agent other than the Trustee, or if the Trustee
      shall appoint such a paying agent, the Company will cause such paying agent
      to
      execute and deliver to the Trustee an instrument in which such agent shall
      agree
      with the Trustee, subject to the provisions of this Section:

     

    (a) that
      it
      will hold all sums held by it as such agent for the payment of the principal
      of
      or Interest on the Notes (whether such sums have been paid to it by the Company
      or by any other obligor on the Notes) in trust for the benefit of the holders
      of
      the Notes;

     

    (a) that
      it
      will give the Trustee notice of any failure by the Company (or by any other
      obligor on the Notes) to make any payment of the principal of or Interest on
      the
      Notes when the same shall be due and payable; and

     

    (a) that
      at
      any time during the continuance of an Event of Default, upon request of the
      Trustee, it will forthwith pay to the Trustee all sums so held in
      trust.

     

    The
      Company shall, on the Business Day prior to each due date of the principal
      or
      Interest on the Notes, deposit with the paying agent a sum (in funds which
      are
      immediately available on the due date for such payment) sufficient to pay such
      principal or Interest, and (unless such paying agent is the Trustee) the Company
      will promptly notify the Trustee in writing of any failure to take such action;
      provided
      that if
      such deposit is made on the due date, such deposit shall be received by the
      paying agent by 10:00 a.m. New York City time, on such date.

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    (b) If
      the
      Company shall act as its own paying agent, it will, on the Business Day prior
      to
      each due date of the principal of or Interest on the Notes, set aside, segregate
      and hold in trust for the benefit of the holders of the Notes a sum sufficient
      to pay such principal or Interest so becoming due and will promptly notify
      the
      Trustee in writing of any failure to take such action and of any failure by
      the
      Company (or any other obligor under the Notes) to make any payment of the
      principal of or Interest on the Notes when the same shall become due and
      payable.

     

    (c) Anything
      in this Section to the contrary notwithstanding, the Company may, at any time,
      for the purpose of obtaining a satisfaction and discharge of this Indenture,
      or
      for any other reason, pay or cause to be paid to the Trustee all sums held
      in
      trust by the Company or any paying agent hereunder as required by this Section,
      such sums to be held by the Trustee upon the trusts herein contained and upon
      such payment by the Company or any paying agent to the Trustee, the Company
      or
      such paying agent shall be released from all further liability with respect
      to
      such sums.

     

    (d) Anything
      in this Section to the contrary notwithstanding, the agreement to hold sums
      in
      trust as provided in this Section is subject to Sections
      11.03
      and
11.04.

     

    The
      Trustee shall not be responsible for the actions of any other paying agents
      (including the Company if acting as its own paying agent) and shall have no
      control of any funds held by such other paying agents.

     

    Section
      4.04. Existence.
      

     

    Subject
      to Article
      5,
      the
      Company will do or cause to be done all things necessary to preserve and keep
      in
      full force and effect its existence and rights (charter and statutory);
provided
      that the
      Company shall not be required to preserve any such right if the Company shall
      determine that the preservation thereof is no longer desirable in the conduct
      of
      the business of the Company and that the loss thereof is not disadvantageous
      in
      any material respect to the Noteholders.

     

    Section
      4.05. Maintenance
      of Properties.
      

     

    The
      Company will cause all properties used or useful in the conduct of its business
      or the business of any Significant Subsidiary to be maintained and kept in
      good
      condition, repair and working order and supplied with all necessary equipment
      and will cause to be made all necessary repairs, renewals, replacements,
      betterments and improvements thereof, all as in the judgment of the Company
      may
      be necessary so that the business carried on in connection therewith may be
      properly and advantageously conducted at all times; provided
      that
      nothing in this Section shall prevent the Company from discontinuing the
      operation or maintenance of any of such properties if such discontinuance is,
      in
      the judgment of the Company, desirable in the conduct of its business or the
      business of any subsidiary and not disadvantageous in any material respect
      to
      the Noteholders.

     

    Section
      4.06. Payment
      of Taxes and Other Claims.
      

     

    The
      Company will pay or discharge, or cause to be paid or discharged, before the
      same may become delinquent, (i) all taxes, assessments and governmental charges
      levied or imposed upon the Company or any Significant Subsidiary or upon the
      income, profits or property of the Company or any Significant Subsidiary, (ii)
      all claims for labor, materials and supplies which, if unpaid, might by law
      become a lien or charge upon the property of the Company or any Significant
      Subsidiary and (iii) all stamp taxes and other duties, if any, which may be
      imposed by the United States or any political subdivision thereof or therein
      in
      connection with the issuance, transfer, exchange, conversion, redemption or
      repurchase of any Notes or with respect to this Indenture; provided
      that, in
      the case of clauses (i) and (ii), the Company shall not be required to pay
      or
      discharge or cause to be paid or discharged any such tax, assessment, charge
      or
      claim (A) if the failure to do so will not, in the aggregate, have a material
      adverse impact on the Company, or (B) if the amount, applicability or validity
      is being contested in good faith by appropriate proceedings.

     

    
      
        
        

      

      
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    Section
      4.07. Stay,
      Extension and Usury Laws.
      

     

    The
      Company covenants (to the extent that it may lawfully do so) that it shall
      not
      at any time insist upon, plead, or in any manner whatsoever claim or take the
      benefit or advantage of, any stay, extension or usury law or other law which
      would prohibit or forgive the Company from paying all or any portion of the
      principal of or Interest on the Notes as contemplated herein, wherever enacted,
      now or at any time hereafter in force, or which may affect the covenants or
      the
      performance of this Indenture and the Company (to the extent it may lawfully
      do
      so) hereby expressly waives all benefit or advantage of any such law, and
      covenants that it will not, by resort to any such law, hinder, delay or impede
      the execution of any power herein granted to the Trustee, but will suffer and
      permit the execution of every such power as though no such law had been
      enacted.

     

    Section
      4.08. Payments
      for Consent.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, directly
      or
      indirectly, pay or cause to be paid any consideration, whether by way of
      interest, fee or otherwise, to or for the benefit of any holder for or as an
      inducement to any consent, waiver or amendment of any of the terms or provisions
      of this Indenture or the Notes unless such consideration is offered to be paid
      and is paid to all holders that consent, waive or agree to amend in the time
      frame set forth in the solicitation documents relating to such consent, waiver
      or agreement.

     

    Section
      4.09. Incurrence
      of Additional Debt.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, Incur,
      directly or indirectly, any Debt unless, after giving effect to the application
      of the proceeds thereof, no Default or Event of Default would occur as a
      consequence of such Incurrence or be continuing following such Incurrence and
      either:

     

    
      	 	
              (1)

            	
              such
                Debt is Debt of the Company or a Guarantor and, after giving effect
                to the
                Incurrence of such Debt and the application of the proceeds thereof,
                (x)
                the Fixed Charge Coverage Ratio would be greater than 3.5 to 1.00
                and (y)
                the Leverage Ratio would not exceed 3.75 to 1.00, or
                

            

    

     

    
      	 	
              (2)

            	
              such
                Debt is Permitted Debt. 

            

    

     

    The
      term
“Permitted Debt” is defined to include the following:

     

    (a)
      (i)
      Debt of the Company evidenced by the Notes and the Floating Rate Notes and
      (ii)
      Debt of the Guarantors evidenced by Guarantees and the Floating Rate Note
      Guarantees;

     

    
      
        
        

      

      
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    (b)
      Debt
      of the WFOE under Credit Facilities, provided
      that
      the
      aggregate principal amount of all such Debt under Credit Facilities at any
      one
      time outstanding shall not exceed

     

    (x)
       $15.0
      million (or its equivalent in another currency; provided
      that the
      amount of Debt so Incurred shall not be deemed to exceed such amount as a result
      of changes in foreign currency exchange rates) or 

     

    (y)
       subject
      to the approval of the Company’s Board of Directors, $25.0 million (or its
      equivalent in another currency; provided
      that the
      amount of Debt so Incurred shall not be deemed to exceed such amount as a result
      of changes in foreign currency exchange rates), only after eighteen (18) months
      following the Issue Date,

     

    which
      amount shall be permanently reduced by the amount of Net Available Cash used
      to
      Repay Debt under Credit Facilities and not subsequently reinvested in Additional
      Assets or used to purchase Notes or Repay other Debt, pursuant to Section
      4.12;

     

    (c)
      Debt
      of the Company owing to and held by any Wholly Owned Subsidiary and Debt of
      any
      Subsidiary of the Company owing to and held by the Company or any Wholly Owned
      Subsidiary; provided,
      however,
      that
      any subsequent issue or transfer of Capital Stock or other event that results
      in
      any such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or
      any
      subsequent transfer of any such Debt (except to the Company or a Wholly Owned
      Subsidiary) shall be deemed, in each case, to constitute the Incurrence of
      such
      Debt by the issuer thereof;

     

    (d)
      Debt
      of any Subsidiary of the Company outstanding on the date on which such
      Subsidiary is acquired by the Company or otherwise becomes a Subsidiary of
      the
      Company (other than Debt Incurred as consideration in, or to provide all or
      any
      portion of the funds or credit support utilized to consummate, the transaction
      or series of transactions pursuant to which such Subsidiary became a Subsidiary
      of the Company or was otherwise acquired by the Company), provided
      that
      at
      the time such Subsidiary is acquired by the Company or otherwise becomes a
      Subsidiary of the Company and after giving effect to the Incurrence of such
      Debt, the Company would have been able to Incur $1.00 of additional Debt
      pursuant to clause (1) of the first paragraph of this covenant;

     

    (e)
      Debt
      under Interest Rate Agreements entered into by the Company or a Guarantor for
      the purpose of limiting interest rate risk in the ordinary course of the
      financial management of the Company or such Guarantor and not for speculative
      purposes, provided
      that
      the
      obligations under such agreements are directly related to payment obligations
      on
      Debt otherwise permitted by the terms of this Section; 

     

    (f)
      Debt
      under Currency Exchange Protection Agreements entered into by the Company or
      any
      of its Subsidiaries for the purpose of limiting currency exchange rate risks
      directly related to transactions entered into by the Company or such Subsidiary
      in the ordinary course of business and not for speculative
      purposes;

     

    (g)
      Debt
      under Commodity Price Protection Agreements entered into by the Company or
      any
      of its Subsidiaries in the ordinary course of the financial management of the
      Company or such Subsidiary and not for speculative purposes;

     

    (h)
      Debt
      in connection with one or more standby letters of credit or performance bonds
      issued by the Company or a Guarantor in the ordinary course of business or
      pursuant to self-insurance obligations and not in connection with the borrowing
      of money or the obtaining of advances or credit;

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

    (i)
      Debt
      of the Company or any of its Subsidiaries outstanding on the Issue Date not
      otherwise described in clauses (a) through (h) above; and

     

    (j)
      Permitted Refinancing Debt Incurred in respect of Debt Incurred pursuant to
      clause (1) of the first paragraph of this covenant and clauses (a), (b), (d)
      and
      (i) above.

     

    Notwithstanding
      anything to the contrary contained in this Section,

     

    (a)
      the
      Company shall not, and
      shall
      not permit any Guarantor to, Incur any Debt pursuant to this covenant if the
      proceeds thereof are used, directly or indirectly, to Refinance any Subordinated
      Obligations unless such Debt shall be subordinated to the Notes or the
      applicable Guarantee, as the case may be, to at least the same extent as such
      Subordinated Debt;

     

    (b)
      the
      Company shall not permit any of its Subsidiaries that is not a Guarantor to
      Incur any Debt pursuant to this covenant if the proceeds thereof are used,
      directly or indirectly, to Refinance any Debt of the Company or any Guarantor;
      and

     

    (c)
      accrual of interest, accretion or amortization of original issue discount and
      the payment of interest or dividends in the form of additional Debt, will be
      deemed not to be an Incurrence of Debt for purposes of this
      Section.

     

    For
      purposes of determining compliance with this Section, in the event that an
      item
      of Debt meets the criteria of more than one of the categories of Permitted
      Debt
      described in clauses (a) through (j) above or is entitled to be incurred
      pursuant to clause (l) of the first paragraph of this Section, the Company
      shall, in its sole discretion, classify (or later reclassify in whole or in
      part, in its sole discretion) such item of Debt in any manner that complies
      with
      this Section.

     

    Section
      4.10. Restricted
      Payments.

     

    The
      Company shall not make, and shall not permit any of its Subsidiaries to make,
      directly or indirectly, any Restricted Payment if at the time of, and after
      giving effect to, such proposed Restricted Payment,

     

    (a)
      a
      Default or Event of Default shall have occurred and be continuing,
      or

     

    (b)
      the
      Company could not Incur at least $1.00 of additional Debt pursuant to clause
      (1)
      of the first paragraph of Section
      4.09,
      or

     

    (c)
      the
      aggregate amount of such Restricted Payment and all other Restricted Payments
      declared or made since the Issue Date (the amount of any Restricted Payment,
      if
      made other than in cash, to be based upon Fair Market Value at the time of
      such
      Restricted Payment) would exceed an amount equal to the sum of:

     

    (1)
      10%
      of the aggregate amount of Consolidated Net Income accrued during the period
      (treated as one accounting period) from the beginning of the Fiscal Quarter
      after the Issue Date to the end of the most recent Fiscal Quarter ending prior
      to the date of such Restricted Payment (or if the aggregate amount of
      Consolidated Net Income for such period shall be a deficit, minus 100% of such
      deficit), plus

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

    (2)
      100%
      of the Capital Stock Sale Proceeds, plus

     

    (3)
      the
      sum of:

     

    (A)
      the
      aggregate net cash proceeds received by the Company or any Guarantor from the
      issuance or sale after the Issue Date of convertible or exchangeable Debt that
      has been converted into or exchanged for Capital Stock (other than Disqualified
      Stock) of the Company, and 

     

    (B)
      the
      aggregate amount by which Debt (other than Subordinated Obligations) of the
      Company or any Guarantor is reduced on the Company’s consolidated balance sheet
      on or after the Issue Date upon the conversion or exchange of any Debt issued
      or
      sold on or prior to the Issue Date that is convertible or exchangeable for
      Capital Stock (other than Disqualified Stock) of the Company,

     

    excluding,
      in the case of clause (A) or (B):

     

    (x)
      any
      such Debt issued or sold to the Company or a Subsidiary of the Company or an
      employee stock ownership plan or trust established by the Company or any such
      Subsidiary for the benefit of their employees, and 

     

    (y)
      the
      aggregate amount of any cash or other Property distributed by the Company or
      any
      of its Subsidiaries upon any such conversion or exchange, plus

     

    (4)
      an
      amount equal to the net reduction in Investments in any Person other than the
      Company or any of its Subsidiaries resulting from dividends, repayments of
      loans
      or advances or other transfers of Property, in each case to the Company or
      any
      of its Subsidiaries from such Person.

     

    Notwithstanding
      the foregoing limitation, the Company may:

     

    (a)
      pay
      dividends on its Capital Stock within 60 days of the declaration thereof if,
      on
      the declaration date, such dividends could have been paid in compliance with
      the
      Indenture; provided,
      however,
      that at
      the time of such payment of such dividend, no other Default or Event of Default
      shall have occurred and be continuing (or result therefrom); provided
      further,
      however,
      that
      such dividend shall be included in the calculation of the amount of Restricted
      Payments;

     

    (b)
      purchase, repurchase, redeem, legally defease, acquire or retire for value
      Capital Stock of the Company or Subordinated Obligations in exchange for, or
      out
      of the proceeds of the substantially concurrent sale of, Capital Stock of the
      Company (other than Disqualified Stock and other than Capital Stock issued
      or
      sold to a Subsidiary of the Company or an employee stock ownership plan or
      trust
      established by the Company or any such Subsidiary for the benefit of their
      employees); provided,
      however,
      that

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

    (1)
      such
      purchase, repurchase, redemption, legal defeasance, acquisition or retirement
      shall be excluded in the calculation of the amount of Restricted Payments
      and

     

    (2)
      the
      Capital Stock Sale Proceeds from such exchange or sale shall be excluded from
      the calculation pursuant to clause (c)(2) above; and

     

    (c)
      purchase, repurchase, redeem, legally defease, acquire or retire for value
      any
      Subordinated Obligations in exchange for, or out of the proceeds of the
      substantially concurrent sale of, Permitted Refinancing Debt; provided,
      however,
      that
      such purchase, repurchase, redemption, legal defeasance, acquisition or
      retirement shall be excluded in the calculation of the amount of Restricted
      Payments.

     

    Section
      4.11. Liens.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, directly
      or
      indirectly, Incur or suffer to exist, any Lien (other than Permitted Liens)
      upon
      any of its Property (including Capital Stock of any of its Subsidiaries),
      whether owned at the Issue Date or thereafter acquired, or any interest therein
      or any income or profits therefrom, unless it has made or will make effective
      provision whereby the Notes or the applicable Guarantee will be secured by
      such
      Lien equally and ratably with (or, if such other Debt constitutes Subordinated
      Debt, prior to) all other Debt of the Company or any of its Subsidiaries secured
      by such Lien for so long as such other Debt is secured by such
      Lien.

     

    Section
      4.12. Asset
      Sales.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, directly
      or
      indirectly, consummate any Asset Sale unless: 

     

    (a)
      the
      Company or such Subsidiary receives consideration at the time of such Asset
      Sale
      at least equal to the Fair Market Value of the Property subject to such Asset
      Sale;

     

    (b)
      at
      least 75% of the consideration paid to the Company or such Subsidiary in
      connection with such Asset Sale is in the form of cash or Cash Equivalents
      or
      the assumption by the purchaser of liabilities of the Company or any of its
      Subsidiaries (other than contingent liabilities or liabilities that are by
      their
      terms subordinated to the Notes or the applicable Guarantee) as a result of
      which the Company and its Subsidiaries are no longer obligated with respect
      to
      such liabilities; and 

     

    (c)
      the
      Company delivers an Officers’ Certificate to the Trustee certifying that such
      Asset Sale complies with the foregoing clauses (a) and (b).

     

    The
      Net
      Available Cash (or any portion thereof) from Asset Sales may be applied by
      the
      Company or any of its Subsidiaries, to the extent the Company or such Subsidiary
      elects (or is required by the terms of any Debt) to reinvest in Additional
      Assets (including by means of an Investment in Additional Assets by any
      Subsidiary of the Company with Net Available Cash received by the Company or
      another Subsidiary of the Company).

     

    Any
      Net
      Available Cash from an Asset Sale not applied in accordance with the preceding
      paragraph within 120 days from the date of the receipt of such Net Available
      Cash shall constitute “Excess
      Proceeds”.
      

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

    When
      the
      aggregate amount of Excess Proceeds exceeds $5.0 million (taking into account
      income earned on such Excess Proceeds, if any), the Company will be required
      to
      make an offer to repurchase (the “Asset
      Sale Offer”)
      the
      Notes, which offer shall be in the amount of the Allocable Excess Proceeds
      (rounded to the nearest $100,000), on a pro
      rata
      basis
      according to principal amount, at a purchase price equal to 100% of the
      principal amount thereof, plus accrued and unpaid interest if any to the
      Purchase Date (subject to the right of holders of record on the relevant Regular
      Record Date to receive interest due on the relevant Interest Payment Date),
      in
      accordance with the procedures (including prorating in the event of
      oversubscription) set forth in Section
      3.02.
      To the
      extent that any portion of the amount of Net Available Cash remains after
      compliance with the preceding sentence and provided
      that
      all
      holders of Notes have been given the opportunity to tender their Notes for
      repurchase in accordance with Section
      3.02,
      the
      Company or such Subsidiary may use such remaining amount first to Repay the
      Credit Facilities or any other Senior Debt of the Company or any Guarantor
      or
      Debt of any Subsidiary of the Company that is not a Guarantor (excluding, in
      any
      such case, any Debt owed to the Company or an Affiliate of the Company), and
      only thereafter, for any purpose permitted by this Indenture, and the amount
      of
      Excess Proceeds will be reset to zero. 

     

    The
      term
“Allocable
      Excess Proceeds”
shall
      mean the product of: 

     

    (a)
      the
      Excess Proceeds and 

     

    (b)
      a
      fraction, 

    

    (1)
      the
      numerator of which is the aggregate principal amount of the Notes outstanding
      on
      the date of the Asset Sale Offer, and 

     

    (2)
      the
      denominator of which is the sum of the aggregate principal amount of the Notes
      outstanding on the date of the Asset Sale Offer and the aggregate principal
      amount (or accreted value, if applicable) of other Debt of the Company
      outstanding on the date of the Asset Sale Offer that is pari
      passu in
      right
      of payment with the Notes (including, without limitation, in respect of the
      Floating Rate Notes) and subject to terms and conditions in respect of Asset
      Sales similar in all material respects to this Section and requiring the Company
      to make an offer to repurchase such Debt at substantially the same time as
      the
      Asset Sale Offer.

     

    Section
      4.13. Restrictions
      on Distributions from Subsidiaries.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, directly
      or
      indirectly, create or otherwise cause or suffer to exist any consensual
      restriction on the right of any of its Subsidiaries to:

     

    (a)
      pay
      dividends, in cash or otherwise, or make any other distributions on or in
      respect of its Capital Stock owned by, or pay any Debt or other obligation
      owed,
      to, the Company or any other Subsidiary of the Company, 

     

    (b)
      make
      any loans or advances to the Company or any other Subsidiary of the Company,
      or

     

    (c)
      transfer any of its Property to the Company or any other Subsidiary of the
      Company. 

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

    The
      foregoing limitations will not apply:

     

    (1)
      with
      respect to clauses (a), (b) and (c), to restrictions:

     

    (A)
      in
      effect on the Issue Date (including, without limitation, restrictions pursuant
      to the Notes, this Indenture, the Floating Rate Notes and the indenture relating
      thereto), 

     

    (B)
      relating to Debt of any Subsidiary of the Company and existing at the time
      it
      became a Subsidiary of the Company if such restriction was not created in
      connection with or in anticipation of the transaction or series of transactions
      pursuant to which such Subsidiary became a Subsidiary of the Company or was
      acquired by the Company, or 

     

    (C)
      that
      result from the Refinancing of Debt Incurred pursuant to an agreement referred
      to in clause (1)(A) or (B) above or in clause (2)(A) or (B) below, provided
      such
      restrictions are not less favorable to the holders of Notes than those under
      the
      agreement evidencing the Debt so Refinanced, and

     

    (2)
      with
      respect to clause (c) only, to restrictions:

     

    (A)
      relating to Debt that is permitted to be Incurred and secured without also
      securing the Notes or the applicable Guarantee pursuant
      to Section
      4.09
      and
Section
      4.11
      that
      limit the right of the debtor to dispose of the Property securing such
      Debt,

     

    (B)
      encumbering Property at the time such Property was acquired by the Company
      or
      any of its Subsidiaries, so long as such restrictions relate solely to the
      Property so acquired and were not created in connection with or in anticipation
      of such acquisition,

     

    (C)
      resulting from customary provisions restricting subletting or assignment of
      leases or customary provisions in other agreements that restrict assignment
      of
      such agreements or rights thereunder, or

     

    (D)
      customary restrictions contained in asset sale agreements limiting the transfer
      of such Property pending the closing of such sale.

     

    Section
      4.14. Affiliate
      Transactions.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, directly
      or
      indirectly, conduct any business or enter into or suffer to exist any
      transaction or series of transactions (including the purchase, sale, transfer,
      assignment, lease, conveyance or exchange of any Property or the rendering of
      any service) with, or for the benefit of, any Affiliate of the Company (an
      “Affiliate
      Transaction”),
      unless:

     

    (a)
      the
      terms of such Affiliate Transaction are:

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

    (1)
      set
      forth in writing, 

     

    (2)
      in
      the best interest of the Company or such Subsidiary, as the case may be, and
      

     

    (3)
      no
      less favorable to the Company or such Subsidiary, as the case may be, than
      those
      that could be obtained in a comparable arm’s-length transaction with a Person
      that is not an Affiliate of the Company,

     

    (b)
      if
      such Affiliate Transaction involves aggregate payments or value in excess of
      $1.0 million, the Board of Directors (including a majority of the disinterested
      members of the Board of Directors) approves such Affiliate Transaction and,
      in
      its good faith judgment, believes that such Affiliate Transaction complies
      with
      clauses (a)(2) and (3) of this paragraph as evidenced by a Board Resolution
      promptly delivered to the Trustee, and 

     

    (c)
      if
      such Affiliate Transaction involves aggregate payments or value in excess of
      $5.0 million, the Company obtains a written opinion from an Independent
      Financial Advisor to the effect that the consideration to be paid or received
      in
      connection with such Affiliate Transaction is fair, from a financial point
      of
      view, to the Company and its Subsidiaries.

     

    Notwithstanding
      the foregoing limitation, the Company or any of its Subsidiaries may enter
      into
      or suffer to exist the following:

     

    (a)
      any
      transaction or series of transactions between the Company and one or more of
      its
      Subsidiaries or between two or more of its Subsidiaries in the ordinary course
      of business, provided
      that no
      more than 5% of the total voting power of the Voting Stock (on a fully diluted
      basis) of any such Subsidiary is owned by an Affiliate of the Company (other
      than any Subsidiary of the Company);

     

    (b)
      any
      Restricted Payment permitted to be made pursuant to Section
      4.10
      or any
      Permitted Investment;

     

    (c)
      the
      payment of compensation (including amounts paid pursuant to employee benefit
      plans) for the personal services of officers, directors and employees of the
      Company or any of its Subsidiaries, so long as the Board of Directors in good
      faith shall have approved the terms thereof and deemed the services theretofore
      or thereafter to be performed for such compensation to be fair consideration
      therefor; 

     

    (d)
      loans
      and advances to employees made in the ordinary course of business and consistent
      with the past practices of the Company or such Subsidiary, as the case may
      be,
provided
      that
      such
      loans and advances do not exceed $300,000 in the aggregate at any one time
      outstanding; provided,
      however,
      that
      the Company and its Subsidiaries shall comply in all material respects with
      all
      provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
      promulgated in connection therewith that would be applicable to an issuer with
      debt securities registered under the Securities Act relating to such loans
      and
      advances; and

     

    (e)
      the
      following agreements in effect on the Issue Date and any modifications,
      extensions or renewals thereto that are no less favorable to the Company or
      any
      of its Subsidiaries than such agreements as in effect on the Issue Date,
      namely:- 

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

    (1) that
      certain Promissory Note made by the Company to Mr. FU Li dated September 20,
      2006; 

     

    (2) the
      agreements pursuant to which Dalian Fushi on-lends to the WFOE its borrowings
      pursuant to its revolving line of credit with Bank of China and on the same
      terms and conditions as such borrowings are made from the Bank of China;
      and

     

    (3) the
      Restructuring Agreements.

     

    Section
      4.15. Issuance
      or Sale of Capital Stock of Subsidiaries.

     

    The
      Company shall not:

     

    (a)
      sell,
      pledge, hypothecate or otherwise dispose of any shares of Capital Stock of
      any
      of its Subsidiaries, or 

     

    (b)
      permit any Subsidiary of the Company to, directly or indirectly, issue or sell
      or otherwise dispose of any shares of its Capital Stock, 

     

    other
      than, in the case of either (a) or (b):

     

    (1)
      directors’ qualifying shares, 

     

    (2)
      to
      the Company or a Wholly Owned Subsidiary, or

     

    (3)
      a
      disposition of 100% of the shares of Capital Stock of such Subsidiary;
provided,
      however,
      that, in
      the case of this clause (3),

     

    (A) such
      disposition is effected in compliance with Section
      4.12,
      and

     

    (B)
      upon
      consummation of such disposition and execution and delivery of a supplemental
      indenture in form satisfactory to the Trustee, such Subsidiary shall be released
      from any Guarantee previously made by such Subsidiary.

     

    Section
      4.16. Maintenance
      of Consolidated Tangible Net Worth.

     

    The
      Company shall not, on the Issue Date (after giving effect to the issuance of
      the
      Notes) or at the end of any Fiscal Quarter thereafter, permit its Consolidated
      Tangible Net Worth to be less than the Consolidated Tangible Net Worth
      Threshold. The “Consolidated Tangible Net Worth Threshold” shall be equal to
      $25.0 million from the Issue Date until the first annual anniversary thereof,
      and at each annual anniversary of the Issue Date shall increase by an amount
      equal to $10.0 million.

     

    Section
      4.17. Repurchase
      at the Option of Holders Following a Change of Control.

     

    (i) Upon
      the
      occurrence of a Change of Control, the Company shall, within 7 days thereafter
      notify the Trustee and the holders of such Change of Control, and within 30
      days
      of a Change of Control, make an offer (the “Change
      of Control Offer”)
      pursuant to the procedures set forth in Section
      3.02.
      Each
      holder shall have the right to accept such offer and require the Company to
      repurchase all or any portion (equal to $100,000 or an integral multiple
      thereof) of such holder’s Notes pursuant to the Change of Control Offer at a
      purchase price, in cash equal to the Repurchase Amount.

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

    (j) The
      Company shall not be required to make a Change of Control Offer following a
      Change of Control if a third party makes the Change of Control Offer in the
      manner, at the times and otherwise in compliance with the requirements set
      forth
      in this Indenture applicable to a Change of Control Offer made by the Company
      and purchases all Notes properly tendered and not withdrawn under such Change
      of
      Control Offer.

     

    Section
      4.18. Future
      Guarantors.

     

    The
      Company shall cause each Person that becomes a Domestic Subsidiary following
      the
      Issue Date to execute and deliver to the Trustee a Guarantee at the time such
      Person becomes a Domestic Subsidiary.

     

    Section
      4.19. Business
      Activities.

     

    The
      Company shall not, and the Company shall not permit any of its Subsidiaries
      to,
      directly or indirectly, engage in any business other than a Related
      Business.

     

    Section
      4.20. Sale
      and Leaseback Transactions.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, enter into
      any Sale and Leaseback Transaction with respect to any Property
      unless:

     

    (a)
      the
      Company or such Subsidiary would be entitled to:

     

    (1)
      Incur
      Debt in an amount equal to the Attributable Debt with respect to such Sale
      and
      Leaseback Transaction pursuant to Section
      4.09
      and

     

    (2)
      create a Lien on such Property securing such Attributable Debt without also
      securing the Notes or the applicable Guarantee pursuant
      to Section
      4.11
      and

     

    (b)
      such
      Sale and Leaseback Transaction is effected in compliance with Section
      4.12.

     

    Section
      4.21. Impairment
      of Security Interest.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, take or
      omit
      to take any action that might or would have the result of materially impairing
      the security interest with respect to the Collateral for the benefit of the
      Trustee and the holders of the Notes, and the Company shall not, and shall
      not
      permit any of its Subsidiaries to, grant to any Person other than the Collateral
      Agent, for the benefit of the Trustee, the holders of the Notes, the trustee
      for
      the Floating Rate Notes, the holders of the Floating Rate Notes and the other
      beneficiaries described in the Security Documents, any interest whatsoever
      in
      any of the Collateral.

     

    
      
        
        

      

      
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    Section
      4.22. Amendments
      to Security Documents.

     

    The
      Company shall not, and shall not permit any of its Subsidiaries to, amend,
      waive
      or otherwise modify, or permit or consent to any amendment, waiver or other
      modification, the Security Documents in any way that would be adverse to the
      holders of the Notes.

     

    Section
      4.23. Use
      of
      Proceeds.

     

    The
      Company will not use the net proceeds from the sale of the Notes, in any amount,
      for any purpose other than to for Capital Expenditures, in particular, the
      installation of additional production lines, acquisitions, working capital
      and
      general corporate purposes, all in accordance with and subject to the Escrow
      Agreement, and pending the application of all of such net proceeds in such
      manner, to invest the portion of such net proceeds not yet so applied in Cash
      Equivalents. Following the application of net proceeds in such manner, any
      remaining net proceeds may be applied for general corporate purposes not
      otherwise prohibited by the terms of this Indenture.

     

    Section
      4.24. Maintenance
      of Insurance.

     

    The
      Company shall, and shall cause its Subsidiaries to, maintain insurance policies
      covering such risks, in such amounts and with such terms as are normally carried
      by similar companies engaged in a similar business to the Related Business
      in
      the PRC.

     

    Section
      4.25. Qualifying
      IPO.

     

    The
      Company shall make such filings, registrations or qualifications and take all
      other necessary action and will use its best efforts to obtain such consents,
      approvals and authorizations, if any, and satisfy all conditions that may be
      required in connection with listing the Company’s common stock in a Qualifying
      IPO and shall use its best efforts to complete a Qualifying IPO by no later
      than
      July 24, 2008 and maintain such listing continuously thereafter.

     

    Section
      4.26. Repurchase
      Upon Designated Event.

     

    Upon
      the
      occurrence of a Designated Event, the Company shall, within 7 days thereafter
      notify the Trustee and the holders of such Designated Event, and within 30
      days
      of a Designated Event, make an offer (the “Designated
      Event Offer”)
      pursuant to the procedures set forth in Section
      3.02.
      Each
      holder shall have the right to accept such offer and require the Company to
      repurchase all or any portion (equal to $100,000 or an integral multiple of
      $100,000) of such holder’s Notes pursuant to the Designated Event Offer at a
      purchase price, in cash equal to the Repurchase Amount.

     

    Section
      4.27. Government
      Approvals and Licenses; Compliance with Law.

     

    The
      Company shall, and shall cause its Subsidiaries to, (a) obtain and maintain
      in
      full force and effect all Governmental Approvals, authorizations, consents,
      permits, concessions and licenses as are necessary to engage in a Related
      Business, (b) preserve and maintain good and valid title to its properties
      and
      assets (including land-use rights) free and clear of any Liens other than
      Permitted Liens and (c) comply with all laws, regulations, orders, judgments
      and
      decrees of any governmental body, except to the extent that failure so to
      obtain, maintain, preserve and comply would reasonably be expected to have
      a
      material adverse effect on (1) the business, results of operations or prospects
      of the Company and its Subsidiaries taken as a whole or (2) the ability of
      the
      Company or any Guarantor to perform its obligations under the Notes, the
      relevant Guarantee of the Notes or this Indenture.

     

    
      
        
        

      

      
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    Section
      4.28. Minimum
      Fixed Charge Coverage Ratio and Leverage Ratio.

     

    The
      Company shall maintain: 

     

    (a) a
      Fixed
      Charge Coverage Ratio, as determined as of the last day of each Fiscal Quarter,
      for the four Fiscal Quarters ending on such day, of at least 2.0 to
      1.00.

     

    (b) a
      Leverage Ratio, as determined as of the last day of each Fiscal Quarter, for
      the
      four Fiscal Quarters ending on such day, not exceeding 5.5 to 1.00 from the
      Issue Date through December 31, 2007, and 5.0 to 1.00 thereafter.

     

    Section
      4.29. Notes
      to Rank Senior.

     

    The
      Notes
      and all other obligations of the Company and the Guarantors under this Indenture
      are and at all times shall remain direct and first-priority secured obligations
      of the Company and each Guarantor ranking pari
      passu
      as
      against the assets of the Company and each Guarantor with (a) all other Notes
      from time to time issued and outstanding hereunder and (b) the Floating Rate
      Notes and the Floating Rate Note Guarantees, without any preference among
      themselves and senior in right and priority of payment to all other present
      and
      future unsecured Indebtedness (actual or contingent) of the Company and each
      Guarantor (except as otherwise required by law).

     

    Section
      4.30. Compliance
      Certificate.
      

     

    The
      Company shall deliver to the Trustee, within one hundred twenty (120) days
      after
      the end of each fiscal year of the Company, a certificate signed by either
      the
      principal executive officer, principal financial officer or principal accounting
      officer of the Company, stating whether or not to the best knowledge of the
      signer thereof the Company is in default in the performance and observance
      of
      any of the terms, provisions and conditions of this Indenture (without regard
      to
      any period of grace or requirement of notice provided hereunder) and, if the
      Company shall be in default, specifying all such defaults and the nature and
      the
      status thereof of which the signer may have knowledge.

     

    The
      Company will deliver to the Trustee, forthwith upon becoming aware of (i) any
      default in the performance or observance of any covenant, agreement or condition
      contained in this Indenture, or (ii) any Event of Default, an Officers’
Certificate specifying with particularity such Default or Event of Default
      and
      further stating what action the Company has taken, is taking or proposes to
      take
      with respect thereto.

     

    Any
      notice required to be given under this Section shall be delivered to a
      Responsible Officer of the Trustee at its Corporate Trust Office.

     

    
      
        
        

      

      
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    Section
      4.31. Additional
      Interest Notice.
      

     

    In
      the
      event that the Company is required to pay Additional Interest to holders of
      Notes pursuant to the terms hereof, the Company will provide written notice
      (“Additional
      Interest Notice”)
      to the
      Trustee and the holders of the Company’s obligation to pay Additional Interest
      no later than fifteen (15) days prior to the proposed payment date for the
      Additional Interest, and the Additional Interest Notice shall set forth the
      amount of Additional Interest to be paid by the Company on such payment date.
      The Trustee shall not at any time be under any duty or responsibility to any
      holder of Notes to determine the Additional Interest, or with respect to the
      nature, extent or calculation of the amount of Additional Interest when made,
      or
      with respect to the method employed in such calculation of the Additional
      Interest.

     

    Section
      4.32. Calculation
      of Original Issue Discount.
      

     

    The
      Company shall file with the Trustee, solely for purposes of making such
      information available to the holders upon request, promptly at the end of each
      calendar year (i) a written notice specifying the amount of Tax Original Issue
      Discount (including daily rates and accrual periods) accrued on outstanding
      Notes as of the end of such year and (ii) such other specific information
      relating to such Tax Original Issue Discount as may then be required under
      the
      Code, or the Treasury regulations promulgated thereunder.

     

    ARTICLE
      5

     

    SUCCESSORS

     

    Section
      5.01. Merger,
      Consolidation and Sale of Assets.

     

    (a) The
      Company shall not merge, consolidate or amalgamate with or into any other Person
      (other than a merger of a Wholly Owned Subsidiary into the Company) or sell,
      transfer, assign, lease, convey or otherwise dispose of all or substantially
      all
      of its Property in any one transaction or series of transactions unless:

     

    (i) the
      Company shall be the Surviving Person in such merger, consolidation or
      amalgamation, or the Surviving Person (if other than the Company) formed by
      such
      merger, consolidation or amalgamation or to which such sale, transfer,
      assignment, lease, conveyance or disposition is made shall be a corporation
      organized and existing under the laws of the United States of America, any
      State
      thereof or the District of Columbia;

     

    (ii) the
      Surviving Person (if other than the Company) expressly assumes, by supplemental
      indenture in form satisfactory to the Trustee, executed and delivered to the
      Trustee by such Surviving Person, the due and punctual payment of the principal
      of, and premium, if any, and interest on, all the Notes, according to their
      tenor, and the due and punctual performance and observance of all the covenants
      and conditions of this Indenture to be performed by the Company; 

     

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

    (iii) in
      the
      case of a sale, transfer, assignment, lease, conveyance or other disposition
      of
      all or substantially all the Property of the Company, such Property shall have
      been transferred as an entirety or virtually as an entirety to one Person;
      

     

    (iv) immediately
      before and after giving effect to such transaction or series of transactions
      on
      a pro forma basis (and treating, for purposes of this clause (iv) and clauses
      (v) and (vi) below, any Debt that becomes, or is anticipated to become, an
      obligation of the Surviving Person or any Subsidiary of the Company as a result
      of such transaction or series of transactions as having been Incurred by the
      Surviving Person or such Subsidiary at the time of such transaction or series
      of
      transactions), no Default or Event of Default shall have occurred and be
      continuing; 

     

    (v) immediately
      after giving effect to such transaction or series of transactions on a pro
      forma
      basis: 

     

    (1) the
      Company or the Surviving Person, as the case may be, would be able to Incur
      at
      least $1.00 of additional Debt under clause (1) of Section
      4.09;
      and

     

    (2) the
      Company or the Surviving Person, as the case may be, would have a Fixed Charge
      Coverage Ratio that is not lower than the Fixed Charge Coverage Ratio of the
      Company immediately prior to such transaction; 

     

    (vi) immediately
      after giving effect to such transaction or series of transactions on a pro
      forma
      basis, the Surviving Person shall have a Consolidated Net Worth in an amount
      which is not less than the Consolidated Net Worth of the Company immediately
      prior to such transaction or series of transactions;

     

    (vii) the
      Company shall deliver, or cause to be delivered, to the Trustee, an Officers’
Certificate and an Opinion of Counsel, each stating that such transaction or
      series of transactions and the supplemental indenture, if any, in respect
      thereto comply with this covenant and that all conditions precedent herein
      provided for relating to such transaction or series of transactions have been
      satisfied; and

     

    (viii) the
      Company shall have delivered to the Trustee an Opinion of Counsel to the effect
      that the holders will not recognize income, gain or loss for federal income
      tax
      purposes as a result of such transaction and will be subject to federal income
      tax on the same amounts, in the same manner and at the same times as would
      have
      been the case if such transaction had not occurred.

     

    The
      foregoing provisions (other than clause (iv)) shall not apply to any transaction
      or series of transactions which constitute an Asset Sale if the Company has
      complied with Section
      4.12.

     

    (b) The
      Company shall not permit any Guarantor to merge, consolidate or amalgamate
      with
      or into any other Person (other than a merger of a Wholly Owned Subsidiary
      into
      the Company or such Guarantor) or sell, transfer, assign, lease, convey or
      otherwise dispose of all or substantially all its Property in any one
      transaction or series of transactions unless:

     

    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    

    (i) the
      Surviving Person (if not such Guarantor) formed by such merger, consolidation
      or
      amalgamation or to which such sale, transfer, assignment, lease, conveyance
      or
      disposition is made shall be a corporation, company (including a limited
      liability company) or partnership organized and existing under the laws of
      the
      United States of America, any State thereof or the District of Columbia;

     

    (ii) the
      Surviving Person (if other than such Guarantor) expressly assumes, by
      supplemental indenture in form satisfactory to the Trustee, executed and
      delivered to the Trustee by such Surviving Person, the due and punctual
      performance and observance of all the obligations of such Guarantor under its
      Guarantee; 

     

    (iii) in
      the
      case of a sale, transfer, assignment, lease, conveyance or other disposition
      of
      all or substantially all the Property of such Guarantor, such Property shall
      have been transferred as an entirety or virtually as an entirety to one Person;
      

     

    (iv) immediately
      before and after giving effect to such transaction or series of transactions
      on
      a pro forma basis (and treating, for purposes of this clause (iv) and clauses
      (v) and (vi) below, any Debt that becomes, or is anticipated to become, an
      obligation of the Surviving Person, the Company or any of its Subsidiaries
      as a
      result of such transaction or series of transactions as having been Incurred
      by
      the Surviving Person, the Company or such Subsidiary at the time of such
      transaction or series of transactions), no Default or Event of Default shall
      have occurred and be continuing; 

     

    (v) immediately
      after giving effect to such transaction or series of transactions on a pro
      forma
      basis:

     

    (1)
      the
      Company would be able to Incur at least $1.00 of additional Debt under clause
      (1) of the first paragraph of Section
      4.09
      , and

     

    (2)
      the
      Company would have a Fixed Charge Coverage Ratio which is not lower than the
      Fixed Charge Coverage Ratio of the Company immediately prior to such
      transaction; and

     

    (vi) immediately
      after giving effect to such transaction or series of transactions on a pro
      forma
      basis, the Company shall have a Consolidated Net Worth in an amount which is
      not
      less than the Consolidated Net Worth of the Company immediately prior to such
      transaction or series of transactions;

     

    (vii) the
      Company shall deliver, or cause to be delivered, to the Trustee, an Officers’
Certificate and an Opinion of Counsel, each stating that such transaction or
      series of transactions and the supplemental indenture, if any, in respect
      thereto comply with this covenant and that all conditions precedent herein
      provided for relating to such transaction or series of transactions have been
      satisfied; and

     

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

    (viii) the
      Company shall have delivered to the Trustee an Opinion of Counsel to the effect
      that the holders will not recognize income, gain or loss for federal income
      tax
      purposes as a result of such transaction and will be subject to federal income
      tax on the same amounts, in the same manner and at the same times as would
      have
      been the case if such transaction had not occurred.

     

    The
      foregoing provisions (other than clause (iv)) shall not apply to any transaction
      or series of transactions which constitute an Asset Sale if the Company has
      complied with Section
      4.12.

    

    Section
      5.02. Successor
      Corporation Substituted.

     

    The
      Surviving Person shall succeed to, and be substituted for, and may exercise
      every right and power of the Company or a Guarantor, as applicable, under this
      Indenture; provided,
      however,
      that
      the predecessor entity shall not be released from any of the obligations or
      covenants under this Indenture, including with respect to the payment of the
      Notes and obligations under the Guarantee, as the case may be, in the case
      of:

     

    (a) a
      sale,
      transfer, assignment, conveyance or other disposition (unless such sale,
      transfer, assignment, conveyance or other disposition is of all or substantially
      all of the assets of the Company, taken as a whole or, in the case of a
      Guarantor, such sale, transfer, assignment, conveyance or other disposition
      is
      of all or substantially all of the assets of such Guarantor to a Person that
      is
      not (either before or after giving effect to such transaction) a Subsidiary
      of
      the Company, or such portion of the Capital Stock of such Guarantor ceases
      to be
      a Subsidiary of the Company), or

     

    (b) a
      lease.

     

    ARTICLE
      6

     

    REMEDIES
      OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT

     

    Section
      6.01. Events
      of Default.
      

     

    In
      case
      one or more of the following Events of Default (whatever the reason for such
      Event of Default and whether it shall be voluntary or involuntary or be effected
      by operation of law or pursuant to any judgment, decree or order of any court
      or
      any order, rule or regulation of any administrative or governmental body) shall
      have occurred and be continuing:

     

    (a) default
      in the payment of any installment of Interest upon any of the Notes as and
      when
      the same shall become due and payable and continuance of such default for a
      period of fifteen (15) days; or

     

    (b) default
      in the payment of the principal of, and premium, if any, on, any of the Notes
      as
      and when the same shall become due and payable either at maturity or in
      connection with any redemption, repurchase or otherwise, in each case pursuant
      to Article
      3,
      by
      acceleration or otherwise, including payment of Additional Amounts pursuant
      to
Section
      4.01;
      or

     

    
      
        
        

      

      
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    (c) default
      in the Company’s obligation to provide an Offer to Purchase when required in
      connection with an Asset Sale, a Change of Control or Designated Event as
      provided in Section
      3.03;
      or

     

    (d) failure
      to comply with Section
      5.01;

     

    (e) failure
      on the part of the Company duly to observe or perform any other of the covenants
      or agreements on the part of the Company in the Notes or in this Indenture
      (other than a covenant or agreement a default in whose performance or whose
      breach is elsewhere in this Section specifically dealt with and other than
      the
      failure to comply with Section
      4.26,
      for
      which payment of Additional Amounts is provided for hereunder and is governed
      by
Section
      4.01))
      continued for a period of thirty (30) days after the date on which written
      notice of such failure, requiring the Company to remedy the same, shall have
      been given to the Company by the Trustee, or the Company and a Responsible
      Officer of the Trustee by the holders of at least twenty-five percent (25%)
      in
      aggregate principal amount of the Notes at the time outstanding determined
      in
      accordance with Section
      12.04;
      or

     

    (f) the
      Company, any of its Significant Subsidiaries (or any group of Subsidiaries
      that,
      when taken together, would constitute a Significant Subsidiary) pursuant to
      or
      within the meaning of any Bankruptcy Law:

     

    (i) commences
      a voluntary case or gives notice of intention to make a proposal under any
      Bankruptcy Law;

     

    (ii) consents
      to the entry of an order for relief against it in an involuntary case or
      consents to its dissolution or winding up;

     

    (iii) consents
      to the appointment of a receiver, interim receiver, receiver and manager,
      liquidator, trustee or custodian of it or for all or substantially all of its
      property;

     

    (iv) makes
      a
      general assignment for the benefit of its creditors; or

     

    (v) admits
      in
      writing its inability to pay its debts as they become due or otherwise admits
      its insolvency; or

     

    (g) a
      court
      of competent jurisdiction enters an order or decree under any Bankruptcy Law
      that:

     

    (i) is
      for
      relief against the Company, any of its Significant Subsidiaries (or any group
      of
      Subsidiaries that, when taken together, would constitute a Significant
      Subsidiary) in an involuntary case; or

     

    (ii) appoints
      a receiver, interim receiver, receiver and manager, liquidator, trustee or
      custodian of the Company, any of its Significant Subsidiaries (or any group
      of
      Subsidiaries that, when taken together, would constitute a Significant
      Subsidiary) for all or substantially all of the property of the Company, any
      of
      its Significant Subsidiaries (or any group of Subsidiaries that, when taken
      together, would constitute a Significant Subsidiary); or

     

    
      
        
        

      

      
        66

        
          

        

      

      
        
        

      

    

    (iii) orders
      the liquidation of the Company, any of its Significant Subsidiaries (or any
      group of Subsidiaries that, when taken together, would constitute a Significant
      Subsidiary);

     

    and
      such
      order or decree remains unstayed and in effect for 60 consecutive
      days;

     

    (h) a
      default
      under any Debt by the Company or any of its Subsidiaries that results in
      acceleration of the maturity of such Debt, or failure to pay any such Debt
      when
      due, in an aggregate amount greater than $3.0 million or its foreign currency
      equivalent at the time;

     

    (i) any
      legal
      proceedings in respect of, or judgment or judgments for, the payment of money
      in
      an aggregate amount potentially in excess of $1.0 million (or its foreign
      currency equivalent at the time) that shall be instituted or rendered against
      the Company or any of its Subsidiaries;

     

    (j) any
      Guarantee ceases to be in full force and effect (other than in accordance with
      the terms of such Guarantee) or any Guarantor or a group of Guarantors that,
      taken as a whole, would constitute a Significant Subsidiary denies or disaffirms
      its obligations under its Guarantee;

     

    (k) any
      default by the Company or Future Guarantor Pledgor in any of its obligations
      under the Security Documents, which adversely affects the enforceability,
      validity, perfection or priority of the applicable Lien on the Collateral or
      which adversely affects the condition or value of the Collateral, taken as
      a
      whole, in any material respect; the security interest under the Security
      Documents shall, at any time, cease to be in full force and effect for any
      reason other than the satisfaction in full of all obligations under the
      Indenture and discharge of the Indenture or any security interest created
      thereunder shall be declared invalid or unenforceable or the Company or any
      Guarantor shall assert, in any pleading in any court of competent jurisdiction,
      that any such security interest is invalid or unenforceable;

     

    (l) the
      Company or any Future Guarantor Pledgor denies or disaffirms its obligations
      under any Security Document or, other than in accordance with this Indenture
      and
      the Security Documents, any Security Document ceases to be or is not in full
      force and effect or the Trustee ceases to have a first priority interest in
      the
      Collateral;

     

    (m) 
      the
      Company, the WFOE or Dalian Fushi amends or modifies their respective
      constitutive documents in such a manner that would have a Material Adverse
      Effect or engages any business other than a Related Business;

     

    (n) either
      (i) any Restructuring Agreement (or all Restructuring Agreements considered
      as a
      whole), the Indenture, the Notes, any loan made directly or indirectly from
      the
      Company to the WFOE, or any Security Document shall be (A) declared by any
      Governmental Authority to be illegal or enforceable or (B) terminated prior
      to
      its scheduled termination date, or (ii) any party to a Restructuring Agreement
      shall deny that it has any liability or obligation under any such Restructuring
      Agreement to which it is a party and such party shall have ceased performance
      thereunder prior to its scheduled expiration date;

     

    
      
        
        

      

      
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    (o) (i)
      the
      confiscation, expropriation or nationalization by any Governmental Authority
      of
      any Property of the Company or any of its Subsidiaries or their respective
      interests in any Restructuring Agreement (or all Restructuring Agreements
      considered as a whole); or (ii) the cancellation, or material and substantially
      adverse modification, of the rights of the WFOE pursuant to the Restructuring
      Agreements, or (iii) if such revocation or repudiation could reasonably be
      expected to have a Material Adverse Effect, the revocation or repudiation by
      any
      Governmental Authority of any previously granted Governmental Approval to Dalian
      Fushi or the WFOE that is material to the operation of the Related Business;
      or
      (iv) the imposition or introduction of material and discriminatory taxes,
      tariffs, royalties, customs or excise duties imposed on Dalian Fushi or the
      WFOE, or the material and discriminatory withdrawal or suspension of material
      privileges or specifically granted material rights of a fiscal
      nature;

     

    (p) failure
      by the Company or any Affiliate thereof (other than any Person who is an
      Affiliate solely because such Person is a holder of Notes or Floating Rate
      Notes) to comply with any of the agreements in that certain Investor Rights
      Agreement dated the Issue Date by and among the Company, the WFOE, Dalian Fushi,
      certain Affiliates of the Company and the other Persons therein named if such
      failure continues for 30 days after written notice is given to the Company
      by
      the Trustee or the holders of not less than 25% in aggregate principal amount
      of
      the Notes then outstanding specifying the default, demanding that it be remedied
      and stating that such notice is a “Notice of Default;” or

     

    (q) failure
      by the Company to comply with the Escrow Agreement if such failure continues
      for
      30 days after written notice is given to the Company by the Trustee or the
      holders of not less than 25% in aggregate principal amount of the Notes then
      outstanding specifying the default, demanding that it be remedied and stating
      that such notice is a “Notice of Default.”

     

    then,
      and
      in each and every such case (other than an Event of Default specified in
Section
      6.01(f)
      or
6.01(g)),
      unless
      the principal of all of the Notes shall have already become due and payable,
      either the Trustee or the holders of not less than twenty-five percent (25%)
      in
      aggregate principal amount of the Notes then outstanding hereunder determined
      in
      accordance with Section
      12.04,
      by
      notice in writing to the Company (and to the Trustee if given by Noteholders),
      may declare the principal of all the Notes, the Interest accrued thereon to
      be
      due and payable immediately, and upon any such declaration the same shall become
      and shall be immediately due and payable, anything in this Indenture or in
      the
      Notes contained to the contrary notwithstanding. If an Event of Default
      specified in Section
      6.01(f)
      or
6.01(g)
      occurs,
      the principal of all the Notes and the Interest accrued thereon shall be
      immediately and automatically due and payable without necessity of further
      action. 

     

    
      
        
        

      

      
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    This
      provision, however, is subject to the conditions that if, at any time after
      the
      principal of the Notes shall have been so declared due and payable, and before
      any judgment or decree for the payment of the monies due shall have been
      obtained or entered as hereinafter provided, (i) the Company shall pay or shall
      deposit with the Trustee a sum sufficient to pay all matured installments of
      Interest upon all Notes and the principal of any and all Notes which shall
      have
      become due otherwise than by acceleration (with interest on overdue installments
      of Interest (to the extent that payment of such interest is enforceable under
      applicable law) and on such principal at the rate borne by the Notes, to the
      date of such payment or deposit) and amounts due to the Trustee pursuant to
      Section
      7.06,
      (ii) if
      any and all defaults under this Indenture, other than the nonpayment of
      principal of and accrued Interest on Notes which shall have become due by
      acceleration, shall have been cured or waived pursuant to Section
      6.07,
      then
      and in every such case the holders of a majority in aggregate principal amount
      of the Notes then outstanding, by written notice to the Company and to the
      Trustee, may waive all Defaults or Events of Default and rescind and annul
      such
      declaration and its consequences; but no such waiver or rescission and annulment
      shall extend to or shall affect any subsequent Default or Event of Default,
      or
      shall impair any right consequent thereon. The Company shall notify in writing
      a
      Responsible Officer of the Trustee, promptly upon becoming aware thereof, of
      any
      Event of Default.

     

    In
      case
      the Trustee shall have proceeded to enforce any right under this Indenture
      and
      such proceedings shall have been discontinued or abandoned because of such
      waiver or rescission and annulment or for any other reason or shall have been
      determined adversely to the Trustee, then and in every such case the Company,
      the holders of Notes, and the Trustee shall be restored respectively to their
      several positions and rights hereunder, and all rights, remedies and powers
      of
      the Company, the holders of Notes, and the Trustee shall continue as though
      no
      such proceeding had been taken.

     

    Section
      6.02. Payments
      of Notes on Default; Suit Therefor.
      

     

    The
      Company covenants that (a) in case default shall be made in the payment of
      any
      installment of Interest upon any of the Notes as and when the same shall become
      due and payable, and such default shall have continued for a period of thirty
      (30) days, or (b) in case default shall be made in the payment of the principal
      of any of the Notes as and when the same shall have become due and payable,
      whether at maturity of the Notes or in connection with any redemption or
      repurchase, by or under this Indenture declaration or otherwise, then, upon
      demand of the Trustee, the Company will pay to the Trustee, for the benefit
      of
      the holders of the Notes, the whole amount that then shall have become due
      and
      payable on all such Notes for principal or Interest, as the case may be, with
      interest upon the overdue principal and (to the extent that payment of such
      interest is enforceable under applicable law) upon the overdue installments
      of
      Interest at the rate borne by the Notes, plus 1% and, in addition thereto,
      such
      further amount as shall be sufficient to cover the costs and expenses of
      collection, including compensation to the Trustee, its agents, attorneys and
      counsel, and all other amounts due the Trustee under Section
      7.06.
      Until
      such demand by the Trustee, the Company may pay the principal of and Interest
      on
      the Notes to the registered holders, whether or not the Notes are
      overdue.

     

    In
      case
      the Company shall fail forthwith to pay such amounts upon such demand, the
      Trustee, in its own name and as trustee of an express trust, shall be entitled
      and empowered to institute any actions or proceedings at law or in equity for
      the collection of the sums so due and unpaid, and may prosecute any such action
      or proceeding to judgment or final decree, and may enforce any such judgment
      or
      final decree against the Company or any other obligor on the Notes and collect
      in the manner provided by law out of the property of the Company or any other
      obligor on the Notes wherever situated the monies adjudged or decreed to be
      payable.

     

    
      
        
        

      

      
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    In
      case
      there shall be pending proceedings for the bankruptcy or for the reorganization
      of the Company or any other obligor on the Notes under any Bankruptcy Law,
      or in
      case a receiver, assignee or trustee in bankruptcy or reorganization,
      liquidator, sequestrator or similar official shall have been appointed for
      or
      taken possession of the Company or such other obligor, the property of the
      Company or such other obligor, or in the case of any other judicial proceedings
      relative to the Company or such other obligor upon the Notes, or to the
      creditors or property of the Company or such other obligor, the Trustee,
      irrespective of whether the principal of the Notes shall then be due and payable
      as therein expressed or by declaration or otherwise and irrespective of whether
      the Trustee shall have made any demand pursuant to the provisions of this
      Section, shall be entitled and empowered, by intervention in such proceedings
      or
      otherwise, to file and prove a claim or claims for the whole amount of principal
      and Interest owing and unpaid in respect of the Notes, and, in case of any
      judicial proceedings, to file such proofs of claim and other papers or documents
      as may be necessary or advisable in order to have the claims of the Trustee
      and
      of the Noteholders allowed in such judicial proceedings relative to the Company
      or any other obligor on the Notes, its or their creditors, or its or their
      property, and to collect and receive any monies or other property payable or
      deliverable on any such claims, and to distribute the same after the deduction
      of any amounts due the Trustee under Section
      7.06,
      and to
      take any other action with respect to such claims, including participating
      as a
      member of any official committee of creditors, as it reasonably deems necessary
      or advisable, and, unless prohibited by law or applicable regulations, and
      any
      receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
      custodian or similar official is hereby authorized by each of the Noteholders
      to
      make such payments to the Trustee, and, in the event that the Trustee shall
      consent to the making of such payments directly to the Noteholders, to pay
      to
      the Trustee any amount due it for compensation, expenses, advances and
      disbursements, including counsel fees and expenses incurred by it up to the
      date
      of such distribution. To the extent that such payment of compensation, expenses,
      advances and disbursements out of the estate in any such proceedings shall
      be
      denied for any reason, payment of the same shall be secured by a lien on, and
      shall be paid out of, any and all distributions, dividends, monies, securities
      and other property which the holders of the Notes may be entitled to receive
      in
      such proceedings, whether in liquidation or under any plan of reorganization
      or
      arrangement or otherwise.

     

    All
      rights of action and of asserting claims under this Indenture, or under any
      of
      the Notes, may be enforced by the Trustee without the possession of any of
      the
      Notes, or the production thereof at any trial or other proceeding relative
      thereto, and any such suit or proceeding instituted by the Trustee shall be
      brought in its own name as trustee of an express trust, and any recovery of
      judgment shall, after provision for the payment of the compensation, expenses,
      disbursements and advances of the Trustee, its agents and counsel, be for the
      ratable benefit of the holders of the Notes.

     

    In
      any
      proceedings brought by the Trustee (and in any proceedings involving the
      interpretation of any provision of this Indenture to which the Trustee shall
      be
      a party) the Trustee shall be held to represent all the holders of the Notes,
      and it shall not be necessary to make any holders of the Notes parties to any
      such proceedings.

     

    
      
        
        

      

      
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    Section
      6.03. Application
      of Monies Collected by Trustee.
      

     

    Any
      monies or property collected by the Trustee pursuant to this Article shall
      be
      applied in the order following, at the date or dates fixed by the Trustee for
      the distribution of such monies or property, upon presentation of the several
      Notes and either (i) stamping thereon the payment, if only partially paid,
      or
      (ii) upon surrender thereof, if fully paid.

     

    FIRST:
      To
      the payment of all amounts due the Trustee under Section
      7.06
      in
      connection with the Trustee’s performance of its duties under this Indenture,
      the Security Documents or the Notes, including the collection or distribution
      of
      such amounts held or realized or in connection with expenses incurred in
      enforcing its remedies under the Security Documents and preserving the
      Collateral and all amounts for which the Trustee is entitled to indemnification
      under the Security Documents;

     

    SECOND:
      In case the principal of the outstanding Notes shall not have become due and
      be
      unpaid, to the payment of Interest on the Notes in default in the order of
      the
      maturity of the installments of such Interest, with interest (to the extent
      that
      such interest has been collected by the Trustee) upon the overdue installments
      of Interest at the rate specified in the Notes, such payments to be made ratably
      to the Persons entitled thereto and pari
      passu
      with all
      such similar amounts due and payable to the holders of the Company’s Floating
      Rate Notes;

     

    THIRD:
      In
      case the principal of the outstanding Notes shall have become due, by
      declaration or otherwise, and be unpaid to the payment of the whole amount
      then
      owing and unpaid upon the Notes for principal and Interest, with Interest on
      the
      overdue principal and (to the extent that such Interest has been collected
      by
      the Trustee) upon overdue installments of Interest at the rate specified in
      the
      Notes, and in case such monies shall be insufficient to pay in full the whole
      amounts so due and unpaid upon the Notes, then to the payment of such principal
      and Interest without preference or priority of principal over Interest, or
      of
      Interest over principal, or of any installment of Interest over any other
      installment of Interest, or of any Note over any other Note, ratably to the
      aggregate of such principal and accrued and unpaid Interest, and in all cases
      pari
      passu
      with all
      such similar amounts due and payable to the holders of the Company’s Floating
      Rate Notes; and

     

    FOURTH:
      To the payment of the remainder, if any, to the Company or the Guarantors or
      to
      whomever may be lawfully entitled thereto.

     

    Section
      6.04. Proceedings
      by Noteholder.
      

     

    No
      holder
      of any Note shall have any right by virtue of or by reference to any provision
      of this Indenture to institute any suit, action or proceeding in equity or
      at
      law upon or under or with respect to this Indenture, or for the appointment
      of a
      receiver, trustee, liquidator, custodian or other similar official, or for
      any
      other remedy hereunder, unless (a) such holder previously shall have given
      to
      the Trustee written notice of an Event of Default and of the continuance
      thereof, as hereinbefore provided, (b) the holders of not less than twenty-five
      percent (25%) in aggregate principal amount of the Notes then outstanding shall
      have made written request upon the Trustee to institute such action, suit or
      proceeding in its own name as Trustee hereunder and shall have offered to the
      Trustee such security or indemnity as it may require against the costs, expenses
      and liabilities to be incurred therein or thereby, and the Trustee for sixty
      (60) days after its receipt of such notice, request and offer of indemnity
      shall
      have neglected or refused to institute any such action, suit or proceeding
      and
      no direction inconsistent with such written request shall have been given to
      the
      Trustee pursuant to Section
      6.07;
      it
      being understood and intended, and being expressly covenanted by the taker
      and
      holder of every Note with every other taker and holder and the Trustee, that
      no
      one or more holders of Notes shall have any right in any manner whatever by
      virtue of or by reference to any provision of this Indenture to affect, disturb
      or prejudice the rights of any other holder of Notes, or to obtain or seek
      to
      obtain priority over or preference to any other such holder, or to enforce
      any
      right under this Indenture, except in the manner herein provided and for the
      equal, ratable and common benefit of all holders of Notes (except as otherwise
      provided herein). For the protection and enforcement of this Section each and
      every Noteholder and the Trustee shall be entitled to such relief as can be
      given either at law or in equity.

     

    
      
        
        

      

      
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    Notwithstanding
      any other provision of this Indenture and any provision of any Note, the right
      of any holder of any Note to receive payment of the principal of (including
      the
      purchase price upon an Offer to Purchase or the repurchase price, in each case
      pursuant to Article
      3)
      and
      accrued Interest on such Note, on or after the respective due dates expressed
      in
      such Note or in the event of an Offer to Purchase or a repurchase, as the case
      may be, or to institute suit for the enforcement of any such payment on or
      after
      such respective dates against the Company shall not be impaired or affected
      without the consent of such holder.

     

    Anything
      in this Indenture or the Notes to the contrary notwithstanding, the holder
      of
      any Note, without the consent of either the Trustee or the holder of any other
      Note, in its own behalf and for its own benefit, may enforce, and may institute
      and maintain any proceeding suitable to enforce, its rights of conversion as
      provided herein.

     

    Section
      6.05. Proceedings
      by Trustee.
      

     

    In
      case
      of an Event of Default, the Trustee may, in its discretion, proceed to protect
      and enforce the rights vested in it by this Indenture by such appropriate
      judicial proceedings as are necessary to protect and enforce any of such rights,
      either by suit in equity or by action at law or by proceeding in bankruptcy
      or
      otherwise, whether for the specific enforcement of any covenant or agreement
      contained in this Indenture or in aid of the exercise of any power granted
      in
      this Indenture, or to enforce any other legal or equitable right vested in
      the
      Trustee by this Indenture or by law.

     

    Section
      6.06. Remedies
      Cumulative and Continuing.
      

     

    Except
      as
      provided in Section
      2.06,
      all
      powers and remedies given by this Article to the Trustee or to the Noteholders
      shall, to the extent permitted by law, be deemed cumulative and not exclusive
      of
      any thereof or of any other powers and remedies available to the Trustee or
      the
      holders of the Notes, by judicial proceedings or otherwise, to enforce the
      performance or observance of the covenants and agreements contained in this
      Indenture, and no delay or omission of the Trustee or of any holder of any
      of
      the Notes to exercise any right or power accruing upon any Default or Event
      of
      Default occurring and continuing as aforesaid shall impair any such right or
      power, or shall be construed to be a waiver of any such default or any
      acquiescence therein, and, subject to the provisions of Section
      6.04,
      every
      power and remedy given by this Article or by law to the Trustee or to the
      Noteholders may be exercised from time to time, and as often as shall be deemed
      expedient, by the Trustee or by the Noteholders.

     

    
      
        
        

      

      
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    Section
      6.07. Direction
      of Proceedings and Waiver of Defaults by Majority of Noteholders.
      

     

    The
      holders of a majority in aggregate principal amount of the Notes at the time
      outstanding determined in accordance with Section
      12.04
      shall
      have the right to direct the time, method and place of conducting any proceeding
      for any remedy available to the Trustee or exercising any trust or power
      conferred on the Trustee; provided
      that (a)
      such direction shall not be in conflict with any rule of law or with this
      Indenture, (b) the Trustee may take any other action which is not inconsistent
      with such direction, (c) the Trustee may decline to take any action that would
      benefit some Noteholder to the detriment of other Noteholders and (d) the
      Trustee may decline to take any action that would involve the Trustee in
      personal liability. Subject to Section
      6.01,
      the
      holders of a majority in aggregate principal amount of the Notes at the time
      outstanding determined in accordance with Section
      12.04
      may, on
      behalf of the holders of all of the Notes, waive any past Default or Event
      of
      Default hereunder and its consequences except (i) a default in the payment
      of
      Interest on, or the principal of, the Notes, (ii) a failure by the Company
      to
      convert any Notes into Common Stock, (iii) a default in the payment of the
      purchase price pursuant to Section
      3.02,
      (iv) a
      default in the payment of the repurchase price pursuant to Section
      3.03
      or (v) a
      default in respect of a covenant or provisions hereof which under Article
      8
      cannot
      be modified or amended without the consent of the holders of each or all of
      the
      Notes then outstanding or affected thereby. Upon any such waiver, the Company,
      the Trustee and the holders of the Notes shall be restored to their former
      positions and rights hereunder; but no such waiver shall extend to any
      subsequent or other Default or Event of Default or impair any right consequent
      thereon. Whenever any Default or Event of Default hereunder shall have been
      waived as permitted by this Section, said Default or Event of Default shall
      for
      all purposes of the Notes and this Indenture be deemed to have been cured and
      to
      be not continuing; but no such waiver shall extend to any subsequent or other
      Default or Event of Default or impair any right consequent thereon.

     

    Section
      6.08. Notice
      of Default.
      

     

    If
      the
      Trustee receives notice of any Default or Event of Default from the Company,
      the
      Trustee shall mail to all Noteholders, as the names and addresses of such
      holders appear upon the Security Register, Notice of the Default or Event of
      Default within 90 days after it occurs, unless the Default or Event of Default
      shall have been cured or waived before the giving of such notice; provided
      that
      except in the case of default in the payment of the principal of or Interest
      on
      any of the Notes, the Trustee shall be protected in withholding such notice
      if
      and so long as a trust committee of directors and/or Responsible Officers of
      the
      Trustee in good faith determines that the withholding of such notice is in
      the
      interests of the Noteholders.

     

    
      
        
        

      

      
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    Section
      6.09. Undertaking
      to Pay Costs.
      

     

    All
      parties to this Indenture agree, and each holder of any Note by his acceptance
      thereof shall be deemed to have agreed, that any court may, in its discretion,
      require, in any suit for the enforcement of any right or remedy under this
      Indenture, or in any suit against the Trustee for any action taken or omitted
      by
      it as Trustee, the filing by any party litigant in such suit of an undertaking
      to pay the costs of such suit and that such court may in its discretion assess
      reasonable costs, including reasonable attorneys’ fees and expenses, against any
      party litigant in such suit, having due regard to the merits and good faith
      of
      the claims or defenses made by such party litigant; provided
      that the
      provisions of this Section (to the extent permitted by law) shall not apply
      to
      any suit instituted by the Trustee, to any suit instituted by any Noteholder,
      or
      group of Noteholders, holding in the aggregate more than ten percent in
      principal amount of the Notes at the time outstanding determined in accordance
      with Section
      12.04,
      or to
      any suit instituted by any Noteholder for the enforcement of the payment of
      the
      principal of or Interest on any Note on or after the due date expressed in
      such
      Note or to any suit for the enforcement of the right to convert any Note in
      accordance with the provisions of Article
      14.

     

    ARTICLE
      7

     

    THE
      TRUSTEE

     

    Section
      7.01. Duties
      and Responsibilities of Trustee.
      

     

    The
      Trustee, prior to the occurrence of an Event of Default and after the curing
      of
      all Events of Default which may have occurred, undertakes to perform such duties
      and only such duties as are specifically set forth in this Indenture. In case
      an
      Event of Default has occurred (which has not been cured or waived), the Trustee
      shall exercise such of the rights and powers vested in it by this Indenture,
      and
      use the same degree of care and skill in their exercise, as a prudent person
      would exercise or use under the circumstances in the conduct of such person’s
      own affairs.

     

    No
      provision of this Indenture shall be construed to relieve the Trustee from
      liability for its own negligent action, its own negligent failure to act or
      its
      own willful misconduct, except that:

     

    (a) prior
      to
      the occurrence of an Event of Default and after the curing or waiving of all
      Events of Default which may have occurred:

     

    (i) the
      duties and obligations of the Trustee shall be determined solely by the express
      provisions of this Indenture, and the Trustee shall not be liable except for
      the
      performance of such duties and obligations as are specifically set forth in
      this
      Indenture and no implied covenants, duties or obligations shall be read into
      this Indenture against the Trustee; and

     

    (ii) in
      the
      absence of bad faith and willful misconduct on the part of the Trustee, the
      Trustee may conclusively rely as to the truth of the statements and the
      correctness of the opinions expressed therein, upon any certificates or opinions
      furnished to the Trustee and conforming to the requirements of this Indenture;
      but, in the case of any such certificates or opinions which by any provisions
      hereof are specifically required to be furnished to the Trustee under this
      Indenture, the Trustee shall be under a duty to examine the same to determine
      whether or not they conform to the requirements of this Indenture but need
      not
      confirm or investigate the accuracy of mathematical calculations or other facts
      stated therein;

     

    
      
        
        

      

      
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    (b) the
      Trustee shall not be liable for any error of judgment made in good faith by
      a
      Responsible Officer or Officers of the Trustee, unless the Trustee was negligent
      in ascertaining the pertinent facts;

     

    (c) the
      Trustee shall not be liable with respect to any action taken or omitted to
      be
      taken by it in good faith in accordance with the written direction of the
      holders of not less than a majority in principal amount of the Notes at the
      time
      outstanding determined as provided in Section
      12.04
      relating
      to the time, method and place of conducting any proceeding for any remedy
      available to the Trustee, or exercising any trust or power conferred upon the
      Trustee, under this Indenture;

     

    (d) whether
      or not therein provided, every provision of this Indenture relating to the
      conduct or affecting the liability of, or affording protection to, the Trustee
      shall be subject to the provisions of this Section;

     

    (e) the
      Trustee shall not be liable in respect of any payment (as to the correctness
      of
      amount, entitlement to receive or any other matters relating to payment) or
      notice effected by the Company or any paying agent or any records maintained
      by
      any co-registrar with respect to the Notes;

     

    (f) if
      any
      party fails to deliver a notice relating to an event the fact of which, pursuant
      to this Indenture, requires notice to be sent to the Trustee, the Trustee may
      conclusively rely on its failure to receive such notice as reason to act as
      if
      no such event occurred; and

     

    (g) the
      Trustee shall not be deemed to have knowledge of any Default or Event of Default
      hereunder unless a Responsible Officer of the Trustee at the Corporate Trust
      Office shall have been notified in writing of such Default or Event of Default
      by the Company or the holders of at least 25% in aggregate principal amount
      of
      the Notes.

     

    None
      of
      the provisions contained in this Indenture shall require the Trustee to expend
      or risk its own funds or otherwise incur personal financial liability in the
      performance of any of its duties or in the exercise of any of its rights or
      powers, if there is reasonable ground for believing that the repayment of such
      funds or adequate indemnity against such risk or liability is not reasonably
      assured to it.

     

    Section
      7.02. Rights
      of Trustee.
      

     

    (a) The
      Trustee may conclusively rely and shall be protected in acting upon any
      resolution, certificate, statement, instrument, opinion, report, notice,
      request, consent, order, bond, debenture, note, coupon or other paper or
      document (whether in its original or facsimile form) believed by it in good
      faith to be genuine and to have been signed or presented by the proper party
      or
      parties.

     

    
      
        
        

      

      
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    (b) Any
      request, direction, order or demand of the Company mentioned herein shall be
      sufficiently evidenced by an Officers’ Certificate (unless other evidence in
      respect thereof be herein specifically prescribed); and any resolution of the
      Board of Directors may be evidenced to the Trustee by a copy thereof certified
      by the Secretary or an Assistant Secretary of the Company; the Trustee shall
      be
      entitled to accept such certificate as sufficient and conclusive evidence of
      the
      fulfillment of the applicable conditions precedent, in which event it shall
      be
      conclusive and binding on the Noteholders.

     

    (c) The
      Trustee may consult with counsel of its own selection and any advice or Opinion
      of Counsel shall be full and complete authorization and protection in respect
      of
      any action taken or omitted by it hereunder in good faith and in accordance
      with
      such advice or Opinion of Counsel; the Trustee shall be entitled to accept
      such
      opinion as sufficient and conclusive evidence of the fulfillment of the
      applicable conditions precedent, in which event it shall be conclusive and
      binding on the Noteholders.

     

    (d) The
      Trustee shall be under no obligation to exercise any of the rights or powers
      vested in it by this Indenture at the request, order or direction of any of
      the
      Noteholders pursuant to the provisions of this Indenture, unless such
      Noteholders shall have offered to the Trustee security or indemnity satisfactory
      to it against the costs, expenses and liabilities which may be incurred therein
      or thereby.

     

    (e) The
      Trustee shall not be bound to make any investigation into the facts or matters
      stated in any resolution, certificate, statement, instrument, opinion, report,
      notice, request, direction, consent, order, bond, debenture or other paper
      or
      document, but the Trustee may make such further inquiry or investigation into
      such facts or matters as it may see fit, and, if the Trustee shall determine
      to
      make such further inquiry or investigation, it shall be entitled to examine
      the
      books, records and premises of the Company, personally or by agent or attorney
      at the expense of the Company, and shall incur no liability of any kind by
      reason of such inquiry or investigation.

     

    (f) The
      Trustee may execute any of the trusts or powers hereunder or perform any duties
      hereunder either directly or by or through agents or attorneys and the Trustee
      shall not be responsible for any misconduct or negligence on the part of any
      agent or attorney appointed by it with due care hereunder.

     

    (g) The
      Trustee shall not be liable for any action taken, suffered or omitted to be
      taken by it in good faith and reasonably believed by it to be authorized or
      within the discretion or rights or powers conferred upon it by this
      Indenture.

     

    (h) The
      rights, privileges, protections, immunities and benefits given to the Trustee,
      including, without limitation, its right to be indemnified, are extended to,
      and
      shall be enforceable by, the Trustee in each of its capacities hereunder, and
      each agent, custodian and other Person employed to act hereunder.

     

    (i)  The
      Trustee may request that the Company deliver an Officers’ Certificate setting
      forth the names of individuals and/or titles of officers authorized at such
      time
      to take specified actions pursuant to this Indenture, which Officers’
Certificate may be signed by any person authorized to sign an Officers’
Certificate, including any person specified as so authorized in any such
      certificate previously delivered and not superseded. 

     

    
      
        
        

      

      
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    (j)  Any
      permissive right or authority granted to the Trustee shall not be construed
      as a
      mandatory duty.

     

    (k)  The
      Trustee shall not be required to give any bond or surety in respect of he
      performance of its power and duties hereunder.

     

    (l)  The
      Trustee shall have no duty to inquire as to the performance of the Company’s
      covenants herein.

     

    (m)  Neither
      the Trustee nor any clearing system through which the Notes are traded shall
      have any obligation or duty to monitor, determine or inquire as to compliance,
      and shall not be responsible or liable for compliance, with restrictions on
      transfer, exchange, redemption, purchase or repurchase, as applicable, of
      minimum denominations imposed hereunder or under applicable law or regulation
      with respect of any transfer, exchange, redemption, purchase or repurchase,
      as
      applicable, of interest in any Note.

     

    (n) In
      the
      event the Trustee receives inconsistent or conflicting requests and indemnity
      from two or more groups of Noteholders, each representing less than a majority
      in aggregate principal amount of the Notes then outstanding, pursuant to the
      provisions of this Indenture, the Trustee, in its sole discretion, may determine
      what action, if any, will be taken.

     

    (o) The
      Trustee is entitled to enter into business transactions with the Company, its
      Affiliates or any entity related thereto without accounting for any
      profit.

     

    (p) In
      connection with the exercise of its functions (including but not limited to
      those in relation to any proposed modification, authorization, waiver or
      substitution), the Trustee will have regard to the interests of the Noteholders
      as a class, and will not have regard to the consequences of such exercise for
      individual Noteholders. The Trustee will not be entitled to require, nor will
      any Noteholder be entitled to claim, from the Company or any Guarantor, any
      indemnification or payment in respect of any tax consequences of any such
      exercise upon individual Noteholders.

     

    (q) The
      Trustee may refrain from taking any action in any jurisdiction if the taking
      of
      such action in that jurisdiction would, in its opinion based upon legal advice
      in the relevant jurisdiction, be contrary to any law of that jurisdiction or,
      to
      the extent applicable, of the State of New York. Furthermore, the Trustee may
      also refrain from taking such action if it would otherwise render it liable
      to
      any person in that jurisdiction or the State of New York or if, in its opinion
      based upon such legal advice, it would not have the power to do the relevant
      thing in that jurisdiction by virtue of any applicable law in that jurisdiction
      or in the State of New York or if it is determined by any court or other
      competent authority in that jurisdiction or in the State of New York that it
      does not have such power.

     

    
      
        
        

      

      
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    Section
      7.03. No
      Responsibility for Recitals, Etc.
      

     

    The
      recitals contained herein and in the Notes (except in the Trustee’s certificate
      of authentication) shall be taken as the statements of the Company, and the
      Trustee assumes no responsibility for the correctness of the same. The Trustee
      makes no representations as to the validity or sufficiency of this Indenture
      or
      of the Notes. The Trustee shall not be accountable for the use or application
      by
      the Company of any Notes or the proceeds of any Notes authenticated and
      delivered by the Trustee in conformity with the provisions of this
      Indenture.

     

    Section
      7.04. Trustee,
      Paying Agents, Conversion Agents, Collateral Agent, Common Depositary or
      Registrar May Own Notes.
      

     

    The
      Trustee, any paying agent, any conversion agent, Collateral Agent, Common
      Depositary or Security Registrar, in its individual or any other capacity,
      may
      become the owner or pledgee of Notes with the same rights it would have if
      it
      were not Trustee, paying agent, conversion agent, Collateral Agent, Common
      Depositary or Security Registrar.

     

    Section
      7.05. Monies
      to Be Held in Trust.
      

     

    Subject
      to the provisions of Section
      11.04,
      all
      monies received by the Trustee shall, until used or applied as herein provided,
      be held in trust for the purposes for which they were received. Money held
      by
      the Trustee in trust hereunder need not be segregated from other funds except
      to
      the extent required by law. The Trustee shall be under no liability for interest
      on any money received by it hereunder except as may be agreed in writing from
      time to time by the Company and the Trustee.

     

    Section
      7.06. Compensation
      and Expenses of Trustee.
      

     

    The
      Company and each Guarantor, jointly and severally, covenants and agrees to
      pay
      to the Trustee from time to time, and the Trustee shall be entitled to, such
      compensation for all services rendered by it hereunder in any capacity (which
      shall not be limited by any provision of law in regard to the compensation
      of a
      trustee of an express trust) as mutually agreed to from time to time in writing
      between the Company and the Trustee, and the Company and each Guarantor, jointly
      and severally, will pay or reimburse the Trustee upon its request for all
      expenses, disbursements and advances incurred or made by the Trustee in
      accordance with any of the provisions of this Indenture and the Security
      Documents (including the compensation and the expenses and disbursements of
      its
      counsel and of all Persons not regularly in its employ), except any such
      expense, disbursement or advance as shall be determined to have been caused
      by
      its own gross negligence or willful misconduct. The Company and each Guarantor,
      jointly and severally, also covenants to indemnify the Trustee and any
      predecessor Trustee (or any officer, director or employee of the Trustee) in
      any
      capacity under this Indenture and the Security Documents (which, for the
      avoidance of doubt, includes its duties as Collateral Agent, paying agent,
      conversion agent, Common Depositary or Security Registrar) and its agents and
      any authenticating agent for, and to hold them harmless against, any and all
      loss, liability, damage, claim or expense, including taxes (other than taxes
      based on the income of the Trustee) incurred without gross negligence, bad
      faith
      or willful misconduct on the part of the Trustee or such officers, directors,
      employees and agent or authenticating agent, as the case may be, and arising
      out
      of or in connection with the acceptance or administration of this trust or
      in
      any other capacity hereunder, including the costs and expenses of defending
      themselves against any claim (whether asserted by the Company, any holder or
      any
      other Person) of liability in the premises. The obligations of the Company
      under
      this Section to compensate or indemnify the Trustee and to pay or reimburse
      the
      Trustee for expenses, disbursements and advances shall be secured by a lien
      prior to that of the Notes upon all property and funds held or collected by
      the
      Trustee as such, except funds held in trust for the benefit of the holders
      of
      particular Notes. The obligation of the Company under this Section shall survive
      the satisfaction and discharge of this Indenture pursuant to Article
      11
      hereof,
      the termination of this Indenture and the Security Documents, the resignation
      or
      removal of the Trustee or payment in full of the Notes through the expiration
      of
      the applicable statute of limitations.

    

    
      
        
        

      

      
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    To
      secure
      the Company’s payment obligations in this Section, the Trustee shall have a Lien
      prior to the Notes on all money or property held or collected by the Trustee,
      except that held in trust to pay principal, premium, if any, and interest on
      particular Notes. Such Lien shall survive the satisfaction and discharge of
      this
      Indenture pursuant to Article
      11
      hereof,
      the termination of this Indenture and the Security Documents, the resignation
      or
      removal of the Trustee or payment in full of the Notes through the expiration
      of
      the applicable statute of limitations.

    

    When
      the
      Trustee and its agents and any authenticating agent incur expenses or render
      services after an Event of Default specified in Section
      6.01(f)
      or
(g)
      with
      respect to the Company occurs, the expenses and the compensation for the
      services are intended to constitute expenses of administration under any
      bankruptcy, insolvency or similar laws.

     

    Section
      7.07. Eligibility
      of Trustee.
      

     

    There
      shall at all times be a Trustee hereunder which shall be a Person that has
      a
      combined capital and surplus of at least $50,000,000 (or, if such Person is
      a
      member of a bank holding company system, its bank holding company shall have
      a
      combined capital and surplus of at least $50,000,000). If such Person publishes
      reports of condition at least annually, pursuant to law or to the requirements
      of any supervising or examining authority, then for the purposes of this Section
      the combined capital and surplus of such Person shall be deemed to be its
      combined capital and surplus as set forth in its most recent report of condition
      so published. If at any time the Trustee shall cease to be eligible in
      accordance with the provisions of this Section, it shall resign immediately
      in
      the manner and with the effect hereinafter specified in this
      Article.

     

    Section
      7.08. Resignation
      or Removal of Trustee.

     

    (a) The
      Trustee may at any time resign by giving written notice of such resignation
      to
      the Company and to the holders of Notes. Upon receiving such notice of
      resignation, the Company shall promptly appoint a successor trustee by written
      instrument, in duplicate, executed by order of the Board of Directors, one
      copy
      of which instrument shall be delivered to the resigning Trustee and one copy
      to
      the successor trustee. If no successor trustee shall have been so appointed
      and
      have accepted appointment sixty (60) days after the mailing of such notice
      of
      resignation to the Noteholders, the resigning Trustee may, upon ten (10)
      Business Days’ notice to the Company and the Noteholders, petition, at the
      expense of the Company, any court of competent jurisdiction for the appointment
      of a successor trustee, or, any Noteholder who has been a bona fide holder
      of a
      Note or Notes for at least six (6) months may, subject to the provisions of
      Section
      6.09,
      on
      behalf of himself and all others similarly situated, petition any such court
      for
      the appointment of a successor trustee. Such court may thereupon, after such
      notice, if any, as it may deem proper and prescribe, appoint a successor
      trustee.

     

    
      
        
        

      

      
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    (b) In
      case
      at any time any of the following shall occur:

     

    (i) the
      Trustee shall cease to be eligible in accordance with the provisions of
Section
      7.09
      and
      shall fail to resign after written request therefor by the Company or by any
      such Noteholder; or

     

    (ii) the
      Trustee shall become incapable of acting, or shall be adjudged a bankrupt or
      insolvent, or a receiver of the Trustee or of its property shall be appointed,
      or any public officer shall take charge or control of the Trustee or of its
      property or affairs for the purpose of rehabilitation, conservation or
      liquidation;

     

    then,
      in
      any such case, the Company may remove the Trustee and appoint a successor
      trustee by written instrument, in duplicate, executed by order of the Board
      of
      Directors, one copy of which instrument shall be delivered to the Trustee so
      removed and one copy to the successor trustee, or, subject to the provisions
      of
Section
      6.09,
      any
      Noteholder who has been a bona fide holder of a Note or Notes for at least
      six
      (6) months may, on behalf of himself and all others similarly situated, petition
      any court of competent jurisdiction for the removal of the Trustee and the
      appointment of a successor trustee; provided
      that if
      no successor Trustee shall have been appointed and have accepted appointment
      sixty (60) days after either the Company or such Noteholder has removed the
      Trustee, or the Trustee resigns, the Trustee so removed may petition, at the
      expense of the Company, any court of competent jurisdiction for an appointment
      of a successor trustee. Such court may thereupon, after such notice, if any,
      as
      it may deem proper and prescribe, remove the Trustee and appoint a successor
      trustee.

     

    (c) The
      holders of a majority in aggregate principal amount of the Notes at the time
      outstanding may at any time remove the Trustee and nominate a successor trustee
      which shall be deemed appointed as successor trustee unless, within ten (10)
      days after notice to the Company of such nomination, the Company objects
      thereto, in which case the Trustee so removed or any Noteholder, or, if such
      Trustee so removed or any Noteholder fails to act, the Company, upon the terms
      and conditions and otherwise as in Section
      7.08(a)
      provided, may petition any court of competent jurisdiction for an appointment
      of
      a successor trustee.

     

    (d) Any
      resignation or removal of the Trustee and appointment of a successor trustee
      pursuant to any of the provisions of this Section shall become effective upon
      acceptance of appointment by the successor trustee as provided in Section
      7.09.

     

    (e) Notwithstanding
      the replacement of the Trustee pursuant to this Section, the Company’s
      obligations under Section
      7.06
      shall
      continue for the benefit of the retiring Trustee.

     

    Section
      7.09. Acceptance
      by Successor Trustee.
      

     

    Any
      successor trustee appointed as provided in Section
      7.08
      shall
      execute, acknowledge and deliver to the Company and to its predecessor trustee
      an instrument accepting such appointment hereunder, and thereupon the
      resignation or removal of the predecessor trustee shall become effective and
      such successor trustee, without any further act, deed or conveyance, shall
      become vested with all the rights, powers, duties and obligations of its
      predecessor hereunder, with like effect as if originally named as trustee
      herein; but, nevertheless, on the written request of the Company or of the
      successor trustee, the trustee ceasing to act shall, upon payment of any amount
      then due it pursuant to the provisions of Section
      7.06,
      execute
      and deliver an instrument transferring to such successor trustee all the rights
      and powers of the trustee so ceasing to act. Upon request of any such successor
      trustee, the Company shall execute any and all instruments in writing for more
      fully and certainly vesting in and confirming to such successor trustee all
      such
      rights and powers. Any trustee ceasing to act shall, nevertheless, retain a
      lien
      upon all property and funds held or collected by such trustee as such, except
      for funds held in trust for the benefit of holders of particular Notes, to
      secure any amounts then due it pursuant to the provisions of Section
      7.06.

     

    
      
        
        

      

      
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    No
      successor trustee shall accept appointment as provided in this Section unless,
      at the time of such acceptance, such successor trustee shall be eligible under
      the provisions of Section
      7.07.

     

    Upon
      acceptance of appointment by a successor trustee as provided in this Section,
      the Company (or the former trustee, at the written direction of the Company)
      shall mail or cause to be mailed notice of the succession of such trustee
      hereunder to the holders of Notes at their addresses as they shall appear on
      the
      Security Register. If the Company fails to mail such notice within ten (10)
      days
      after acceptance of appointment by the successor trustee, the successor trustee
      shall cause such notice to be mailed at the expense of the Company.

     

    Section
      7.10. Succession
      by Merger.
      

     

    Any
      corporation into which the Trustee may be merged or converted or with which
      it
      may be consolidated, or any corporation resulting from any merger, conversion
      or
      consolidation to which the Trustee shall be a party, or any corporation
      succeeding to all or substantially all of the corporate trust business of the
      Trustee (including any trust created by this Indenture), shall be the successor
      to the Trustee hereunder without the execution or filing of any paper or any
      further act on the part of any of the parties hereto, provided
      that in
      the case of any corporation succeeding to all or substantially all of the
      corporate trust business of the Trustee, such corporation shall be eligible
      under the provisions of Section
      7.09.

     

    In
      any
      case where at the time such successor to the Trustee shall succeed to the trusts
      created by this Indenture, any of the Notes shall have been authenticated but
      not delivered, any such successor to the Trustee may adopt the certificate
      of
      authentication of any predecessor trustee or authenticating agent appointed
      by
      such predecessor trustee, and deliver such Notes so authenticated; and in case
      at that time any of the Notes shall not have been authenticated, any successor
      to the Trustee or any authenticating agent appointed by such successor trustee
      may authenticate such Notes in the name of the successor trustee; and in all
      such cases such certificates shall have the full force that is provided in
      the
      Notes or in this Indenture; provided
      that the
      right to adopt the certificate of authentication of any predecessor Trustee
      or
      to authenticate Notes in the name of any predecessor Trustee shall apply only
      to
      its successor or successors by merger, conversion or consolidation.

     

    
      
        
        

      

      
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    Section
      7.11. Trustee’s
      Application for Instructions from the Company.
      

     

    Any
      application by the Trustee for written instructions from the Company (other
      than
      with regard to any action proposed to be taken or omitted to be taken by the
      Trustee that affects the rights of the holders of the Notes under this
      Indenture) may, at the option of the Trustee, set forth in writing any action
      proposed to be taken or omitted by the Trustee under this Indenture and the
      date
      on and/or after which such action shall be taken or such omission shall be
      effective. The Trustee shall not be liable for any action taken by, or omission
      of, the Trustee in accordance with a proposal included in such application
      on or
      after the date specified in such application (which date shall not be less
      than
      three (3) Business Days after the date any Officer of the Company actually
      receives such application, unless any such Officer shall have consented in
      writing to any earlier date) unless prior to taking any such action (or the
      effective date in the case of an omission), the Trustee shall have received
      written instructions in response to such application specifying the action
      to be
      taken or omitted.

     

    Section
      7.12. Reports
      by Trustee.
      

     

    (a) Within
      60
      days after each May 15 beginning with the May 15 following the date of this
      Indenture, and for so long as Notes remain outstanding, the Trustee shall mail
      to the holders a brief report dated as of such reporting date with respect
      to
      any of the following events which may have occurred within the previous 12
      months (but if no such event has occurred such date, no report need be
      transmitted).

     

    (i) the
      character and amount of any disbursements made by it, as the Trustee under
      this
      Indenture, which remain unpaid on the date of such report, and for the
      reimbursement of which it claims or may claim a lien or charge, prior to that
      of
      Notes, on property or funds held or collected by it as the Trustee under this
      Indenture, if such disbursements so remaining unpaid aggregate more than
      one-half of 1 per centum of the principal amount of the Notes outstanding on
      such date;

     

    (ii) any
      release, or release and substitution, of property subject to the Lien under
      the
      Security Documents (and the consideration therefor, if any) which it has not
      previously reported; and

     

    (iii) any
      action taken by it in the performance of its duties under this Indenture which
      it has not previously reported and which in its opinion materially affects
      the
      Notes, except action in respect of a default, notice of which has been or is
      to
      be withheld by it in accordance with this Indenture.

     

    (b) A
      copy of
      each report at the time of its mailing to the holders shall be mailed to the
      Company. The Company shall promptly notify the Trustee when the Notes are listed
      on any stock exchange and any delisting thereof.

     

    Section
      7.13. Certain
      Provisions.

     

    Each
      Noteholder by accepting a Note authorizes and directs on his or her behalf
      the
      Trustee to enter into and to take such actions and to make such acknowledgements
      as are set forth in this Indenture or other documents entered into in connection
      therewith.

     

    
      
        
        

      

      
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    The
      Trustee shall not be responsible for the legality, validity, effectiveness,
      suitability, adequacy or enforceability of any of the Security Documents or
      any
      obligation or rights created or purported to be created thereby or pursuant
      thereto or any security or the priority thereof constituted or purported to
      be
      constituted thereby or pursuant thereto, nor shall it be responsible or liable
      to any person because of any invalidity of any provision of such documents
      or
      the unenforceability thereof, whether arising from statute, law or decision
      of
      any court. The Trustee shall be under no obligation to monitor or supervise
      the
      functions of the Collateral Agent under the Security Documents and shall be
      entitled to assume that the Collateral Agent is properly performing its
      functions and obligations thereunder and the Trustee shall not be responsible
      for any diminution in the value of or loss occasioned to the assets subject
      thereto by reason of the act or omission by the Collateral Agent in relation
      to
      its functions thereunder. The Trustee shall have no responsibility whatsoever
      to
      the Company, any Guarantor or any Noteholder as regards any deficiency which
      might arise because the Trustee is subject to any tax in respect of the Security
      Documents, the security created thereby or any part thereof or any income
      therefrom or any proceeds thereof.

     

    ARTICLE
      8

     

    SUPPLEMENTAL
      INDENTURES

     

    Section
      8.01. Supplemental
      Indentures Without Consent of Noteholders.
      

     

    The
      Company, when authorized by the resolutions of the Board of Directors, and
      the
      Trustee may, from time to time, and at any time enter into an indenture or
      indentures supplemental hereto for one or more of the following
      purposes:

     

    (a) make
      provision with respect to the conversion rights of the holders of Notes pursuant
      to the requirements of Section
      14.05,
      the
      purchase obligations of the Company pursuant to the requirements of Section
      3.02
      and the
      repurchase obligations of the Company pursuant to the requirements of
Section
      3.03;

     

    (b) to
      convey, transfer, assign, mortgage or pledge to the Trustee as security for
      the
      Notes, any property or assets;

     

    (c) to
      evidence the succession of another Person to the Company, or successive
      successions, and the assumption by the successor Person of the covenants,
      agreements and obligations of the Company pursuant to Article
      11;

     

    (d) to
      add to
      the covenants of the Company such further covenants, restrictions or conditions
      as the Board of Directors and the Trustee shall consider to be for the benefit
      of the holders of Notes, and to make the occurrence, or the occurrence and
      continuance, of a default in any such additional covenants, restrictions or
      conditions a Default or an Event of Default permitting the enforcement of all
      or
      any of the several remedies provided in this Indenture as herein set forth;
      provided
      that, in
      respect of any such additional covenant, restriction or condition, such
      supplemental indenture may provide for a particular period of grace after
      Default (which period may be shorter or longer than that allowed in the case
      of
      other Defaults) or may provide for an immediate enforcement upon such default
      or
      may limit the remedies available to the Trustee upon such Default;

     

    
      
        
        

      

      
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    (e) to
      provide for the issuance under this Indenture of Notes in coupon form (including
      Notes registrable as to principal only) and to provide for exchangeability
      of
      such Notes with the Notes issued hereunder in fully registered form and to
      make
      all appropriate changes for such purpose;

     

    (f) to
      cure
      any ambiguity or to correct or supplement any provision contained herein or
      in
      any supplemental indenture that may be defective or inconsistent with any other
      provision contained herein or in any supplemental indenture, or to make such
      other provisions in regard to matters or questions arising under this Indenture
      that shall not materially adversely affect the interests of the holders of
      the
      Notes;

     

    (g) to
      evidence and provide for the acceptance of appointment hereunder by a successor
      Trustee with respect to the Notes;

     

    (h) add
      additional Guarantees or additional obligors with respect to the Notes or
      release Guarantors from guarantees as permitted by the terms of this
      Indenture;

     

    (i) further
      secure the Notes, or release all or any portion of the Collateral pursuant
      to
      the terms of the Security Documents; or

     

    (j) to
      increase, from time to time, the per annum interest rate on the Notes for any
      period.

     

    Upon
      the
      written request of the Company, accompanied by a copy of the resolutions of
      the
      Board of Directors certified by its Secretary or Assistant Secretary authorizing
      the execution of any supplemental indenture (in form satisfactory to the
      Trustee), the Trustee is hereby authorized to join with the Company in the
      execution of any such supplemental indenture, to make any further appropriate
      agreements and stipulations that may be therein contained and to accept the
      conveyance, transfer and assignment of any property thereunder; provided
      that the
      Trustee shall not be obligated to, but may in its discretion, enter into any
      supplemental indenture that affects the Trustee’s own rights, duties or
      immunities under this Indenture or otherwise.

     

    Any
      supplemental indenture authorized by the provisions of this Section may be
      executed by the Company and the Trustee without the consent of the holders
      of
      any of the Notes at the time outstanding, notwithstanding any of the provisions
      of Section
      8.02.

     

    Section
      8.02. Supplemental
      Indenture with Consent of Noteholders.
      

     

    With
      the
      consent (evidenced as provided in Article
      12)
      of the
      holders of a majority in aggregate principal amount of the Notes at the time
      outstanding, the Company, when authorized by the resolutions of the Board of
      Directors, and the Trustee may, from time to time and at any time, enter into
      an
      indenture or indentures supplemental hereto for the purpose of adding any
      provisions to or changing in any manner or eliminating any of the provisions
      of
      this Indenture or any supplemental indenture or of modifying in any manner
      the
      rights of the holders of the Notes; provided
      that no
      such supplemental indenture shall:

     

    
      
        
        

      

      
        84

        
          

        

      

      
        
        

      

    

    (a) extend
      the fixed maturity of any Note; 

     

    (b) reduce
      the rate or extend the time of payment of Interest thereon; 

     

    (c) reduce
      the principal amount thereof or reduce any amount payable on redemption or
      repurchase thereof; 

     

    (d) change
      the obligation of the Company to repurchase any Note at the option of a
      Noteholder on a Repurchase Date in a manner adverse to the holders of Notes;
      

     

    (e) change
      the obligation of the Company to repurchase any Note upon the happening of
      a
      Designated Event in a manner adverse to the holders of Notes;

     

    (f) impair
      the right of any Noteholder to institute suit for the payment thereof;

     

    (g) make
      the
      principal thereof or Interest thereon payable in any coin or currency other
      than
      that provided in the Notes; 

     

    (h) impair
      the right to convert the Notes into Common Stock or reduce the number of shares
      of Common Stock or any other property receivable by a Noteholder upon conversion
      subject to the terms set forth herein, including Section
      14.05,
      in each
      case, without the consent of the holder of each Note so affected; 

     

    (i) modify
      any of the provisions of this Section or Section
      6.07,
      except
      to increase any such percentage or to provide that certain other provisions
      of
      this Indenture cannot be modified or waived without the consent of the holder
      of
      each Note so affected; 

     

    (j) change
      any obligation of the Company to maintain an office or agency in the places
      and
      for the purposes set forth in Section
      4.02;
      

     

    (k) reduce
      the quorum or voting requirements set forth in Article
      13;
      

     

    (l) subordinate
      the Notes or any Guarantee to any other obligation of the Company or the
      applicable Guarantor; 

     

    (m) release
      the security interest granted in favor of the holders of the Notes in the
      Collateral other than pursuant to the terms of the Security Documents;

     

    (n) release
      any other security interest that may have been granted in favor of the holders
      of the Notes other than pursuant to the terms of such security interest;

     

    (o) reduce
      the amount payable as Additional Amounts; 

     

    (p) reduce
      the premium payable upon a Change of Control or, at any time after a Change
      of
      Control has occurred, change the time at which the Change of Control Offer
      relating thereto must be made or at which the Notes must be repurchased pursuant
      to such Change of Control Offer; 

     

    
      
        
        

      

      
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    (q) at
      any
      time after the Company is obligated to make an Asset Sale Offer with the Excess
      Proceeds from Asset Sales, change the time at which such Asset Sale Offer must
      be made or at which the Notes must be repurchased pursuant thereto;

     

    (r) make
      any
      change in any Guarantee that would adversely affect the holders; or

     

    (s) reduce
      the aforesaid percentage of Notes, the holders of which are required to consent
      to any such supplemental indenture, without the consent of the holders of all
      Notes then outstanding.

     

    Upon
      the
      written request of the Company, accompanied by a copy of the resolutions of
      the
      Board of Directors certified by its Secretary or Assistant Secretary authorizing
      the execution of any such supplemental indenture (in form satisfactory to the
      Trustee), and upon the filing with the Trustee of evidence of the consent of
      Noteholders as aforesaid, the Trustee shall join with the Company in the
      execution of such supplemental indenture unless such supplemental indenture
      affects the Trustee’s own rights, duties or immunities under this Indenture or
      otherwise, in which case the Trustee may in its discretion, but shall not be
      obligated to, enter into such supplemental indenture.

     

    It
      shall
      not be necessary for the consent of the Noteholders under this Section to
      approve the particular form of any proposed supplemental indenture, but it
      shall
      be sufficient if such consent shall approve the substance thereof.

     

    Section
      8.03. Effect
      of Supplemental Indenture.
      

     

    Upon
      the
      execution of any supplemental indenture pursuant to the provisions of this
      Article, this Indenture shall be and be deemed to be modified and amended in
      accordance therewith and the respective rights, limitation of rights,
      obligations, duties and immunities under this Indenture of the Trustee, the
      Company and the holders of Notes shall thereafter be determined, exercised
      and
      enforced hereunder, subject in all respects to such modifications and amendments
      and all the terms and conditions of any such supplemental indenture shall be
      and
      be deemed to be part of the terms and conditions of this Indenture for any
      and
      all purposes.

     

    Section
      8.04. Notation
      on Notes.
      

     

    Notes
      authenticated and delivered after the execution of any supplemental indenture
      pursuant to the provisions of this Article may bear a notation in form approved
      by the Trustee as to any matter provided for in such supplemental indenture.
      If
      the Company or the Trustee shall so determine, new Notes so modified as to
      conform, in the opinion of the Trustee and the Board of Directors, to any
      modification of this Indenture contained in any such supplemental indenture
      may,
      at the Company’s expense, be prepared and executed by the Company, authenticated
      by the Trustee (or an authenticating agent duly appointed by the Trustee
      pursuant to Section
      15.10)
      and
      delivered in exchange for the Notes then outstanding, upon surrender of such
      Notes then outstanding.

     

    
      
        
        

      

      
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    Section
      8.05. Evidence
      of Compliance of Supplemental Indenture to Be Furnished to
      Trustee.
      

     

    Prior
      to
      entering into any supplemental indenture, the Trustee shall be provided with
      an
      Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any
      supplemental indenture executed pursuant hereto complies with the requirements
      of this Article and is otherwise authorized or permitted by this
      Indenture.

     

    ARTICLE
      9

     

    GUARANTEES

     

    Section
      9.01. Guarantee.

     

    Subject
      to this Article
      9,
      each
      Guarantor hereby unconditionally guarantees to each holder of a Note
      authenticated and delivered by the Trustee and to the Trustee and its successors
      and assigns: (a) the due and punctual payment of the principal of, premium,
      if
      any, and interest on the Notes, subject to any applicable grace period, whether
      at Stated Maturity, by acceleration, redemption or otherwise, the due and
      punctual payment of interest on the overdue principal of and premium, if any,
      and, to the extent permitted by law, interest, and the due and punctual
      performance of all other obligations of the Company to the holders or the
      Trustee under this Indenture or any other agreement with or for the benefit
      of
      the holders or the Trustee, all in accordance with the terms hereof and thereof;
      and (b) in case of any extension of time of payment or renewal of any Notes
      or
      any of such other obligations, that same shall be promptly paid in full when
      due
      or performed in accordance with the terms of the extension or renewal, whether
      at Stated Maturity, by acceleration pursuant to Section
      6.01,
      redemption or otherwise. Failing payment when due of any amount so guaranteed
      or
      any performance so guaranteed for whatever reason, the Guarantors shall be
      jointly and severally obligated to pay the same immediately. Each Guarantor
      agrees that this is a guarantee of payment and not a guarantee of
      collection.

     

    
      
        
        

      

      
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    Each
      Guarantor hereby agrees that its obligations with regard to its Guarantee shall
      be joint and several, unconditional, irrespective of the validity or
      enforceability of the Notes or the obligations of the Company under this
      Indenture, the absence of any action to enforce the same, the recovery of any
      judgment against the Company or any other obligor with respect to this
      Indenture, the Notes or the Obligations of the Company under this Indenture
      or
      the Notes, any action to enforce the same or any other circumstances (other
      than
      complete performance) which might otherwise constitute a legal or equitable
      discharge or defense of a Guarantor. Each Guarantor further, to the extent
      permitted by law, waives and relinquishes all claims, rights and remedies
      accorded by applicable law to guarantors and agrees not to assert or take
      advantage of any such claims, rights or remedies, including but not limited
      to:
      (a) any right to require any of the Trustee, the holders or the Company (each
      a
“Benefited
      Party”),
      as a
      condition of payment or performance by such Guarantor, to (1) proceed against
      the Company, any other guarantor (including any other Guarantor) of the
      Obligations under the Guarantees or any other Person, (2) proceed against or
      exhaust any security held from the Company, any such other guarantor or any
      other Person, (3) proceed against or have resort to any balance of any deposit
      account or credit on the books of any Benefited Party in favor of the Company
      or
      any other Person, or (4) pursue any other remedy in the power of any Benefited
      Party whatsoever; (b) any defense arising by reason of the incapacity, lack
      of
      authority or any disability or other defense of the Company including any
      defense based on or arising out of the lack of validity or the unenforceability
      of the Obligations under the Guarantees or any agreement or instrument relating
      thereto or by reason of the cessation of the liability of the Company from
      any
      cause other than payment in full of the Obligations under the Guarantees; (c)
      any defense based upon any statute or rule of law which provides that the
      obligation of a surety must be neither larger in amount nor in other respects
      more burdensome than that of the principal; (d) any defense based upon any
      Benefited Party’s errors or omissions in the administration of the Obligations
      under the Guarantees, except behavior which amounts to bad faith; (e)(1) any
      principles or provisions of law, statutory or otherwise, which are or might
      be
      in conflict with the terms of the Guarantees and any legal or equitable
      discharge of such Guarantor’s obligations hereunder, (2) the benefit of any
      statute of limitations affecting such Guarantor’s liability hereunder or the
      enforcement hereof, (3) any rights to set-offs, recoupments and counterclaims
      and (4) promptness, diligence and any requirement that any Benefited Party
      protect, secure, perfect or insure any security interest or lien or any property
      subject thereto; (f) notices, demands, presentations, protests, notices of
      protest, notices of dishonor and notices of any action or inaction, including
      acceptance of the Guarantees, notices of Default under the Notes or any
      agreement or instrument related thereto, notices of any renewal, extension
      or
      modification of the Obligations under the Guarantees or any agreement related
      thereto, and notices of any extension of credit to the Company and any right
      to
      consent to any thereof; (g) to the extent permitted under applicable law, the
      benefits of any “One Action” rule and (h) any defenses or benefits that may be
      derived from or afforded by law which limit the liability of or exonerate
      guarantors or sureties, or which may conflict with the terms of the Guarantees.
      Except to the extent expressly provided herein, including Section
      9.05,
      each
      Guarantor hereby covenants that its Guarantee shall not be discharged except
      by
      complete performance of the obligations contained in its Guarantee and this
      Indenture.

     

    If
      any
      holder or the Trustee is required by any court or otherwise to return to the
      Company, the Guarantors or any custodian, trustee, liquidator or other similar
      official acting in relation to either the Company or the Guarantors, any amount
      paid by either to the Trustee or such holder, the Guarantee of such Guarantor,
      to the extent theretofore discharged, shall be reinstated in full force and
      effect.

     

    Each
      Guarantor agrees that it shall not be entitled to any right of subrogation
      in
      relation to the holders in respect of any obligations guaranteed hereby until
      payment in full of all obligations guaranteed hereby. Each Guarantor further
      agrees that, as between the Guarantors, on the one hand, and the holders and
      the
      Trustee, on the other hand, (x) the maturity of the obligations guaranteed
      hereby may be accelerated as provided in Section
      6.01
      hereof
      for the purposes of this Guarantee, notwithstanding any stay, injunction or
      other prohibition preventing such acceleration in respect of the obligations
      guaranteed hereby and (y) in the event of any declaration of acceleration of
      such obligations as provided in Section
      6.01
      hereof,
      such obligations (whether or not due and payable) shall forthwith become due
      and
      payable by the Guarantors for the purpose of this Guarantee. The Guarantors
      shall have the right to seek contribution from any non-paying Guarantor so
      long
      as the exercise of such right does not impair the rights of the holders under
      the Guarantee.

     

    
      
        
        

      

      
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    Section
      9.02. Limitation
      on Guarantor Liability.

     

    (a) Each
      Guarantor, and by its acceptance of Notes, each holder, hereby confirms that
      it
      is the intention of all such parties that the Guarantee of such Guarantor not
      constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
      the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
      or
      any similar federal or state law to the extent applicable to any guarantee.
      To
      effectuate the foregoing intention, the Trustee, the holders and the Guarantors
      hereby irrevocably agree that each Guarantor’s liability shall be that amount
      from time to time equal to the aggregate liability of such Guarantor under
      the
      guarantee, but shall be limited to the lesser of (a) the aggregate amount of
      the
      Company’s obligations under the Notes and this Indenture or (b) the amount, if
      any, which would not have (1) rendered the Guarantor “insolvent” (as such term
      is defined in Bankruptcy Law and in the Debtor and Creditor Law of the State
      of
      New York) or (2) left it with unreasonably small capital at the time its
      guarantee with respect to the Notes was entered into, after giving effect to
      the
      incurrence of existing Debt immediately before such time; provided,
      however,
      it
      shall be a presumption in any lawsuit or proceeding in which a Guarantor is
      a
      party that the amount guaranteed pursuant to the guarantee with respect to
      the
      Notes is the amount described in clause (a) above unless any creditor, or
      representative of creditors of the Guarantor, or debtor in possession or trustee
      in bankruptcy of the Guarantor, otherwise proves in a lawsuit that the aggregate
      liability of the Guarantor is limited to the amount described in clause (b).
      

     

    (b) In
      making
      any determination as to the solvency or sufficiency of capital of a Guarantor
      in
      accordance with the proviso of Section
      9.02(a),
      the
      right of each Guarantor to contribution from other Guarantors and any other
      rights such Guarantor may have, contractual or otherwise, shall be taken into
      account.

     

    Section
      9.03. Execution
      and Delivery of Guarantee.

     

    To
      evidence its Guarantee set forth in Section
      9.01,
      each
      Guarantor hereby agrees that a notation of such Guarantee in substantially
      the
      form included in Exhibit
      B
      attached
      hereto shall be endorsed by an Officer of such Guarantor on each Note
      authenticated and delivered by the Trustee and that this Indenture shall be
      executed on behalf of such Guarantor by its President or one of its Vice
      Presidents.

     

    Each
      Guarantor hereby agrees that its Guarantee set forth in Section
      9.01
      shall
      remain in full force and effect notwithstanding any failure to endorse on each
      Note a notation of such Guarantee.

     

    If
      an
      Officer whose signature is on this Indenture or on the Guarantee no longer
      holds
      that office at the time the Trustee authenticates the Note on which a Guarantee
      is endorsed, the Guarantee shall be valid nevertheless.

     

    The
      delivery of any Note by the Trustee, after the authentication thereof hereunder,
      shall constitute due delivery of the Guarantee set forth in this Indenture
      on
      behalf of the Guarantors.

     

    The
      Company hereby agrees that it shall cause each Person that becomes obligated
      to
      provide a Guarantee pursuant to Section
      4.18
      (each, a
“Future
      Guarantor”)
      to
      execute a supplemental indenture in form and substance satisfactory to the
      Trustee, pursuant to which such Person provides the guarantee set forth in
      this
Article
      9
      and
      otherwise assumes the obligations and accepts the rights of a Guarantor under
      this Indenture, in each case with the same effect and to the same extent as
      if
      such Person had been named herein as a Guarantor. The Company also hereby agrees
      to cause each such new Guarantor to evidence its guarantee by endorsing a
      notation of such guarantee on each Note as provided in this
      Section.

     

    
      
        
        

      

      
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    Section
      9.04. Guarantors
      May Consolidate, etc., on Certain Terms.

     

    Except
      as
      otherwise provided in Section
      9.05,
      no
      Guarantor may consolidate with or merge with or into (whether or not such
      Guarantor is the Surviving Person) another Person whether or not affiliated
      with
      such Guarantor unless:

     

    (a) subject
      to Section
      9.05,
      the
      Person formed by or surviving any such consolidation or merger (if other than
      a
      Guarantor or the Company) unconditionally assumes all the obligations of such
      Guarantor, pursuant to a supplemental indenture in form and substance
      satisfactory to the Trustee, under this Indenture, the Guarantee on the terms
      set forth herein or therein; and

     

    (b) the
      Guarantor complies with the requirements of Article
      5
      hereof.

     

    In
      case
      of any such consolidation, merger, sale or conveyance and upon the assumption
      by
      the successor Person, by supplemental indenture, executed and delivered to
      the
      Trustee and satisfactory in form and substance to the Trustee, of the Guarantee
      endorsed upon the Notes and the due and punctual performance of all of the
      covenants and conditions of this Indenture to be performed by the Guarantor,
      such successor Person shall succeed to and be substituted for the Guarantor
      with
      the same effect as if it had been named herein as a Guarantor. Such successor
      Person thereupon may cause to be signed any or all of the Guarantees to be
      endorsed upon all of the Notes issuable hereunder which theretofore shall not
      have been signed by the Company and delivered to the Trustee. All the Guarantees
      so issued shall in all respects have the same legal rank and benefit under
      this
      Indenture as the Guarantees theretofore and thereafter issued in accordance
      with
      the terms of this Indenture as though all of such Guarantees had been issued
      at
      the date of the execution hereof.

     

    Except
      as
      set forth in Articles
      4
      and
5,
      and
      notwithstanding clauses (a) and (b) above, nothing contained in this Indenture
      or in any of the Notes shall prevent any consolidation or merger of a Guarantor
      with or into the Company or another Guarantor, or shall prevent any sale or
      conveyance of the property of a Guarantor as an entirety or substantially as
      an
      entirety to the Company or another Guarantor.

     

    Section
      9.05. Releases
      Following Merger, Consolidation or Sale of Assets, Etc.

     

    In
      the
      event of a sale or other disposition of all or substantially all of the assets
      of any Guarantor, by way of merger, consolidation or otherwise, or a sale or
      other disposition of all of the Capital Stock of any Guarantor, in each case
      to
      a Person that is not (either before or after giving effect to such transactions)
      a Subsidiary of the Company, then such Guarantor (in the event of a sale or
      other disposition, by way of merger, consolidation or otherwise, of all of
      the
      Capital Stock of such Guarantor) or the corporation acquiring the property
      (in
      the event of a sale or other disposition of all or substantially all of the
      assets of such Guarantor) shall be released and relieved of any obligations
      under its Guarantee; provided
      that the
      net proceeds of such sale or other disposition shall be applied in accordance
      with the applicable provisions of this Indenture, including without limitation
      Section
      4.12.
      Upon
      delivery by the Company to the Trustee of an Officers’ Certificate and an
      Opinion of Counsel to the effect that such sale or other disposition was made
      by
      the Company in accordance with the provisions of this Indenture, including
      without limitation Section
      4.12,
      the
      Trustee shall execute any documents reasonably required in order to evidence
      the
      release of any Guarantor from its obligations under its Guarantee.

     

    
      
        
        

      

      
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    Any
      Guarantor not released from its obligations under its Guarantee shall remain
      liable for the full amount of principal of and interest on the Notes and for
      the
      other obligations of any Guarantor under this Indenture as provided in this
      Article
      9.

     

    ARTICLE
      10

     

    COLLATERAL
      AND SECURITY

     

    Section
      10.01. Security
      Documents.

     

    (a) The
      due
      and punctual payment of the principal of and interest on the Notes when and
      as
      the same shall be due and payable, whether on an Interest Payment Date, at
      maturity, by acceleration, repurchase, redemption or otherwise, and interest
      on
      the overdue principal of and interest on the Notes and performance of all other
      obligations of the Company to the holders or the Trustee under this Indenture
      and the Notes, according to the terms hereunder or thereunder, are secured
      as
      provided in the Security Documents which the Company has entered into
      simultaneously with the execution of this Indenture and which is attached as
      Exhibit
      E
      hereto.
      Each holder, by its acceptance thereof, consents and agrees to the terms of
      the
      Security Documents (including, without limitation, the provisions providing
      for
      foreclosure and release of Collateral) as the same may be in effect or may
      be
      amended from time to time in accordance with its terms and authorizes and
      directs the Trustee to enter into the Security Documents and to perform its
      obligations and exercise its rights thereunder as a Secured Party in accordance
      therewith. The Company will do or cause to be done all such acts and things
      as
      may be required by applicable law or may be necessary or proper, or as may
      be
      required by the provisions of the Security Documents, to assure and confirm
      to
      the Trustee the security interest in the Collateral contemplated hereby, by
      the
      Security Documents or any part thereof, as from time to time constituted, so
      as
      to render the same available for the security and benefit of this Indenture
      and
      of the Notes secured hereby, according to the intent and purposes herein
      expressed. The Company will take, and will cause its Subsidiaries to take,
      upon
      request of the Trustee, any and all actions reasonably required to cause the
      Security Documents to create and maintain, as security for the Obligations
      of
      the Company hereunder, a valid and enforceable perfected first priority Lien
      in
      and on all the Collateral, in favor of the Trustee, as Secured Party, for the
      benefit of the holders, superior to and prior to the rights of all third Persons
      and subject to no other Liens than Permitted Liens.

     

    (b) If
      at any
      time after the Issue Date there is a change in PRC law or interpretation in
      PRC
      law that permits the encumbrance of the WFOE’s assets or Property by a Lien
      without the approval of any governmental body of the PRC, then the Company
      shall
      cause the WFOE to, concurrently:

     

    
      
        
        

      

      
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    (i) execute
      and deliver to the Trustee a Security Document upon substantially the same
      terms
      granting a Lien upon such property to the Trustee for the benefit of the holders
      of Notes, which Lien shall be first priority if such assets or Property is
      not
      then encumbered by any other Lien (other than Liens required by law) or a second
      priority Lien if such assets or Property is at that time so
      encumbered;

     

    (ii) cause
      the
      Lien to be granted in such Security Document to be duly perfected in any manner
      permitted by law; and

     

    (iii) deliver
      to the Trustee an Opinion of Counsel confirming as to such Security Document
      the
      matters set forth as to the Security Documents and Liens thereunder in the
      Opinions of Counsel delivered to holders on the Issue Date and, if the property
      subject to such Security Document is an interest in real estate, such local
      counsel opinions, insurance policies, surveys and other supporting documents
      as
      the Trustee may reasonably request.

     

    (c) Notwithstanding
      (i) anything to the contrary contained in this Indenture, the Security
      Documents, the Notes or any other instrument governing, evidencing or relating
      to any Debt, (ii) the time, order or method of attachment of any Liens, (iii)
      the time or order of filing or recording of financing statements or other
      documents filed or recorded to perfect any Lien upon any Collateral, (iv) the
      time of taking possession or control over any Collateral or (v) the rules for
      determining priority under the Uniform Commercial Code as in effect in the
      State
      of Nevada or any other law of any relevant jurisdiction governing relative
      priorities of secured creditors:

     

    (A) the
      Liens
      will rank at least equally and ratably with all valid, enforceable and perfected
      Liens, whenever granted upon any present or future Collateral, but only to
      the
      extent such Liens are permitted under this Indenture to exist and to rank
      equally and ratably with the Notes and the Guarantees; and

     

    (B) all
      proceeds of the Collateral applied under the Security Documents shall be
      allocated and distributed as set forth in Section
      6.03.

    

    Section
      10.02. Future
      Guarantor Pledgors.

     

    (a) The
      Company will use its reasonable best efforts promptly to obtain any necessary
      consents and waivers and to take all other actions necessary to pledge and
      to
      cause each Future Guarantor to pledge the Capital Stock of any future Subsidiary
      (other than any Subsidiary organized under the laws of the PRC) in each case
      owned by the Company or such Future Guarantor, on a first priority basis
      (subject to Permitted Liens) in order to secure the obligations of the Company
      under the Notes and this Indenture and of such Future Guarantor under its
      Guarantee; provided
      that in
      exercising such reasonable best efforts the Company shall not be required to
      take any action that is commercially unreasonable.

     

    (b) The
      Company will, for the benefit of the holders of the Notes, pledge, or cause
      each
      Guarantor to pledge, the Capital Stock owned by the Company or such Guarantor
      of
      any Person that becomes a Subsidiary (other than Persons organized under the
      laws of the PRC) after the Issue Date, immediately upon such Person becoming
      a
      Subsidiary, to secure the obligations of the Company under the Notes and this
      Indenture, and of such Guarantor under its Guarantee, in the manner described
      above.

     

    
      
        
        

      

      
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    (c) Each
      Guarantor that pledges Capital Stock of a Subsidiary after the Issue Date is
      referred to as a “Future
      Guarantor Pledgor”
and,
      upon giving such pledge, will be a “Guarantor
      Pledgor.”

     

    (d) Upon
      each
      pledge by a Future Guarantor of the Capital Stock of any Other Non-Guarantor
      Subsidiary or any future Subsidiary in accordance with Section
      10.02(a)
      or
Section
      10.02(b),
      the
      Company will deliver to the Trustee an Officers’ Certificate stating that entry
      into the applicable pledge agreement has been duly and validly authorized and
      an
      Opinion of Counsel to the effect that (i) in the opinion of such counsel, such
      action has been taken with respect to the recording, registering and filing
      of
      or with respect to this Indenture and the applicable pledge agreement and all
      other instruments of further assurance as are necessary to make effective the
      first priority lien (subject to Permitted Liens) created by such pledge
      agreement in the Capital Stock referenced in Section
      10.02(a)
      or
Section
      10.02(b),
      and
      referencing the details of such action; or (ii) in the opinion of such counsel,
      no such action is necessary to make such first priority lien (subject to
      Permitted Liens) effective; provided
      that any
      such Opinion of Counsel may rely on an Officers’ Certificate or certificates of
      public officials with respect to matters of fact.

     

    (e) All
      Opinions of Counsel delivered pursuant to Section
      10.02(d)
      may
      contain assumptions, qualifications, exceptions and limitations as are
      appropriate and customary for similar opinions relating to the nature of the
      Capital Stock pledged.

     

    (f) Upon
      each
      pledge by any Future Guarantor of the Capital Stock of any Other Non-Guarantor
      Subsidiary or any future Subsidiary in accordance with Section
      10.02(a)
      or
Section
      10.02(b),
      the
      Company will give notice, file, register or record any supplemental indentures,
      financing statements, continuation statements, pledge agreements or other
      instruments or cause each such Future Guarantor Pledgor to give notice, file,
      register or record any supplemental indentures, financing statements,
      continuation statements, pledge agreements or other instruments and take any
      other actions necessary in order to perfect and protect the first priority
      lien
      (subject to Permitted Liens) thereby created.

     

    Section
      10.03. Recording
      and Opinions.

     

    (a) The
      Company will furnish to the Trustee within three months after each anniversary
      of the Issue Date, an Opinion of Counsel, dated as of such date, stating either
      that (i) in the opinion of such counsel, action has been taken with respect
      to
      the recording, registering, filing, re-recording, re-registering and re-filing
      of all supplemental indentures, financing statements, continuation statements
      or
      other instruments of further assurance as is necessary to maintain the Lien
      of
      the Security Documents and reciting with respect to the security interest in
      the
      Collateral the details of such action or referring to prior Opinions of Counsel
      in which such details are given, and stating that, in the opinion of such
      counsel, based on relevant laws as in effect on the date of such Opinion of
      Counsel, all financing statements and continuation statements have been executed
      and filed that are necessary as of such date and during the succeeding 12 months
      fully to preserve and protect, to the extent such protection and preservation
      are possible by filing, the rights of the holders and the Trustee hereunder
      and
      under the Security Documents with respect to the security interest in the
      Collateral; or (ii) in the opinion of such counsel, no such action is necessary
      to maintain such Lien and assignment.

     

    
      
        
        

      

      
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    (b) So
      long
      as no Default or Event of Default has occurred and is continuing, and subject
      to
      certain terms and conditions, the Company and the Guarantors will be entitled
      to
      receive all cash dividends, interest and other payments made upon or with
      respect to the Collateral pledged by them. 

     

    (c) So
      long
      as there has occurred no Event of Default, then the Company and the Guarantors
      shall have the right to exercise any voting and other consensual rights
      pertaining to the Collateral pledged by them.

     

    (d) Upon
      the
      occurrence and during the continuance of a Default or Event of Default, all
      rights of the Company and the Guarantors to receive all cash dividends, interest
      and other payments made upon or with respect to the Collateral will cease and
      such cash dividends, interest and other payments will be paid to the Collateral
      Agent;

     

    (e) Upon
      the
      occurrence and during the continuance of an Event of Default:

     

    (i)
      all
      rights of the Company and the Guarantors to exercise such voting or other
      consensual rights will cease, and all such rights will become vested in the
      Collateral Agent, which, to the extent permitted by law, will have the sole
      right to exercise such voting and other consensual rights; and

     

    (ii)
      the
      Collateral Agent may sell the Collateral or any part of the Collateral in
      accordance with the terms of the Security Documents. The Collateral Agent,
      in
      accordance with the provisions of this Indenture, will distribute all funds
      distributed under the Security Documents and received by the Collateral Agent
      to
      the Trustee for the benefit of the holders of the Notes.

     

    Section
      10.04. Release
      of Collateral.

     

    (a) Subject
      to subsections (b), (c) and (d) of this Section
      10.04,
      Collateral may be released from the Lien and security interest created by the
      Security Documents at any time or from time to time in accordance with the
      provisions of the Security Documents or as provided hereby. In addition, upon
      the request of the Company pursuant to an Officers’ Certificate certifying that
      all conditions precedent hereunder have been met and stating whether or not
      such
      release is in connection with an Asset Sale and (at the sole cost and expense
      of
      the Company) the Trustee will release Collateral that is sold, conveyed or
      disposed of in compliance with the provisions of this Indenture; provided,
      that
      if such sale, conveyance or disposition constitutes an Asset Sale, the Company
      will apply the Net Available Cash in accordance with Section
      4.12
      hereof.
      Upon receipt of such Officers’ Certificate the Trustee shall execute, deliver or
      acknowledge any necessary or proper instruments of termination, satisfaction
      or
      release to evidence the release of any Collateral permitted to be released
      pursuant to this Indenture or the Security Documents.

     

    
      
        
        

      

      
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    (b) No
      Collateral may be released from the Lien and security interest created by the
      Security Documents pursuant to the provisions of the Security Documents unless
      the certificate required by this Section 
      has been
      delivered to the Trustee.

     

    (c) At
      any
      time when a Default or Event of Default has occurred and is continuing and
      the
      maturity of the Notes has been accelerated (whether by declaration or
      otherwise), no release of Collateral pursuant to the provisions of the Security
      Documents will be effective as against the holders.

     

    (d) The
      release of any Collateral from the terms of this Indenture and the Security
      Documents will not be deemed to impair the security under this Indenture in
      contravention of the provisions hereof if and to the extent the Collateral
      is
      released pursuant to the terms of the Security Documents and
      hereof.

     

    Section
      10.05. Authorization
      of Actions to Be Taken by the Trustee Under the Security
      Documents.

     

    Subject
      to the provisions of Section
      7.01
      and
7.02
      hereof,
      the Trustee may, in its sole discretion and without the consent of the holders,
      take, on behalf of the holders, all actions it deems necessary or appropriate
      in
      order to:

     

    (a) enforce
      any of the terms of the Security Documents; and 

     

    (b) collect
      and receive any and all amounts payable in respect of the Obligations of the
      Company hereunder.

     

    The
      Trustee will have power to institute and maintain such suits and proceedings
      as
      it may deem expedient to prevent any impairment of the Collateral by any acts
      that may be unlawful or in violation of the Security Documents or this
      Indenture, and such suits and proceedings as the Trustee may deem expedient
      to
      preserve or protect its interests and the interests of the holders in the
      Collateral (including power to institute and maintain suits or proceedings
      to
      restrain the enforcement of or compliance with any legislative or other
      governmental enactment, rule or order that may be unconstitutional or otherwise
      invalid if the enforcement of, or compliance with, such enactment, rule or
      order
      would impair the security interest hereunder or be prejudicial to the interests
      of the holders or of the Trustee).

     

    Section
      10.06. Authorization
      of Receipt of Funds by the Trustee Under the Security Documents.

     

    The
      Trustee is authorized to receive any funds for the benefit of the holders
      distributed under the Security Documents, and to make further distributions
      of
      such funds to the holders according to the provisions of this
      Indenture.

     

    Section
      10.07. Termination
      of Security Interest.

     

    Upon
      the
      payment in full of all Obligations of the Company under this Indenture and
      the
      Notes, the Trustee will, at the request of the Company, release the Liens
      pursuant to this Indenture and the Security Documents.

     

    
      
        
        

      

      
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    ARTICLE
      11

     

    SATISFACTION
      AND DISCHARGE OF INDENTURE

     

    Section
      11.01. Discharge
      of Indenture.
      

     

    When
      (a)
      the Company shall deliver to the Trustee for cancellation all Notes theretofore
      authenticated (other than any Notes that have been mutilated, destroyed, lost
      or
      stolen and in lieu of or in substitution for which other Notes shall have been
      authenticated and delivered) and not theretofore canceled, or (b) all the Notes
      not theretofore canceled or delivered to the Trustee for cancellation shall
      have
      become due and payable, or are by their terms to become due and payable within
      one year or are to be called for redemption within one year under arrangements
      satisfactory to the Trustee for the giving of notice of redemption, and the
      Company shall deposit with the Trustee, in trust, funds sufficient to pay at
      maturity or upon redemption of all of the Notes (other than any Notes that
      shall
      have been mutilated, destroyed, lost or stolen and in lieu of or in substitution
      for which other Notes shall have been authenticated and delivered) not
      theretofore canceled or delivered to the Trustee for cancellation, including
      principal and Interest due or to become due to such date of maturity or
      redemption date, as the case may be, accompanied by a verification report,
      as to
      the sufficiency of the deposited amount, from an independent certified
      accountant or other financial professional satisfactory to the Trustee, and
      if
      the Company shall also pay or cause to be paid all other sums payable hereunder
      by the Company, and in the case of either clause (a) or (b), no Default or
      Event
      of Default with respect to this Indenture or the Notes shall have occurred
      and
      be continuing on the date of such deposit or shall occur as a result of such
      deposit and such deposit shall not result in a breach or violation of, or
      constitute a default under, any other instrument or agreement to which the
      Company is a party or by which it is bound, then this Indenture shall cease
      to
      be of further effect (except as to (i) remaining rights of registration of
      transfer, substitution and exchange and conversion of Notes, (ii) rights
      hereunder of Noteholders to receive payments of principal of and Interest on
      the
      Notes and the other rights, duties and obligations of Noteholders, as
      beneficiaries hereof with respect to the amounts, if any, so deposited with
      the
      Trustee and (iii) the rights, obligations and immunities of the Trustee
      hereunder), and the Trustee, on written demand of the Company accompanied by
      an
      Officers’ Certificate and an Opinion of Counsel as required by Section
      15.05
      and at
      the cost and expense of the Company, shall execute proper instruments
      acknowledging satisfaction of and discharging this Indenture; the Company,
      however, hereby agrees to reimburse the Trustee for any costs or expenses
      thereafter incurred by the Trustee and to compensate the Trustee for any
      services thereafter rendered by the Trustee in connection with this Indenture
      or
      the Notes. The Trustee shall hold in trust money deposited with it pursuant
      to
      this Article. It shall apply the deposited money through the Paying Agent and
      in
      accordance with this Indenture to the payment of principal of and Interest
      on
      the Notes. 

     

    Section
      11.02. Deposited
      Monies to Be Held in Trust by Trustee.
      

     

    Subject
      to Section
      11.04,
      all
      monies deposited with the Trustee pursuant to Section
      11.01
      shall be
      held in trust for the sole benefit of the Noteholders, and such monies shall
      be
      applied by the Trustee to the payment, either directly or through any paying
      agent (including the Company if acting as its own paying agent), to the holders
      of the particular Notes for the payment or redemption of which such monies
      have
      been deposited with the Trustee of all sums due and to become due thereon for
      principal, premium, if any, and Interest.

     

    
      
        
        

      

      
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    Section
      11.03. Paying
      Agent to Repay Monies Held.
      

     

    Upon
      the
      satisfaction and discharge of this Indenture, all monies then held by any paying
      agent of the Notes (other than the Trustee) shall, upon written request of
      the
      Company, be repaid to it or paid to the Trustee, and thereupon such paying
      agent
      shall be released from all further liability with respect to such
      monies.

     

    Section
      11.04. Return
      of Unclaimed Monies.
      

     

    Subject
      to the requirements of applicable law, any monies deposited with or paid to
      the
      Trustee for payment of the principal or Interest on Notes and not applied but
      remaining unclaimed by the holders of Notes for two years (or such shorter
      period of time under applicable escheat law) after the date upon which the
      principal of or Interest on such Notes, as the case may be, shall have become
      due and payable, shall be repaid to the Company by the Trustee on demand and
      all
      liability of the Trustee shall thereupon cease with respect to such monies;
      and
      the holder of any of the Notes shall thereafter look only to the Company for
      any
      payment that such holder may be entitled to collect unless an applicable
      abandoned property law designates another Person.

     

    Section
      11.05. Reinstatement.
      

     

    If
      the
      Trustee or the paying agent is unable to apply any money in accordance with
      Section
      11.02
      by
      reason of any order or judgment of any court or governmental authority
      enjoining, restraining or otherwise prohibiting such application, the Company’s
      obligations under this Indenture and the Notes shall be revived and reinstated
      as though no deposit had occurred pursuant to Section
      11.01
      until
      such time as the Trustee or the paying agent is permitted to apply all such
      money in accordance with Section
      11.02;
      provided
      that, if
      the Company makes any payment of Interest on or principal of any Note following
      the reinstatement of its obligations, the Company shall be subrogated to the
      rights of the holders of such Notes to receive such payment from the money
      held
      by the Trustee or paying agent.

     

    ARTICLE
      12

     

    THE
      NOTEHOLDERS

     

    Section
      12.01. Action
      by Noteholders.
      

     

    Whenever
      in this Indenture it is provided that the holders of a specified percentage
      in
      aggregate principal amount of the Notes may take any action (including the
      making of any demand or request, the giving of any notice, consent or waiver
      or
      the taking of any other action), the fact that, at the time of taking any such
      action, the holders of such specified percentage have joined therein may be
      evidenced (a) by any instrument or any number of instruments of similar tenor
      executed by Noteholders in person or by agent or proxy appointed in writing,
      or
      (b) by the record of the holders of Notes voting in favor thereof at any meeting
      of Noteholders duly called and held in accordance with the provisions of
Article
      13,
      or (c)
      by a combination of such instrument or instruments and any such record of such
      a
      meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
      of any action by the Noteholders, the Company or the Trustee may fix in advance
      of such solicitation a date as the record date for determining holders entitled
      to take such action. The record date shall be not more than fifteen (15) days
      prior to the date of commencement of solicitation of such action.

     

    
      
        
        

      

      
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    Section
      12.02. Proof
      of Execution by Noteholders.
      

     

    Subject
      to the provisions of Sections
      7.01,
      7.02
      and
13.04,
      proof
      of the execution of any instrument by a Noteholder or its agent or proxy shall
      be sufficient if made in accordance with such reasonable rules and regulations
      as may be prescribed by the Trustee or in such manner as shall be satisfactory
      to the Trustee. The holding of Notes shall be proved by the registry of such
      Notes or by a certificate of the Security Registrar.

     

    The
      record of any Noteholders’ meeting shall be proved in the manner provided in
Section
      13.05.

     

    Section
      12.03. Who
      Are Deemed Absolute Owners.
      

     

    The
      Company, the Trustee, any paying agent, any conversion agent, any Collateral
      Agent, any Common Depositary and any Security Registrar may deem the Person
      in
      whose name such Note shall be registered upon the Security Register to be,
      and
      may treat it as, the absolute owner of such Note (whether or not such Note
      shall
      be overdue and notwithstanding any notation of ownership or other writing
      thereon made by any Person other than the Company or any Security Registrar)
      for
      the purpose of receiving payment of or on account of the principal of and
      Interest on such Note, for conversion of such Note and for all other purposes;
      and neither the Company nor the Trustee nor any paying agent, Collateral Agent,
      Common Depositary, conversion agent nor any Security Registrar shall be affected
      by any notice to the contrary. All such payments so made to any holder for
      the
      time being, or upon such holder’s order, shall be valid and, to the extent of
      the sum or sums so paid, effectual to satisfy and discharge the liability for
      monies payable upon any such Note.

     

    Section
      12.04. Company-owned
      Notes Disregarded.
      

     

    In
      determining whether the holders of the requisite aggregate principal amount
      of
      Notes have concurred in any direction, consent, waiver or other action under
      this Indenture, Notes which are owned by the Company or any other obligor on
      the
      Notes or any Affiliate of the Company or any other obligor on the Notes shall
      be
      disregarded and deemed not to be outstanding for the purpose of any such
      determination; provided
      that,
      for the purposes of determining whether the Trustee shall be protected in
      relying on any such direction, consent, waiver or other action, only Notes
      which
      a Responsible Officer knows are so owned shall be so disregarded. Notes so
      owned
      which have been pledged in good faith may be regarded as outstanding for the
      purposes of this Section if the pledgee shall establish to the satisfaction
      of
      the Trustee the pledgee’s right to vote such Notes and that the pledgee is not
      the Company, any other obligor on the Notes or any Affiliate of the Company
      or
      any such other obligor. In the case of a dispute as to such right, any decision
      by the Trustee taken upon the advice of counsel shall be full protection to
      the
      Trustee. Upon request of the Trustee, the Company shall furnish to the Trustee
      promptly an Officers’ Certificate listing and identifying all Notes, if any,
      known by the Company to be owned or held by or for the account of any of the
      above described Persons, and, subject to Section
      7.01,
      the
      Trustee shall be entitled to accept such Officers’ Certificate as conclusive
      evidence of the facts therein set forth and of the fact that all Notes not
      listed therein are outstanding for the purpose of any such
      determination.

     

    
      
        
        

      

      
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    Section
      12.05. Revocation
      of Consents; Future Holders Bound.
      

     

    At
      any
      time prior to (but not after) the evidencing to the Trustee, as provided in
      Section
      12.01,
      of the
      taking of any action by the holders of the percentage in aggregate principal
      amount of the Notes specified in this Indenture in connection with such action,
      any holder of a Note which is shown by the evidence to be included in the Notes
      the holders of which have consented to such action may, by filing written notice
      with the Trustee at its Corporate Trust Office and upon proof of holding as
      provided in Section
      12.02,
      revoke
      such action so far as concerns such Note. Except as aforesaid, any such action
      taken by the holder of any Note shall be conclusive and binding upon such holder
      and upon all future holders and owners of such Note and of any Notes issued
      in
      exchange or substitution therefor, irrespective of whether any notation in
      regard thereto is made upon such Note or any Note issued in exchange or
      substitution therefor.

     

    ARTICLE
      13

     

    MEETINGS
      OF NOTEHOLDERS

     

    Section
      13.01. Purpose
      of Meetings.
      

     

    A
      meeting
      of Noteholders may be called at any time and from time to time pursuant to
      the
      provisions of this Article for any of the following purposes:

     

    (a) to
      give
      any notice to the Company or to the Trustee or to give any directions to the
      Trustee permitted under this Indenture, or to consent to the waiving of any
      Default or Event of Default hereunder and its consequences, or to take any
      other
      action authorized to be taken by Noteholders pursuant to any of the provisions
      of Article
      6;

     

    (b) to
      remove
      the Trustee and nominate a successor trustee pursuant to the provisions of
      Article
      7;

     

    (c) to
      consent to the execution of an indenture or indentures supplemental hereto
      pursuant to the provisions of Section
      8.02;
      or

     

    (d) to
      take
      any other action authorized to be taken by or on behalf of the holders of any
      specified aggregate principal amount of the Notes under any other provision
      of
      this Indenture or under applicable law.

     

    Section
      13.02. Call
      of Meetings by Company or Noteholders.
      

     

    In
      case
      at any time the Company, pursuant to a resolution of its Board of Directors,
      or
      the holders of at least ten percent (10%) in aggregate principal amount of
      the
      Notes then outstanding, shall have requested the Trustee to call a meeting
      of
      Noteholders, by written request setting forth in reasonable detail the action
      proposed to be taken at the meeting, and the Trustee shall not have mailed
      the
      notice of such meeting within twenty (20) days after receipt of such request,
      then the Company or such Noteholders may determine the time and the place for
      such meeting and may call such meeting to take any action authorized in
Section
      13.01
      by
      mailing notice a notice of meeting. Notice of every meeting of the Noteholders,
      setting forth the time and place of such meeting and in general terms the action
      proposed to be taken at such meeting and the establishment of any record date
      pursuant to Section
      12.01,
      shall
      be mailed to holders of Notes at their addresses as they shall appear on the
      Security Register. Such notice shall also be mailed to the Company. Such notices
      shall be mailed not less than twenty (20) nor more than ninety (90) days prior
      to the date fixed for the meeting.

     

    
      
        
        

      

      
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    Any
      meeting of Noteholders shall be valid without notice if the holders of all
      Notes
      then outstanding are present in person or by proxy or if notice is waived before
      or after the meeting by the holders of all Notes outstanding, and if the Company
      and the Trustee are either present by duly authorized representatives or have,
      before or after the meeting, waived notice.

     

    Section
      13.03. Qualifications
      for Voting.
      

     

    To
      be
      entitled to vote at any meeting of Noteholders, a person shall (a) be a holder
      of one or more Notes on the record date pertaining to such meeting or (b) be
      a
      person appointed by an instrument in writing as proxy by a holder of one or
      more
      Notes on the record date pertaining to such meeting. The only persons who shall
      be entitled to be present or to speak at any meeting of Noteholders shall be
      the
      persons entitled to vote at such meeting and their counsel and any
      representatives of the Trustee and its counsel and any representatives of the
      Company and its counsel.

     

    Section
      13.04. Regulations.
      

     

    Notwithstanding
      any other provisions of this Indenture, the Trustee may make such reasonable
      regulations as it may deem advisable for any meeting of Noteholders, in regard
      to proof of the holding of Notes and of the appointment of proxies, and in
      regard to the appointment and duties of inspectors of votes, the submission
      and
      examination of proxies, certificates and other evidence of the right to vote,
      and such other matters concerning the conduct of the meeting as it shall think
      fit.

     

    The
      Company or the Noteholders calling the meeting, as the case may be, shall,
      by an
      instrument in writing, appoint a temporary chairman of the meeting. A permanent
      chairman and a permanent secretary of the meeting shall be elected by vote
      of
      the holders of a majority in principal amount of the Notes represented at the
      meeting and entitled to vote at the meeting.

     

    Subject
      to the provisions of Section
      12.04,
      at any
      meeting each Noteholder or proxyholder shall be entitled to one vote for each
      $100,000 principal amount of Notes held or represented by him; provided
      that no
      vote shall be cast or counted at any meeting in respect of any Note challenged
      as not outstanding and ruled by the chairman of the meeting to be not
      outstanding. The chairman of the meeting shall have no right to vote other
      than
      by virtue of Notes held by him or instruments in writing as aforesaid duly
      designating him as the proxy to vote on behalf of other Noteholders. Any meeting
      of Noteholders duly called pursuant to the provisions of Section
      13.02
      may be
      adjourned from time to time by the holders of a majority of the aggregate
      principal amount of Notes represented at the meeting, whether or not
      constituting a majority of the aggregate principal amount of Notes outstanding,
      the latter of which shall constitute a quorum, and the meeting may be held
      as so
      adjourned without further notice.

     

    
      
        
        

      

      
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    Section
      13.05. Voting.
      

     

    The
      vote
      upon any resolution submitted to any meeting of Noteholders shall be by written
      ballot on which shall be subscribed the signatures of the holders of Notes
      or of
      their representatives by proxy and the outstanding principal amount of the
      Notes
      held or represented by them. The permanent chairman of the meeting shall appoint
      two inspectors of votes who shall count all votes cast at the meeting for or
      against any resolution and who shall make and file with the secretary of the
      meeting their verified written reports in duplicate of all votes cast at the
      meeting. A record in duplicate of the proceedings of each meeting of Noteholders
      shall be prepared by the secretary of the meeting, and there shall be attached
      to said record the original reports of the inspectors of votes on any vote
      by
      ballot taken thereat and affidavits by one or more persons having knowledge
      of
      the facts setting forth a copy of the notice of the meeting and showing that
      said notice was mailed as provided in Section
      13.02.
      The
      record shall show the principal amount of the Notes voting in favor of or
      against any resolution. The record shall be signed and verified by the
      affidavits of the permanent chairman and secretary of the meeting and one of
      the
      duplicates shall be delivered to the Company and the other to the Trustee to
      be
      preserved by the Trustee, the latter to have attached thereto the ballots voted
      at the meeting.

     

    Any
      record so signed and verified shall be conclusive evidence of the matters
      therein stated.

     

    Section
      13.06. No
      Delay of Rights by Meeting.
      

     

    Nothing
      contained in this Article shall be deemed or construed to authorize or permit,
      by reason of any call of a meeting of Noteholders or any rights expressly or
      impliedly conferred hereunder to make such call, any hindrance or delay in
      the
      exercise of any right or rights conferred upon or reserved to the Trustee or
      to
      the Noteholders under any of the provisions of this Indenture or of the
      Notes.

     

    ARTICLE
      14

     

    CONVERSION
      OF NOTES

     

    Section
      14.01. Right
      to Convert.
      

     

    (a) Subject
      to and upon compliance with the provisions of this Indenture, the holder of
      any
      Note shall have the right, at such holder’s option at any time prior to the
      close of business on the date of maturity of the Notes, to convert the principal
      amount of the Note, or any portion of such principal amount which is a multiple
      of $100,000, into fully paid and non-assessable shares of Common Stock (as
      such
      shares shall then be constituted) at the Conversion Rate in effect at such
      time,
      by surrender of the Note so to be converted in whole or in part, together with
      any required funds, under the circumstances described in this Section and in
      the
      manner provided in Section
      14.02.
      

     

    
      
        
        

      

      
        101

        
          

        

      

      
        
        

      

    

    (b) A
      Note in
      respect of which a holder is electing to exercise its option to require the
      Company to purchase such holder’s Notes upon an Asset Sale Offer, Change of
      Control Offer or Designated Event Offer pursuant to Section
      3.02,
      or at
      the option of the holder pursuant to Section
      3.03,
      may be
      converted only if such holder withdraws its election in accordance with
Section
      3.02
      or
Section
      3.05,
      respectively. A holder of Notes is not entitled to any rights of a holder of
      Common Stock until such holder has converted his Notes to Common Stock, and
      only
      to the extent such Notes are deemed to have been converted to Common Stock
      under
      this Article.

     

    Section
      14.02. Exercise
      of Conversion Right; Issuance of Common Stock on Conversion; No Adjustment
      for
      Interest or Dividends.
      

     

    In
      order
      to exercise the conversion right with respect to any Note in certificated form,
      the Company must receive at the office or agency of the Company maintained
      for
      that purpose or, at the option of such holder, the Corporate Trust Office,
      such
      Note with the original or facsimile of the form entitled “Conversion Notice” on
      the reverse thereof, duly completed and manually signed, together with such
      Notes duly endorsed for transfer, accompanied by the funds, if any, required
      by
      this Section. Such notice shall also state the name or names (with address
      or
      addresses) in which the certificate or certificates for shares of Common Stock
      which shall be issuable on such conversion shall be issued, and shall be
      accompanied by transfer or similar taxes, if required pursuant to Section
      14.07.

     

    In
      order
      to exercise the conversion right with respect to any interest in a Global Note,
      the beneficial holder must complete, or cause to be completed, the appropriate
      instruction form for conversion pursuant to the Common Depositary’s book-entry
      conversion program, deliver, or cause to be delivered, by book-entry delivery
      an
      interest in such Global Note, furnish appropriate endorsements and transfer
      documents if required by the Company or the Trustee or conversion agent, and
      pay
      the funds, if any, required by this Section and any transfer taxes if required
      pursuant to Section
      14.07.

     

    As
      promptly as practicable after satisfaction of the requirements for conversion
      set forth above, subject to compliance with any restrictions on transfer if
      shares issuable on conversion are to be issued in a name other than that of
      the
      Noteholder (as if such transfer were a transfer of the Note or Notes (or portion
      thereof) so converted), the Company shall issue and shall deliver to such
      Noteholder at the office or agency maintained by the Company for such purpose
      pursuant to Section
      4.02
      a
      certificate or certificates for the number of full shares of Common Stock
      issuable upon the conversion of such Note or portion thereof as determined
      by
      the Company in accordance with the provisions of this Article and a check or
      cash in respect of any fractional interest in respect of a share of Common
      Stock
      arising upon such conversion, calculated by the Company as provided in
Section
      14.03.
      In case
      any Note of a denomination greater than $100,000 shall be surrendered for
      partial conversion, and subject to Section
      2.03,
      the
      Company shall execute and the Trustee shall authenticate and deliver to the
      holder of the Note so surrendered, without charge to such holder, a new Note
      or
      Notes in authorized denominations in an aggregate principal amount equal to
      the
      unconverted portion of the surrendered Note.

     

    
      
        
        

      

      
        102

        
          

        

      

      
        
        

      

    

    Each
      conversion shall be deemed to have been effected as to any such Note (or portion
      thereof) on the date (the “Conversion
      Date”)
      on
      which the requirements set forth above in this Section have been satisfied
      as to
      such Note (or portion thereof), and the Person in whose name any certificate
      or
      certificates for shares of Common Stock shall be issuable upon such conversion
      shall be deemed to have become on said date the holder of record of the shares
      represented thereby; provided
      that any
      such surrender on any date when the stock transfer books of the Company shall
      be
      closed shall constitute the Person in whose name the certificates are to be
      issued as the record holder thereof for all purposes on the next succeeding
      day
      on which such stock transfer books are open, but such conversion shall be at
      the
      Conversion Rate in effect on the date upon which such Note shall be
      surrendered.

     

    Any
      Note
      or portion thereof surrendered for conversion during the period from the close
      of business on the record date for any interest payment date to the close of
      business on the Business Day preceding such interest payment date shall be
      accompanied by payment, in immediately available funds or other funds acceptable
      to the Company, of an amount equal to the Interest otherwise payable on such
      interest payment date on the principal amount being converted; provided
      that no
      such payment need be made (1) if the Company has specified a Designed Event
      Repurchase Date that is after a record date and on or prior to the next interest
      payment date or (2) to the extent of any overdue Interest, if any overdue
      Interest exists at the time of conversion with respect to such Note. Except
      as
      provided above in this Section, no payment or other adjustment shall be made
      for
      Interest accrued on any Note converted or for dividends on any shares issued
      upon the conversion of such Note as provided in this Article.

     

    Upon
      the
      conversion of an interest in a Global Note, the Trustee (or other conversion
      agent appointed by the Company), or the Custodian at the direction of the
      Trustee (or other conversion agent appointed by the Company), shall make a
      notation on such Global Note as to the reduction in the principal amount
      represented thereby. The Company shall notify the Trustee in writing of any
      conversions of Notes effected through any conversion agent other than the
      Trustee.

     

    Upon
      the
      conversion of a Note, that portion of the accrued but unpaid Interest, including
      accrued Additional Interest, if any, to the Conversion Date, with respect to
      the
      converted Note shall not be canceled, extinguished or forfeited, but rather
      shall be deemed to be paid in full to the holder thereof through delivery of
      the
      Common Stock (together with the cash payment, if any in lieu of fractional
      shares) in exchange for the Note being converted pursuant to the provisions
      hereof, and the Fair Market Value of such shares of Common Stock (together
      with
      any such cash payment in lieu of fractional shares) shall be treated as issued,
      to the extent thereof, first in exchange for and in satisfaction of the
      Company’s obligation to pay the principal amount of the converted Note, the
      accrued but unpaid Interest, including Additional Interest, if any, through
      the
      Conversion Date and the balance, if any, of such Fair Market Value of such
      Common Stock (and any such cash payment) shall be treated as issued in exchange
      for and in satisfaction of the right to convert the Note being converted
      pursuant to the provisions hereof.

     

    Section
      14.03. Cash
      Payments in Lieu of Fractional Shares.
      

     

    No
      fractional shares of Common Stock or scrip certificates representing fractional
      shares shall be issued upon conversion of Notes. If more than one Note shall
      be
      surrendered for conversion at one time by the same holder, the number of full
      shares that shall be issuable upon conversion shall be computed on the basis
      of
      the aggregate principal amount of the Notes (or specified portions thereof
      to
      the extent permitted hereby) so surrendered. If any fractional share of stock
      would be issuable upon the conversion of any Note or Notes, the Company shall
      make an adjustment and payment therefor in cash at the Closing Sale Price on
      the
      last Trading Day immediately preceding the Conversion Date thereof to the holder
      of Notes. 

     

    
      
        
        

      

      
        103

        
          

        

      

      
        
        

      

    

    Section
      14.04. Conversion
      Rate.
      

     

    Each
      $100,000 principal amount of the Notes shall be initially convertible into
      14,285 shares of Common Stock at the initial Conversion Price of $7.00 per
      share, as specified in the form of Note (herein called the “Conversion
      Rate”)
      attached as Exhibit
      A
      hereto,
      subject to adjustment as provided in this Article.

     

    Section
      14.05. Adjustment
      of Conversion Rate.
      

     

    The
      Conversion Rate shall be adjusted from time to time by the Company as
      follows:

     

    (a) In
      case
      the Company shall hereafter pay a dividend or make a distribution to all holders
      of the outstanding Common Stock in shares of Common Stock, the Conversion Rate
      shall be increased so that the same shall equal the rate determined by
      multiplying the Conversion Rate in effect at the opening of business on the
      date
      following the date fixed for the determination of shareholders entitled to
      receive such dividend or other distribution by a fraction,

     

    (i) the
      numerator of which shall be the sum of the number of shares of Common Stock
      outstanding at the close of business on the date fixed for the determination
      of
      shareholders entitled to receive such dividend or other distribution plus the
      total number of shares of Common Stock constituting such dividend or other
      distribution; and

     

    (ii) the
      denominator of which shall be the number of shares of Common Stock outstanding
      at the close of business on the date fixed for such determination,

     

    such
      increase to become effective immediately after the opening of business on the
      day following the date fixed for such determination. For the purpose of this
      paragraph (a), the number of shares of Common Stock at any time outstanding
      shall not include shares held in the treasury of the Company. The Company will
      not pay any dividend or make any distribution on shares of Common Stock held
      in
      the treasury of the Company. If any dividend or distribution of the type
      described in this Section
      14.05(a)
      is
      declared but not so paid or made, the Conversion Rate shall again be adjusted
      to
      the Conversion Rate that would then be in effect if such dividend or
      distribution had not been declared.

     

    (b) In
      case
      the Company shall issue rights or warrants to all holders of its outstanding
      shares of Common Stock entitling them (for a period expiring within forty-five
      (45) days after the date fixed for determination of shareholders entitled to
      receive such rights or warrants) to subscribe for or purchase shares of Common
      Stock at a price per share less than the Current Market Price immediately
      preceding the date such distribution is first publicly announced by the Company,
      the Conversion Rate shall be increased so that the same shall equal the rate
      determined by multiplying the Conversion Rate in effect immediately prior to
      the
      date fixed for determination of shareholders entitled to receive such rights
      or
      warrants by a fraction,

     

    
      
        
        

      

      
        104

        
          

        

      

      
        
        

      

    

    (i) the
      numerator of which shall be the number of shares of Common Stock outstanding
      on
      the date fixed for determination of shareholders entitled to receive such rights
      or warrants plus the total number of additional shares of Common Stock offered
      for subscription or purchase, and

     

    (ii) the
      denominator of which shall be the sum of the number of shares of Common Stock
      outstanding at the close of business on the date fixed for determination of
      shareholders entitled to receive such rights or warrants plus the number of
      shares that the aggregate offering price of the total number of shares so
      offered would purchase at a price equal to the Current Market Price immediately
      preceding the date such distribution is first publicly announced by the
      Company,

     

    such
      adjustment shall be successively made whenever any such rights or warrants
      are
      issued, and shall become effective immediately after the opening of business
      on
      the day following the date fixed for determination of shareholders entitled
      to
      receive such rights or warrants. To the extent that shares of Common Stock
      are
      not delivered after the expiration of such rights or warrants, the Conversion
      Rate shall be readjusted to the Conversion Rate that would then be in effect
      had
      the adjustments made upon the issuance of such rights or warrants been made
      on
      the basis of delivery of only the number of shares of Common Stock actually
      delivered. If such rights or warrants are not so issued, the Conversion Rate
      shall again be adjusted to be the Conversion Rate that would then be in effect
      if such date fixed for the determination of shareholders entitled to receive
      such rights or warrants had not been fixed. In determining whether any rights
      or
      warrants entitle the holders to subscribe for or purchase shares of Common
      Stock
      at a price less than the Current Market Price immediately preceding the date
      such distribution is first publicly announced by the Company, and in determining
      the aggregate offering price of such shares of Common Stock, there shall be
      taken into account any consideration received by the Company for such rights
      or
      warrants and any amount payable on exercise or conversion thereof, the value
      of
      such consideration, if other than cash, to be determined by the Board of
      Directors.

     

    (c) In
      case
      outstanding shares of Common Stock shall be subdivided into a greater number
      of
      shares of Common Stock, the Conversion Rate in effect at the opening of business
      on the day following the day upon which such subdivision becomes effective
      shall
      be proportionately increased, and, conversely, in case outstanding shares of
      Common Stock shall be combined into a smaller number of shares of Common Stock,
      the Conversion Rate in effect at the opening of business on the day following
      the day upon which such combination becomes effective shall be proportionately
      reduced, such increase or reduction, as the case may be, to become effective
      immediately after the opening of business on the day following the day upon
      which such subdivision or combination becomes effective.

     

    (d) In
      case
      the Company shall, by dividend or otherwise, distribute to all holders of Common
      Stock shares of any class of capital stock of the Company or evidences of its
      indebtedness or assets (including securities, but excluding any rights or
      warrants referred to in Section
      14.05(b),
      and
      excluding any dividend or distribution (x) paid exclusively in cash or (y)
      referred to in Section
      14.05(a)
      (any of
      the foregoing hereinafter in this Section
      14.05(d)
      called
      the “Securities”)),
      then, in each such case (unless the Company elects to reserve such Securities
      for distribution to the Noteholders upon the conversion of the Notes so that
      any
      such holder converting Notes will receive upon such conversion, in addition
      to
      the shares of Common Stock to which such holder is entitled, the amount and
      kind
      of such Securities which such holder would have received if such holder had
      converted its Notes into Common Stock immediately prior to the Record Date
      for
      such distribution of the Securities) the Conversion Rate shall be increased
      so
      that the same shall be equal to the rate determined by multiplying the
      Conversion Rate in effect on the Record Date with respect to such distribution
      by a fraction,

     

    
      
        
        

      

      
        105

        
          

        

      

      
        
        

      

    

    (i) the
      numerator of which shall be the Current Market Price on such Record Date;
      and

     

    (ii) the
      denominator of which shall be the Current Market Price on such Record Date
      less
      the Fair Market Value (as determined by the Board of Directors, whose
      determination shall be conclusive, and described in a resolution of the Board
      of
      Directors) on the Record Date of the portion of the Securities so distributed
      applicable to one share of Common Stock,

     

    such
      adjustment to become effective immediately prior to the opening of business
      on
      the day following such Record Date; provided
      that, if
      the then Fair Market Value (as so determined) of the portion of the Securities
      so distributed applicable to one share of Common Stock is equal to or greater
      than the Current Market Price on the Record Date, in lieu of the foregoing
      adjustment, adequate provision shall be made so that each Noteholder shall
      have
      the right to receive upon conversion the amount of Securities such holder would
      have received had such holder converted each Note on the Record Date. If such
      dividend or distribution is not so paid or made, the Conversion Rate shall
      again
      be adjusted to be the Conversion Rate that would then be in effect if such
      dividend or distribution had not been declared. If the Board of Directors
      determines the Fair Market Value of any distribution for purposes of this
Section
      14.05(d)
      by
      reference to the actual or when issued trading market for any securities, it
      must in doing so consider the prices in such market over the same period used
      in
      computing the Current Market Price on the applicable Record Date.
      Notwithstanding the foregoing, if the Securities distributed by the Company
      to
      all holders of its Common Stock consist of capital stock of, or similar equity
      interests in, a Subsidiary or other business unit, the Conversion Rate shall
      be
      increased so that the same shall be equal to the rate determined by multiplying
      the Conversion Rate in effect on the Record Date with respect to such
      distribution by a fraction,

     

    (i) the
      numerator of which shall be the sum of (A) the average of the Closing Sale
      Prices of the Common Stock for the ten (10) Trading Days commencing on and
      including the fifth Trading Day after the Ex-Dividend Time plus (B) the Fair
      Market Value of the securities distributed in respect of each share of Common
      Stock for which this Section
      14.05(d)
      applies,
      which shall equal the number of Securities distributed in respect of each share
      of Common Stock multiplied by the average of the closing sale prices of those
      Securities distributed (where such closing sale prices are available) for the
      ten (10) Trading Days commencing on and including the fifth Trading Day after
      the Ex-Dividend Time; and

     

    
      
        
        

      

      
        106

        
          

        

      

      
        
        

      

    

    (ii) the
      denominator of which shall be the average of the Closing Sale Prices of the
      Common Stock for the ten (10) Trading Days commencing on and including the
      fifth
      Trading Day after the Ex-Dividend Time,

     

    such
      adjustment to become effective immediately prior to the opening of business
      on
      the day following such Record Date; provided
      that the
      Company may in lieu of the foregoing adjustment make adequate provision so
      that
      each Noteholder shall have the right to receive upon conversion the amount
      of
      Securities such holder would have received had such holder converted each Note
      on the Record Date with respect to such distribution.

     

    Rights
      or
      warrants distributed by the Company to all holders of Common Stock entitling
      the
      holders thereof to subscribe for or purchase shares of the Company’s capital
      stock (either initially or under certain circumstances), which rights or
      warrants, until the occurrence of a specified event or events (“Trigger
      Event”):
      (i)
      are deemed to be transferred with such shares of Common Stock; (ii) are not
      exercisable; and (iii) are also issued in respect of future issuances of Common
      Stock, shall be deemed not to have been distributed for purposes of this Section
      (and no adjustment to the Conversion Rate under this Section will be required)
      until the occurrence of the earliest Trigger Event, whereupon such rights and
      warrants shall be deemed to have been distributed and an appropriate adjustment
      (if any is required) to the Conversion Rate shall be made under this
Section
      14.05(d).
      If any
      such right or warrant, including any such existing rights or warrants
      distributed prior to the date of this Indenture, are subject to events, upon
      the
      occurrence of which such rights or warrants become exercisable to purchase
      different securities, evidences of indebtedness or other assets, then the date
      of the occurrence of any and each such event shall be deemed to be the date
      of
      distribution and record date with respect to new rights or warrants with such
      rights (and a termination or expiration of the existing rights or warrants
      without exercise by any of the holders thereof). In addition, in the event
      of
      any distribution (or deemed distribution) of rights or warrants, or any Trigger
      Event or other event (of the type described in the preceding sentence) with
      respect thereto that was counted for purposes of calculating a distribution
      amount for which an adjustment to the Conversion Rate under this Section was
      made, (1) in the case of any such rights or warrants that shall all have been
      redeemed or repurchased without exercise by any holders thereof, the Conversion
      Rate shall be readjusted upon such final redemption or repurchase to give effect
      to such distribution or Trigger Event, as the case may be, as though it were
      a
      cash distribution, equal to the per share redemption or repurchase price
      received by a holder or holders of Common Stock with respect to such rights
      or
      warrants (assuming such holder had retained such rights or warrants), made
      to
      all holders of Common Stock as of the date of such redemption or repurchase,
      and
      (2) in the case of such rights or warrants that shall have expired or been
      terminated without exercise by any holders thereof, the Conversion Rate shall
      be
      readjusted as if such rights and warrants had not been issued.

     

    No
      adjustment of the Conversion Rate shall be made pursuant to this Section
      14.05(d)
      in
      respect of rights or warrants distributed or deemed distributed on any Trigger
      Event to the extent that such rights or warrants are actually distributed,
      or
      reserved by the Company for distribution to holders of Notes upon conversion
      by
      such holders of Notes to Common Stock.

     

    
      
        
        

      

      
        107

        
          

        

      

      
        
        

      

    

    For
      purposes of this Section
      14.05(d)
      and
Sections
      14.05(a)
      and
(b),
      any
      dividend or distribution to which this Section
      14.05(d)
      is
      applicable that also includes shares of Common Stock, or rights or warrants
      to
      subscribe for or purchase shares of Common Stock (or both), shall be deemed
      instead to be (1) a dividend or distribution of the evidences of indebtedness,
      assets or shares of capital stock other than such shares of Common Stock or
      rights or warrants (and any Conversion Rate adjustment required by this
Section
      14.05(d)
      with
      respect to such dividend or distribution shall then be made) immediately
      followed by (2) a dividend or distribution of such shares of Common Stock or
      such rights or warrants (and any further Conversion Rate adjustment required
      by
Sections
      14.05(a)
      and
14.05(b)
      with
      respect to such dividend or distribution shall then be made), except (A) the
      Record Date of such dividend or distribution shall be substituted as “the date
      fixed for the determination of shareholders entitled to receive such dividend
      or
      other distribution”, “the date fixed for the determination of shareholders
      entitled to receive such rights or warrants” and “the date fixed for such
      determination” within the meaning of Sections
      14.05(a)
      and
14.05(b)
      and (B)
      any shares of Common Stock included in such dividend or distribution shall
      not
      be deemed “outstanding at the close of business on the date fixed for such
      determination” within the meaning of Section
      14.05(a).

     

    (e) In
      case
      the Company shall, by dividend or otherwise, distribute to all holders of its
      Common Stock cash (excluding any dividend or distribution in connection with
      the
      liquidation, dissolution or winding up of the Company, whether voluntary or
      involuntary), then, in such case, the Conversion Rate shall be increased so
      that
      the same shall equal the rate determined by multiplying the Conversion Rate
      in
      effect immediately prior to the close of business on such Record Date by a
      fraction,

     

    (i) the
      numerator of which shall be the Current Market Price on such Record Date;
      and

     

    (ii) the
      denominator of which shall be the Current Market Price on such Record Date
      less
      the amount of cash so distributed applicable to one share of Common
      Stock,

     

    such
      adjustment to be effective immediately prior to the opening of business on
      the
      day following the Record Date; provided
      that if
      the portion of the cash so distributed applicable to one share of Common Stock
      is equal to or greater than the Current Market Price on the Record Date, in
      lieu
      of the foregoing adjustment, adequate provision shall be made so that each
      Noteholder shall have the right to receive upon conversion the amount of cash
      such holder would have received had such holder converted each Note on the
      Record Date. If such dividend or distribution is not so paid or made, the
      Conversion Rate shall again be adjusted to be the Conversion Rate that would
      then be in effect if such dividend or distribution had not been
      declared.

     

    
      
        
        

      

      
        108

        
          

        

      

      
        
        

      

    

    (f) In
      case a
      tender or exchange offer made by the Company or any Subsidiary for all or any
      portion of the Common Stock shall expire and such tender or exchange offer
      (as
      amended upon the expiration thereof) shall require the payment to shareholders
      of consideration per share of Common Stock having a Fair Market Value (as
      determined by the Board of Directors, whose determination shall be conclusive
      and described in a resolution of the Board of Directors) that as of the last
      time (the “Expiration
      Time”)
      tenders or exchanges may be made pursuant to such tender or exchange offer
      (as
      it may be amended) exceeds the Closing Sale Price of a share of Common Stock
      on
      the Trading Day next succeeding the Expiration Time, the Conversion Rate shall
      be increased so that the same shall equal the rate determined by multiplying
      the
      Conversion Rate in effect immediately prior to the Expiration Time by a
      fraction,

     

    (i) the
      numerator of which shall be the sum of (x) the Fair Market Value (determined
      as
      aforesaid) of the aggregate consideration payable to shareholders based on
      the
      acceptance (up to any maximum specified in the terms of the tender or exchange
      offer) of all shares validly tendered or exchanged and not withdrawn as of
      the
      Expiration Time (the shares deemed so accepted up to any such maximum, being
      referred to as the “Purchased
      Shares”)
      and
      (y) the product of the number of shares of Common Stock outstanding (less any
      Purchased Shares) at the Expiration Time and the Closing Sale Price of a share
      of Common Stock on the Trading Day next succeeding the Expiration Time,
      and

     

    (ii) the
      denominator of which shall be the number of shares of Common Stock outstanding
      (including any tendered or exchanged shares) at the Expiration Time multiplied
      by the Closing Sale Price of a share of Common Stock on the Trading Day next
      succeeding the Expiration Time,

     

    such
      adjustment to become effective immediately prior to the opening of business
      on
      the day following the Expiration Time. If the Company is obligated to purchase
      shares pursuant to any such tender or exchange offer, but the Company is
      permanently prevented by applicable law from effecting any such purchases or
      all
      such purchases are rescinded, the Conversion Rate shall again be adjusted to
      be
      the Conversion Rate that would then be in effect if such tender or exchange
      offer had not been made.

     

    (g) On
      March
      1 and September 1 of each year, beginning with March 1, 2008, the Conversion
      Rate shall be adjusted to equal the quotient obtained by dividing (i) $100,000
      by (ii) the Trading Reference VWAP; provided
      that no
      such adjustment shall be made if the number of shares issuable upon conversion
      of the Notes at such adjusted Conversion Rate would be lower than the number
      of
      shares issuable at then existing Conversion Rate (after giving effect to prior
      adjustments permitted pursuant to this clause).

     

    (h) If
      at any
      time after the Issue Date the Company shall issue or sell its Common Stock
      at a
      price per share less than the Conversion Price then in effect, the Conversion
      Rate shall be increased such that the Conversion Price is equal to the lowest
      price at which the Company has issued or sold its Common Stock after the Issue
      Date such adjustment to take effect as of the date of the issuance or sale
      of
      such Common Stock; provided,
      however,
      that no
      adjustment shall be made to the Conversion Price for the issuance of Common
      Stock or the issuance or grants of options to purchase Common Stock pursuant
      to
      (i) the conversion or exercise of convertible or exercisable securities issued
      or outstanding on or prior to the Issue Date or (ii) the Company’s stock option
      plans and employee stock purchase plans and which have been approved by the
      Company’s Board of Directors so long as such issuances in the aggregate do not
      exceed five percent (5%) of the Common Stock of the Company issued and
      outstanding immediately prior to such issuance or grants.

     

    
      
        
        

      

      
        109

        
          

        

      

      
        
        

      

    

    (i) If
      and at
      each time, upon completion of the quarter review (for each Fiscal Quarter ended
      March 31, June 30 and September 30) or annual audit (for each Fiscal Quarter
      ended December 31) of the Company’s financial statements a Financial and
      Operational Trigger shall have occurred in the immediately preceding Fiscal
      Quarter, then within five (5) Business Days following issuance of the review
      or
      audit report, as the case
      may
      be, for such Fiscal Quarter, the Conversion Rate per
      Note
      shall be adjusted (such
      adjustment to take effect as of the date of its determination
      to
      equal:

     

    Conversion
      Rate then in effect +
      [(A x
      B) / C],

    

    where
      

    

    
      	 	
              A
                =
                

            	
              the
                total number of shares of Common Stock issued and outstanding on
                a
                fully-diluted basis at the date of determination of such
                adjustment;
                

            

    

    

    
      	
            	B
              =	
              2%
                expressed as a decimal; and

            

    

    

    
      	 	
              C
                =

            	
              the
                aggregate principal amount of the Notes issued on the Issue Date
                divided
                by the principal amount of a Note.

            

    

    

    For
      the
      avoidance of doubt, the adjustments contemplated by this Section
      14.05(i) (x)
      shall
      be made upon the occurrence of each Financial and Operational Trigger,
      irrespective of the number of adjustments made prior thereto pursuant to this
      Section
      14.05(i), and (y) shall not be subject to any ceiling or floor, including the
      Conversion Rate and the Conversion Price, respectively. 

     

    (j) For
      purposes of this Section
      14.05,
      the
      following terms shall have the meaning indicated:

     

    (i) “Current
      Market Price”
shall
      mean the average of the daily Closing Sale Prices per share of Common Stock
      for
      the ten (10) consecutive Trading Days ending on the earlier of the Trading
      Day
      immediately preceding the relevant date and the day before the “ex” date with
      respect to the issuance, distribution, subdivision or combination requiring
      such
      computation. For purpose of this paragraph, the term “ex” date, (1) when used
      with respect to any issuance or distribution, means the first date on which
      the
      Common Stock trades, regular way, on the relevant exchange or in the relevant
      market from which the Closing Sale Price was obtained without the right to
      receive such issuance or distribution, and (2) when used with respect to any
      subdivision or combination of shares of Common Stock, means the first date
      on
      which the Common Stock trades, regular way, on such exchange or in such market
      after the time at which such subdivision or combination becomes
      effective.

     

    
      
        
        

      

      
        110

        
          

        

      

      
        
        

      

    

    If
      another issuance, distribution, subdivision or combination to which Section
      14.05
      applies
      occurs during the period applicable for calculating “Current Market Price”
pursuant to the definition in the preceding paragraph, “Current Market Price”
shall be calculated for such period in a manner determined by the Board of
      Directors to reflect the impact of such issuance, distribution, subdivision
      or
      combination on the Closing Sale Price of the Common Stock during such
      period.

     

    (ii) “Record
      Date”
shall
      mean, with respect to any dividend, distribution or other transaction or event
      in which the holders of Common Stock have the right to receive any cash,
      securities or other property or in which the Common Stock (or other applicable
      security) is exchanged for or converted into any combination of cash, securities
      or other property, the date fixed for determination of shareholders entitled
      to
      receive such cash, securities or other property (whether such date is fixed
      by
      the Board of Directors or by statute, contract or otherwise).

     

    (iii) “Trading
      Day”
shall
      mean (x) if the applicable security is quoted on the Nasdaq Global Market,
      Global Select Market or Capital Market, a day on which trades may be made
      thereon, (y) if the applicable security is listed or admitted for trading on
      the
      American Stock Exchange, New York Stock Exchange or another national securities
      exchange, a day on which the American Stock Exchange, New York Stock Exchange
      or
      another national securities exchange is open for business, or (z) if the
      applicable security is not so listed, admitted for trading or quoted, any day
      other than a Saturday or Sunday or a day on which banking institutions in the
      State of New York are authorized or obligated by law or executive order to
      close.

     

    (k) The
      Company may make such increases in the Conversion Rate, in addition to those
      required by Section
      14.05(a)
      through
(i)
      as the
      Board of Directors considers to be advisable to avoid or diminish any income
      tax
      to holders of Common Stock or rights to purchase Common Stock resulting from
      any
      dividend or distribution of stock (or rights to acquire stock) or from any
      event
      treated as such for income tax purposes.

     

    To
      the
      extent permitted by applicable law and Nasdaq Marketplace rules, the Company
      from time to time may increase the Conversion Rate by any amount for any period
      of time if the period is at least twenty (20) Business Days, the increase is
      irrevocable during the period and the Board of Directors shall have made a
      determination that such increase would be in the best interests of the Company,
      which determination shall be conclusive. Whenever the Conversion Rate is
      increased pursuant to the preceding sentence, the Company shall mail to holders
      of record of the Notes a notice of the increase at least fifteen (15) days
      prior
      to the date the increased Conversion Rate takes effect, and such notice shall
      state the increased Conversion Rate and the period during which it will be
      in
      effect.

     

    
      
        
        

      

      
        111

        
          

        

      

      
        
        

      

    

    (l) No
      adjustment in the Conversion Rate shall be required unless such adjustment
      would
      require an increase or decrease of at least one percent (1%) in such rate;
      provided
      that any
      adjustments that by reason of this Section
      14.05(l)
      are not
      required to be made shall be carried forward and taken into account in any
      subsequent adjustment. All calculations under this Article shall be made by
      the
      Company and shall be made to the nearest cent or to the nearest one-ten
      thousandth (1/10,000) of a share, as the case may be. No adjustment need be
      made
      for rights to purchase Common Stock pursuant to a Company plan for reinvestment
      of dividends or interest or for any issuance of Common Stock or convertible
      or
      exchangeable securities or rights to purchase Common Stock or convertible or
      exchangeable securities. To the extent the Notes become convertible into cash,
      assets, property or securities (other than capital stock of the Company), no
      adjustment need be made thereafter as to the cash, assets, property or such
      securities. Interest will not accrue on any cash into which the Notes are
      convertible.

     

    (m) Whenever
      the Conversion Rate is adjusted as herein provided, the Company shall promptly
      file with the Trustee and any conversion agent other than the Trustee an
      Officers’ Certificate setting forth the Conversion Rate after such adjustment
      and setting forth a brief statement of the facts requiring such adjustment.
      Unless and until a Responsible Officer of the Trustee shall have received such
      Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any
      adjustment of the Conversion Rate and may assume that the last Conversion Rate
      of which it has knowledge is still in effect. Promptly after delivery of such
      certificate, the Company shall prepare a notice of such adjustment of the
      Conversion Rate setting forth the adjusted Conversion Rate and the date on
      which
      each adjustment becomes effective and shall mail such notice of such adjustment
      of the Conversion Rate to the holder of each Note at his last address appearing
      on the Security Register provided for in Section
      4.02
      of this
      Indenture, within twenty (20) days after execution thereof. Failure to deliver
      such notice shall not affect the legality or validity of any such
      adjustment.

     

    (n) In
      any
      case in which this Section provides that an adjustment shall become effective
      immediately after (1) a record date or Record Date for an event, (2) the date
      fixed for the determination of shareholders entitled to receive a dividend
      or
      distribution pursuant to Section
      14.05(a),
      (3) a
      date fixed for the determination of shareholders entitled to receive rights
      or
      warrants pursuant to Section
      14.05(b),
      or (4)
      the Expiration Time for any tender or exchange offer pursuant to Section
      14.05(f),
      (each a
“Determination
      Date”),
      the
      Company may elect to defer until the occurrence of the applicable Adjustment
      Event (as hereinafter defined) (x) issuing to the holder of any Note converted
      after such Determination Date and before the occurrence of such Adjustment
      Event, the additional shares of Common Stock or other securities issuable upon
      such conversion by reason of the adjustment required by such Adjustment Event
      over and above the Common Stock issuable upon such conversion before giving
      effect to such adjustment and (y) paying to such holder any amount in cash
      in
      lieu of any fraction pursuant to Section
      14.03.
      For
      purposes of this Section
      14.05(n),
      the
      term “Adjustment
      Event”
shall
      mean:

     

    (i) in
      any
      case referred to in clause (1) hereof, the occurrence of such
      event,

     

    
      
        
        

      

      
        112

        
          

        

      

      
        
        

      

    

    (ii) in
      any
      case referred to in clause (2) hereof, the date any such dividend or
      distribution is paid or made,

     

    (iii) in
      any
      case referred to in clause (3) hereof, the date of expiration of such rights
      or
      warrants, and

     

    (iv) in
      any
      case referred to in clause (4) hereof, the date a sale or exchange of Common
      Stock pursuant to such tender or exchange offer is consummated and becomes
      irrevocable.

     

    (o) For
      purposes of this Section, the number of shares of Common Stock at any time
      outstanding shall not include shares held in the treasury of the Company but
      shall include shares issuable in respect of scrip certificates issued in lieu
      of
      fractions of shares of Common Stock. The Company will not pay any dividend
      or
      make any distribution on shares of Common Stock held in the treasury of the
      Company.

     

    Section
      14.06. Effect
      of Reclassification, Consolidation, Merger or Sale.

     

    If
      any of
      the following events occur, namely (i) any reclassification or change of the
      outstanding shares of Common Stock (other than (x) a subdivision or combination
      to which Section
      14.05(c)
      applies)
      as a result of which holders of Common Stock shall be entitled to receive stock,
      other securities or other property or assets (including cash) with respect
      to or
      in exchange for such Common Stock, (ii) any consolidation, merger or combination
      of the Company with another Person as a result of which holders of Common Stock
      shall be entitled to receive stock, other securities or other property or assets
      (including cash) with respect to or in exchange for such Common Stock, or (iii)
      any sale or conveyance of all or substantially all of the properties and assets
      of the Company to any other Person as a result of which holders of Common Stock
      shall be entitled to receive stock, other securities or other property or assets
      (including cash) with respect to or in exchange for such Common Stock, then
      the
      Company or the successor or purchasing Person, as the case may be, shall execute
      with the Trustee a supplemental indenture (in form satisfactory to the Trustee)
      providing that each Note shall be convertible into the kind and amount of shares
      of stock, other securities or other property or assets (including cash)
      receivable upon such reclassification, change, consolidation, merger,
      combination, sale or conveyance by a holder of a number of shares of Common
      Stock issuable upon conversion of such Notes (assuming, for such purposes,
      a
      sufficient number of authorized shares of Common Stock are available to convert
      all such Notes) immediately prior to such reclassification, change,
      consolidation, merger, combination, sale or conveyance assuming such holder
      of
      Common Stock did not exercise such holder’s rights of election, if any, as to
      the kind or amount of stock, other securities or other property or assets
      (including cash) receivable upon such reclassification, change, consolidation,
      merger, combination, sale or conveyance (provided
      that, if
      the kind or amount of stock, other securities or other property or assets
      (including cash) receivable upon such reclassification, change, consolidation,
      merger, combination, sale or conveyance is not the same for each share of Common
      Stock in respect of which such rights of election shall not have been exercised
      (“Non-electing
      share”),
      then
      for the purposes of this Section the kind and amount of stock, other securities
      or other property or assets (including cash) receivable upon such
      reclassification, change, consolidation, merger, combination, sale or conveyance
      for each Non-electing share shall be deemed to be the kind and amount so
      receivable per share by a plurality of the Non-electing shares). Such
      supplemental indenture shall provide for adjustments which shall be as nearly
      equivalent as may be practicable to the adjustments provided for in this
      Article.

     

    
      
        
        

      

      
        113

        
          

        

      

      
        
        

      

    

    The
      Company shall cause notice of the execution of such supplemental indenture
      to be
      mailed to each holder of Notes, at its address appearing on the Security
      Register provided for in Section
      4.02
      of this
      Indenture, within twenty (20) days after execution thereof. Failure to deliver
      such notice shall not affect the legality or validity of such supplemental
      indenture.

     

    The
      above
      provisions of this Section shall similarly apply to successive
      reclassifications, changes, consolidations, mergers, combinations, sales and
      conveyances.

     

    If
      this
      Section applies to any event or occurrence, Section
      14.05
      shall
      not apply.

     

    Section
      14.07. Taxes
      on Shares Issued.
      

     

    The
      issue
      of stock certificates on conversions of Notes shall be made without charge
      to
      the converting Noteholder for any documentary, stamp or similar issue or
      transfer tax in respect of the issue thereof. The Company shall not, however,
      be
      required to pay any such tax which may be payable in respect of any transfer
      involved in the issue and delivery of stock in any name other than that of
      the
      holder of any Note converted, and the Company shall not be required to issue
      or
      deliver any such stock certificate unless and until the Person or Persons
      requesting the issue thereof shall have paid to the Company the amount of such
      tax or shall have established to the satisfaction of the Company that such
      tax
      has been paid.

     

    Section
      14.08. Reservation
      of Shares; Shares to Be Fully Paid; Compliance with Governmental Requirements;
      Listing of Common Stock.
      

     

    The
      Company shall provide, free from preemptive rights, out of its authorized but
      unissued shares or shares held in treasury, sufficient shares of Common Stock
      to
      provide for the conversion of the Notes from time to time as such Notes are
      presented for conversion.

     

    Before
      taking any action which would cause an adjustment increasing the Conversion
      Rate
      to an amount that would cause the Conversion Price to be reduced below the
      then
      par value, if any, of the shares of Common Stock issuable upon conversion of
      the
      Notes, the Company will take all corporate action which may, in the opinion
      of
      its counsel, be necessary in order that the Company may validly and legally
      issue shares of such Common Stock at such adjusted Conversion Rate.

     

    The
      Company covenants that all shares of Common Stock which may be issued upon
      conversion of Notes will upon issue be fully paid and non-assessable by the
      Company and free from all taxes, liens and charges with respect to the issue
      thereof.

     

    The
      Company covenants that, if any shares of Common Stock to be provided for the
      purpose of conversion of Notes hereunder require registration with or approval
      of any governmental authority under any federal or state law before such shares
      may be validly issued upon conversion, the Company will in good faith and as
      expeditiously as possible, to the extent then permitted by the rules and
      interpretations of the Commission (or any successor thereto), endeavor to secure
      such registration or approval, as the case may be.

     

    
      
        
        

      

      
        114

        
          

        

      

      
        
        

      

    

    The
      Company further covenants that, if at any time the Common Stock shall be listed
      on the Nasdaq Global Market, Nasdaq Global Select Market or Nasdaq Capital
      Market or any other national securities exchange or automated quotation system,
      the Company will, if permitted by the rules of such exchange or automated
      quotation system, list and keep listed, so long as the Common Stock shall be
      so
      listed on such exchange or automated quotation system, all Common Stock issuable
      upon conversion of the Notes; provided
      that if
      the rules of such exchange or automated quotation system permit the Company
      to
      defer the listing of such Common Stock until the first conversion of the Notes
      into Common Stock in accordance with the provisions of this Indenture, the
      Company covenants to list such Common Stock issuable upon conversion of the
      Notes in accordance with the requirements of such exchange or automated
      quotation system at such time.

     

    Section
      14.09. Responsibility
      of Trustee.
      

     

    The
      Trustee and any other conversion agent shall not at any time be under any duty
      or responsibility to any Noteholder to determine the Conversion Rate or whether
      any facts exist which may require any adjustment of the Conversion Rate, or
      with
      respect to the nature or extent or calculation of any such adjustment when
      made,
      or with respect to the method employed, or herein or in any supplemental
      indenture provided to be employed, in making the same. The Trustee and any
      other
      conversion agent shall not be accountable with respect to the validity or value
      (or the kind or amount) of any shares of Common Stock, or of any securities
      or
      property, which may at any time be issued or delivered upon the conversion
      of
      any Note; and the Trustee and any other conversion agent make no representations
      with respect thereto. Neither the Trustee nor any conversion agent shall be
      responsible for any failure of the Company to issue, transfer or deliver any
      shares of Common Stock or stock certificates or other securities or property
      or
      cash upon the surrender of any Note for the purpose of conversion or to comply
      with any of the duties, responsibilities or covenants of the Company contained
      in this Article. Without limiting the generality of the foregoing, neither
      the
      Trustee nor any conversion agent shall be under any responsibility to determine
      the correctness of any provisions contained in any supplemental indenture
      entered into pursuant to Section
      14.06
      relating
      either to the kind or amount of shares of stock or securities or property
      (including cash) receivable by Noteholders upon the conversion of their Notes
      after any event referred to in such Section
      14.06
      or to
      any adjustment to be made with respect thereto, but, subject to the provisions
      of Section
      7.01,
      may
      accept as conclusive evidence of the correctness of any such provisions, and
      shall be protected in relying upon, the Officers’ Certificate (which the Company
      shall be obligated to file with the Trustee prior to the execution of any such
      supplemental indenture) with respect thereto.

     

    Section
      14.10. Notice
      to Holders Prior to Certain Actions.
      

     

    In
      case:

     

    (a) the
      Company shall declare a dividend (or any other distribution) on its Common
      Stock
      that would require an adjustment in the Conversion Rate pursuant to Section
      14.05;
      or

     

    (b) the
      Company shall authorize the granting to the holders of all or substantially
      all
      of its Common Stock of rights or warrants to subscribe for or purchase any
      share
      of any class or any other rights or warrants; or

     

    
      
        
        

      

      
        115

        
          

        

      

      
        
        

      

    

    (c) of
      any
      reclassification or reorganization of the Common Stock of the Company (other
      than a subdivision or combination of its outstanding Common Stock, or a change
      in par value, or from par value to no par value, or from no par value to par
      value), or of any consolidation or merger to which the Company is a party and
      for which approval of any shareholders of the Company is required, or of the
      sale or transfer of all or substantially all of the assets of the Company;
      or

     

    (d) of
      the
      voluntary or involuntary dissolution, liquidation or winding-up of the
      Company;

     

    the
      Company shall cause to be filed with the Trustee and to be mailed to each
      Noteholder at such holder’s address appearing on the Security Register provided
      for in Section
      4.02
      of this
      Indenture, as promptly as possible but in any event at least ten (10) days
      prior
      to the applicable date hereinafter specified, a notice stating (x) the date
      on
      which a record is to be taken for the purpose of such dividend, distribution
      or
      rights or warrants, or, if a record is not to be taken, the date as of which
      the
      holders of Common Stock of record to be entitled to such dividend, distribution
      or rights are to be determined, or (y) the date on which such reclassification,
      consolidation, merger, sale, transfer, dissolution, liquidation or winding-up
      is
      expected to become effective or occur, and the date as of which it is expected
      that holders of Common Stock of record shall be entitled to exchange their
      Common Stock for securities or other property deliverable upon such
      reclassification, consolidation, merger, sale, transfer, dissolution,
      liquidation or winding-up. Failure to give such notice, or any defect therein,
      shall not affect the legality or validity of such dividend, distribution,
      reclassification, consolidation, merger, sale, transfer, dissolution,
      liquidation or winding-up.

     

    Section
      14.11. Shareholder
      Rights Plans.
      

     

    Each
      share of Common Stock issued upon conversion of Notes pursuant to this Article
      shall be entitled to receive the appropriate number of rights, if any, and
      the
      certificates representing the Common Stock issued upon such conversion shall
      bear such legends, if any, in each case as may be provided by the terms of
      any
      shareholder rights plan adopted by the Company, as the same may be amended
      from
      time to time. If at the time of conversion, however, the rights have separated
      from the shares of Common Stock in accordance with the provisions of the
      applicable shareholder rights agreement so that the holders of the Notes would
      not be entitled to receive any rights in respect of Common Stock issuable upon
      conversion of the Notes, the conversion rate will be adjusted in accordance
      with
Section
      14.05(d)
      treating
      all rights previously issued as Securities for purposes of such adjustment,
      subject to readjustment in the event of the expiration, termination or
      redemption of the rights.

     

    ARTICLE
      15

     

    MISCELLANEOUS
      PROVISIONS

     

    Section
      15.01. Provisions
      Binding on Company’s Successors.
      

     

    All
      the
      covenants, stipulations, promises and agreements by the Company contained in
      this Indenture shall bind its successors and assigns whether so expressed or
      not.

     

    
      
        
        

      

      
        116

        
          

        

      

      
        
        

      

    

    Section
      15.02. Official
      Acts by Successor Corporation.
      

     

    Any
      act
      or proceeding by any provision of this Indenture authorized or required to
      be
      done or performed by any board, committee or officer of the Company shall and
      may be done and performed with like force and effect by the like board,
      committee or officer of any Person that shall at the time be the lawful sole
      successor of the Company.

     

    Section
      15.03. Addresses
      for Notices, Etc.

     

    Any
      notice or demand which by any provision of this Indenture is required or
      permitted to be given or served by the Trustee or by the holders of Notes on
      the
      Company shall be deemed to have been sufficiently given or made, for all
      purposes, if given or served by being deposited postage prepaid by registered
      or
      certified mail in a post office letter box or sent by telecopier transmission
      addressed as follows: 

     

    If
      to the
      Company:

    

    Fushi
      International, Inc.

    1
      Shuang
      Qiang Road

    Jinzhou,
      Dalian

    People’s
      Republic of China 116100

    

    Attention:
      Mr. Chris Wenbing Wang 

    Facsimile
      No: +86 10 8447 8847

    

    With
      a
      copy to:

    

    Guzov
      Ofsink, LLC

    600
      Madison Avenue

    New
      York,
      NY 10022

    Facsimile
      No: +1 212 688 7273

    Attention:
      Darren L. Ofsink, Esq.

    

    If
      to the
      Trustee:

    

    The
      Bank
      of New York

    101
      Barclay Street

    21st
      Floor West

    New
      York,
      NY 10286

    U.S.A.

    Attention:
      Global Corporate Trust

    Facsimile
      No: +1 212 815 5802/5803 

    

    
      
        
        

      

      
        117

        
          

        

      

      
        
        

      

    

    With
      a
      copy to:

    

    The
      Bank
      of New York

    One
      Temasek Avenue

    #02-01
      Millenia Tower

    Singapore
      039192

    Attention:
      Global Corporate Trust

    Facsimile
      No: +65 6883 0338

    

    The
      Trustee, by notice to the Company, may designate additional or different
      addresses for subsequent notices or communications.

     

    Any
      notice or communication mailed to a Noteholder shall be mailed to such holder
      by
      first-class mail, postage prepaid, at his address as it appears on the Security
      Register and shall be sufficiently given to such holder if so mailed within
      the
      time prescribed.

     

    Failure
      to mail a notice or communication to a Noteholder or any defect in it shall
      not
      affect its sufficiency with respect to other Noteholders. If a notice or
      communication is mailed in the manner provided above, it is duly given, whether
      or not the addressee receives it.

     

    Section
      15.04. Governing
      Law.
      

     

    THIS
      INDENTURE, THE GUARANTEE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
      ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

     

    Section
      15.05. Evidence
      of Compliance with Conditions Precedent; Certificates to Trustee.
      

     

    Upon
      any
      application or demand by the Company to the Trustee to take any action under
      any
      of the provisions of this Indenture, the Company shall furnish to the Trustee
      an
      Officers’ Certificate stating that all conditions precedent, if any, provided
      for in this Indenture relating to the proposed action have been complied with,
      and an Opinion of Counsel stating that, in the opinion of such counsel, all
      such
      conditions precedent have been complied with.

     

    Each
      certificate or opinion provided for in this Indenture and delivered to the
      Trustee with respect to compliance with a condition or covenant provided for
      in
      this Indenture shall include: (1) a statement that the person making such
      certificate or opinion has read such covenant or condition; (2) a brief
      statement as to the nature and scope of the examination or investigation upon
      which the statement or opinion contained in such certificate or opinion is
      based; (3) a statement that, in the opinion of such person, he has made such
      examination or investigation as is necessary to enable him to express an
      informed opinion as to whether or not such covenant or condition has been
      complied with; and (4) a statement as to whether or not, in the opinion of
      such
      person, such condition or covenant has been complied with.

     

    Section
      15.06. Legal
      Holidays.
      

     

    In
      any
      case in which the date of maturity of Interest on or principal of the Notes
      or
      the redemption date of any Note will not be a Business Day, then payment of
      such
      Interest on or principal of the Notes need not be made on such date, but may
      be
      made on the next succeeding Business Day with the same force and effect as
      if
      made on the date of maturity or the redemption date, and no Interest shall
      accrue for the period from and after such date.

     

    
      
        
        

      

      
        118

        
          

        

      

      
        
        

      

    

    Section
      15.07. Company
      Responsible for Making Calculations.

     

    The
      Company will be responsible for making all calculations required under the
      Notes. The company will make these calculations in good faith and absent
      manifest error, these calculations will be final and binding on the Noteholders.
      Promptly after the calculation thereof, the Company will provide to each of
      the
      Trustee and any other conversion agent and Officers’ Certificate setting forth a
      schedule of its calculations, and each of the Trustee and any other conversion
      agent is entitled to conclusively rely upon the accuracy of such calculations
      without independent verification. The Trustee will forward the Company’s
      calculations any holder upon the written request of such holder. 

     

    Section
      15.08. Benefits
      of Indenture.
      

     

    Nothing
      in this Indenture or in the Notes, express or implied, shall give to any Person,
      other than the parties hereto, any paying agent, any authenticating agent,
      any
      conversion agent, any Collateral Agent, any Common Depositary, any Security
      Registrar and their successors hereunder and the holders of Notes any benefit
      or
      any legal or equitable right, remedy or claim under this Indenture.

     

    Section
      15.09. Table
      of Contents, Headings, Etc.

     

    The
      table
      of contents and the titles and headings of the Articles and Sections of this
      Indenture have been inserted for convenience of reference only, are not to
      be
      considered a part hereof, and shall in no way modify or restrict any of the
      terms or provisions hereof.

     

    Section
      15.10. Authenticating
      Agent.
      

     

    The
      Trustee may appoint an authenticating agent that shall be authorized to act
      on
      its behalf, and subject to its direction, in the authentication and delivery
      of
      Notes in connection with the original issuance thereof and transfers and
      exchanges of Notes hereunder, including under Sections
      2.04,
      2.05,
      2.06,
      2.07,
      3.02,
      3.07
      and
14.02,
      as
      fully to all intents and purposes as though the authenticating agent had been
      expressly authorized by this Indenture and those Sections to authenticate and
      deliver Notes. For all purposes of this Indenture, the authentication and
      delivery of Notes by the authenticating agent shall be deemed to be
      authentication and delivery of such Notes “by the Trustee” and a certificate of
      authentication executed on behalf of the Trustee by an authenticating agent
      shall be deemed to satisfy any requirement hereunder or in the Notes for the
      Trustee’s certificate of authentication. Such authenticating agent shall at all
      times be a Person eligible to serve as trustee hereunder pursuant to
Section
      7.07.

     

    Any
      corporation into which any authenticating agent may be merged or converted
      or
      with which it may be consolidated, or any corporation resulting from any merger,
      consolidation or conversion to which any authenticating agent shall be a party,
      or any corporation succeeding to the corporate trust business of any
      authenticating agent, shall be the successor of the authenticating agent
      hereunder, if such successor corporation is otherwise eligible under this
      Section, without the execution or filing of any paper or any further act on
      the
      part of the parties hereto or the authenticating agent or such successor
      corporation.

     

    
      
        
        

      

      
        119

        
          

        

      

      
        
        

      

    

    Any
      authenticating agent may at any time resign by giving written notice of
      resignation to the Trustee and to the Company. The Trustee may at any time
      terminate the agency of any authenticating agent by giving written notice of
      termination to such authenticating agent and to the Company. Upon receiving
      such
      a notice of resignation or upon such a termination, or in case at any time
      any
      authenticating agent shall cease to be eligible under this Section, the Trustee
      shall either promptly appoint a successor authenticating agent or itself assume
      the duties and obligations of the former authenticating agent under this
      Indenture and, upon such appointment of a successor authenticating agent, if
      made, shall give written notice of such appointment of a successor
      authenticating agent to the Company and shall mail notice of such appointment
      of
      a successor authenticating agent to all holders of Notes as the names and
      addresses of such holders appear on the Security Register.

     

    The
      Company agrees to pay to the authenticating agent from time to time such
      compensation for its services as shall be agreed upon in writing between the
      Company and the authenticating agent.

     

    The
      provisions of Sections
      7.02,
      7.03,
      7.04
      and
12.03
      and this
      Section shall be applicable to any authenticating agent.

     

    Section
      15.11. Indenture
      and Notes Solely Corporate Obligations.
      

     

    No
      recourse for the payment of the principal of, premium, if any, or Interest
      on
      any Note, or for any claim based thereon or otherwise in respect thereof, and
      no
      recourse under or upon any obligation, covenant or agreement of the Company
      in
      this Indenture or in any supplemental indenture or in any Note, or because
      of
      the creation of any indebtedness represented thereby, shall be had against
      any
      incorporator, shareholder, employee, agent, officer, director or subsidiary,
      as
      such, past, present or future, of the Company or of any successor corporation,
      either directly or through the Company or any successor corporation, whether
      by
      virtue of any constitution, statute or rule of law, or by the enforcement of
      any
      assessment or penalty or otherwise; it being expressly understood that all
      such
      liability is hereby expressly waived and released as a condition of, and as
      a
      consideration for, the execution of this Indenture and the issue of the
      Notes.

     

    Section
      15.12. Execution
      in Counterparts.
      

     

    This
      Indenture may be executed in any number of counterparts, each of which shall
      be
      an original, but such counterparts shall together constitute but one and the
      same instrument.

     

    Section
      15.13. Severability.
      

     

    In
      case
      any provision in this Indenture or in the Notes shall be invalid, illegal or
      unenforceable, then (to the extent permitted by law) the validity, legality
      and
      enforceability of the remaining provisions shall not in any way be affected
      or
      impaired thereby.

     

    
      
        
        

      

      
        120

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
      executed.

     

     

    
      	 	
              FUSHI
                INTERNATIONAL, INC.

              

              

              By:                                                                             
                

              Name:
                

              Title:
                

              

              FUSHI
                HOLDINGS, INC.

              

              

              
                By:                                                                             
                  
Name:
                

              Title:
                

              

              

              THE
                BANK OF NEW YORK,

              a
                New York banking corporation, 

              as
                Trustee

              

              

              
                By:                                                                             
                  
Name:
                

              Title:
                

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    EXHIBIT
      A

     

    [FORM
      OF
      FACE OF NOTE]

    

    [UNLESS
      THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR
      BANK
      S.A./N.V. (“EUROCLEAR”), OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME
      (“CLEARSTREAM”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
      EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
      ITS
      AUTHORIZED NOMINEE OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
      REPRESENTATIVE OF EUROCLEAR OR CLEARSTREAM (AND ANY PAYMENT IS MADE TO ITS
      AUTHORIZED NOMINEE, OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
      REPRESENTATIVE OF EUROCLEAR OR CLEARSTREAM), ANY TRANSFER, PLEDGE OR OTHER
      USE
      HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
      REGISTERED OWNER HEREOF, ITS AUTHORIZED NOMINEE, HAS AN INTEREST
      HEREIN.]1 

    

    THIS
      SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY HAVE
      NOT
      BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
      AMENDED (THE “SECURITIES ACT”) OR OTHER SECURITIES LAWS OF ANY STATE OR OTHER
      JURISDICTION, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
      FOLLOWING SENTENCE, BY ACQUISITION HEREOF, THE HOLDER:

    

    (1) REPRESENTS
      THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
      SECURITIES ACT;

    

    (2) AGREES
      THAT IT WILL NOT WITHIN THE PERIOD SET FORTH IN RULE 144 UNDER THE SECURITIES
      ACT (CURRENTLY TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY OTHER
      THAN
      WITH RESPECT TO AFFILIATES) (A) RESELL OR OTHERWISE TRANSFER THE SECURITY
      EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY
      EXCEPT (I) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (II) TO A QUALIFIED
      INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
      (III)
      TO A NON-U.S. PERSON OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION
      S
      UNDER THE SECURITIES ACT, (IV) PURSUANT TO THE EXEMPTION FROM REGISTRATION
      PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, OR (V) PURSUANT
      TO
      A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
      ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER OR
      (B)
      ENGAGE
      IN HEDGING TRANSACTIONS WITH RESPECT TO THIS SECURITY OR THE COMMON STOCK
      ISSUABLE UPON CONVERSION OF SUCH SECURITY UNLESS IN COMPLIANCE WITH THE
      SECURITIES ACT; AND

     

    
      
        

      

    

    
      
        1
          This
          legend should be included only if the Note is a Global Note.

        
           

        

      

    

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    (3) AGREES
      THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
      TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(A)(V) ABOVE) A NOTICE
      SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

    

    [IN
      CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
      TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
      MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
      RESTRICTIONS.]2 

     

     

     

     

     

    
      
        
          

        

      

      
        2
          This
          legend should be included only if the Note is a Definitive Note.

      

      

    

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    FUSHI
      INTERNATIONAL, INC.

     

    3.0%
      GUARANTEED SENIOR SECURED CONVERTIBLE NOTES DUE 2012

     

    ISIN:
      XS0280736314

    Common
      Code: 028073631

     

    No.
      1
      $__________

     

    FUSHI
      INTERNATIONAL, INC., a corporation duly organized and validly existing under
      the
      laws of the State of Nevada (herein called the “Company”,
      which
      term includes any successor corporation under the Indenture referred to on
      the
      reverse hereof), for value received hereby promises to pay to The Bank of New
      York, a New York banking corporation, or its registered assigns at the office
      or
      agency of the Company maintained for that purpose in accordance with the terms
      of the Indenture, in such coin or currency of the United States of America
      as at
      the time of payment shall be legal tender for the payment of public and private
      debts, (i) the Repurchase Amount as set forth on Schedule
      I
      hereto
      on January 24, 2012, (ii) interest, semi-annually on January 24 and July 24
      of
      each year, commencing July 24, 2007 on the outstanding principal sum of the
      Note
      at said office or agency, in like coin or currency, at the rate per annum of
      3.0%, from and including January 25, 2007 or from the most recent Interest
      Payment Date to which interest has been paid or duly provided for to, but
      excluding the following Interest Payment Date, (iii) Additional Interest of
      3.0%
      per annum if no Qualifying IPO has occurred on or before July 24, 2008 such
      interest accruing from and including such date (or, if Interest has been paid
      since such date, from and including the most recent interest payment date
      thereafter) to but excluding each date of payment thereof, (iv) Additional
      Amounts upon the occurrence of any events, in the amounts and at the times
      specified in the definition of “Additional Amounts” in Section 1.01 of the
      Indenture, and (v) interest on overdue principal and (to the extent that payment
      of such interest is enforceable under applicable law) interest at the rate
      borne
      by the Notes, including Additional Interest, if any, at the rate of 5% per
      annum. 

     

    Except
      as
      otherwise provided in the Indenture, the interest payable on the Note pursuant
      to the Indenture on any January 24 or July 24 will be paid to the Person
      entitled thereto as it appears in the Security Register at the close of business
      on the record date, which shall be the January 10 or July 10 (whether or not
      a
      Business Day) next preceding such January 24 or July 24, as provided in the
      Indenture; provided
      that any
      such interest not punctually paid or duly provided for shall be payable as
      provided in the Indenture. The Company shall pay interest (i) on any Notes
      in
      certificated form by check mailed to the address of the Person entitled thereto
      as it appears in the Security Register (provided
      that the
      holder of Notes with an aggregate principal amount in excess of $1,000,000
      shall, at the written election of such holder, be paid by wire transfer of
      immediately available funds) or (ii) on any Global Note by wire transfer of
      immediately available funds to the account of the Common Depositary or its
      nominee.

     

    Reference
      is made to the further provisions of this Note set forth on the reverse hereof,
      including, without limitation, provisions giving the holder of this Note the
      right to convert this Note into Common Stock of the Company on the terms and
      subject to the limitations referred to on the reverse hereof and as more fully
      specified in the Indenture. Such further provisions shall for all purposes
      have
      the same effect as though fully set forth at this place.

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    This
      Note
      shall be governed by and construed in accordance with the laws of the State
      of
      New York.

     

    This
      Note
      shall not be valid or become obligatory for any purpose until the certificate
      of
      authentication hereon shall have been manually signed by the Trustee or a duly
      authorized authenticating agent under the Indenture.

     

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Note to be duly
      executed.

     

    FUSHI
      INTERNATIONAL, INC.

     

    
      By:                                                                             
        
Name:
      

    Title:
      

     

    Attest:

     

    
      By:                                                                             
        
Name:
      

    Title:

     

    TRUSTEE’S
      CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes described in the within-named Indenture.

     

    THE
      BANK
      OF NEW YORK,

    a
      New
      York banking corporation, 

    as
      Trustee

    

    

    
      By:                                                                             
        
Authorized
      Signatory

     

     

    or

     

    
      By:                                                                             
        
As
      Authenticating Agent

    (if
      different from Trustee)

     

     

    
      By:                                                                             
        
Authorized
      Signatory

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

    FORM
      OF
      REVERSE OF NOTE

     

    FUSHI
      INTERNATIONAL, INC.

     

    3.0%
      GUARANTEED SENIOR SECURED CONVERTIBLE NOTE DUE 2012

     

    This
      Note
      is one of a duly authorized issue of Notes of the Company, designated as its
      3.0%
      Guaranteed Senior Secured Convertible Notes due 2012 (herein called the
“Notes”),
      in an
      initial aggregate principal amount of $__________, issued and to be issued
      under
      and pursuant to an Indenture dated January 25, 2007 (herein called the
“Indenture”),
      between the Company and The
      Bank
      of New York, a New York banking corporation, as trustee (herein called the
      “Trustee”),
      to
      which Indenture and all indentures supplemental thereto reference is hereby
      made
      for a description of the rights, limitations of rights, obligations, duties
      and
      immunities thereunder of the Trustee, the Company and the holders of the
      Notes.

     

    In
      case
      an Event of Default shall have occurred and be continuing, the principal of
      and
      accrued and unpaid Interest on all Notes may be declared by either the Trustee
      or the holders of not less than 25% in aggregate principal amount of the Notes
      then outstanding, and upon said declaration shall become, due and payable,
      in
      the manner, with the effect and subject to the conditions provided in the
      Indenture.

     

    The
      Indenture contains provisions permitting the Company and the Trustee, with
      the
      consent of the holders of a majority in aggregate principal amount of the Notes
      at the time outstanding, to execute supplemental indentures adding any
      provisions to or changing in any manner or eliminating any of the provisions
      of
      the Indenture or of any supplemental indenture or modifying in any manner the
      rights of the holders of the Notes; provided
      that no
      such supplemental indenture shall (i) extend the fixed maturity of any Note,
      (ii) reduce the rate or extend the time of payment of Interest thereon, (iii)
      reduce the principal amount thereof or reduce any amount payable upon redemption
      or repurchase thereof, (iv) change the obligation of the Company to repurchase
      any Note at the option of a Noteholder on a Repurchase Date in a manner adverse
      to the holders of Notes, (v) change the obligation of the Company to repurchase
      any Note upon the happening of a Designated Event in a manner adverse to the
      holders of Notes, (vi) impair the right of any Noteholder to institute suit
      for
      the payment thereof, (vii) make the principal thereof or interest thereon
      payable in any coin or currency other than that provided in the Notes, (viii)
      impair the right to convert the Notes into Common Stock or reduce the number
      of
      shares of Common Stock or any other property receivable by a Noteholder upon
      conversion subject to the terms set forth in the Indenture, including Section
      14.05 thereof, in each case, without the consent of the holder of each Note
      so
      affected, (ix) modify any of the provisions of Section 8.02 or Section 6.07
      thereof, except to increase any such percentage or to provide that certain
      other
      provisions of the Indenture cannot be modified or waived without the consent
      of
      the holder of each Note so affected, (x) change any obligation of the Company
      to
      maintain an office or agency in the places and for the purposes set forth in
      Section 4.02 thereof, (xi) reduce the quorum or voting requirements set forth
      in
      Article 13, (xii) subordinate the Notes or any Guarantee to any other obligation
      of the Company or the applicable Guarantor, (xiii) release the security interest
      granted in favor of the holders of the Notes in the Collateral other than
      pursuant to the terms of the Security Documents, (xiv) release any other
      security interest that may have been granted in favor of the holders of the
      Notes other than pursuant to the terms of such security interest, (xv) reduce
      the amount payable as Additional Amounts, (xvi) reduce the premium payable
      upon
      a Change of Control or, at any time after a Change of Control has occurred,
      change the time at which the Change of Control Offer relating thereto must
      be
      made or at which the Notes must be repurchased pursuant to such Change of
      Control Offer, (xvii) at any time after the Company is obligated to make an
      Asset Sale Offer with the Excess Proceeds from Asset Sales, change the time
      at
      which such Asset Sale Offer must be made or at which the Notes must be
      repurchased pursuant thereto, (xviii) make any change in any Guarantee that
      would adversely affect the holders or (xix) reduce the aforesaid percentage
      of
      Notes, the holders of which are required to consent to any such supplemental
      indenture, without the consent of the holders of all Notes then outstanding.
      Subject to the provisions of the Indenture, the holders of a majority in
      aggregate principal amount of the Notes at the time outstanding may on behalf
      of
      the holders of all of the Notes waive any past Default or Event of Default
      under
      the Indenture and its consequences except (A) a default in the payment of
      Interest on, or the principal of, any of the Notes, (B) a failure by the Company
      to convert any Notes into Common Stock of the Company, (C) a default in the
      payment of the purchase price pursuant to Section 3.02 of the Indenture, (D)
      a
      default in the payment of the repurchase price pursuant to Section 3.03 of
      the
      Indenture, or (E) a default in respect of a covenant or provisions of the
      Indenture which under Article 10 of the Indenture cannot be modified or amended
      without the consent of the holders of each or all Notes then outstanding or
      affected thereby. Any such consent or waiver by the holder of this Note (unless
      revoked as provided in the Indenture) shall be conclusive and binding upon
      such
      holder and upon all future holders and owners of this Note and any Notes which
      may be issued in exchange or substitution hereof, irrespective of whether or
      not
      any notation thereof is made upon this Note or such other Notes.

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

    No
      reference herein to the Indenture and no provision of this Note or of the
      Indenture shall alter or impair the obligation of the Company, which is absolute
      and unconditional, to pay the principal of and Interest on this Note at the
      place, at the respective times, at the rate and in the coin or currency herein
      prescribed.

     

    Interest
      on the Notes shall be computed on the basis of a 360-day year of twelve 30-day
      months.

     

    The
      Notes
      are issuable in fully registered form, without coupons, in denominations of
      $100,000 principal amount and any multiple of $100,000. At the office or agency
      of the Company referred to on the face hereof, and in the manner and subject
      to
      the limitations provided in the Indenture, without payment of any service charge
      but with payment of a sum sufficient to cover any tax, assessment or other
      governmental charge that may be imposed in connection with any registration
      or
      exchange of Notes, Notes may be exchanged for a like aggregate principal amount
      of Notes of any other authorized denominations. 

     

    The
      Notes
      are not subject to redemption through the operation of any sinking
      fund.

     

    If
      a
      Designated Event occurs at any time prior to maturity of the Notes, the Company
      shall become obligated to purchase, at the option of the holder, all or any
      portion of the Notes held by such holder, on a date specified by the Company
      that is thirty (30) days after notice thereof at a cash “Repurchase
      Amount”
of
      the
      Redemption Price plus
      any
      accrued and unpaid Interest on such Note (including post-petition interest
      in
      any proceeding under any Bankruptcy Law) and interest accrued on overdue
      principal (and, to the extent lawful, on overdue installments of interest)
      and
      premium, if any, at a rate that is 5% per annum in excess of the rate of
      Interest then in effect, where “Redemption
      Price”
means
      the amount calculated in accordance with the following formula, rounded (if
      necessary) to two decimal places with 0.005 being rounded upwards:

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

    

     

    
      	
              Redemption
                Price = I x (1 + r/2)d/180

            
	
              Where:

            	 	 
	
              I

            	
              =

            	
              Issue
                price (100% of principal amount) of the Notes;

            
	 	 	 
	
              r

            	
              =

            	
              15.0%
                expressed as a decimal; and

            
	 	 	 
	
              d

            	
              =

            	
              number
                of days from and including the Issue Date to but excluding, the date
                for
                redemption or repurchase, calculated on the basis of a 360-day year
                consisting of 12 months of 30 days each, and in the case of an incomplete
                month, the actual number of days
                elapsed.

            

    

     

    provided
      that if
      the repurchase date falls after a record date and on or prior the corresponding
      interest payment date, then accrued and unpaid Interest to, but excluding,
      the
      Designated Event Repurchase Date shall be paid on such interest payment date
      to
      the holders of record of such Notes on the applicable record date instead of
      to
      the holders surrendering such Notes for repurchase on such date. The Notes
      will
      be subject to repurchase in multiples of $100,000 principal amount. The Company
      shall mail to all holders of record of the Notes a notice of the occurrence
      of a
      Designated Event and of the repurchase right arising as a result thereof on
      or
      before the 15th day after the occurrence of such Designated Event. To exercise
      such right, a holder shall deliver to the Company such Note with the form
      entitled “Designated Event Repurchase Notice” on the reverse thereof duly
      completed, together with the Note, duly endorsed for transfer, at any time
      prior
      to the close of business on the Business Day immediately preceding the
      Designated Event Repurchase Date, and shall deliver the Notes to the Trustee
      (or
      other paying agent appointed by the Company) as set forth in the
      Indenture.

     

    Subject
      to the terms and conditions of the Indenture, the Company shall become obligated
      to purchase, at the option of the holder, all or any portion of the Notes held
      by such holder on January 24, 2010 in whole multiples of $100,000 at the cash
      Repurchase Amount. To exercise such right, a holder shall deliver to the Company
      such Note with the form entitled “Repurchase Notice” on the reverse thereof duly
      completed, together with the Note, duly endorsed for transfer, at any time
      from
      the opening of business on the date that is 20 Business Days prior to such
      Repurchase Date until the close of business on the date that is two Business
      Days prior to the Repurchase Date, and shall deliver the Notes to the Trustee
      (or other paying agent appointed by the Company) as set forth in the
      Indenture.

     

    Holders
      have the right to withdraw any Designated Event Repurchase Notice or the
      Repurchase Notice, as the case may be, by delivering to the Trustee (or other
      paying agent appointed by the Company) a written notice of withdrawal up to
      the
      close of business on the Business Day immediately preceding the Designated
      Event
      Repurchase Date or the Repurchase Date, as the case may be, all as provided
      in
      the Indenture.

     

    If
      money
      or cash, sufficient to pay the repurchase price of all Notes or portions thereof
      to be purchased as of the Designated Event Repurchase Date or the Repurchase
      Date, as the case may be, is deposited with the Trustee (or other paying agent
      appointed by the Company), on the Designated Event Repurchase Date or the
      Repurchase Date, as the case may be, interest will cease to accrue on such
      Notes
      (or portions thereof) immediately after such Repurchase Date, and the holder
      thereof shall have no other rights as such other than the right to receive
      the
      repurchase price upon surrender of such Note.

     

    
      
        
        

      

      
        A-8

        
          

        

      

      
        
        

      

    

    Subject
      to the occurrence of certain events and in compliance with the provisions of
      the
      Indenture, prior to the final maturity date of the Notes, the holder hereof
      has
      the right, at its option, to convert each $100,000 principal amount of the
      Notes
      into 14,285 shares of the Company’s Common Stock (a conversion price of
      approximately $7.00 per share), as such shares shall be constituted at the
      date
      of conversion and subject to adjustment from time to time as provided in the
      Indenture, upon surrender of this Note with the form entitled “Conversion
      Notice” on the reverse thereof duly completed, to the Company at the office or
      agency of the Company maintained for that purpose in accordance with the terms
      of the Indenture, or at the option of such holder, the Corporate Trust Office,
      and, unless the shares issuable on conversion are to be issued in the same
      name
      as this Note, duly endorsed by, or accompanied by instruments of transfer in
      form satisfactory to the Company duly executed by, the holder or by his duly
      authorized attorney. The Company will notify the holder thereof in writing
      of
      any event triggering the right to convert the Notes as specified above in
      accordance with the Indenture.

     

    No
      adjustment in respect of interest on any Note converted or dividends on any
      shares issued upon conversion of such Note will be made upon any conversion
      except as set forth in the next sentence. If this Note (or portion hereof)
      is
      surrendered for conversion during the period from the close of business on
      any
      record date for the payment of interest to the close of business on the Business
      Day preceding the following interest payment date, this Note (or portion hereof
      being converted) must be accompanied by payment, in immediately available funds
      or other funds acceptable to the Company, of an amount equal to the interest
      otherwise payable on such interest payment date on the principal amount being
      converted; provided
      that no
      such payment shall be required (1) if the Company has specified a redemption
      date that is after a record date and prior to the next interest payment date,
      (2) if the Company has specified a Designated Event Repurchase Date that is
      during such period or (3) to the extent of any overdue Interest, if any overdue
      interest exists at the time of conversion with respect to such Note.

     

    No
      fractional shares will be issued upon any conversion, but an adjustment and
      payment in cash will be made, as provided in the Indenture, in respect of any
      fraction of a share which would otherwise be issuable upon the surrender of
      any
      Note or Notes for conversion.

     

    If
      there
      is a Change of Control, the Company shall be required to offer to purchase
      on
      the Purchase Date all outstanding Notes in cash at the Repurchase Amount.
      Holders of Notes that are subject to an offer to purchase will receive a Change
      of Control offer from the Company prior to any related Purchase Date and may
      elect to have such Notes or portions thereof in authorized denominations
      purchased by completing the form entitled “Option of Holder to Elect Purchase”
appearing below.

     

    A
      Note in
      respect of which a holder is exercising its right to require repurchase upon
      a
      Change of Control, Designated Event or repurchase on a Repurchase Date may
      be
      converted only if such holder withdraws its election to exercise either such
      right in accordance with the terms of the Indenture.

     

    
      
        
        

      

      
        A-9

        
          

        

      

      
        
        

      

    

    Upon
      due
      presentment for registration of transfer of this Note at the office or agency
      of
      the Company maintained for that purpose in accordance with the terms of the
      Indenture, a new Note or Notes of authorized denominations for an equal
      aggregate principal amount will be issued to the transferee in exchange thereof,
      subject to the limitations provided in the Indenture, without charge except
      for
      any tax, assessment or other governmental charge imposed in connection
      therewith.

     

    The
      Company, the Trustee, any authenticating agent, any paying agent, any conversion
      agent and any Security Registrar may deem and treat the registered holder hereof
      as the absolute owner of this Note (whether or not this Note shall be overdue
      and notwithstanding any notation of ownership or other writing hereon made
      by
      anyone other than the Company or any Security Registrar) for the purpose of
      receiving payment hereof, or on account hereof, for the conversion hereof and
      for all other purposes, and neither the Company nor the Trustee nor any other
      authenticating agent nor any paying agent nor other conversion agent nor any
      Security Registrar shall be affected by any notice to the contrary. All payments
      made to or upon the order of such registered holder shall, to the extent of
      the
      sum or sums paid, satisfy and discharge liability for monies payable on this
      Note.

     

    No
      recourse for the payment of the principal of or Interest on this Note, or for
      any claim based hereon or otherwise in respect hereof, and no recourse under
      or
      upon any obligation, covenant or agreement of the Company in the Indenture
      or
      any supplemental indenture or in any Note, or because of the creation of any
      indebtedness represented thereby, shall be had against any incorporator,
      shareholder, employee, agent, officer or director or subsidiary, as such, past,
      present or future, of the Company or of any successor corporation, either
      directly or through the Company or any successor corporation, whether by virtue
      of any constitution, statute or rule of law or by the enforcement of any
      assessment or penalty or otherwise, all such liability being, by acceptance
      hereof and as part of the consideration for the issue hereof, expressly waived
      and released.

     

    For
      purposes of sections 1272, 1273 and 1275 of the Internal Revenue Code of 1986,
      as amended, this Note is being issued with Tax Original Issue Discount and
      the
      issue date of this Note is January 25, 2007.

     

    This
      Note
      shall be governed by and construed in accordance with the laws of New
      York.

     

    Terms
      used in this Note and defined in the Indenture are used herein as therein
      defined.

     

    
      
        
        

      

      
        A-10

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription of the face of this Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations.

     

    
      	
              TEN
                COM

            	
              -

            	
              as
                tenants in common

            	
              UNIF
                GIFT MIN ACT -
                Custodian 

            
	
              TEN
                ENT

            	
              -

            	
              as
                tenant by the entireties

            	
              (Cust)
                (Minor)

            
	
              JT
                TEN

            	
              -

            	
              as
                joint tenants with right of survivorship under Uniform Gifts to Minors
                Act
                and not as tenants in common 

            
	 	
            	
            	 

    

     

    
      	 	  

	 	
              (State)

            

    

     

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        A-11

        
          

        

      

      
        
        

      

       

    

    CONVERSION
      NOTICE

     

    TO:
      FUSHI INTERNATIONAL, INC.

     

    _______

     

    The
      undersigned registered owner of this Note hereby irrevocably exercises the
      option to convert this Note, or the portion thereof (which is $100,000 or a
      multiple thereof) below designated, into shares of Common Stock of Fushi
      International, Inc. in accordance with the terms of the Indenture referred
      to in
      this Note, and directs that the shares issuable and deliverable upon such
      conversion, together with any check in payment for fractional shares and any
      Notes representing any unconverted principal amount hereof, be issued and
      delivered to the registered holder hereof unless a different name has been
      indicated below. Capitalized terms used herein but not defined shall have the
      meanings ascribed to such terms in the Indenture. If shares or any portion
      of
      this Note not converted are to be issued in the name of a person other than
      the
      undersigned, the undersigned will provide the appropriate information below
      and
      pay all transfer taxes payable with respect thereto. Any amount required to
      be
      paid by the undersigned on account of interest, including additional interest,
      if any, accompanies this Note.

     

    Dated:

     

    
      
        

      

    

     

      
        

      

    

     

    Signature(s)

    Signature(s)
      must be guaranteed by an “eligible guarantor institution” meeting the
      requirements of the Security Registrar, which requirements include membership
      or
      participation in the Security Transfer Agent Medallion Program (“STAMP”) or such
      other “signature guarantee program” as may be determined by the Security
      Registrar in addition to, or in substitution for, STAMP.

     

    
      
        

      

    

    Fill
      in
      the registration of shares of Common Stock if to be issued, and Notes if to
      be
      delivered, other than to and in the name of the registered holder:

     

     

    
      
        

      

    

    (Name)

     

     

    
      
        

      

    

    (Street
      Address)

     

     

    
      
        

      

    

    (City,
      State and Zip Code)

     

     

    
      
        
        

      

      
        A-12

        
          

        

      

      
        
        

      

    

     

    Please
      print name and address

    

    Principal
      amount to be converted

    (if
      less than all): 

     

    $__________________________________    

     

    Social
      Security or Other Taxpayer

    Identification
      Number: 

     

    
      
        

      

    

     

     

    
      
        
        

      

      
        A-13

        
          

        

      

      
        
        

      

       

    

    REPURCHASE
      NOTICE

     

    TO:
      FUSHI INTERNATIONAL, INC.

     

    _______

     

    The
      undersigned registered owner of this Note hereby requests and instructs Fushi
      International, Inc. (the “Company”)
      to
      repurchase the entire principal amount of this Note, or the portion thereof
      (which is $100,000 or an integral multiple thereof) below designated, in
      accordance with the terms of the Notes and the Indenture at a price equal to
      the
      Repurchase Amount, to the registered holder hereof. Capitalized terms used
      herein but not defined shall have the meanings ascribed to such terms in the
      Indenture. The Notes shall be repurchased by the Company as of the Repurchase
      Date pursuant to the terms and conditions specified in the
      Indenture.

     

    $ 
      __________                     
_
      principal amount of the Notes to which this Repurchase Notice relates (if less
      than entire principal amount)

     

    Dated:

     

    Signature(s):

     

    NOTICE:
      The above signatures of the holder(s) hereof must correspond with the name
      as
      written upon the face of the Note in every particular without alteration or
      enlargement or any change whatever.

     

    Note
      Certificate Number (if applicable):

     

    Principal
      amount to be repurchased (if less than all):

     

    Social
      Security or Other Taxpayer Identification Number:

     

     

    
      
        
        

      

      
        A-14

        
          

        

      

      
        
        

      

    

    PURCHASE
      NOTICE

     

    TO:
      FUSHI INTERNATIONAL, INC.

     

    _______

     

    The
      undersigned registered owner of this Note hereby irrevocably acknowledges
      receipt of a notice from Fushi International, Inc. (the “Company”)
      regarding the right of holders to elect to require the Company to repurchase
      the
      Notes upon the occurrence of either an Asset Sale Offer, a Change of Control
      Offer or a Designated Event Offer and requests and instructs the Company to
      repay the entire principal amount of this Note, or the portion thereof (which
      is
      $100,000 or an integral multiple thereof) below designated, in accordance with
      the terms of the Indentureat the price of:-

     

    
      	 	
              (i)

            	
              100%
                of the principal amount thereof, together with accrued and unpaid
                Interest
                thereon (including post-petition interest in any proceeding under
                any
                Bankruptcy Law), interest accrued on overdue principal (and, to the
                extent
                lawful, on overdue installments of interest) and premium, if any,
                at a
                rate that is 5% per annum in excess of the rate of Interest then
                in effect
                to but excluding the Purchase Date, in the case of an Asset Sale
                Offer,
                and 

            

    

     

    
      	 	
              (ii)

            	
              the
                Repurchase Amount, to the registered holder hereof, in case of a
                Change of
                Control Offer or Designated Event Offer.

            

    

     

    Capitalized
      terms used herein but not defined shall have the meanings ascribed to such
      terms
      in the Indenture. The Notes shall be purchased by the Company as of the Purchase
      Date pursuant to the terms and conditions specified in the
      Indenture.

     

    $ 
      principal amount of the Notes to which this Purchase Notice relates (if less
      than entire principal amount) pursuant to 4.12, 4.17 or 4.26 of the Indenture,
      check the box below:

     

    
      	
              o

            	
              Section
                4.12

            	
              Purchase
                Date:_______________

            
	 	 	 
	
              
                o

              

            	
              Section
                4.17

            	 
	 	 	 
	
              
                o

              

            	
              Section
                4.26

            	 

    

     

    Dated:

     

    Signature(s):

     

    NOTICE:
      The above signatures of the holder(s) hereof must correspond with the name
      as
      written upon the face of the Note in every particular without alteration or
      enlargement or any change whatever.

     

    
      
        
        

      

      
        A-15

        
          

        

      

      
        
        

      

    

    Note
      Certificate Number (if applicable):

     

    Principal
      amount to be repurchased (if less than all):

     

    Social
      Security or Other Taxpayer Identification Number:

     

    Assignment
      Form

     

    To
      assign
      this Note, fill in the form below: 

     

    (I)
      or
      (we) assign and transfer this Note to

     

      
        

      

    

    (Insert
      assignee’s social security or other tax I.D. no.)

     

    
      
        

      

    

     

      
        

      

       

      
        

      

       

    

    
      
        

      

    

    (Print
      or
      type assignee’s name, address and zip code)

    

    and
      irrevocably
      appoint________________________________________________________________________________as
      agent
      to transfer this Note on the books of the Company. The agent may substitute
      another to act for him.

     

    
      
        

      

    Date:
      ______________

     

    
      
        	 	
                Your
                  Signature:_____________________________

                (Sign
                  exactly as your name appears on the face of this
                  Note)

              

      

    

     

    Signature
      Guarantee:                                                         
      

     

    
      
        
        

      

      
        A-16

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    FORM
      OF NOTATION OF GUARANTEE

     

    For
      value
      received, each Guarantor (which term includes any successor Person under the
      Indenture), jointly and severally, unconditionally guarantees, to the extent
      set
      forth in the Indenture and subject to the provisions in the Indenture, dated
      January 25, 2007 (the “Indenture”),
      among
      Fushi International, Inc., as issuer (the “Company”),
      the
      Guarantors listed on the signature pages thereto and The Bank of New York,
      a New
      York banking corporation, as trustee (the “Trustee”),
      (a)
      the due and punctual payment of the principal of, premium, if any, and interest
      on the Notes, whether at maturity, by acceleration, redemption, repurchase
      or
      otherwise, the due and punctual payment of interest on overdue principal and
      premium, if any, and, to the extent permitted by law, interest and the due
      and
      punctual performance of all other obligations of the Company to the holders
      or
      the Trustee all in accordance with the terms of the Indenture and (b) in case
      of
      any extension of time of payment or renewal of any Notes or any of such other
      obligations, that the same will be promptly paid in full when due or performed
      in accordance with the terms of the extension or renewal, whether at stated
      maturity, by acceleration or otherwise. The obligations of the Guarantors to
      the
      holders of Notes and to the Trustee pursuant to the Guarantee and the Indenture
      are expressly set forth in Article 9 of the Indenture and reference is hereby
      made to the Indenture for the precise terms of the Guarantee. This Guarantee
      is
      subject to release as and to the extent set forth in Section 9.05 of the
      Indenture. Each holder of a Note, by accepting the same agrees to and shall
      be
      bound by such provisions. Capitalized terms used herein and not defined are
      used
      herein as so defined in the Indenture.

     

    

    
      	 	
              [GUARANTOR
                NAME]

               

              

              By:__________________________

              Name:

              Title:

            

    

     

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    FORM
      OF CERTIFICATE OF TRANSFER

     

    Fushi
      International, Inc.

    1
      Shuang
      Qiang Road

    Jinzhou,
      Dalian

    People’s
      Republic of China 116100

    

    The
      Bank
      of New York

    101
      Barclay Street

    21st
      Floor West

    New
      York,
      NY 10286

    U.S.A.

     

    Attention:
      Global Corporate Trust

     

    The
      Bank
      of New York

    One
      Temasek Avenue

    #02-01
      Millenia Tower

    Singapore
      039192

    Attention:
      Global Corporate Trust

     

    Re:  3.0%
      GUARANTEED SENIOR SECURED CONVERTIBLE NOTES DUE 2012

     

    Reference
      is hereby made to the Indenture, dated January 25, 2007 (the “Indenture”),
      among
      FUSHI INTERNATIONAL, INC., as issuer (the “Company”),
      the
      Guarantor party thereto and THE BANK OF NEW YORK, a New York banking
      corporation, as trustee. Capitalized terms used but not defined herein shall
      have the meanings given to them in the Indenture.

     

    ___________________,
      (the “Transferor”)
      owns
      and proposes to transfer the Note[s] or interest in such Note[s] in the
      principal amount of $___________ (the “Transfer”),
      to
      ___________________________ (the “Transferee”).
      In
      connection with the Transfer, the Transferor hereby certifies that:

     

    [CHECK
      ALL THAT APPLY]

     

    1.࿶ Check
      if Transferee will take delivery of a beneficial interest in the Global Note
      or
      a Definitive Note Pursuant to Rule 144A.
      The
      Transfer is being effected pursuant to and in accordance with Rule 144A under
      the United States Securities Act of 1933, as amended (the “Securities
      Act”),
      and,
      accordingly, the Transferor hereby further certifies that the beneficial
      interest or Definitive Note is being transferred to a Person that the Transferor
      reasonably believed and believes is purchasing the beneficial interest or
      Definitive Note for its own account, or for one or more accounts with respect
      to
      which such Person exercises sole investment discretion, and such Person and
      each
      such account is a “qualified institutional buyer” within the meaning of Rule
      144A in a transaction meeting the requirements of Rule 144A and such Transfer
      is
      in compliance with any applicable blue sky securities laws of any state of
      the
      United States. Upon consummation of the proposed Transfer in accordance with
      the
      terms of the Indenture, the transferred beneficial interest or Definitive Note
      will be subject to the restrictions on transfer enumerated in the legend printed
      on the Global Note and/or the Definitive Note and in the Securities
      Act.

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

    2.
      ࿶ Check
      if Transferee will take delivery of a beneficial interest in the Global Note
      or
      a Definitive Note pursuant to Regulation S.
      The
      Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
      904 under the Securities Act and, accordingly, the Transferor hereby further
      certifies that (i) the Transfer is not being made to a Person in the United
      States and (A) at the time the buy order was originated, the Transferee was
      outside the United States or such Transferor and any Person acting on its behalf
      reasonably believed and believes that the Transferee was outside the United
      States or (B) the transaction was executed in, on or through the facilities
      of a
      designated offshore securities market and neither such Transferor nor any Person
      acting on its behalf knows that the transaction was prearranged with a buyer
      in
      the United States, (ii) no directed selling efforts have been made in
      contravention of the requirements of Rule 903(b) or Rule 904(a) of Regulation
      S
      under the Securities Act, (iii) the transaction is not part of a plan or scheme
      to evade the registration requirements of the Securities Act and (iv) if the
      proposed transfer is being made prior to the expiration of the Distribution
      Compliance Period (as defined in Regulation S under the Securities Act), (A)
      the
      transfer is not being made to a U.S. Person or for the account or benefit of
      a
      U.S. Person, (B) the Transferee is not a U.S. person and is not acquiring the
      Notes for the account or benefit of any U.S. person or is a U.S. person who
      purchased securities in a transaction that did not require registration under
      the Securities Act, (C) the Transferee understands that it may and agrees to
      resell the Notes only in accordance with the provisions of Regulation S,
      pursuant to registration under the Securities Act, or pursuant to an available
      exemption from registration; and understands that it may not and agrees
      not
      to
      engage
      in
      hedging
      transactions
      with regard to the Notes or the common stock issuable upon conversion unless
      in
      compliance with the Securities Act; (D) the Transferee acknowledges that the
      certificates evidencing the Notes will contain a legend to the effect that
      transfer is prohibited except in accordance with the provisions of Regulation
      S,
      pursuant to registration under the Securities Act, or pursuant to an available
      exemption from registration; and that hedging transactions involving those
      securities may not be conducted unless in compliance with the Securities Act;
      (E) the Transferee acknowledges that the Company is required to refuse to
      register any transfer of the securities not made in accordance with the
      provisions of Regulation S, pursuant to registration under the Securities Act,
      or pursuant to an available exemption from registration; provided,
      however,
      that if
      the Notes are in bearer form or foreign law prevents the Company from refusing
      to register securities transfers, other reasonable procedures (such as a legend
      described above) are implemented to prevent any transfer of the securities
      not
      made in accordance with the provisions of Regulation S. Upon consummation of
      the
      proposed transfer in accordance with the terms of the Indenture, the transferred
      beneficial interest or Definitive Note will be subject to the restrictions
      on
      Transfer enumerated in the legend printed on the Global Note and/or the
      Definitive Note and in the Securities Act. 

     

    3.࿶ Check
      and complete if Transferee will take delivery of a beneficial interest in the
      Global Note or a Definitive Note pursuant to any provision of the Securities
      Act
      other than Rule 144A or Regulation S.
      The
      Transfer is being effected in compliance with the transfer restrictions
      applicable to beneficial interests in Global Notes and Definitive Notes and
      pursuant to and in accordance with the Securities Act and any applicable blue
      sky securities laws of any state of the United States, and accordingly the
      Transferor hereby further certifies that:

     

    
      
        
        

      

      
        C-2

        
          

        

      

      
        
        

      

    

    (i) 
      such
      Transfer is being effected pursuant to and in accordance with Rule 144 under
      the
      Securities Act; or

     

    (ii) 
      such
      Transfer is being effected to the Company or a subsidiary thereof; or

     

    (iii) 
      such
      Transfer is being effected pursuant to an effective registration statement
      under
      the Securities Act.

     

    This
      certificate and the statements contained herein are made for your benefit and
      the benefit of the Company.

     

    

    
      	 	_________________________________
	 	
              [Insert
                Name of Transferor]

               

              By:
                ________________________________

              Name:

              Title:

               

              Dated:
                ______________________

            

    

     

     

    
      
        
        

      

      
        C-3

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      D

     

    FORM
      OF RESTRICTIVE LEGEND FOR

    COMMON
      STOCK ISSUED UPON CONVERSION

     

     

    THE
      SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
      UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR
      OTHER SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE OFFERED
      OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE, BY ACQUISITION HEREOF,
      THE HOLDER:

    

    (1) REPRESENTS
      THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
      SECURITIES ACT;

    

    (2) AGREES
      THAT IT WILL NOT WITHIN THE PERIOD SET FORTH IN RULE 144 UNDER THE SECURITIES
      ACT (CURRENTLY TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY OTHER
      THAN
      WITH RESPECT TO AFFILIATES) (A) RESELL OR OTHERWISE TRANSFER THE SECURITY
      EVIDENCED HEREBY EXCEPT (I) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (II) TO
      A
      QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
      ACT, (III) TO A NON-U.S. PERSON OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
      REGULATION S UNDER THE SECURITIES ACT, (IV) PURSUANT TO THE EXEMPTION FROM
      REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, OR
      (V)
      PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
      THE
      SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER
      OR (B)
      ENGAGE
      IN HEDGING TRANSACTIONS WITH RESPECT TO THIS SECURITY UNLESS IN COMPLIANCE
      WITH
      THE SECURITIES ACT; AND

    

    (3) AGREES
      THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
      TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE) A NOTICE
      SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

     

    
      
        
        

      

      
        D-1

        
          

        

      

      
        
        

      

    

    
 

    Schedule
      I

     

    FUSHI
      INTERNATIONAL, INC.

     

    3.0%
      Guaranteed Senior Secured Convertible Notes due 2012

     

    No.
      1

     

    The
      original Principal Amount of this Note is TWENTY MILLION DOLLARS ($20,000,000).
      The Company will pay the Repurchase Amount as defined below. 

     

    “Repurchase
      Amount”
means,
      with respect to any Note, the Redemption Price plus
      any
      accrued and unpaid Interest on such Note (including post-petition interest
      in
      any proceeding under any Bankruptcy Law) and interest accrued on overdue
      principal (and, to the extent lawful, on overdue installments of interest)
      and
      premium, if any, at a rate that is 5% per annum in excess of the rate of
      Interest then in effect.

     

    “Redemption
      Price”
means
      the amount calculated in accordance with the following formula, rounded (if
      necessary) to two decimal places with 0.005 being rounded upwards:

     

    
      	
              Redemption
                Price = I x (1 + r/2)d/180

            
	
              Where:

            	 	 
	
              I

            	
              =

            	
              Issue
                price (100% of Principal Amount) of the Notes;

            
	
              r

            	
              =

            	
              15.0%
                expressed as a decimal; and

            
	
              d

            	
              =

            	
              number
                of days from and including the Issue Date to but excluding, the date
                for
                redemption, calculated on the basis of a 360-day year consisting
                of 12
                months of 30 days each, and in the case of an incomplete month, the
                actual
                number of days elapsed.

            

    

    

    

    For
      purposes thereof, the Principal Amount has been adjusted in accordance with
      the
      terms of the Indenture as set forth below:

     

     

    Date
      

     

     

    Principal
      Amount

     

     

    Notation
      Explaining Principal

     

    
      
        
        

      

      
        D-2

        
          

        

      

      
        
        

      

    

     

    Amount
      Recorded  

     

     

    Authorized
      Signature of Trustee or Custodian

     

    

     

     

    
      
        
        

      

      
        D-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]