Document:

exv10w1

EXHIBIT 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

     This Second Amendment to Credit Agreement (“Second Amendment”) is made as of this
9th day of September, 2009 by and among Borrowers (as defined below), which are listed
on attached Schedule 1, the Lenders (as defined below) signatory hereto and Comerica Bank, as Agent
for the Lenders (in such capacity, the “Agent”).

RECITALS

     A. PMFG, Inc. (“Holdings”), Peerless Mfg. Co. (the “Company”), PMC Acquisition, Inc. (“PMC
Acquisition”), and, following the execution and delivery by any other Subsidiary (as defined in the
Credit Agreement), and acceptance by the Agent, from time to time, of a Credit Agreement Joinder
Agreement from such Subsidiary, collectively with the Company, PMC Acquisition and each such
Subsidiary, the “Borrowers” and each individually, a “Borrower”) are party to that certain
Revolving Credit and Term Loan Agreement dated April 30, 2008, with the financial institutions from
time to time signatory thereto (individually a “Lender,” and any and all such financial
institutions collectively the “Lenders”) and Agent, as amended by that certain Consent and First
Amendment to Credit Agreement dated as of September 4, 2009, and as further amended or otherwise
modified from time to time (the “Credit Agreement”).

     B. Borrowers have requested that Agent and the Lenders make certain amendments to the Credit
Agreement as set forth herein and Agent and the Lenders are willing to do so, but only on the terms
and conditions set forth in this Second Amendment.

     NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and
valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Borrowers,
Agent and the Lenders agree as follows:

     1. Section 1 of the Credit Agreement is hereby amended as follows:

	 	(a)	 	The following definitions are hereby added to Section 1 of the Credit Agreement:

“Applicable Equity Proceeds Recapture Percentage” shall mean (i) at any time
the Consolidated Total Leverage Ratio is equal to or greater than 3.50 to
1:00, 100% with respect to the first $5,000,000 in Net Cash Proceeds
generated by the issuance of Equity Interests and 50% with respect to any
additional Net Cash Proceeds generated by the issuance of Equity Interests;
and (ii) at any time the Consolidated Total Leverage Ratio is less than 3.50
to 1.00, 50%.

“Base Rate” shall mean for any day, that rate of interest per annum which is
equal to the sum of the Applicable Margin plus the greatest of (a) the Prime
Rate for such day, (b) the Federal Funds Effective Rate in effect on such
day, plus one percent (1.0%) per annum, and (c) the Daily Adjusting LIBOR
Rate plus one percent (1.0%) per annum; provided, however, for
purposes of determining the Base Rate during any period that LIBOR Rate is
unavailable as determined under Sections 11.3 or 11.4 hereof, the Base

1

 

Rate shall be determined using, for clause (c) hereof, the Daily
Adjusting LIBOR Rate in effect immediately prior to the LIBOR Rate becoming
unavailable pursuant to Sections 11.3 or 11.4.

“Base Rate Advance” shall mean an Advance which bears interest at the Base
Rate.

“Daily Adjusting LIBOR Rate” shall mean for any day a per annum interest
rate which is equal to the quotient of the following:

     (a) the LIBOR Rate;

     divided by

     (b) a percentage equal to 1.00 minus the maximum rate on such date at
which Agent is required to maintain reserves on “Euro-currency Liabilities”
as defined in and pursuant to Regulation D of the Board of Governors of the
Federal Reserve System or, if such regulation or definition is modified, and
as long as Agent is required to maintain reserves against a category of
liabilities which includes eurodollar deposits or includes a category of
assets which includes eurodollar loans, the rate at which such reserves are
required to be maintained on such category;

     such sum to be rounded upward, if necessary, in the discretion of the
Agent, to the nearest whole multiple of 1/100th of 1%.

“Defaulting Lender” shall mean a Lender which, in the reasonable
determination of the Agent (a) has failed to fund its Percentage of any
Advance or to purchase participations in a Swing Line Advance or any
Reimbursement Obligations as required under this Agreement, unless such
Lender is disputing its funding obligation in good faith, (b) has otherwise
failed to pay to the Agent or any other Lender any other amount required to
be paid by it under the terms of this Agreement or any other Loan Document,
unless such Lender is disputing such obligation to pay any such amount in
good faith, (c) has been, or whose holding company has been, determined to
be insolvent or that has become subject to a bankruptcy, receivership or
other similar proceeding, or (d) prior to the time it became a party to this
Agreement, has had a substantial portion of its assets or management (or a
substantial portion of the assets or management of its holding company)
taken over by any governmental authority or any governmental authority has
restricted its ability to act under this Agreement, including its ability to
enter into amendments, waivers or modifications of this Agreement or any of
the other Loan Documents (provided that the exercise of the customary rights
of a shareholder by a governmental authority which owns shares in such
Lender (or its holding company) shall not be covered by this clause (d)),

2

 

provided, however, in all cases that a Defaulting Lender shall no longer be
deemed a Defaulting Lender when (i) the Defaulting Lender shall have cured
the conditions which shall have caused it to be a Defaulting Lender
hereunder and (ii) the Agent has agreed that such Lender shall no longer be
deemed a Defaulting Lender hereunder.

“Defaulting Lender’s Unfunded Portion” shall mean (a) an amount equal to
such Defaulting Lender’s Revolving Credit Percentage of the Revolving Credit
Aggregate Commitment minus (b) the sum of (i) the aggregate principal amount
of all Revolving Credit Advances funded by the Defaulting Lender under the
Revolving Credit, plus (ii) such Defaulting Lender’s Revolving Credit
Percentage of the aggregate outstanding principal amount of all Swing Line
Advances and Letter of Credit Obligations.

“Impaired Lender” means a Defaulting Lender and any other Lender (a) which
the Agent, the Issuing Lender or Swing Line Lender believes, in good faith,
has defaulted (and continues to be in default) in fulfilling its obligations
under any other syndicated credit facilities or as a participant in any
other credit facility and such Lender is not in good faith disputing that
such a failure has occurred, or (b) which, if carrying an investment grade
rating of at least BBB- from S&P or Baa3 from Moody’s at the time it became
a party to this Agreement, no longer carries a rating of at least BBB- from
S&P or Baa3 from Moody’s, provided, however, in all cases that an Impaired
Lender shall no longer be deemed an Impaired Lender when (i) the Impaired
Lender shall have cured the conditions which shall have caused it to be an
Impaired Lender hereunder and (ii) the Agent has agreed that such Lender
shall no longer be deemed an Impaired Lender hereunder.

“LIBOR Floor” shall mean one percent (1.0%) per annum.

“LIBOR Rate” shall mean,

     (a) with respect the principal amount of any Eurodollar-based Advance
outstanding hereunder, the per annum rate of interest determined on the
basis of the rate per annum for deposits in United States Dollars for a
period equal to the relevant Eurodollar-Interest Period, commencing on the
first day of such Eurodollar-Interest Period, appearing on Page BBAM of the
Bloomberg Financial Markets Information Service as of 11:00 a.m. (Detroit,
Michigan time) (or as soon thereafter as practical), two (2) Business Days
prior to the first day of such Eurodollar-Interest Period. In the event
that such rate does not appear on Page BBAM of the Bloomberg Financial
Markets Information Service (or otherwise on such Service), the “LIBOR Rate”
shall be determined by reference to such other publicly available service
for displaying LIBOR rates as may be agreed upon by Agent and Borrowers, or,
in the absence of such

3

 

agreement, the “LIBOR Rate” shall, instead, be the per annum rate equal
to the average (rounded upward, if necessary, to the nearest one-sixteenth
of one percent (1/16%)) of the rate per annum at which Agent is offered
dollar deposits at or about 11:00 a.m. (Detroit, Michigan time) (or as soon
thereafter as practical), two (2) Business Days prior to the first day of
such Eurodollar-Interest Period in the interbank LIBOR market in an amount
comparable to the principal amount of the relevant Eurodollar-based Advance
which is to bear interest at such Eurodollar-based Rate and for a period
equal to the relevant Eurodollar-Interest Period; and

(b) with respect to the principal amount of any Advance carried at the Daily
Adjusting LIBOR Rate outstanding hereunder, the per annum rate of interest
determined on the basis of the rate per annum for deposits in United States
Dollars for a period equal to one (1) month appearing on Page BBAM of the
Bloomberg Financial Markets Information Service as of 11:00 a.m. (Detroit,
Michigan time) (or as soon thereafter as practical) on such day, or if such
day is not a Business Day, on the immediately preceding Business Day. In
the event that such rate does not appear on Page BBAM of the Bloomberg
Financial Markets Information Service (or otherwise on such Service), the
“LIBOR Rate” shall be determined by reference to such other publicly
available service for displaying eurodollar rates as may be agreed upon by
Agent and Borrowers, or, in the absence of such agreement, the “LIBOR Rate”
shall, instead, be the per annum rate equal to the average of the rate per
annum at which Agent is offered dollar deposits at or about 11:00 a.m.
(Detroit, Michigan time) (or as soon thereafter as practical) on such day in
the interbank eurodollar market in an amount comparable to the principal
amount of the Indebtedness hereunder which is to bear interest at such
“LIBOR Rate” and for a period equal to one (1) month.

“Non-Defaulting Lender” shall have the meaning ascribed to such term in
Section 10.4.

“Purchase” is defined in Section 8.5 hereof.

“Second Amendment” shall mean that certain Second Amendment to Credit
Agreement by and among the Borrowers, the Lenders and the Agent, dated as of
September 9, 2009.”

“Second Amendment Effective Date” shall mean September 9, 2009.

“Second Amendment Fee” shall have the meaning ascribed to such term in
Section 10(b) of the Second Amendment.

	 	(b)	 	The following definitions set forth in Section 1 of the Credit Agreement are
amended and restated in their entireties as follows:

4

 

“Consolidated Fixed Charges” shall mean, as of any date of determination,
the sum, without duplication, of (i) all cash Consolidated Interest Expense
paid or payable by any Credit Party in respect of such period on the
Consolidated Funded Debt and in respect of Hedging Transactions less
interest income (including, without limitation, income earned under Hedging
Transactions plus losses incurred under Hedging Transactions), in each case
for the four consecutive fiscal quarters ending on the applicable date of
determination plus (ii) all installments of principal or other sums due and
payable by any Credit Party with respect to the Consolidated Funded Debt
(including principal payments in respect of the Term Loan and the principal
component of obligations under Capitalized Leases, but excluding voluntary
prepayments of the Term Loan), during the four consecutive fiscal quarters
ending on the applicable date of determination plus (iii) all Distributions
paid in cash by any Credit Party during the four consecutive fiscal quarters
ending on the applicable date of determination plus (iv) all Purchases made
in cash by any Credit Party during the four consecutive fiscal quarters
ending on the applicable date of determination.

“Eligible Assignee” shall mean (a) a Lender; (b) an Affiliate of a Lender;
(c) any Person (other than a natural person) that is or will be engaged in
the business of making, purchasing, holding or otherwise investing in
commercial loans or similar extensions of credit in the ordinary course of
its business, provided that such Person is administered or managed by a
Lender, an Affiliate of a Lender or an entity or Affiliate of an entity that
administers or manages a Lender; or (d) any other Person (other than a
natural person) approved by the (i) Agent (and in the case of an assignment
of a commitment under the Revolving Credit, the Issuing Lender and Swing
Line Lender), and (ii) unless a Event of Default has occurred and is
continuing, the Borrowers (each such approval not to be unreasonably
withheld or delayed); provided that (x) notwithstanding the foregoing,
“Eligible Assignee” shall not include the Borrowers, or any of Borrower’s
Affiliates or Subsidiaries; (y) notwithstanding clause (d)(ii) of this
definition, no assignment shall be made to an entity which is a competitor
of any Credit Party without the consent of the Borrowers, which consent may
be withheld in its sole discretion; and (z) and no assignment shall be made
to an Impaired Lender without the consent of the Agent, and in the case of
an assignment of a commitment under the Revolving Credit, the Issuing Lender
and the Swing Line Lender.

“Eurodollar-based Rate” shall mean a per annum interest rate which is equal
to the sum of the Applicable Margin, plus the greater of (a) the LIBOR Floor
and (b) the quotient of:

     (i) the LIBOR Rate, divided by

5

 

     (ii) a percentage equal to 100% minus the maximum rate on such date at
which Agent is required to maintain reserves on ‘Eurocurrency Liabilities’
as defined in and pursuant to Regulation D of the Board of Governors of the
Federal Reserve System or, if such regulation or definition is modified, and
as long as Agent is required to maintain reserves against a category of
liabilities which includes eurocurrency deposits or includes a category of
assets which includes eurocurrency loans, the rate at which such reserves
are required to be maintained on such category,

such sum to be rounded upward, if necessary, in the discretion of the Agent,
to the nearest whole multiple of 1/100th of 1%.

“Excess Cash Flow” shall mean, for any Fiscal Year, the sum of (a)
Consolidated Net Income for such Fiscal Year plus (b) to the extent deducted
in determining Consolidated Net Income, depreciation, depletion and
amortization, minus (c) the sum of (i) Capital Expenditures made during such
Fiscal Year, excluding any Capital Expenditures financed with money borrowed
(other than with Advances of the Revolving Credit or the Swing Line) and the
principal portion of any Capitalized Leases, (ii) the amount of all
scheduled or mandatory payments or prepayments of principal on Funded Debt
made during such Fiscal Year (excluding any payment (1) on the Revolving
Credit or any other revolving loan facility except to the extent of any
permanent reduction thereof, (2) in respect of Excess Cash Flow for any
prior period and (3) with the Net Cash Proceeds, Insurance Proceeds or
Condemnation Proceeds except to the extent that Consolidated Net Income was
increased as a result thereof) and (iii) the amount of any other prepayment
made during such Fiscal Year on any term Debt permitted hereunder, other
than any optional prepayments on the Term Loan and other than the
prepayment, in September 2009, of the Mezzanine Subordinated Debt.

“Fees” shall mean the Revolving Credit Facility Fee, the Letter of Credit
Fees, the Second Amendment Fee and the other fees and charges (including any
agency fees) payable from time to time by Borrowers to the Lenders, the
Issuing Lender or Agent hereunder or under the Fee Letter.

“Restricted Payment Threshold” shall mean maintaining, as of the end of the
most recent fiscal quarter for which Holdings has reported under Section 7.1
hereof and, on a pro forma basis as of the date of the proposed Distribution
or Purchase (as applicable), both before and after giving effect thereto, a
Consolidated Fixed Charge Coverage Ratio of not less than 1.10 to 1.00 (all
capitalized terms used in this definition being defined using the
definitions in effect on the First Amendment Effective Date).

6

 

	 	(c)	 	Clause (e) of the definition of “Permitted Acquisitions” is hereby amended and
restated as follows:

“(e) Both immediately before and after the consummation of such acquisition
and after giving effect to the Pro Forma Projected Financial Information,
(i) no Default or Event of Default shall have occurred and be continuing and
(ii) the Consolidated Fixed Charge Coverage Ratio as of the end of the most
recent fiscal quarter for which Holdings has reported under Section 7.1
hereof and, on a pro forma basis as of the date of the proposed acquisition,
both before and after giving effect thereto, shall be equal to or greater
than 1.40 to 1.00;”

	 	(d)	 	The definitions of “Alternate Base Rate”, “Prime-based Rate” and “Prime-based
Advance” are hereby deleted in their entirety from Section 1.
	 
	 	(e)	 	All references to “Prime-based Advance” and “Prime-based Rate” shall be deleted
and replaced, respectively, with references to “Base Rate Advance” and “Base Rate” in
the Credit Agreement and Exhibits to the Credit Agreement.

     2. Article 3 of the Credit Agreement is amended as follows:

	 	(a)	 	Section 3.2 of the Credit Agreement is hereby amended by deleting the word
“and” at the end of clause (g); deleting the period (“.”) at the end of clause (h) and
replace with “; and”; and add the following as new clause (i):
	 
	 	 	 	“(i) if any Revolving Credit Lender is an Impaired Lender, the Issuing
Lender has entered into arrangements reasonably satisfactory to it to
eliminate the Issuing Lender’s risk with respect to the participation in
Letters of Credit by all such Impaired Lenders, including, without
limitation, the creation of a cash collateral account or delivery of other
security by the Borrowers to assure payment of such Impaired Lender’s
Percentage of all outstanding Letter of Credit Obligations.”
	 
	 	(b)	 	Section 3.6 of the Credit Agreement is hereby amended by adding the following
as new clause (j):

“(j) In the event that any Revolving Credit Lender becomes an Impaired
Lender, the Issuing Lender may, at its option, require that the Borrowers
enter into arrangements reasonably satisfactory to Issuing Lender to
eliminate the Issuing Lender’s risk with respect to the participation in
Letters of Credit by such Impaired Lender, including creation of a cash
collateral account or delivery of other security to assure payment of such
Impaired Lender’s Percentage of all outstanding Letter of Credit
Obligations.”

     3. Article 4 of the Credit Agreement is hereby amended as follows:

	 	(a)	 	The following shall be added to the end of clause (b) of Section 4.8:

7

 

“Notwithstanding the foregoing, subject to clauses (e) and (f) hereof, the
Borrowers shall be required to prepay the Term Loan by an amount equal to
one hundred percent (100%) of any Net Cash Proceeds received by any Credit
Party from the sale of Equity Interests of, or all or substantially all of
the assets of, Bos-Hatten, Inc. or any other operating Subsidiary or from
the sale of an entire product division or product line, regardless (in each
case) of whether the Borrowers have Reinvested or intend to Reinvest any
such Net Cash Proceeds.”

	 	(b)	 	Clause (c) of Section 4.8 is hereby amended and restated as follows:

“(c) Subject to clauses (e) and (f) hereof, (i) immediately upon receipt by
any Credit Party of Net Cash Proceeds generated from the issuance of any
Equity Interests of any Credit Party (other than Equity Interests under any
stock option or employee incentive plans listed on Schedule 6.12 hereto (or
any successor plans) or in connection with the conversion of any
Subordinated Debt to equity) after the Second Amendment Effective Date,
Borrowers shall prepay the Term Loan by an amount equal to the Applicable
Equity Proceeds Recapture Percentage of such Net Cash Proceeds from the
issuance of any Equity Interests; and (ii) immediately upon receipt by any
Credit Party of Net Cash Proceeds generated from Net Cash Proceeds from the
issuance of any Subordinated Debt after the Effective Date, Borrowers shall
prepay the Term Loan by an amount equal to one hundred percent (100%) of
such Net Cash Proceeds from the issuance of Subordinated Debt.”

     4. Clauses (a) and (b) of Section 7.9 of the Credit Agreement are amended and restated as
follows:

“(a) Consolidated Total Leverage Ratio. Maintain a Consolidated
Total Leverage Ratio as of the last day of each fiscal quarter ending during
the periods specified below of not greater than the ratio set forth below
opposite the applicable period:

	 	 	 
	Quarter Ending	 	Ratio
	Fiscal Quarter ending June 30, 2009

	 	4.00 to 1.00
	July 1, 2009 through December 31, 2009

	 	3.50 to 1.00
	January 1, 2010 through September 30, 2010

	 	4.00 to 1.00
	October 1, 2010 and thereafter

	 	3.50 to 1.00”

“(b) Consolidated Fixed Charge Coverage Ratio. Maintain a
Consolidated Fixed Charge Coverage Ratio as of the last day of each fiscal
quarter during the periods specified below of not less than the ratio set
forth below opposite the applicable period:

8

 

	 	 	 
	Quarter Ending	 	Ratio
	Fiscal Quarter ending June 30, 2009

	 	1.25 to 1.00
	July 1, 2009 through September 30, 2009

	 	1.40 to 1.00
	October 1, 2009 through December 31, 2009

	 	1.25 to 1.00
	January 1, 2010 through March 31, 2010

	 	1.10 to 1.00
	April 1, 2010 through September 30, 2010

	 	1.00 to 1.00
	October 1, 2010 and thereafter

	 	1.10 to 1.00”

     5. The following is hereby added as new Section 7.19 of the Credit Agreement:

“7.19 Second Amendment Fee. Within thirty (30) days of the Second
Amendment Effective Date, pay to Agent, for pro rata distribution to the
Lenders, the unpaid portion of the Second Amendment Fee.”

     6. Article 8 of the Credit Agreement is amended as follows:

	 	(a)	 	Clause (d) of Section 8.5 is hereby amended and restated in its entirety as
follows:

“(d) each Credit Party may declare and make Distributions to and Purchases
from any other holder of any of its Equity Interests so long as (i) no
Default or Event of Default under this Agreement has occurred and is
continuing both before and after giving effect to the making of such
Distribution or Purchase, (ii) the Credit Parties are in pro forma
compliance with the financial covenants set forth in Section 7.9 hereof,
after giving effect to such Distribution or Purchase, (iii) notwithstanding
compliance with clauses (i) and (ii) of this subparagraph (d), the Credit
Parties are also in compliance with the Restricted Payment Threshold, both
before and after giving effect to such Distribution or Purchase and (iv)
with respect to Distributions or Purchases to be made in any Fiscal Year,
the Excess Cash Flow payment that is or will be required to paid during such
Fiscal Year pursuant to Section 4.8(a) hereof has been paid, or the
Borrowers have established cash reserves for the making of such Excess Cash
Flow payment to the satisfaction of the Agent.”

     7. The following is hereby added to Article 10 as new Section 10.4:

“10.4 Treatment of a Defaulting Lender.

     (a) The obligation of any Lender to make any Advance hereunder shall
not be affected by the failure of any other Lender to make any Advance under
this Agreement, and no Lender shall have any liability to any Borrower or
any of their Subsidiaries, the Agent, any other Lender, or any other Person
for another Lender’s failure to make any loan or Advance hereunder.

     (b) If any Lender shall become a Defaulting Lender, then such
Defaulting Lender’s right to participate in the administration of the loans,

9

 

this Agreement and the other Loan Documents, including without limitation
any right to vote in respect of any amendment, consent or waiver of the
terms of this Agreement or such other Loan Documents, or to direct or
approve any action or inaction by the Agent shall be suspended for the
entire period that such Lender remains a Defaulting Lender and the stated
commitment amounts and outstanding Advances of such Defaulting Lender shall
not be included in determining whether all Lenders or the Majority Lender
(or any class thereof), as the case may be, have taken or may take any
action hereunder (including, without limitation, any action to approve any
consent, waiver or amendment to this Agreement or the other Loan Documents);
provided, however, that the foregoing shall not permit (i) an increase in
such Defaulting Lender’s stated commitment amounts, (ii) the waiver,
forgiveness or reduction of the principal amount of any Indebtedness
outstanding to such Defaulting Lender (unless all other Lenders affected
thereby are treated similarly), (iii) the extension of the final maturity
date(s) of such Defaulting Lenders’ portion of any of the loans or other
extensions of credit or other obligations of Borrowers owing to such
Defaulting Lender, in each case without such Defaulting Lender’s consent,
(iv) any other modification which under Section 13.10 requires the consent
of all Lenders or the Lender(s) affected thereby which affects the
Defaulting Lender differently than the Lenders that are not Defaulting
Lenders (“Non-Defaulting Lenders”) affected by such modification, other than
a change to or waiver of the requirements of Section 10.3 which results in a
reduction of the Defaulting Lender’s commitment or its share of the
Indebtedness on a non pro-rata basis.

     (c) To the extent and for so long as a Lender remains a Defaulting
Lender and notwithstanding the provisions of Section 10.3 hereof, the Agent
shall be entitled, without limitation, (i) to withhold or setoff and to
apply in satisfaction of those obligations for payment (and any related
interest) in respect of which the Defaulting Lender shall be delinquent or
otherwise in default to Agent or any Lender (or to hold as cash collateral
for such delinquent obligations or any future defaults) the amounts
otherwise payable to such Defaulting Lender under this Agreement or any
other Loan Document, (ii) if the amount of Advances made by such Defaulting
Lender is less than its Percentage requires, apply payments of principal
made by the Borrowers amongst the Non-Defaulting Lenders on a pro rata basis
until all outstanding Advances are held by all Lenders according to their
respective Percentages and (iii) to bring an action or other proceeding, in
law or equity, against such Defaulting Lender in a court of competent
jurisdiction to recover the delinquent amounts, and any related interest.
Performance by Borrowers of their respective obligations under this
Agreement and the other Loan Documents shall not be excused or otherwise
modified as a result of the operation of this Section, except to the extent
expressly set forth herein and in any event the Borrowers shall not be
required to pay any Revolving

10

 

Credit Facility Fee under Section 2.9 of this Agreement in respect of
such Defaulting Lender’s Unfunded Portion of the Revolving Credit for the
period during which such Lender is a Defaulting Lender. Furthermore, the
rights and remedies of Borrowers, the Agent, the Issuing Lender, the Swing
Line Lender and the other Lenders against a Defaulting Lender under this
section shall be in addition to any other rights and remedies such parties
may have against the Defaulting Lender under this Agreement or any of the
other Loan Documents, applicable law or otherwise, and the Borrowers waive
no rights or remedies against any Defaulting Lender.”

     8. Sections 11.3, 11.4 and 11.5 of the Credit Agreement are hereby amended and restated in
their entirety as follows:

“11.3 Circumstances Affecting LIBOR Rate Availability. If Agent or
the Majority Lenders (after consultation with Agent) shall determine in good
faith that, by reason of circumstances affecting the foreign exchange and
interbank markets generally, deposits in eurodollars in the applicable
amounts are not being offered to the Agent or such Lenders at the applicable
LIBOR Rate, then Agent shall forthwith give notice thereof to Borrowers.
Thereafter, until Agent notifies Borrowers that such circumstances no longer
exist, (i) the obligation of Lenders to make Advances which bear interest at
or by reference to the LIBOR Rate, and the right of Borrowers to convert an
Advance to or refund an Advance as an Advance which bear interest at or by
reference to the LIBOR Rate shall be suspended, (ii) effective upon the last
day of each Eurodollar-Interest Period related to any existing
Eurodollar-based Advance, each such Eurodollar-based Advance shall
automatically be converted into an Advance which bears interest at or by
reference to the Base Rate (without regard to satisfaction of any conditions
to conversion contained elsewhere herein), and (iii) effective immediately
following such notice, each Advance which bears interest at or by reference
to the Daily Adjusting LIBOR Rate shall automatically be converted into an
Advance which bears interest at or by reference to the Base Rate (without
regard to satisfaction of any conditions to conversion contained elsewhere
herein).”

“11.4 Laws Affecting LIBOR Rate Availability. If, after the date of
this Agreement, the adoption or introduction of, or any change in, any
applicable law, rule or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Eurodollar Lending Offices) with any
request or directive (whether or not having the force of law) of any such
authority, shall make it unlawful or impossible for any of the Lenders (or
any of their respective Eurodollar Lending Offices) to honor its obligations
hereunder to make or maintain any Advance which bears interest at or by
reference to the LIBOR Rate, such Lender shall forthwith

11

 

give notice thereof to Borrowers and to Agent. Thereafter, (a) the
obligations of the applicable Lenders to make Advances which bear interest
at or by reference to the LIBOR Rate and the right of Borrowers to convert
an Advance into or refund an Advance as an Advance which bears interest at
or by reference to the LIBOR Rate shall be suspended and thereafter only the
Base Rate shall be available, and (b) if any of the Lenders may not lawfully
continue to maintain an Advance which bears interest at or by reference to
the LIBOR Rate, the applicable Advance shall immediately be converted to an
Advance which bears interest at or by reference to the Base Rate. For
purposes of this Section, a change in law, rule, regulation, interpretation
or administration shall include, without limitation, any change made or
which becomes effective on the basis of a law, rule, regulation,
interpretation or administration presently in force, the effective date of
which change is delayed by the terms of such law, rule, regulation,
interpretation or administration.”

“11.5 Increased Cost of Advances Carried at the LIBOR Rate. If,
after the date of this Agreement, the adoption or introduction of, or any
change in, any applicable law, rule or regulation or in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any of the Lenders (or any of their respective Eurodollar
Lending Offices) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency:

     (a) shall subject any of the Lenders (or any of their
respective Eurodollar Lending Offices) to any tax, duty or other
charge with respect to any Advance or shall change the basis of
taxation of payments to any of the Lenders (or any of their
respective Eurodollar Lending Offices) of the principal of or
interest on any Advance or any other amounts due under this
Agreement in respect thereof (except for changes in the rate of tax
on the overall net income of any of the Lenders or any of their
respective Eurodollar Lending Offices); or

     (b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System), special deposit or similar
requirement against assets of, deposits with or for the account of,
or credit extended by, any of the Lenders (or any of their
respective Eurodollar Lending Offices) or shall impose on any of the
Lenders (or any of their respective Eurodollar Lending Offices) or
the foreign exchange and interbank markets any other condition
affecting any Advance;

12

 

and the result of any of the foregoing matters is to increase the costs to
any of the Lenders of maintaining any part of the Indebtedness hereunder as
an Advance which bears interest at or by reference to the LIBOR Rate to
reduce the amount of any sum received or receivable by any of the Lenders
under this Agreement in respect of an Advance which bears interest at or by
reference to the LIBOR Rate, then such Lender shall promptly notify Agent,
and Agent shall promptly notify Borrowers of such fact and demand
compensation therefor and, within ten (10) Business Days after such notice,
each Borrower agrees to pay to such Lender or Lenders such additional amount
or amounts as will compensate such Lender or Lenders for such increased cost
or reduction, provided that each Lender agrees to take any reasonable
action, to the extent such action could be taken without cost or
administrative or other burden or restriction to such Lender, to mitigate or
eliminate such cost or reduction, within a reasonable time after becoming
aware of the foregoing matters. Agent will promptly notify Borrowers of any
event of which it has knowledge which will entitle Lenders to compensation
pursuant to this Section, or which will cause Borrowers to incur additional
liability under Section 11.1 hereof, provided that Agent shall incur no
liability whatsoever to the Lenders or Borrowers in the event it fails to do
so. A certificate of Agent (or such Lender, if applicable) setting forth the
basis for determining such additional amount or amounts necessary to
compensate such Lender or Lenders shall accompany such demand and shall be
conclusively presumed to be correct absent manifest error.”

     9. Section 13.12 of the Credit Agreement is hereby amended and restated as follows:

“13.12 Substitution or Removal of Lenders.

If (a) the obligation of any Lender to make Eurodollar-based Advances has
been suspended pursuant to Section 11.3 or 11.4, (b) any Lender has demanded
compensation under Sections 3.4(c), 11.5 or 11.6, (c) any Lender has become
an Impaired Lender or has not approved an amendment, waiver or other
modification of this Agreement, if such amendment, waiver or modification
has been approved by the Majority Lenders and the consent of such Lender is
required or (d) a Borrower is required to make additional payments to or on
account of Lender (or permitted assignee) under Section 10.1(d) solely as a
result of a change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority that occurred after the date on which such Lender (or permitted
assignee) first became a party to this Agreement (and the assignment below
shall result in a reduction in the amount of the payments otherwise required
to be made by the applicable Borrowers thereunder) (in each case, an
“Affected Lender”), then the Borrowers shall have the following rights in
addition to any other rights or remedies it may have hereunder:

13

 

     (i) Subject to Section 13.8 hereof, the Borrowers may, with the
assistance of the Agent, seek a substitute Lender or Lenders (which
may be one or more of the Lenders (the “Purchasing Lender” or
“Purchasing Lenders”) to purchase the Advances of the Revolving
Credit, Swing Line and/or the Term Loan, as the case may be and
assume the Revolving Credit Aggregate Commitment (including without
limitation the participations in Swing Line Advances and Letters of
Credit) under this Agreement of such Affected Lender, and require
the Affected Lender to sell its Advances of the Revolving Credit,
Swing Line and/or the Term Loan, as the case may be, and assign its
Revolving Credit Aggregate Commitment to such Purchasing Lender or
Purchasing Lenders within two (2) Business Days after receiving
notice from the Borrowers requiring it to do so, at an aggregate
price equal to the outstanding principal amount thereof, plus unpaid
interest accrued thereon up to but excluding the date of the sale,
payable (in immediately available funds) in cash. In connection with
any such sale, and as a condition thereof, the Borrowers shall pay
to the Affected Lender all fees accrued for its account hereunder to
but excluding the date of such sale, plus, if demanded by the
Affected Lender within ten (10) Business Days after such sale, (x)
the amount of any compensation which would be due to the Affected
Lender under Section 11.1 if the Borrowers had prepaid the
outstanding Eurodollar-based Advances of the Affected Lender on the
date of such sale (unless such Affected Lender is an Impaired
Lender, in which case no such compensation shall be due) and (y) any
additional compensation accrued for its account under Sections
3.4(c), 11.5 and 11.6 to but excluding said date. Upon such sale,
the Purchasing Lender or Purchasing Lenders shall assume the
Affected Lender’s commitment, and the Affected Lender shall be
released from its obligations hereunder to a corresponding extent.
The Affected Lender, as assignor, such Purchasing Lender, as
assignee, the Borrowers and the Agent, shall enter into an
Assignment Agreement pursuant to Section 13.8 hereof, whereupon such
Purchasing Lender shall be a Lender party to this Agreement, shall
be deemed to be an assignee hereunder and shall have all the rights
and obligations of a Lender with a Revolving Credit Percentage equal
to its ratable share of the then applicable Revolving Credit
Aggregate Commitment and the applicable Percentages of the Term Loan
of the Affected Lender, provided, however, that if the Affected
Lender does not execute such Assignment Agreement within (2)
Business Days of receipt thereof, the Agent may execute the
Assignment Agreement as the Affected Lender’s attorney-in-fact. Each
of the Lenders hereby irrevocably constitutes and appoints the Agent
and any officer or agent thereof, with full power of substitution,
as its true

14

 

and lawful attorney-in-fact with full power and authority in
the name of such Lender or in its own name to execute and deliver an
Assignment Agreement while such Lender is an Affected Lender
hereunder (such power of attorney to be deemed coupled with an
interest and irrevocable). In connection with any assignment
pursuant to this Section 13.12, the Borrowers or the Purchasing
Lender shall pay to the Agent the administrative fee for processing
such assignment referred to in Section 13.8; and

     (ii) With respect to any Affected Lender that is an Impaired
Lender, the Borrowers may, with the prior written consent of the
Agent and the other Lenders (excluding any Impaired Lender) and
notwithstanding Section 10.3 of this Agreement or any other
provisions requiring pro rata payments to the Lenders, elect to
reduce the Revolving Credit Aggregate Commitment by the amount of
the Revolving Credit Aggregate Commitment of such Affected Lender
and repay all amounts (both any outstanding Term Loan Advances,
subject to clause (D), below if such Affected Lender is a Defaulting
Lender, and any Revolving Credit Advances) owing to such Affected
Lender, subject to the following:

     (A) such Affected Lender shall receive an amount in cash equal
to the outstanding principal amount owing to such Affected Lender
under this Agreement, plus unpaid interest accrued thereon up to
but excluding the date of the repayment. In addition, and as a
condition thereof, the Borrowers shall pay to the Affected Lender
all fees accrued for its account hereunder to but excluding the
date of such repayment, plus, if demanded by the Affected Lender
within ten (10) Business Days after such repayment, (x) the amount
of any compensation which would be due to the Affected Lender under
Section 11.1 if the Borrowers had prepaid the outstanding
Eurodollar-based Advances of the Affected Lender on the date of
such repayment and (y) any additional compensation accrued for its
account under Sections 3.4(c), 11.5 and 11.6 to but excluding said
date;

     (B) after giving effect to the reduction in the Revolving
Credit Aggregate Commitment and the payments required under
subclause (A) above, the Borrowers shall have Unused Revolving
Credit Availability, on the date of the repayment, of at least
$5,000,000;

     (C) the stated dollar commitment of any other Lender is not
increased thereby; and

     (D) if such Affected Lender is a Defaulting Lender and such
Defaulting Lender holds no share of the Revolving Credit

15

 

Aggregate Commitment, or with respect to which the Borrowers
have elected to reduce the Revolving Credit Aggregate Commitment of
such Defaulting Lender by such Defaulting Lender’s Revolving Credit
Percentage in accordance with the foregoing provisions of this
clause (ii) the Borrowers may repay all amounts owing to such
Lender in connection with the Term Loan, provided that (A) the
Agent and the other Lenders (excluding any Impaired Lender) have
consented to such payment in writing, (B) after giving effect to
any reduction of the Revolving Credit Aggregate Commitment or
payments on the Revolving Credit under clause (ii) above and
payments on the Term Loan under this clause (iii), the Borrowers
shall have Unused Revolving Credit Availability, on the date of the
repayment, of at least $5,000,000; and (C) the stated dollar
commitment of any other Lender is not increased thereby.”

     10. This Second Amendment shall become effective (according to the terms hereof) on the date
(the “Second Amendment Effective Date”) that the following conditions have been fully satisfied by
Borrowers (the “Conditions”):

	 	(a)	 	Agent shall have received via facsimile or electronic mail (followed by the
prompt delivery of original signatures) counterpart originals of this Second Amendment,
in each case duly executed and delivered by the Agent, Borrowers and the Lenders; and
	 
	 	(b)	 	Borrowers shall have paid (i) to the Agent, for pro rata distribution to the
Lenders, a non-refundable amendment fee (“Second Amendment Fee”) in an amount equal to
50 basis points on the Revolving Credit Aggregate Commitment and the outstanding
principal amount of the Term Loan, in each case after giving effect to this Second
Amendment, such fee to be fully earned on the Second Amendment Effective Date;
provided, however, that Borrowers may elect to pay the Second Amendment Fee in two
equal installments, by paying the first installment on the Second Amendment Effective
Date and the second installment no later than thirty (30) days after the Second
Amendment Effective Date, and (ii) to the Agent all fees and reasonable costs and
expenses, if any, owed to the Agent and accrued to the Second Amendment Effective Date,
in each case, as and to the extent required to be paid in accordance with the Loan
Documents.

     11. Borrowers hereby certify to the Agent and the Lenders as of the Second Amendment Effective
Date and after giving effect to this Amendment, that (a) execution and delivery of this Second
Amendment and the other Loan Documents required to be delivered hereunder, and the performance by
Borrowers of their obligations under the Credit Agreement as amended hereby (herein, as so amended,
the “Amended Credit Agreement”) are within the Borrowers’ powers, have been duly authorized, are
not in contravention of law or the terms of its articles of incorporation or bylaws or other
organizational documents of the parties thereto, as applicable, and except as have been previously
obtained do not require the consent or approval, material to the amendments contemplated in this
Second Amendment, of any governmental

16

 

body, agency or authority, and the Amended Credit Agreement and the other Loan Documents
required to be delivered hereunder will constitute the valid and binding obligations of such
undersigned parties enforceable in accordance with its terms, except as enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium, ERISA or similar laws
affecting the enforcement of creditors’ rights generally and by general principles of equity
(whether enforcement is sought in a proceeding in equity or at law), (b) the representations and
warranties set forth in Section 6 of the Amended Credit Agreement are true and correct on and as of
the Second Amendment Effective Date (except to the extent such representations specifically relate
to an earlier date), and (c) on and as of the Second Amendment Effective Date, after giving effect
to this Second Amendment, no Default or Event of Default shall have occurred and be continuing.

     12. Except as specifically set forth above, this Second Amendment shall not be deemed to amend
or alter in any respect the terms and conditions of the Amended Credit Agreement (including without
limitation all conditions and requirements for Advances and any financial covenants), any of the
Notes issued thereunder or any of the other Loan Documents. Nor shall this Second Amendment
constitute a waiver or release by the Agent or the Lenders of any right, remedy, Default or Event
of Default under or a consent to any transaction not meeting the terms and conditions of the
Amended Credit Agreement, any of the Notes issued thereunder or any of the other Loan Documents.
Furthermore, this Second Amendment shall not affect in any manner whatsoever any rights or remedies
of the Lenders with respect to any other non-compliance by Borrowers or any Guarantor with the
Amended Credit Agreement or the other Loan Documents, whether in the nature of a Default or Event
of Default, and whether now in existence or subsequently arising, and shall not apply to any other
transaction. Borrowers hereby confirm that each of the Collateral Documents continues in full
force and effect and secures, among other things, all of its obligations, liabilities and
indebtedness owing to the Agent and the Lenders under the Credit Agreement and the other Loan
Documents (where applicable, as amended herein).

     13. Borrowers hereby acknowledge and agree that this Second Amendment and the amendments
contained herein do not constitute any course of dealing or other basis for altering any obligation
of Borrowers, any other Credit Party, any Guarantor or any other party or any rights, privilege or
remedy of the Lenders under the Credit Agreement, any other Loan Document, any other agreement or
document, or any contract or instrument.

     14. Except as specifically defined to the contrary herein, capitalized terms used in this
Second Amendment shall have the meanings set forth in the Credit Agreement.

     15. This Second Amendment may be executed in counterpart in accordance with Section 13.9 of
the Credit Agreement and shall be considered a “Loan Document” within the meaning of the Credit
Agreement.

     16. This Second Amendment shall be construed in accordance with and governed by the laws of
the State of Texas.

17

 

     WITNESS the due execution hereof as of the day and year first above written.

	 	 	 	 	 
	 	COMERICA BANK, as Agent

 	 
	 	By:  	/s/ Kelly Cowherd
 	 
	 	 	Name:  	Kelly Cowherd 	 
	 	 	Title:  	Assistant Vice President 	 
	 

Signature Page to Second Amendment

 

 

	 	 	 	 	 
	 	PMFG, INC.

 	 
	 	By:  	/s/ Peter Burlage
 	 
	 	 	Name:  	Peter Burlage 	 
	 	 	Title:  	President 	 
	 
	 	PEERLESS MFG. CO.

 	 
	 	By:  	/s/ Peter Burlage
 	 
	 	 	Name:  	Peter Burlage 	 
	 	 	Title:  	President 	 
	 
	 	NITRAM ENERGY, INC.

 	 
	 	By:  	/s/ Peter Burlage
 	 
	 	 	Name:  	Peter Burlage 	 
	 	 	Title:  	President 	 
	 
	 	BOS-HATTEN, INC.

 	 
	 	By:  	/s/ Peter Burlage
 	 
	 	 	Name:  	Peter Burlage 	 
	 	 	Title:  	President 	 
	 
	 	BURGESS — MANNING, INC.

 	 
	 	By:  	/s/ Peter Burlage
 	 
	 	 	Name:  	Peter Burlage 	 
	 	 	Title:  	President 	 
	 
	 	BURMAN MANAGEMENT, INC.

 	 
	 	By:  	/s/ Peter Burlage
 	 
	 	 	Name:  	Peter Burlage 	 
	 	 	Title:  	President 	 
	 

Signature Page to Second Amendment

 

 

LENDERS:

	 	 	 	 	 
	 	COMERICA BANK, as a Lender, Issuing Lender 
and Swing Line Lender

 	 
	 	By:  	/s/ Kelly Cowherd
 	 
	 	 	Name:  	Kelly Cowherd 	 
	 	 	Title:  	Assistant Vice President 	 
	 

Signature Page to Second Amendment

 

 

	 	 	 	 	 
	 	MB FINANCIAL BANK, N.A.

 	 
	 	By:  	/s/ David G. Killpack
 	 
	 	 	Name:  	David G. Killpack 	 
	 	 	Title:  	Senior Vice President 	 
	 

Signature Page to Second Amendment

 

 

	 	 	 	 	 
	 	CITIBANK N.A.

 	 
	 	By:  	/s/ Yousuf Omar
 	 
	 	 	Name:  	Yousuf Omar 	 
	 	 	Title:  	Senior Vice President 	 
	 

Signature Page to Second Amendment

 

 

SCHEDULE 1

Peerless Mfg. Co.

PMC Acquisition, Inc.

Nitram Energy, Inc.

Bos-Hatten, Inc.

Burgess — Manning, Inc.

Burman Management, Inc.

 

 

ATTACHMENT 1

Schedule 1.1

Applicable Margin Grid

Revolving Credit and Term Loan Facilities 

(basis points per annum)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Basis for Pricing	 	Level I	 	Level II	 	Level III	 	Level IV**
	Consolidated Total Leverage Ratio*
	 	< 2.00 to 1.00	 	≥ 2.00 to 1.00 but 
< 2.50 to 1.00	 	≥2.50 to 1.00 but 
< 3.00 to 1.00	 	≥3.00 to 1.00
	Revolving Credit:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Facility Fee
	 	 	25.0	 	 	 	25.0	 	 	 	25.0	 	 	 	25.0	 
	Eurodollar Margin
	 	 	350.0	 	 	 	400.0	 	 	 	450.0	 	 	 	475.0	 
	Base Rate Margin
	 	 	275.0	 	 	 	300.0	 	 	 	350.0	 	 	 	375.0	 
	Letter of Credit Fee
	 	 	350.0	 	 	 	400.0	 	 	 	450.0	 	 	 	475.0	 
	Term Loan:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Eurodollar Margin
	 	 	375.0	 	 	 	425.0	 	 	 	475.0	 	 	 	500.0	 
	Base Rate Margin
	 	 	275.0	 	 	 	325.0	 	 	 	375.0	 	 	 	400.0	 

 

			
	*	 	Definitions as set forth in the Credit Agreement.
	 
	**	 	Level IV pricing shall be in effect as of the Second Amendment Effective Date and shall adjust
thereafter in accordance with Section 11.9(a).

2EX-4.03

Exhibit 4.03

Deposit
Agreement Between

Shanda Games Limited

And

JPMorgan Chase Bank, N.A. As

Depositary

Holders Of American Depositary

Receipts

 

 

J.P.Morgan

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	PARTIES
	 	 	1	 
	RECITALS
	 	 	1	 
	 
	 	 	 	 
	Section 1. Certain Definitions
	 	 	1	 
	(a) ADR Register
	 	 	1	 
	(b) ADRs; Direct Registration ADRs
	 	 	1	 
	(c) ADS
	 	 	1	 
	(d) Custodian
	 	 	1	 
	(e) Deliver, execute, issue et al
	 	 	1	 
	(f) Delivery Order
	 	 	2	 
	(g) Deposited Securities
	 	 	2	 
	(h) Direct Registration System
	 	 	2	 
	(i) Holder
	 	 	2	 
	(j) Securities Act of 1933
	 	 	2	 
	(k) Securities Exchange Act of 1934
	 	 	2	 
	(l) Shares
	 	 	2	 
	(m) Transfer Office
	 	 	2	 
	(n) Withdrawal Order
	 	 	2	 
	Section 2. ADRs
	 	 	2	 
	Section 3. Deposit of Shares
	 	 	3	 
	Section 4. Issue of ADRs
	 	 	4	 
	Section 5. Distributions on Deposited Securities
	 	 	4	 
	Section 6. Withdrawal of Deposited Securities
	 	 	4	 
	Section 7. Substitution of ADRs
	 	 	4	 
	Section 8. Cancellation and Destruction of ADRs
	 	 	5	 
	Section 9. The Custodian
	 	 	5	 
	Section 10. Co-Registrars and Co-Transfer Agents
	 	 	5	 
	Section 11. Lists of Holders
	 	 	6	 
	Section 12. Depositary’s Agents
	 	 	6	 
	Section 13. Successor Depositary
	 	 	6	 
	Section 14. Reports
	 	 	7	 
	Section 15. Additional Shares
	 	 	7	 
	Section 16. Indemnification
	 	 	7	 
	Section 17. Notices
	 	 	8	 
	Section 18. Miscellaneous
	 	 	9	 
	Section 19. Consent to Jurisdiction
	 	 	9	 
	TESTIMONIUM
	 	 	11	 
	SIGNATURES
	 	 	11	 

- i -

 

J.P.Morgan

	 	 	 	 	 
	 	 	Page	 
	EXHIBIT A

	FORM OF FACE OF ADR
	 	 	A-1	 
	 
	 	 	 	 
	Introductory Paragraph
	 	 	A-1	 
	 
	 	 	 	 
	(1) Issuance of ADRs and Pre-Release of ADRs
	 	 	A-2	 
	(2) Withdrawal of Deposited Securities
	 	 	A-3	 
	(3) Transfers of ADRs
	 	 	A-3	 
	(4) Certain Limitations
	 	 	A-4	 
	(5) Taxes
	 	 	A-5	 
	(6) Disclosure of Interests
	 	 	A-5	 
	(7) Charges of Depositary
	 	 	A-6	 
	(8) Available Information
	 	 	A-7	 
	(9) Execution
	 	 	A-8	 
	 
	 	 	 	 
	Signature of Depositary
	 	 	A-8	 
	 
	 	 	 	 
	Address of Depositary’s Office
	 	 	A-8	 
	 
	 	 	 	 
	FORM OF REVERSE OF ADR
	 	 	A-9	 
	 
	 	 	 	 
	(10) Distributions on Deposited Securities
	 	 	A-9	 
	(11) Record Dates
	 	 	A-10	 
	(12) Voting of Deposited Securities
	 	 	A-10	 
	(13) Changes Affecting Deposited Securities
	 	 	A-11	 
	(14) Exoneration
	 	 	A-11	 
	(15) Resignation and Removal of Depositary; the Custodian
	 	 	A-13	 
	(16) Amendment
	 	 	A-13	 
	(17) Termination
	 	 	A-14	 
	(18) Appointment
	 	 	A-15	 
	(19) Waiver
	 	 	A-15	 

- ii -

 

J.P.Morgan

     DEPOSIT AGREEMENT dated as of [DATE] , 2009 (the “Deposit Agreement”) among SHANDA GAMES
LIMITED and its successors (the “Company”), JPMORGAN CHASE BANK, N.A., as depositary hereunder (the
“Depositary”), and all holders from time to time of American Depositary Receipts issued hereunder
(“ADRs”) evidencing American Depositary Shares (“ADSs”) representing deposited Shares (defined
below). The Company hereby appoints the Depositary as depositary for the Deposited Securities and
hereby authorizes and directs the Depositary to act in accordance with the terms set forth in this
Deposit Agreement. All capitalized terms used herein have the meanings ascribed to them in Section
1 or elsewhere in this Deposit Agreement. The parties hereto agree as follows:

     1. Certain Definitions.

     (a) “ADR Register” is defined in paragraph (3) of the form of ADR.

     (b) “ADRs” mean the American Depositary Receipts executed and delivered hereunder.
ADRs may be either in physical certificated form or Direct Registration ADRs. ADRs in physical
certificated form, and the terms and conditions governing the Direct Registration ADRs (as
hereinafter defined), shall be substantially in the form of Exhibit A annexed hereto (the “form
of ADR”). The term “Direct Registration ADR” means an ADR, the ownership of which is
recorded on the Direct Registration System. References to “ADRs” shall include certificated ADRs
and Direct Registration ADRs, unless the context otherwise requires. The form of ADR is hereby
incorporated herein and made a part hereof; the provisions of the form of ADR shall be binding upon
the parties hereto.

     (c) Subject to paragraph (13) of the form of ADR, each “ADS” evidenced by an ADR
represents the right to receive two Shares and a pro rata share in any other Deposited
Securities.

     (d) “Custodian” means the agent or agents of the Depositary (singly or collectively,
as the context requires) and any additional or substitute Custodian appointed pursuant to Section
9.

     (e) The terms “deliver”, “execute”, “issue”, “register”,
“surrender”, “transfer” or “cancel”, when used with respect to Direct
Registration ADRs, shall refer to an entry or entries or an electronic transfer or transfers in the
Direct Registration System, and, when used with respect to ADRs in physical certificated form,
shall refer to the physical delivery, execution, issuance, registration, surrender, transfer or
cancellation of certificates representing the ADRs.

1

 

 J.P.Morgan

     (f) “Delivery Order” is defined in Section 3.

     (g) “Deposited Securities” as of any time means all Shares at such time deposited
under this Deposit Agreement and any and all other Shares, securities,
property and cash at such time held by the Depositary or the Custodian in respect or in lieu
of such deposited Shares and other Shares, securities, property and cash.

     (h) “Direct Registration System” means the system for the uncertificated registration
of ownership of securities established by The Depository Trust Company (“DTC”) and utilized by the
Depositary pursuant to which the Depositary may record the ownership of ADRs without the issuance
of a certificate, which ownership shall be evidenced by periodic statements issued by the
Depositary to the Holders entitled thereto. For purposes hereof, the Direct Registration System
shall include access to the Profile Modification System maintained by DTC which provides for
automated transfer of ownership between DTC and the Depositary.

     (i) “Holder” means the person or persons in whose name an ADR is registered on the ADR
Register.

     (j) “Securities Act of 1933” means the United States Securities Act of 1933, as from
time to time amended.

     (k) “Securities Exchange Act of 1934” means the United States Securities Exchange Act
of 1934, as from time to time amended.

     (l) “Shares” mean the Class A ordinary shares of the Company, and shall include the rights to
receive Shares specified in paragraph (1) of the form of ADR.

     (m) “Transfer Office” is defined in paragraph (3) of the form of ADR.

     (n) “Withdrawal Order” is defined in Section 6.

     2. ADRs. (a) ADRs in certificated form shall be engraved, printed or otherwise
reproduced at the discretion of the Depositary in accordance with its customary practices in its
American depositary receipt business, or at the request of the Company typewritten and photocopied
on plain or safety paper, and shall be substantially in the form set forth in the form of ADR, with
such changes as may be required by the Depositary or the Company to comply with their obligations
hereunder, any applicable law, regulation or usage or to indicate any special limitations or
restrictions to which any particular ADRs are subject. ADRs may be issued in denominations of any
number of ADSs. ADRs in certificated form shall be

2

 

J.P.Morgan

executed by the Depositary by the manual or
facsimile signature of a duly authorized officer of the Depositary. ADRs in certificated form
bearing the facsimile signature of anyone who was at the time of execution a duly authorized
officer of the Depositary shall bind the Depositary, notwithstanding that such officer has ceased
to hold such office prior to the delivery of such ADRs.

     (b) Direct Registration ADRs. Notwithstanding anything in this Deposit Agreement or
in the form of ADR to the contrary, ADSs shall be evidenced by Direct
Registration ADRs, unless certificated ADRs are specifically requested by the Holder.

     (c) Holders shall be bound by the terms and conditions of this Deposit Agreement and
of the form of ADR, regardless of whether their ADRs are Direct Registration ADRs or certificated
ADRs.

     3. Deposit of Shares. In connection with the deposit of Shares hereunder, the
Depositary or the Custodian may require the following in form satisfactory to it: (a) a written
order directing the Depositary to issue to, or upon the written order of, the person or persons
designated in such order a Direct Registration ADR or ADRs evidencing the number of ADSs
representing such deposited Shares (a “Delivery Order”); (b) proper endorsements or duly executed
instruments of transfer in respect of such deposited Shares; (c) instruments assigning to the
Depositary, the Custodian or a nominee of either any distribution on or in respect of such
deposited Shares or indemnity therefor; and (d) proxies entitling the Custodian to vote such
deposited Shares. As soon as practicable after the Custodian receives Deposited Securities
pursuant to any such deposit or pursuant to paragraph (10) or (13) of the form of ADR, the
Custodian shall present such Deposited Securities for registration of transfer into the name of the
Depositary, the Custodian or a nominee of either, to the extent such registration is practicable,
at the cost and expense of the person making such deposit (or for whose benefit such deposit is
made) and shall obtain evidence satisfactory to it of such registration. Deposited Securities
shall be held by the Custodian for the account and to the order of the Depositary at such place or
places and in such manner as the Depositary shall determine. Deposited Securities may be delivered
by the Custodian to any person only under the circumstances expressly contemplated in this Deposit
Agreement. To the extent that the provisions of or governing the Shares make delivery of
certificates therefor impracticable, Shares may be deposited hereunder by such delivery thereof as
the Depositary or the Custodian may reasonably accept, including, without limitation, by causing
them to be credited to an account maintained by the Custodian for such purpose with the Company or
an accredited intermediary, such as a bank, acting as a registrar for the Shares, together with
delivery of the documents, payments and Delivery Order referred to herein to the Custodian or the
Depositary.

3

 

 J.P.Morgan

     4. Issue of ADRs. After any such deposit of Shares, the Custodian shall notify the
Depositary of such deposit and of the information contained in any related Delivery Order by
letter, first class airmail postage prepaid, or, at the request, risk and expense of the person
making the deposit, by cable, telex or facsimile transmission. After receiving such notice from
the Custodian, the Depositary, subject to this Deposit Agreement, shall properly issue at the
Transfer Office, to or upon the order of any person named in such notice, an ADR or ADRs registered
as requested and evidencing the aggregate ADSs to which such person is entitled.

     5. Distributions on Deposited Securities. To the extent that the Depositary
determines in its reasonable discretion that any distribution pursuant to paragraph (10) of the
form of ADR is not practicable with respect to any Holder, the Depositary may make such
distribution as it so deems practicable, including the distribution of
foreign currency, securities or property (or appropriate documents evidencing the right to
receive foreign currency, securities or property) or the retention thereof as Deposited Securities
with respect to such Holder’s ADRs (without liability for interest thereon or the investment
thereof).

     6. Withdrawal of Deposited Securities. In connection with any surrender of an
ADR for withdrawal of the Deposited Securities represented by the ADSs evidenced thereby, the
Depositary may require proper endorsement in blank of such ADR (or duly executed instruments of
transfer thereof in blank) and the Holder’s written order directing the Depositary to cause the
Deposited Securities represented by the ADSs evidenced by such ADR to be withdrawn and delivered
to, or upon the written order of, any person designated in such order (a “Withdrawal Order”).
Directions from the Depositary to the Custodian to deliver Deposited Securities shall be given by
letter, first class airmail postage prepaid, or, at the request, risk and expense of the Holder, by
cable, telex or facsimile transmission. Delivery of Deposited Securities may be made by the
delivery of certificates (which, if required by law shall be properly endorsed or accompanied by
properly executed instruments of transfer or, if such certificates may be registered, registered in
the name of such Holder or as ordered by such Holder in any Withdrawal Order) or by such other
means as the Depositary may deem practicable, including, without limitation, by transfer of record
ownership thereof to an account designated in the Withdrawal Order maintained either by the Company
or an accredited intermediary, such as a bank, acting as a registrar for the Deposited Securities.

     7. Substitution of ADRs. The Depositary shall execute and deliver a new Direct
Registration ADR in exchange and substitution for any mutilated certificated ADR upon cancellation
thereof or in lieu of and in substitution for such destroyed, lost or stolen certificated ADR,
unless the Depositary has notice that such ADR has been acquired by a bona fide purchaser, upon the
Holder thereof filing with the Depositary a request

4

 

J.P.Morgan

for such execution and delivery and a
sufficient indemnity bond and satisfying any other reasonable requirements imposed by the
Depositary.

     8. Cancellation and Destruction of ADRs; Maintenance of Records. All ADRs
surrendered to the Depositary shall be cancelled by the Depositary. The Depositary is authorized
to destroy ADRs in certificated form so cancelled in accordance with its customary practices.

     The Depositary agrees to maintain or cause its agents to maintain records of all ADRs
surrendered and Deposited Securities withdrawn under Section 6 hereof and paragraph (2) of the form
of ADR, substitute ADRs delivered under Section 7 hereof, and canceled or destroyed ADRs under this
Section 8, in keeping with the procedures ordinarily followed by stock transfer agents located in
the City of New York or as required by the laws or regulations governing the Depositary.

     9. The Custodian. Any Custodian in acting hereunder shall be subject to the
directions of the Depositary and shall be responsible solely to it. The Depositary shall be
responsible for the compliance by the Custodian with any applicable provisions of
the Deposit Agreement. The Depositary reserves the right to add, replace or remove a
Custodian. The Depositary will give prompt notice of any such action, which will be advance notice
if practicable. Each Custodian so appointed (other than JPMorgan Chase Bank, N.A.) shall give
written notice to the Company and the Depositary accepting such appointment and agreeing to be
bound by the applicable terms hereof.

     Any Custodian may resign from its duties hereunder by at least 30 days written notice to the
Depositary. The Depositary may discharge any Custodian at any time upon notice to the Custodian
being discharged. Any Custodian ceasing to act hereunder as Custodian shall deliver, upon the
instruction of the Depositary, all Deposited Securities held by it to a Custodian continuing to
act. If upon the effectiveness of such resignation there would be no Custodian acting
hereunder, the Depositary shall, promptly after receiving such notice, appoint a substitute
custodian or custodians, each of which shall thereafter be a Custodian hereunder.

     10. Co-Registrars and Co-Transfer Agents. The Depositary may appoint and
remove (i) co-registrars to register ADRs and transfers, combinations and split-ups of ADRs and to
countersign ADRs in accordance with the terms of any such appointment and (ii) co-transfer agents
for the purpose of effecting transfers, combinations and split-ups of ADRs at designated transfer
offices in addition to the Transfer Office on behalf of the Depositary. Each co-registrar or
co-transfer agent (other than JPMorgan Chase Bank, N.A.) shall give notice in writing to the
Company and the Depositary accepting such appointment and agreeing to be bound by the applicable
terms of this Deposit Agreement.

5

 

J.P.Morgan

     11. Lists of Holders. The Company shall have the right to inspect transfer records
of the Depositary and its agents and the ADR Register, take copies thereof and require the
Depositary and its agents to supply copies of such portions of such records as the Company may
request. The Depositary or its agent shall furnish to the Company promptly upon the written
request of the Company, a list of the names, addresses and holdings of ADSs by all Holders as of a
date within seven days of the Depositary’s receipt of such request.

     12. Depositary’s Agents. The Depositary may perform its obligations under this
Deposit Agreement through any agent appointed by it, provided that the Depositary shall notify the
Company of such appointment and shall remain responsible for the performance of such primary
obligations as if no agent were appointed, subject to paragraph (14) of the form of ADR.

     13. Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by written notice of its election so to do delivered to the Company, such resignation to
take effect upon the appointment of a successor depositary and its acceptance of such appointment
as hereinafter provided. The Depositary may at any time be removed by the Company by providing no
less than 90 days prior written notice of such removal to the Depositary, such removal to take
effect the later of (i) the 90th day after such notice of removal is first provided and
(ii) the appointment of a successor depositary and its acceptance of such appointment as
hereinafter
provided. Notwithstanding the foregoing, if upon the resignation or removal of the Depositary
a successor depositary is not appointed within the applicable 45-day period (in the case of
resignation) or 90-day period (in the case of removal) as specified in paragraph (17) of the form
of ADR, then the Depositary may elect to terminate this Deposit Agreement and the ADR and the
provisions of said paragraph (17) shall thereafter govern the Depositary=s obligations
hereunder. In case at any time the Depositary acting hereunder shall resign or be removed, the
Company shall use its best efforts to appoint a successor depositary, which shall be a bank or
trust company having an office in the Borough of Manhattan, The City of New York. Every successor
depositary shall execute and deliver to its predecessor and to the Company an instrument in writing
accepting its appointment hereunder, and thereupon such successor depositary, without any further
act or deed, shall become fully vested with all the rights, powers, duties and obligations of its
predecessor. The predecessor depositary, only upon payment of all sums due to it and on the
written request of the Company, shall (i) execute and deliver an instrument transferring to such
successor all rights and powers of such predecessor hereunder (other than its rights to
indemnification and fees owing, each of which shall survive any such removal and/or resignation),
(ii) duly assign, transfer and deliver all right, title and interest to the

6

 

J.P.Morgan

Deposited Securities to
such successor, and (iii) deliver to such successor a list of the Holders of all outstanding ADRs.
Any such successor depositary shall promptly mail notice of its appointment to such Holders. Any
bank or trust company into or with which the Depositary may be merged or consolidated, or to which
the Depositary shall transfer substantially all its American depositary receipt business, shall be
the successor of the Depositary without the execution or filing of any document or any further act.

     14. Reports. On or before the first date on which the Company makes any
communication available to holders of Deposited Securities or any securities regulatory authority
or stock exchange, by publication or otherwise, the Company shall transmit to the Depositary a copy
thereof in English or with an English translation or summary. The Company has delivered to the
Depositary, the Custodian and any Transfer Office, a copy of all provisions of or governing the
Shares and any other Deposited Securities issued by the Company or any affiliate of the Company
and, promptly upon any change thereto, the Company shall deliver to the Depositary, the Custodian
and any Transfer Office, a copy (in English or with an English translation) of such provisions as
so changed. The Depositary and its agents may rely upon the Company’s delivery thereof for all
purposes of this Deposit Agreement.

     15. Additional Shares. Neither the Company nor any company controlling, controlled
by or under common control with the Company shall issue additional Shares, rights to subscribe for
Shares, securities convertible into or exchangeable for Shares or rights to subscribe for any such
securities or shall deposit any Shares under this Deposit Agreement, except under circumstances
complying in all respects with the Securities Act of 1933. The Depositary will use reasonable
efforts to comply with written instructions of the Company not to accept for deposit hereunder any
Shares identified in such instructions at such times and under such circumstances as may reasonably
be specified in such instructions in order to facilitate the Company’s
compliance with securities laws in the United States.

     16. Indemnification. The Company shall indemnify, defend and save harmless each of
the Depositary and its agents against any loss, liability or expense (including reasonable fees and
expenses of counsel) which may arise out of acts performed or omitted, in connection with the
provisions of this Deposit Agreement and of the ADRs, as the same may be amended, modified or
supplemented from time to time in accordance herewith by either the Depositary or its agents or
their respective directors, employees, agents and affiliates, except for any liability or expense
directly arising out of the negligence or willful misconduct of the Depositary or its agents acting
in their capacity as such hereunder.

     The indemnities set forth in the preceding paragraph shall also apply to any

7

 

J.P.Morgan

liability or
expense which may arise out of any misstatement or alleged misstatement or omission or alleged
omission in any registration statement, proxy statement, prospectus (or placement memorandum), or
preliminary prospectus (or preliminary placement memorandum) relating to the offer or sale of ADSs,
except to the extent any such liability or expense arises out of (i) information relating to the
Depositary or its agents (other than the Company), as applicable, furnished in writing by the
Depositary and not changed or altered by the Company expressly for use in any of the foregoing
documents or (ii) if such information is provided, the failure to state a material fact necessary
to make the information provided not misleading.

     Except as provided in the next succeeding paragraph, the Depositary shall indemnify,
defend and save harmless the Company against any loss, liability or expense (including reasonable
fees and expenses of counsel) incurred by the Company in respect of this Deposit Agreement to the
extent such loss, liability or expense is due to the negligence or bad faith of the Depositary or
its agents acting in their capacity as such hereunder.

     Notwithstanding any other provision of this Deposit Agreement or the ADRs to the contrary,
neither the Company nor the Depositary, nor any of their agents, shall be liable to the other for
any indirect, special, punitive or consequential damages (collectively “Special Damages”) except
(i) to the extent such Special Damages arise from the gross negligence or willful misconduct of the
party from whom indemnification is sought or (ii) to the extent Special Damages arise from or out
of a claim brought by a third party (including, without limitation, Holders) against the Depositary
or its agents, except to the extent such Special Damages arise out of the gross negligence or
willful misconduct of the party seeking indemnification hereunder.

     The obligations set forth in this Section 16 shall survive the termination of this Deposit
Agreement and the succession or substitution of any indemnified person.

     17. Notices. Notice to any Holder shall be deemed given when first mailed, first
class postage prepaid, to the address of such Holder on the ADR Register or received by such
Holder. Failure to notify a Holder or any defect in the notification to
a Holder shall not affect the sufficiency of notification to other Holders or to the
beneficial owners of ADSs held by such other Holders. Notice to the Depositary or the Company
shall be deemed given when first received by it at the address or facsimile transmission number set
forth in (a) or (b), respectively, or at such other address or facsimile transmission number as
either may specify to the other by written notice:

(a) JPMorgan Chase Bank, N.A.
Four New York Plaza

New York, New York 10004

Attention: ADR Administration

Fax: (212) 623-0079

8

 

J.P.Morgan

(b) Shanda Games Limited

No. 1 Office Building

No. 690 Bibo Road

Pudong New Area

Shanghai, 201203

People’s Republic of China

Attention: Chief Financial Officer

Fax: +86-21-5080-5132

     18. Miscellaneous. This Deposit Agreement is for the exclusive benefit of the
Company, the Depositary, the Holders, and their respective successors hereunder, and shall not give
any legal or equitable right, remedy or claim whatsoever to any other person. The Holders and
owners of ADRs from time to time shall be parties to this Deposit Agreement and shall be bound by
all of the provisions hereof. If any such provision is invalid, illegal or unenforceable in any
respect, the remaining provisions shall in no way be affected thereby. This Deposit Agreement may
be executed in any number of counterparts, each of which shall be deemed an original and all of
which shall constitute one instrument.

     19. Consent to Jurisdiction. The Company irrevocably agrees that any legal
suit, action or proceeding against the Company brought by the Depositary or any Holder, arising out
of or based upon this Deposit Agreement or the transactions contemplated hereby, may be instituted
in any state or federal court in New York, New York, and, to the fullest extent permitted by law,
irrevocably waives any objection which it may now or hereafter have to the laying of venue of any
such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any
such suit, action or proceeding. The Company also irrevocably agrees that any legal suit, action or
proceeding against the Depositary brought by the Company, arising out of or based upon this Deposit
Agreement or the transactions contemplated hereby, may only be instituted in a state or federal
court in New York, New York. The Company has appointed CT Corporation System, 111 Eighth Avenue,
13th Floor, New York, New York, as its authorized agent (the “Authorized Agent”) upon
which process may be served in any such action arising out of or based on this Deposit Agreement or
the transactions contemplated hereby which may be instituted in any state or federal court in New
York, New York by the Depositary or any Holder, and, to the fullest
extent permitted by law, waives any other requirements of or objections to personal
jurisdiction with respect thereto. The Company represents and warrants that the Authorized Agent
has agreed to act as said agent for service of process, and the Company agrees to take any and all
action, including the filing of any and all

9

 

J.P.Morgan

documents and instruments, that may be necessary to
continue such appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of such service to the Company shall be deemed, in every
respect, effective service of process upon the Company. If, for any reason, the Authorized Agent
named above or its successor shall no longer serve as agent of the Company to receive service of
process in New York, the Company shall promptly appoint a successor acceptable to the Depositary,
so as to serve and will promptly advise the Depositary thereof. In the event the Company fails to
continue such designation and appointment in full force and effect, the Company hereby waives
personal service of process upon it and consents that any such service of process may be made by
certified or registered mail, return receipt requested, directed to the Company at its address last
specified for notices hereunder, and service so made shall be deemed completed five (5) days after
the same shall have been so mailed. Notwithstanding the foregoing, any action based on this
Deposit Agreement may be instituted by the Depositary or any Holder in any competent court in the
Cayman Islands, Hong Kong or the People’s Republic of China.

     To the extent that the Company or any of its properties, assets or revenues may have or may
hereafter be entitled to, or have attributed to it, any right of immunity, on the grounds of
sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief
in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from
service of process, from attachment upon or prior to judgment, from attachment in aid of execution
or judgment, or from execution of judgment, or other legal process or proceeding for the giving of
any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at
any time be commenced, with respect to its obligations, liabilities or other matter under or
arising out of or in connection with the Shares or Deposited Securities, the ADSs, the ADRs or this
Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and
unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such
relief and enforcement.

     EACH PARTY TO THIS DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER
AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ADRS) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR
PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED
ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY).

10

 

 J.P.Morgan

     IN WITNESS WHEREOF, SHANDA GAMES LIMITED and JPMORGAN CHASE BANK, N.A. have duly executed this
Deposit Agreement as of the day and year first above set forth and all holders of ADRs shall become
parties hereto upon acceptance by them of ADRs issued in accordance with the terms hereof.

	 	 	 	 	 
	 	 	SHANDA GAMES LIMITED
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title	 	 

	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:
	 	Vice President

11

 

J.P.Morgan

EXHIBIT A

ANNEXED TO AND INCORPORATED IN

 DEPOSIT AGREEMENT 

[FORM OF FACE OF ADR]

	 	 	 	 	 
	 
	 	No. of ADSs:
	 	 
	 	 	 	 	 
	Number	 	 	 	 

           Each ADS represents

           two Shares

           CUSIP:

AMERICAN DEPOSITARY RECEIPT

evidencing

AMERICAN DEPOSITARY SHARES

representing

ORDINARY SHARES

of

SHANDA GAMES LIMITED

(Incorporated under the laws of the Cayman Islands)

          JPMORGAN CHASE BANK, N.A., a national banking association organized under the laws of the
United States of America, as depositary hereunder (the “Depositary”), hereby certifies that        
is the registered owner (a “Holder”) of  American Depositary Shares
(“ADSs”), each (subject to paragraph (13)) representing two Class A ordinary shares (including the
rights to receive Shares described in paragraph (1), “Shares” and, together with any other
securities, cash or property from time to time held by the Depositary in respect or in lieu of
deposited Shares, the “Deposited Securities”), of Shanda Games Limited, a corporation organized
under the laws of the Cayman Islands (the “Company”), deposited under the Deposit Agreement dated
as of [DATE] , 2009 (as amended from time to time, the “Deposit Agreement”) among the Company, the
Depositary and all Holders from time to time of American Depositary Receipts issued thereunder
(“ADRs”), each of whom by accepting an ADR

A-1

 

J.P.Morgan

becomes a party thereto. The Deposit Agreement and this
ADR (which includes the provisions set forth on the reverse hereof) shall be governed by and
construed in accordance with the laws of the State of New York.

     (1) Issuance of ADRs; Pre-Release. This ADR is one of the ADRs issued under the
Deposit Agreement. Subject to paragraph (4), the Depositary may so issue ADRs for delivery at the
Transfer Office (defined in paragraph (3)) only against deposit of: (a) Shares in form
satisfactory to the Custodian; (b) rights to receive Shares from the Company or any registrar,
transfer agent, clearing agent or other entity recording Share ownership or transactions; or, (c)
in accordance with the next paragraph of this paragraph (1).

     In its capacity as Depositary, the Depositary shall not lend Shares or ADSs; provided,
however, that the Depositary may issue ADSs prior to the receipt of Shares (each such transaction a
“Pre-Release”). The Depositary may receive ADSs in lieu of Shares to close out a Pre-Release(which
ADSs will promptly be canceled by the Depositary upon receipt by the Depositary). Each such
Pre-Release will be subject to a written agreement whereby the person or entity (the “Applicant”)
to whom ADSs are to be delivered (a) represents that at the time of the Pre-Release the Applicant
or its customer owns the Shares that are to be delivered by the Applicant under such Pre-Release,
(b) agrees to indicate the Depositary as owner of such Shares in its records and to hold such
Shares in trust for the Depositary until such Shares are delivered to the Depositary or the
Custodian, (c) unconditionally guarantees to deliver to the Depositary or the Custodian, as
applicable, such Shares, and (d) agrees to any additional restrictions or requirements that the
Depositary deems appropriate. Each such Pre-Release will be at all times fully collateralized with
cash, U.S. government securities or such other collateral as the Depositary deems appropriate,
terminable by the Depositary on not more than five (5) business days’ notice and subject to such
further indemnities and credit regulations as the Depositary deems appropriate. The Depositary will
normally limit the number of ADSs involved in such Pre-Release at any one time to thirty percent
(30%) of the ADSs outstanding (without giving effect to Pre-Released ADSs outstanding), provided,
however, that the Depositary reserves the right to change or disregard such limit from time to time
as it deems appropriate. The Depositary may also set limits with respect to the number of ADSs
involved in Pre-Release with any one person on a case-by-case basis as it deems appropriate. The
Depositary may retain for its own account any compensation received by it in conjunction with the
foregoing. Collateral provided as described above, but not the earnings thereon, shall be held for
the benefit of the Holders (other than the Applicant).

     Every person depositing Shares under the Deposit Agreement represents and warrants that such
Shares are validly issued and outstanding, fully paid, nonassessable

A-2

 

J.P.Morgan

and free of pre-emptive
rights, that the person making such deposit is duly authorized so to do and that such Shares (A)
are not “restricted securities” as such term is defined in Rule 144 under the Securities Act of
1933 (“Restricted Securities”) unless at the time of deposit the requirements of paragraphs (c),
(e), (f) and (h) of Rule 144 shall not apply and such Shares may be freely transferred and may
otherwise be offered and sold freely in the United States or (B) have been registered under the
Securities Act of 1933. To the extent the person depositing Shares is an Aaffiliate@ of
the Company as
such term is defined in Rule 144, the person also represents and warrants that upon the sale
of the ADSs, all of the provisions of Rule 144 which enable the Shares to be freely sold (in the
form of ADSs) will be fully complied with and, as a result thereof, all of the ADSs issued in
respect of such Shares will not be on the sale thereof, Restricted Securities. Such
representations and warranties shall survive the deposit of Shares and issuance of ADRs. The
Depositary will not knowingly accept for deposit under the Deposit Agreement any Shares required to
be registered under the Securities Act of 1933 and not so registered; the Depositary may refuse to
accept for such deposit any Shares identified by the Company in order to facilitate the Company’s
compliance with such Act.

     (2) Withdrawal of Deposited Securities. Subject to paragraphs (4) and (5),
upon surrender of (i) a certificated ADR in form satisfactory to the Depositary at the Transfer
Office or (ii) proper instructions and documentation in the case of a Direct Registration ADR, the
Holder hereof is entitled to delivery at, or to the extent in dematerialized form from, the
Custodian’s office of the Deposited Securities at the time represented by the ADSs evidenced by
this ADR. At the request, risk and expense of the Holder hereof, the Depositary may deliver such
Deposited Securities at such other place as may have been requested by the Holder. Notwithstanding
any other provision of the Deposit Agreement or this ADR, the withdrawal of Deposited Securities
may be restricted only for the reasons set forth in General Instruction I.A.(1) of Form F-6 (as
such instructions may be amended from time to time) under the Securities Act of 1933.

     (3) Transfers of ADRs. The Depositary or its agent will keep, at a designated
transfer office (the “Transfer Office”), (a) a register (the “ADR Register”) for the registration,
registration of transfer, combination and split-up of ADRs, and, in the case of Direct Registration
ADRs, shall include the Direct Registration System, which at all reasonable times will be open for
inspection by Holders and the Company for the purpose of communicating with Holders in the interest
of the business of the Company or a matter relating to the Deposit Agreement and (b) facilities for
the delivery and receipt of ADRs. The term ADR Register includes the Direct Registration System.
Title to this ADR (and to the Deposited Securities represented by the ADSs evidenced hereby), when
properly endorsed (in the case of ADRs in certificated form)

A-3

 

J.P.Morgan

or upon delivery to the Depositary of
proper instruments of transfer, is transferable by delivery with the same effect as in the case of
negotiable instruments under the laws of the State of New York; provided that the
Depositary, notwithstanding any notice to the contrary, may treat the person in whose name this ADR
is registered on the ADR Register as the absolute owner hereof for all purposes and neither the
Depositary nor the Company will have any obligation or be subject to any liability under the
Deposit Agreement to any holder of an ADR, unless such holder is the Holder thereof. Subject to
paragraphs (4) and (5), this ADR is transferable on the ADR Register and may be split into other
ADRs or combined with other ADRs into one ADR, evidencing the aggregate number of ADSs surrendered
for split-up or combination, by the Holder hereof or by duly authorized attorney upon surrender of
this ADR at the
Transfer Office properly endorsed (in the case of ADRs in certificated form) or upon delivery
to the Depositary of proper instruments of transfer and duly stamped as may be required by
applicable law; provided that the Depositary may close the ADR Register at any time or from
time to time when deemed expedient by it or when reasonably requested by the Company in order
to comply with applicable law. At the request of a Holder, the Depositary shall, for the
purpose of substituting a certificated ADR with a Direct Registration ADR, or vice versa, execute
and deliver a certificated ADR or a Direct Registration ADR, as the case may be, for any authorized
number of ADSs requested, evidencing the same aggregate number of ADSs as those evidenced by the
certificated ADR or Direct Registration ADR, as the case may be, substituted.

     (4) Certain Limitations. Prior to the issue, registration, registration of
transfer, split-up or combination of any ADR, the delivery of any distribution in respect thereof,
or, subject to the last sentence of paragraph (2), the withdrawal of any Deposited Securities, and
from time to time in the case of clause (b)(ii) of this paragraph (4), the Company, the Depositary
or the Custodian may require: (a) payment with respect thereto of (i) any stock transfer or other
tax or other governmental charge, (ii) any stock transfer or registration fees in effect for the
registration of transfers of Shares or other Deposited Securities upon any applicable register and
(iii) any applicable charges as provided in paragraph (7) of this ADR; (b) the production of proof
satisfactory to it of (i) the identity of any signatory and genuineness of any signature and (ii)
such other information, including without limitation, information as to citizenship, residence,
exchange control approval, beneficial ownership of any securities, compliance with applicable law,
regulations, provisions of or governing Deposited Securities and terms of the Deposit Agreement and
this ADR, as it may deem necessary or proper; and (c) compliance with such regulations as the
Depositary may establish consistent with the Deposit Agreement. The issuance of ADRs, the
acceptance of deposits of Shares, the registration, registration of transfer, split-up or
combination of ADRs or, subject to the last sentence of paragraph (2), the withdrawal of Deposited
Securities may be suspended, generally or in particular instances, when the ADR Register or any
register for

A-4

 

J.P.Morgan

Deposited Securities is closed or when any such action is deemed advisable by the
Depositary or when reasonably requested by the Company in order to comply with applicable
law.

     (5) Taxes. If any tax or other governmental charge shall become payable by or on
behalf of the Custodian or the Depositary with respect to this ADR, any Deposited Securities
represented by the ADSs evidenced hereby or any distribution thereon, such tax or other
governmental charge shall be paid by the Holder hereof to the Depositary. The Depositary may
refuse to effect any registration, registration of transfer, split-up or combination hereof or,
subject to the last sentence of paragraph (2), any withdrawal of such Deposited Securities until
such payment is made. The Depositary may also deduct from any distributions on or in respect of
Deposited Securities, or may sell by public or private sale for the account of the Holder hereof
any part or all of such Deposited Securities (after attempting by reasonable means to notify the
Holder hereof prior to such sale), and may apply such deduction or the
proceeds of any such sale in payment of such tax or other governmental charge, the Holder
hereof remaining liable for any deficiency, and shall reduce the number of ADSs evidenced hereby to
reflect any such sales of Shares. In connection with any distribution to Holders, the Company will
remit to the appropriate governmental authority or agency all amounts (if any) required to be
withheld and owing to such authority or agency by the Company; and the Depositary and the Custodian
will remit to the appropriate governmental authority or agency all amounts (if any) required to be
withheld and owing to such authority or agency by the Depositary or the Custodian. The Depositary
will forward to the Company such information from its records as the Company may reasonably request
to enable the Company to file any necessary reports with governmental authorities or agencies. If
the Depositary determines that any distribution in property other than cash (including Shares or
rights) on Deposited Securities is subject to any tax that the Depositary or the Custodian is
obligated to withhold, the Depositary may dispose of all or a portion of such property in such
amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes, by
public or private sale, and the Depositary shall distribute the net proceeds of any such sale or
the balance of any such property after deduction of such taxes to the Holders entitled thereto.
Each Holder of an ADR or an interest therein agrees to indemnify the Depositary, the Company, the
Custodian and any of their respective directors, employees, agents and affiliates against, and hold
each of them harmless from, any claims by any governmental authority with respect to taxes,
additions to tax, penalties or interest arising out of any refund of taxes, reduced rate of
withholding at source or other tax benefit obtained.

     (6) Disclosure of Interests. To the extent that the provisions of or governing
any Deposited Securities may require disclosure of or impose limits on beneficial or other
ownership of Deposited Securities, other Shares and other securities and may

A-5

 

J.P.Morgan

provide for blocking
transfer, voting or other rights to enforce such disclosure or limits, Holders and all persons
holding ADRs agree to comply with all such disclosure requirements and ownership limitations and to
comply with any reasonable Company instructions in respect thereof. The Depositary agrees to
forward, upon the request and at the expenses of the Company, any written request for beneficial
ownership information from the Company to the Holders, and at the Company’s expense, to promptly
forward to the Company any responses received by the Depositary. The Company reserves the right to
instruct Holders to deliver their ADSs for cancellation and withdrawal of the Deposited Securities
so as to permit the Company to deal directly with the Holder thereof as a holder of Shares and
Holders agree to comply with such instructions. The Depositary agrees to cooperate with the
Company in its efforts to inform Holders of the Company’s exercise of its rights under this
paragraph and agrees to consult with, and provide reasonable assistance without risk, liability or
expense on the part of the Depositary, to the Company on the manner or manners in which it may
enforce such rights with respect to any Holder.

     (7) Charges of Depositary. The Depositary may charge, and collect from, (i) each
person to whom ADSs are issued, including, without limitation, issuances against deposits of
Shares, issuances in respect of Share Distributions, Rights and Other Distributions (as such terms
are defined in paragraph (10)), issuances pursuant to a
stock dividend or stock split declared by the Company, or issuances pursuant to a merger,
exchange of securities or any other transaction or event affecting the ADSs or the Deposited
Securities, and (ii) each person surrendering ADSs for withdrawal of Deposited Securities or whose
ADSs are cancelled or reduced for any other reason, U.S.$5.00 for each 100 ADSs (or portion
thereof) issued, delivered, reduced, cancelled or surrendered (as the case may be). The Depositary
may sell (by public or private sale) sufficient securities and property received in respect of
Share Distributions, Rights and Other Distributions prior to such deposit to pay such charge. The
following additional charges shall be incurred by the Holders, by any party depositing or
withdrawing Shares or by any party surrendering ADSs, to whom ADSs are issued (including, without
limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an
exchange of stock regarding the ADSs or the Deposited Securities or a distribution of ADSs pursuant
to paragraph (10)), whichever is applicable (i) a fee of U.S.$0.05 or less per ADS for any Cash
distribution made pursuant to the Deposit Agreement; provided, however there shall be no such fees
on any cash dividends declared and paid by the Company, (ii) a fee of U.S.$1.50 per ADR or ADRs for
transfers made pursuant to paragraph (3) hereof, (iii) a fee for the distribution or sale of
securities pursuant to paragraph (10) hereof, such fee being in an amount equal to the fee for the
execution and delivery of ADSs referred to above which would have been charged as a result of the
deposit of such securities (for purposes of this paragraph (7) treating all such securities as if
they were Shares) but which securities or the net cash proceeds from the sale thereof are instead

A-6

 

J.P.Morgan

distributed by the Depositary to Holders entitled thereto, (iv) an aggregate fee of U.S.$0.02 per
ADS per calendar year (or portion thereof) for services performed by the Depositary in
administering the ADRs (which fee may be charged on a periodic basis during each calendar year and
shall be assessed against Holders as of the record date or record dates set by the Depositary
during each calendar year and shall be payable at the sole discretion of the Depositary by billing
such Holders or by deducting such charge from one or more cash dividends or other cash
distributions), and (v) reimbursement of such fees, charges and expenses as are incurred by the
Depositary and/or any of the Depositary’s agents (including, without limitation, the Custodian and
expenses incurred on behalf of Holders in connection with compliance with foreign exchange control
regulations or any law or regulation relating to foreign investment) in connection with the
servicing of the Shares or other Deposited Securities, the delivery of Deposited Securities or
otherwise in connection with the Depositary’s or its Custodian’s compliance with applicable law,
rule or regulation (which charge shall be assessed on a proportionate basis against Holders as of
the record date or dates set by the depositary and shall be payable at the sole discretion of the
Depositary by billing such Holders or by deducting such charge from one or more cash dividends or
other cash distributions). The Company will pay all other charges and expenses of the Depositary
and any agent of the Depositary (except the Custodian) pursuant to agreements from time to time
between the Company and the Depositary, except (i) stock transfer or other taxes and other
governmental charges (which are payable by Holders or persons depositing Shares), (ii) cable, telex
and facsimile transmission and delivery charges incurred at the request of persons depositing, or
Holders delivering Shares, ADRs or Deposited Securities (which are payable by such persons or
Holders), (iii) transfer or registration fees for the
registration or transfer of Deposited Securities on any applicable register in connection with
the deposit or withdrawal of Deposited Securities (which are payable by persons depositing Shares
or Holders withdrawing Deposited Securities; there are no such fees in respect of the Shares as of
the date of the Deposit Agreement), and (iv) expenses of the Depositary in connection with the
conversion of foreign currency into U.S. dollars (which are paid out of such foreign currency).
Such charges may at any time and from time to time be changed by agreement between the Company and
the Depositary.

     (8) Available Information. The Deposit Agreement, the provisions of or governing
Deposited Securities and any written communications from the Company, which are both received by
the Custodian or its nominee as a holder of Deposited Securities and made generally available to
the holders of Deposited Securities, are available for inspection by Holders at the offices of the
Depositary and the Custodian and at the Transfer Office. The Depositary will distribute copies of
such communications (or English translations or summaries thereof) to Holders when furnished by the
Company. The Company is subject to the periodic reporting

A-7

 

J.P.Morgan

requirements of the Securities Exchange
Act of 1934 and accordingly files certain reports with the United States Securities and Exchange
Commission (the “Commission”). Such reports and other information may be inspected and copied at
public reference facilities maintained by the Commission located at the date hereof at 100 F
Street, NE, Washington, DC 20549.

     (9) Execution. This ADR shall not be valid for any purpose unless executed by the
Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary.

Dated:

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as Depositary

 	 
	 	By  	 	 
	 	Authorized Officer 	 
	 	 	 	 
	 

     The Depositary’s office is located at 4 New York Plaza, New York, New York 10004.

A-8

 

J.P.Morgan

[FORM OF REVERSE OF ADR]

     (10) Distributions on Deposited Securities. Subject to paragraphs (4) and (5), to
the extent practicable, the Depositary will distribute to each Holder entitled thereto on the
record date set by the Depositary therefor at such Holder’s address shown on the ADR Register, in
proportion to the number of Deposited Securities (on which the following distributions on Deposited
Securities are received by the Custodian) represented by ADSs evidenced by such Holder’s ADRs: (a)
Cash. Any U.S. dollars available to the Depositary resulting from a cash dividend or other
cash distribution or the net proceeds of sales of any other distribution or portion thereof
authorized in this paragraph (10) (“Cash”), on an averaged or other practicable basis, subject to
(i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible or
impracticable with respect to certain Holders, and (iii) deduction of the Depositary’s expenses in
(1) converting any foreign currency to U.S. dollars by sale or in such other manner as the
Depositary may determine to the extent that it determines that such conversion may be made on a
reasonable basis, (2) transferring foreign currency or U.S. dollars to the United States by such
means as the Depositary may determine to the extent that it determines that such transfer may be
made on a reasonable basis, (3) obtaining any approval or license of any governmental authority
required for such conversion or transfer, which is obtainable at a reasonable cost and within a
reasonable time and (4) making any sale by public or private means in any commercially reasonable
manner. (b) Shares. (i) Additional ADRs evidencing whole ADSs representing any Shares
available to the Depositary resulting from a dividend or free distribution on Deposited Securities
consisting of Shares (a “Share Distribution”) and (ii) U.S. dollars available to it resulting from
the net proceeds of sales of Shares received in a Share Distribution, which Shares would give rise
to fractional ADSs if additional ADRs were issued therefor, as in the case of Cash. (c)
Rights. (i) Warrants or other instruments in the discretion of the Depositary representing
rights to acquire additional ADRs in respect of any rights to subscribe for additional Shares or
rights of any nature available to the Depositary as a result of a distribution on Deposited
Securities (“Rights”), to the extent that the Company timely furnishes to the Depositary evidence
satisfactory to the Depositary that the Depositary may lawfully distribute the same (the Company
has no obligation to so furnish such evidence), or (ii) to the extent the Company does not so
furnish such evidence and sales of Rights are practicable, any U.S. dollars available to the
Depositary from the net proceeds of sales of Rights as in the case of Cash, or (iii) to the extent
the Company does not so furnish such evidence and such sales cannot practicably be accomplished by
reason of the nontransferability of the Rights, limited markets therefor, their short duration or
otherwise, nothing (and any Rights may lapse). (d) Other Distributions. (i) Securities or
property available to the Depositary resulting from any distribution on Deposited Securities other
than Cash, Share Distributions and Rights (“Other Distributions”), by any means that the
Depositary may deem equitable and practicable, or (ii) to the

A-9

 

J.P.Morgan

extent the Depositary deems
distribution of such securities or property not to be equitable and practicable, any U.S. dollars
available to the Depositary from the net proceeds of sales of Other Distributions as in the case of
Cash. Such U.S. dollars available will be distributed by checks drawn on a bank in the United
States for whole dollars and cents. Fractional cents will be withheld without liability and dealt
with by
the Depositary in accordance with its then current practices.

     (11) Record Dates. The Depositary may, after consultation with the Company if
practicable, fix a record date (which, to the extent applicable, shall be as near as practicable to
any corresponding record date set by the Company) for the determination of the Holders who shall be
responsible for the fee assessed by the Depositary for administration of the ADR program and for
any expenses provided for in paragraph (7) hereof as well as for the determination of the Holders
who shall be entitled to receive any distribution on or in respect of Deposited Securities, to give
instructions for the exercise of any voting rights, to receive any notice or to act in respect of
other matters and only such Holders shall be so entitled or obligated.

     (12) Voting of Deposited Securities. As soon as practicable after receipt from the
Company of notice of any meeting or solicitation of consents or proxies of holders of Shares or
other Deposited Securities, the Depositary shall distribute to Holders a notice stating (a) such
information as is contained in such notice and any solicitation materials, (b) that each Holder on
the record date set by the Depositary therefor will, subject to any applicable provisions of Cayman
Island law, be entitled to instruct the Depositary as to the exercise of the voting rights, if any,
pertaining to the Deposited Securities represented by the ADSs evidenced by such Holder’s ADRs and
(c) the manner in which such instructions may be given, including instructions to give a
discretionary proxy to a person designated by the Company. Upon receipt of instructions of a
Holder on such record date in the manner and on or before the date established by the Depositary
for such purpose, the Depositary shall endeavor insofar as practicable and permitted under the
provisions of or governing Deposited Securities to vote or cause to be voted the Deposited
Securities represented by the ADSs evidenced by such Holder’s ADRs in accordance with such
instructions. The Depositary will not itself exercise any voting discretion in respect of any
Deposited Securities. To the extent voting instruction cards are not so received by the Depositary
from any Holder, the Depositary shall deem such Holder to have so instructed the Depositary to give
a discretionary proxy to a person designated by the Company and the Depositary shall endeavor
insofar as practicable and permitted under the provisions of or governing Deposited Securities to
give a discretionary proxy to a person designated by the Company to vote the Deposited Securities
represented by the ADSs evidenced by such Holder’s ADRs as to which such deemed instructions are so
given, provided that no such instruction shall be deemed given and no discretionary proxy shall be
given (i) with respect to any matter as to which the Company informs the Depositary (and the

A-10

 

J.P.Morgan

Company agrees to provide such information promptly in writing when and if applicable) that (x) the
Company does not wish such proxy to be given, (y) substantial opposition exists with respect to any
agenda item for which the proxy would be given or (z) materially affects the rights of holders of
Shares and (ii) unless, with respect to such meeting, the Depositary has been provided with an
opinion of counsel to the Company, in form and substance satisfactory to the Depositary, to the
effect that (a) the granting of such discretionary proxy does not subject the Depositary to any
reporting obligations in the Cayman Islands, (b) the granting of such proxy will not result in a
violation of Cayman Island law, rule, regulation or permit, (c) the voting arrangement and deemed
instruction as contemplated herein will be given effect
under Cayman Island law upon a discretionary proxy being granted in the manner as aforesaid,
and (d) the granting of such discretionary proxy alone will not result in the Shares represented by
the ADSs being considered subject to attachment or appropriation by creditors of the Custodian or
the Depositary under Cayman Island law, to the extent Cayman Island law is relevant.

     There is no guarantee that Holders generally or any Holder in particular will receive the
notice described above with sufficient time to enable such Holder to return any voting instructions
to the Depositary in a timely manner.

     (13) Changes Affecting Deposited Securities. Subject to paragraphs (4) and (5), the
Depositary may, in its discretion, amend this ADR or distribute additional or amended ADRs (with or
without calling this ADR for exchange) or cash, securities or property on the record date set by
the Depositary therefor to reflect any change in par value, split-up, consolidation, cancellation
or other reclassification of Deposited Securities, any Share Distribution or Other Distribution not
distributed to Holders or any cash, securities or property available to the Depositary in respect
of Deposited Securities from (and the Depositary is hereby authorized to surrender any Deposited
Securities to any person and, irrespective of whether such Deposited Securities are surrendered or
otherwise cancelled by operation of law, rule, regulation or otherwise, to sell by public or
private sale any property received in connection with) any recapitalization, reorganization,
merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all
the assets of the Company, and to the extent the Depositary does not so amend this ADR or make a
distribution to Holders to reflect any of the foregoing, or the net proceeds thereof, whatever
cash, securities or property results from any of the foregoing shall constitute Deposited
Securities and each ADS evidenced by this ADR shall automatically represent its pro rata interest
in the Deposited Securities as then constituted.

     (14) Exoneration. The Depositary, the Company, their agents and each of them shall:
(a) incur no liability (i) if any present or future law, rule, regulation , fiat, order or decree
of the United States, the Cayman Islands, The People’s Republic of

A-11

 

J.P.Morgan

China (including the Hong Kong
Special Administrative Region, the People’s Republic of China) or any other country, or of any
governmental or regulatory authority or any securities exchange or market or automated quotation
system, the provisions of or governing any Deposited Securities, any present or future provision of
the Company’s charter, any act of God, war, terrorism or other circumstance beyond its control
shall prevent or delay, or shall cause any of them to be subject to any civil or criminal penalty
in connection with, any act which the Deposit Agreement or this ADR provides shall be done or
performed by it or them (including, without limitation, voting pursuant to paragraph (12) hereof),
or (ii) by reason of any exercise or failure to exercise any discretion given it in the Deposit
Agreement or this ADR; (b) assume no liability except to perform its obligations to the extent they
are specifically set forth in this ADR and the Deposit Agreement without gross negligence or bad
faith; (c) in the case of the Depositary and its agents, be under no obligation to appear in,
prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or
this ADR; (d) in the case of the Company and its agents hereunder be
under no obligation to appear in, prosecute or defend any action, suit or other proceeding in
respect of any Deposited Securities or this ADR, which in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense (including fees and
disbursements of counsel) and liability be furnished as often as may be required; or (e) not be
liable for any action or inaction by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Shares for deposit, any Holder, or any other person
believed by it to be competent to give such advice or information. The Depositary shall not be
liable for the acts or omissions made by any securities depository, clearing agency or settlement
system in connection with or arising out of book-entry settlement of Deposited Securities or
otherwise, so long as such acts or omissions are not caused as a direct result of the gross
negligence or willful misconduct of the Depositary. The Depositary shall not be responsible for,
and shall incur no liability in connection with or arising from, the insolvency of any Custodian
that is not a branch or affiliate of JPMorgan Chase Bank, N.A. The Depositary, its agents and the
Company may rely and shall be protected in acting upon any written notice, request, direction or
other document believed by them to be genuine and to have been signed or presented by the proper
party or parties. The Depositary and its agents will not be responsible for any failure to carry
out any instructions to vote any of the Deposited Securities, for the manner in which any such vote
is cast or for the effect of any such vote. The Depositary and its agents may own and deal in any
class of securities of the Company and its affiliates and in ADRs. Notwithstanding anything to the
contrary set forth in the Deposit Agreement or an ADR, the Depositary and its agents may fully
respond to any and all demands or requests for information maintained by or on its behalf in
connection with the Deposit Agreement, any Holder or Holders, any ADR or ADRs or otherwise related
hereto or thereto to the extent such information is requested or required by or pursuant to any
lawful authority, including without limitation laws, rules, regulations, administrative

A-12

 

J.P.Morgan

or judicial process, banking, securities or other regulators. None of the Depositary, the Custodian or the
Company shall be liable for the failure by any Holder or beneficial owner to obtain the benefits of
credits on the basis of non-U.S. tax paid against such Holder=s or beneficial owner=s
income tax liability. The Depositary and the Company shall not incur any liability for any tax
consequences that may be incurred by Holders and beneficial owners on account of their ownership of
the ADRs or ADSs. The Company has agreed to indemnify the Depositary and its agents under certain
circumstances and the Depositary has agreed to indemnify the Company under certain circumstances.
Neither the Depositary, the Company nor any of their respective agents shall be liable to Holders
or beneficial owners of interests in ADSs for any indirect, special, punitive or consequential
damages (including, without limitation, lost profits) of any form incurred by any person or entity,
whether or not foreseeable and regardless of the type of action in which such a claim may be
brought. No disclaimer of liability under the Securities Act of 1933 is intended by any provision
hereof.

     (15) Resignation and Removal of Depositary; the Custodian. The Depositary may resign
as Depositary by written notice of its election so to do delivered to the Company, such resignation
to take effect upon the appointment of a successor depositary and its acceptance of such
appointment as provided in the Deposit
Agreement. The Depositary may at any time be removed by the Company by no less than 90 days
prior written notice of such removal, to become effective upon the later of (i) the 90th day after
delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its
acceptance of such appointment as provided in the Deposit Agreement. The Depositary may appoint
substitute or additional Custodians and the term “Custodian” refers to each Custodian or
all Custodians as the context requires.

     (16) Amendment. Subject to the last sentence of paragraph (2), the ADRs and the
Deposit Agreement may be amended by the Company and the Depositary, provided that any
amendment that imposes or increases any fees or charges (other than stock transfer or other taxes
and other governmental charges, transfer or registration fees, cable, telex or facsimile
transmission costs, delivery costs or other such expenses), or that shall otherwise prejudice any
substantial existing right of Holders, shall become effective 30 days after notice of such
amendment shall have been given to the Holders. Every Holder of an ADR at the time any amendment
to the Deposit Agreement so becomes effective shall be deemed, by continuing to hold such ADR, to
consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby.
In no event shall any amendment impair the right of the Holder of any ADR to surrender such ADR and
receive the Deposited Securities represented thereby, except in order to comply with mandatory
provisions of applicable law. Any amendments or supplements which (i) are reasonably necessary

A-13

 

J.P.Morgan

(as
agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6
under the Securities Act of 1933 or (b) the ADSs or Shares to be traded solely in electronic
book-entry form and (ii) do not in either such case impose or increase any fees or charges to be
borne by Holders, shall be deemed not to prejudice any substantial rights of Holders.
Notwithstanding the foregoing, if any governmental body or regulatory body should adopt new laws,
rules or regulations which would require amendment or supplement of the Deposit Agreement or the
form of ADR to ensure compliance therewith, the Company and the Depositary may amend or supplement
the Deposit Agreement and the ADR at any time in accordance with such changed laws, rules or
regulations. Such amendment or supplement to the Deposit Agreement in such circumstances may
become effective before a notice of such amendment or supplement is given to Holders or within any
other period of time as required for compliance. Notice of any amendment to the Deposit Agreement
or form of ADRs shall not need to describe in detail the specific amendments effectuated thereby,
and failure to describe the specific amendments in any such notice shall not render such notice
invalid, provided, however, that, in each such case, the notice given to the Holders identifies a
means for Holders to retrieve or receive the text of such amendment (i.e., upon retrieval from the
Securities and Exchange Commission’s, the Depositary’s or the Company’s website or upon request
from the Depositary). 

     (17) Termination. The Depositary may, and shall at the written direction of the
Company, terminate the Deposit Agreement and this ADR by mailing notice of such termination to the
Holders at least 30 days prior to the date fixed in such notice for such termination; provided,
however, if the Depositary shall have (i) resigned as Depositary hereunder, notice of such
termination by the Depositary shall not be
provided to Holders unless a successor depositary shall not be operating hereunder within 45
days of the date of such resignation, or (ii) been removed as Depositary hereunder, notice of such
termination by the Depositary shall not be provided to Holders unless a successor depositary shall
not be operating hereunder on the 90th day after the Company’s notice of removal was
first provided to the Depositary. After the date so fixed for termination, the Depositary and its
agents will perform no further acts under the Deposit Agreement and this ADR, except to receive and
hold (or sell) distributions on Deposited Securities and deliver Deposited Securities being
withdrawn. As soon as practicable after the expiration of six months from the date so fixed for
termination, the Depositary shall sell the Deposited Securities and shall thereafter (as long as it
may lawfully do so) hold in a segregated account the net proceeds of such sales, together with any
other cash then held by it under the Deposit Agreement, without liability for interest, in trust
for the pro rata benefit of the Holders of ADRs not theretofore surrendered. After
making such sale, the Depositary shall be discharged from all obligations in respect of the Deposit
Agreement and this ADR, except to account for such net proceeds and other cash. After the date so
fixed for termination, the Company shall be discharged from all obligations under the

A-14

 

J.P.Morgan

Deposit
Agreement except for its obligations to the Depositary and its agents.

     (18) Appointment. Each Holder and each person holding an interest in ADSs, upon
acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions
of the Deposit Agreement shall be deemed for all purposes to (a) be a party to and bound by the
terms of the Deposit Agreement and the applicable ADR(s), and (b) appoint the Depositary its
attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions
contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures
necessary to comply with applicable law and to take such action as the Depositary in its sole
discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and
the applicable ADR(s), the taking of such actions to be the conclusive determinant of the necessity
and appropriateness thereof.

     (19) Waiver. EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR
AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ADRS) HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR
THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH
HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY).

A-15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]