Document:

May
        28, 2008

       

    

    
      

      

    

     

    SHENGDATECH,
      INC.

     

    as
      Issuer

     

     

    THE
      BANK OF NEW YORK

     

    as
      Trustee

     

    and

     

    as
      Conversion Agent 

     

    and

     

    as
      Principal Paying Agent

     

    INDENTURE

     

    Dated
      as of May 28, 2008

     

    6.0%
      Convertible Senior Notes due 2018

     

    
      

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SHENGDATECH,
      INC.

    Reconciliation
      and Tie between Trust Indenture Act of 1939 and

    Indenture,
      dated as of May 28, 2008

     

    
      	
              Trust
                Indenture Act Section

            	
              Indenture
                Section

            
	
              §310(a)(1)

            	
              7.09

            
	
              (a)(2)

            	
              7.09

            
	
              (a)(3)

            	
              Not
                Applicable

            
	
              (a)(4)

            	
              Not
                Applicable

            
	
              (a)(5)

            	
              7.09

            
	
              (b)

            	
              7.08;
                7.10; 7.11

            
	
              (c)

            	
              Not
                Applicable

            
	
              §311(a)

            	
              7.13

            
	
              (b)

            	
              7.13

            
	
              §312(a)

            	
              5.01;
                5.02(a)

            
	
              (b)

            	
              5.02(b)

            
	
              (c)

            	
              5.02(c)

            
	
              §313(a)

            	
              5.03(a)

            
	
              (b)

            	
              5.03(a)

            
	
              (c)

            	
              5.03(a)

            
	
              (d)

            	
              5.03(b)

            
	
              §314(a)

            	
              5.04

            
	
              (b)

            	
              Not
                Applicable

            
	
              (c)(1)

            	
              16.06

            
	
              (c)(2)

            	
              16.06

            
	
              (c)(3)

            	
              Not
                Applicable

            
	
              (d)

            	
              Not
                Applicable

            
	
              (e)

            	
              16.06

            
	
              §315(a)

            	
              7.01

            
	
              (b)

            	
              6.08

            
	
              (c)

            	
              7.01

            
	
              (d)

            	
              7.01

            
	
              (e)

            	
              6.09

            
	
              §316(a)

            	
              8.01

            
	
              (a)(1)(A)

            	
              8.01;
                6.01; 6.07

            
	
              (a)(1)(B)

            	
              6.07

            
	
              (a)(2)

            	
              Not
                Applicable

            
	
              (b)

            	
              6.04

            
	
              (c)

            	
              8.01

            
	
              §317(a)(1)

            	
              6.02;
                6.03; 6.05

            
	
              (a)(2)

            	
              6.02

            
	
              (b)

            	
              7.05;
                12.01

            
	
              §318(a)

            	
              1.02

            
	
              (c)

            	
              1.02

            

    

    

    Note:
      This reconciliation and tie shall not, for any purpose, be deemed to be part
      of
      the Indenture.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

      

      
        
          
            
              
                
                  
                    
                      	
                              TABLE
                                OF CONTENTS

                            	 	
                            
	 	 	 
	 	 	
                              Page 

                            
	 	 	 
	
                              ARTICLE 1

                            	 	 
	
                              Definitions

                            	 	 
	 	 	 
	
                              SECTION 1.01.
                                Definitions

                            	 	
                              2

                            
	
                              SECTION 1.02.
                                Incorporation
                                by Reference of Trust Indenture Act

                            	 	
                              13

                            
	 	 	 
	
                              ARTICLE 2

                            	 	 
	
                              Issue,
                                Description, Execution, Registration and Exchange
                                of Notes

                            	 	 
	 	 	 
	
                              SECTION 2.01.
                                Designation
                                and Amount

                            	 	
                              13

                            
	
                              SECTION 2.02.
                                Form
                                of Notes

                            	 	
                              14

                            
	
                              SECTION 2.03.
                                Legends

                            	 	
                              15

                            
	
                              SECTION 2.04.
                                Date
                                and Denomination of Notes

                            	 	
                              19

                            
	
                              SECTION 2.05.
                                Execution, Authentication and Delivery of Notes

                            	 	
                              19

                            
	
                              SECTION 2.06.
                                Exchange
                                and Registration of Transfer of Notes; Transfer Generally;
                                Depositary

                            	 	
                              20

                            
	
                              SECTION 2.07.
                                Special
                                Transfer Provisions

                            	 	
                              23

                            
	
                              SECTION 2.08.
                                Mutilated,
                                Destroyed, Lost or Stolen Notes

                            	 	
                              25

                            
	
                              SECTION 2.09.
                                Temporary
                                Notes

                            	 	
                              26

                            
	
                              SECTION 2.10.
                                Cancellation
                                of Notes Paid, Etc

                            	 	
                              27

                            
	
                              SECTION 2.11.
                                CUSIP
                                Numbers

                            	 	
                              27

                            
	
                              SECTION 2.12.
                                Additional
                                Notes; Repurchases

                            	 	
                              27

                            
	 	 	 
	
                              ARTICLE 3

                            	 	 
	
                              Redemption

                            	 	 
	 	 	 
	
                              SECTION 3.01.
                                Right
                                to Redeem; Notice to Trustee

                            	 	
                              28

                            
	
                              SECTION 3.02.
                                Selection
                                of Notes to Be Redeemed

                            	 	
                              28

                            
	
                              SECTION 3.03.
                                Notice of Redemption

                            	 	
                              29

                            
	
                              SECTION 3.04 
                                Effect
                                of Notice of Redemption

                            	 	
                              30

                            
	
                              SECTION 3.05. Deposit
                                of Redemption Price

                            	 	
                              30

                            
	
                              SECTION 3.06. Notes
                                Redeemed in Part

                            	 	
                              31

                            
	 	 	 
	
                              ARTICLE 4

                            	 	 
	
                              Particular
                                Covenants of the Company

                            	 	 
	 	 	 
	
                              SECTION 4.01.
                                Payment
                                of Principal, Premium and Interest

                            	 	
                              31

                            
	
                              SECTION 4.02.
                                Additional
                                Interest

                            	 	
                              33

                            
	
                              SECTION 4.03.
                                Maintenance of Office or Agency

                            	 	
                              33

                            
	
                              SECTION 4.04.
                                Appointments
                                to Fill Vacancies in Trustee’s Office

                            	 	
                              34

                            
	
                              SECTION 4.05.
                                Provisions as to Paying Agent

                            	 	
                              34

                            

                    

                  

                

              

               

            

          

        

      

      
        ShengdaTech,
          Inc.

        Indenture

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

        
           

          
            	
                    SECTION 4.06.
                      Existence

                  	 	
                    35

                  
	
                    SECTION 4.07.
                      Payment of Additional Amounts

                  	 	
                    35

                  
	
                    SECTION 4.08.
                      Stay, Extension and Usury Laws

                  	 	
                    38

                  
	
                    SECTION 4.09.
                      Compliance Certificate; Statements as to Defaults

                  	 	
                    38

                  
	
                    SECTION 4.10.
                      Further Instruments and Acts

                  	 	
                    39

                  
	
                    SECTION 4.11.
                      Limitation on Incurrence of Indebtedness.

                  	 	
                    39

                  
	 	 	 
	
                    ARTICLE 5

                  	 	 
	
                    Lists
                      of Noteholders and Reports by the Company and the Trustee

                  	 	 
	 	 	 
	
                    SECTION 5.01.
                      Lists
                      of Noteholders

                  	 	
                    40

                  
	
                    SECTION 5.02.
                      Preservation
                      and Disclosure of Lists

                  	 	
                    40

                  
	
                    SECTION 5.03.
                      Reports
                      by Trustee

                  	 	
                    40

                  
	
                    SECTION 5.04.
                      Reports by Company

                  	 	
                    41

                  
	 	 	 
	
                    ARTICLE 6

                  	 	 
	
                    Defaults
                      and Remedies

                  	 	 
	 	 	 
	
                    SECTION 6.01.
                      Events of Default

                  	 	
                    42

                  
	
                    SECTION 6.02.
                      Payments of Notes on Default; Suit Therefor

                  	 	
                    45

                  
	
                    SECTION 6.03.
                      Application of Monies Collected by Trustee

                  	 	
                    47

                  
	
                    SECTION 6.04.
                      Proceedings by Noteholders

                  	 	
                    47

                  
	
                    SECTION 6.05.
                      Proceedings
                      by Trustee

                  	 	
                    48

                  
	
                    SECTION 6.06.
                      Remedies
                      Cumulative and Continuing

                  	 	
                    49

                  
	
                    SECTION 6.07.
                      Direction of Proceedings and Waiver of Defaults by Majority
                      of
                      Noteholders

                  	 	
                    49

                  
	
                    SECTION 6.08.
                      Notice
                      of Defaults

                  	 	
                    50

                  
	
                    SECTION 6.09.
                      Undertaking to Pay Costs

                  	 	
                    50

                  
	 	 	 
	
                    ARTICLE 7

                  	 	 
	
                    Concerning
                      the Trustee

                  	 	 
	 	 	 
	
                    SECTION 7.01.
                      Duties and Responsibilities of Trustee

                  	 	
                    51

                  
	
                    SECTION 7.02.
                      Reliance on Documents, Opinions, Etc

                  	 	
                    53

                  
	
                    SECTION 7.03.
                      No Responsibility for Recitals, Etc

                  	 	
                    55

                  
	
                    SECTION 7.04.
                      Trustee, Paying Agents, Conversion Agents or Registrar May
                      Own
                      Notes

                  	 	
                    55

                  
	
                    SECTION 7.05.
                      Monies to Be Held in Trust

                  	 	
                    55

                  
	
                    SECTION 7.06.
                      Compensation and Indemnification of Trustee

                  	 	
                    56

                  
	
                    SECTION 7.07.
                      Officers’ Certificate as Evidence

                  	 	
                    57

                  
	
                    SECTION 7.08.
                      Conflicting Interests of Trustee

                  	 	
                    57

                  
	
                    SECTION 7.09.
                      Eligibility of Trustee

                  	 	
                    57

                  
	
                    SECTION 7.10.
                      Resignation or Removal of Trustee

                  	 	
                    58

                  
	
                    SECTION 7.11.
                      Acceptance by Successor Trustee

                  	 	
                    59

                  
	
                    SECTION 7.12.
                      Succession by Merger, Etc

                  	 	
                    60

                  

          

        

         

      

      ShengdaTech,
        Inc.

      Indenture

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      
         

        
          	
                  SECTION 7.13.
                    Limitation on Rights of Trustee as Creditor

                	 	
                  60

                
	
                  SECTION 7.14.
                    Trustee’s Application for Instructions from the
                    Company

                	 	
                  61

                
	 	 	 
	
                  ARTICLE 8

                	 	 
	
                  Concerning
                    the Noteholders

                	 	 
	 	 	 
	
                  SECTION 8.01.
                    Action by Noteholders

                	 	
                  61

                
	
                  SECTION 8.02.
                    Proof of Execution by Noteholder

                	 	
                  61

                
	
                  SECTION 8.03.
                    Who Are Deemed Absolute Owners

                	 	
                  62

                
	
                  SECTION 8.04.
                    Company-Owned Notes Disregarded

                	 	
                  62

                
	
                  SECTION 8.05.
                    Revocation of Consents; Future Holders Bound

                	 	
                  63

                
	 	 	 
	
                  ARTICLE 9

                	 	 
	
                  Noteholders’
                    Meetings

                	 	 
	 	 	 
	
                  SECTION 9.01.
                    Purpose of Meetings

                	 	
                  63

                
	
                  SECTION 9.02.
                    Call of Meetings by Trustee

                	 	
                  63

                
	
                  SECTION 9.03.
                    Call of Meetings by Company or Noteholders

                	 	
                  64

                
	
                  SECTION 9.04.
                    Qualifications for Voting

                	 	
                  64

                
	
                  SECTION 9.05.
                    Regulations

                	 	
                  64

                
	
                  SECTION 9.06.
                    Voting

                	 	
                  65

                
	
                  SECTION 9.07.
                    No Delay of Rights by Meeting

                	 	
                  65

                
	 	 	 
	
                  ARTICLE 10

                	 	 
	
                  Supplemental
                    Indentures

                	 	 
	 	 	 
	
                  SECTION 10.01.
                    Supplemental Indentures without Consent of
                    Noteholders

                	 	
                  66

                
	
                  SECTION 10.02.
                    Supplemental Indentures with Consent of Noteholders

                	 	
                  67

                
	
                  SECTION 10.03.
                    Effect of Supplemental Indentures

                	 	
                  69

                
	
                  SECTION 10.04.
                    Notation on Notes

                	 	
                  69

                
	
                  SECTION 10.05.
                    Evidence of Compliance of Supplemental Indenture to Be Furnished
                    to
                    Trustee

                	 	
                  70

                
	 	 	 
	
                  ARTICLE 11

                	 	 
	
                  Consolidation,
                    Merger, Sale, Conveyance and Lease

                	 	 
	 	 	 
	
                  SECTION 11.01.
                    Company May Consolidate, Etc. on Certain Terms

                	 	
                  70

                
	
                  SECTION 11.02.
                    Successor Corporation to Be Substituted

                	 	
                  71

                
	
                  SECTION 11.03.
                    Officers’ Certificate and Opinion of Counsel to be Given
                    Trustee

                	 	
                  71

                
	 	 	 
	
                  ARTICLE 12

                	 	 
	
                  Satisfaction
                    and Discharge of Indenture

                	 	 
	 	 	 
	
                  SECTION 12.01.
                    Discharge of Indenture

                	 	
                  72

                
	
                  SECTION 12.02.
                    Deposited Monies to Be Held in Trust by Trustee

                	 	
                  72

                

        

      

       

      ShengdaTech,
        Inc.

      Indenture

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  SECTION 12.03.
                    Paying Agent to Repay Monies Held

                	 	
                  73

                
	
                  SECTION 12.04.
                    Return of Unclaimed Monies

                	 	
                  73

                
	
                  SECTION 12.05.
                    Reinstatement

                	 	
                  73

                
	 	 	 
	
                  ARTICLE 13

                	 	 
	
                  Immunity
                    of Incorporators, Stockholders, Officers and Directors

                	 	 
	 	 	 
	
                  SECTION 13.01.
                    Indenture and Notes Solely Corporate Obligations

                	 	
                  73

                
	 	 	 
	
                  ARTICLE 14

                	 	 
	
                  Conversion
                    of Notes

                	 	 
	 	 	 
	
                  SECTION 14.01.
                    Conversion Privilege

                	 	
                  74

                
	
                  SECTION 14.02.
                    Make-Whole Interest.

                	 	
                  76

                
	
                  SECTION 14.03.
                    Conversion Procedure

                	 	
                  78

                
	
                  SECTION 14.04.
                    Adjustment of Conversion Rate

                	 	
                  82

                
	
                  SECTION 14.05.
                    Shares to Be Fully Paid

                	 	
                  92

                
	
                  SECTION 14.06.
                    Effect of Reclassification, Consolidation, Merger or
                    Sale

                	 	
                  92

                
	
                  SECTION 14.07.
                    Certain Covenants

                	 	
                  94

                
	
                  SECTION 14.08.
                    Responsibility of Trustee

                	 	
                  94

                
	
                  SECTION 14.09.
                    Notice to Holders Prior to Certain Actions

                	 	
                  95

                
	
                  SECTION 14.10.
                    Share Rights Plans

                	 	
                  96

                
	 	 	 
	
                  ARTICLE 15

                	 	 
	
                  Purchase
                    of Notes at Option of Holders

                	 	 
	 	 	 
	
                  SECTION 15.01.
                    Purchase of Notes at Option of the Holder on Specified
                    Dates

                	 	
                  96

                
	
                  SECTION 15.02.
                    Purchase at Option of Holders Upon a Fundamental
                    Change

                	 	
                  101

                
	 	 	 
	
                  ARTICLE 16

                	 	 
	
                  Miscellaneous
                    Provisions

                	 	 
	 	 	 
	
                  SECTION 16.01.
                    Provisions Binding on Company’s Successors

                	 	
                  105

                
	
                  SECTION 16.02.
                    Official Acts by Successor Corporation

                	 	
                  105

                
	
                  SECTION 16.03.
                    Addresses for Notices, Etc

                	 	
                  105

                
	
                  SECTION 16.04.
                    Governing
                    Law

                	 	
                  107

                
	
                  SECTION 16.05.
                    Submission to Jurisdiction; Waiver of Immunity

                	 	
                  107

                
	
                  SECTION 16.06.
                    Evidence of Compliance with Conditions Precedent; Certificates
                    and
                    Opinions of Counsel to Trustee

                	 	
                  108

                
	
                  SECTION 16.07.
                    Legal Holidays

                	 	
                  109

                
	
                  SECTION 16.08.
                    No Security Interest Created

                	 	
                  109

                
	
                  SECTION 16.09.
                    Benefits of Indenture

                	 	
                  109

                
	
                  SECTION 16.10.
                    Table of Contents, Headings, Etc

                	 	
                  109

                
	
                  SECTION 16.11.
                    Authenticating
                    Agent

                	 	
                  109

                

        

      

       

      ShengdaTech,
        Inc.

      Indenture

        
          
            
            

          

          
            iv

            
              

            

          

          
            
            

          

        

      

       

      
        
          	
                  SECTION 16.12.
                    Currency
                    Indemnity

                	 	
                  110

                
	
                  SECTION 16.13.
                    Execution
                    in Counterparts

                	 	
                  111

                
	
                  SECTION 16.14.
                    Qualification
                    of Indenture

                	 	
                  111

                
	
                  SECTION 16.15.
                    Calculations

                	 	
                  111

                

        

        
          
            
               

            

          

        

      

      ShengdaTech,
        Inc.

      Indenture

        
          
            
            

          

          
            v

            
              

            

          

          
            
            

          

        

      

       

    

    INDENTURE
      dated as of May 28, 2008 between ShengdaTech, Inc., a Nevada corporation, as
      issuer (hereinafter sometimes called the “Company,”
as
      more fully set forth in Section 1.01), The Bank of New York, a banking
      corporation, as trustee (hereinafter sometimes called the “Trustee”,
      as
      more fully set forth in Section 1.01) and as principal paying agent
      (hereinafter sometimes called the “Principal
      Paying Agent”
as
      more
      fully set forth in Section 1.01).

     

    WITNESSETH:

     

    WHEREAS,
      for its lawful corporate purposes, the Company has duly authorized the issue
      of
      its 6.0% Convertible Senior Notes due 2018 (hereinafter sometimes called the
      “Notes”),
      initially in an aggregate principal amount not to exceed US$100,000,000 (or
      US$115,000,000 if the Initial Purchasers exercise their option to purchase
      additional Notes in full as set forth in the Purchase Agreement), and in order
      to provide the terms and conditions upon which the Notes are to be
      authenticated, issued and delivered, the Company has duly authorized the
      execution and delivery of this Indenture; and

     

    WHEREAS,
      the Notes, the certificate of authentication to be borne by the Notes, a form
      of
      assignment, a form of the Fundamental Change Purchase Notice, a form of the
      Put
      Right Purchase Notice, a form of Conversion Notice and certificate of transfer
      to be borne by the Notes are to be substantially in the forms hereinafter
      provided for; and

     

    WHEREAS,
      all acts and things necessary to make the Notes, when executed by the Company
      and authenticated and delivered by the Trustee or a duly authorized
      authenticating agent, as in this Indenture provided, the valid, binding and
      legal obligations of the Company, and to constitute these presents a valid
      agreement according to its terms, have been done and performed, and the
      execution of this Indenture and the issue hereunder of the Notes have in all
      respects been duly authorized.

     

    NOW,
      THEREFORE, THIS INDENTURE WITNESSETH:

     

    That
      in
      order to declare the terms and conditions upon which the Notes are, and are
      to
      be, authenticated, issued and delivered, and in consideration of the premises
      and of the purchase and acceptance of the Notes by the holders thereof, the
      Company covenants and agrees with the Principal Paying Agent and the Trustee
      for
      the equal and proportionate benefit of the respective holders from time to
      time
      of the Notes (except as otherwise provided below), as follows:

    ShengdaTech,
      Inc.

    SIGNATURE
      PAGE TO INDENTURE

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    ARTICLE 1

    Definitions

     

    SECTION 1.01.
      Definitions. 

     

    (a) The
      terms
      defined in this Section 1.01 (except as herein otherwise expressly provided
      or unless the context otherwise requires) for all purposes of this Indenture
      and
      of any indenture supplemental hereto shall have the respective meanings
      specified in this Section 1.01. All other terms used in this Indenture,
      which are defined in the Trust Indenture Act or which are by reference therein
      defined in the Securities Act (except as herein otherwise expressly provided
      or
      unless the context otherwise requires) shall have the meanings assigned to
      such
      terms in said Trust Indenture Act and in said Securities Act as in force at
      the
      date of the execution of this Indenture. If any provision hereof limits,
      qualifies or conflicts with another provision hereof which is required to be
      included in this Indenture by any of the provisions of the Trust Indenture
      Act,
      such required provision shall control. The words “herein,” “hereof,”
“hereunder,” and words of similar import refer to this Indenture as a whole and
      not to any particular Article, Section or other Subdivision. The terms defined
      in this Article Include the plural as well as the singular.

     

    “Additional
      Shares”
shall
      have the meaning specified in Section 14.01(b).

     

    “Additional
      Amounts”
shall
      have the meaning specified in Section 4.07.

     

    “Additional
      Interest”
means
      all amounts, if any, payable pursuant to Section 2(f) of the Registration
      Rights Agreement.

     

    “Adjustment
      Determination Date”
shall
      have the meaning specified in Section 14.04(k).

     

    “Adjustment
      Event”
shall
      have the meaning specified in Section 14.04(k).

     

    “Affiliate”
of
      any
      specified person means any other person directly or indirectly controlling
      or
      controlled by or under direct or indirect common control with such specified
      person. For the purposes of this definition, “control,”
when
      used with respect to any specified person means the power to direct or cause
      the
      direction of the management and policies of such person, directly or indirectly,
      whether through the ownership of voting securities, by contract or otherwise;
      and the terms “controlling”
and
      “controlled”
have
      meanings correlative to the foregoing.

     

    “Agent
      Member”
means
      a
      member of, or a participant in, the Depositary.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    “Beneficial
      Owner”
and
      “Beneficial
      Ownership”
means
      as determined in accordance with Rule 13d-3 and 13d-5 under the Exchange
      Act.

     

    “Board
      of Directors”
means
      the Board of Directors of the Company or a committee of such Board duly
      authorized to act for it hereunder.

     

    “Board
      Resolution”
means
      a
      copy of a resolution certified by the Secretary or an Assistant Secretary of
      the
      Company to have been duly adopted by the Board of Directors, or duly authorized
      committee thereof (to the extent permitted by applicable law), and to be in
      full
      force and effect on the date of such certification, and delivered to the
      Trustee.

     

    “Business
      Day”
means
      any day, except a Saturday, Sunday or legal holiday on which banking
      institutions in The City of New York or the city in which the Corporate Trust
      Office is located are authorized or obligated by law or executive order to
      close.

     

    “Capital
      Stock”
means,
      for any entity, any and all shares, interests, rights to purchase, warrants,
      options, participations or other equivalents of or interests in (however
      designated) stock issued by that entity.

     

    “Change
      in Control”
means
      either of the following events: (a) any person or group, other than the Company,
      its Subsidiaries or any employee benefit plan of the Company or its
      Subsidiaries, files a Schedule 13D or Schedule TO (or any successor
      schedule, form or report) pursuant to the Exchange Act disclosing that such
      person or group has become the beneficial owner of the Company’s Capital Stock
      with a majority of the total voting power of all of outstanding Capital Stock
      that is entitled to vote generally in the election of the Board of Directors
      (the “Voting
      Securities”),
      unless such beneficial ownership (i) arises solely as a result of a revocable
      proxy delivered in response to a proxy or consent solicitation made pursuant
      to
      the applicable rules and regulations under the Exchange Act, and (ii) is not
      also then reportable on Schedule 13D (or any successor schedule) under the
      Exchange Act; or (b) the Company consolidates with or merges with or into
      another person (other than one of its Subsidiaries), or sells, conveys,
      transfers or leases all or substantially all of its properties and assets to
      any
      person (other than one of its Subsidiaries), or any person (other than one
      of
      its Subsidiaries) consolidates with or merges with or into the Company, and
      the
      Company’s outstanding Voting Securities are reclassified into, converted for or
      converted into the right to receive any property or security; provided
      that
      none
      of these circumstances will be a Change in Control if persons that beneficially
      own the Voting Securities immediately prior to the transaction own, directly
      or
      indirectly, a majority of the Voting Securities of the surviving or transferee
      person immediately after the transaction in substantially the same proportion
      as
      their ownership of the Voting Securities immediately prior to the
      transaction. Notwithstanding
      the foregoing, it will not constitute a Change in Control if at least 90% of
      the
      consideration for the Shares (excluding cash payments for fractional shares
      and
      cash payments made in respect of dissenters’ appraisal rights and cash payment
      of the required cash payment, if any) in the transaction or transactions
      constituting the Change in Control consists of securities traded on a United
      States national securities exchange or quoted on the Nasdaq, or which will
      be so
      traded or quoted when issued or exchanged in connection with the Change in
      Control, and as a result of such transaction or transactions the Notes become
      convertible solely into such securities. For purposes of this definition, (1)
      the terms “person” and “group” have the meanings given by Sections 13(d)
      and 14(d) of the Exchange Act or any successor provisions, (2) the term “group”
includes any group acting for the purpose of acquiring, holding or disposing
      of
      securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act or
      any successor provision and (c) the term “beneficial owner” shall be determined
      in accordance with Rules 13d-3 and 13d-5 under the Exchange Act or any
      successor provisions, except that a person will be deemed to have beneficial
      ownership of all shares of Capital Stock that person has the right to acquire
      irrespective of whether that right is exercisable immediately or only after
      the
      passage of time.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    “close
      of business”
means
      5:00 p.m. New York City time.

     

    “Code”
means
      the U.S. Internal Revenue Code of 1983, as amended.

     

    “Commission”
means
      the Securities and Exchange Commission.

     

    “Common
      Stock Price”
means
      the price paid in the Make-Whole Change in Control per Share, in connection
      with
      a Make-Whole Change in Control, pursuant to which Additional Shares shall be
      added to the Conversion Rate as set forth in Section 14.01(b) hereof, which
      shall be equal to (i) if holders of Shares receive only cash in such Make-Whole
      Change in Control, the cash amount paid per Share, and (ii) in all other cases,
      the average of the Last Reported Sale Prices of the Shares over the five
      consecutive Trading Day period ending on the Trading Day preceding the Effective
      Date of the Make-Whole Change in Control.

     

    “Company”
means
      ShengdaTech, Inc., a Nevada corporation, and subject to the provisions of
      Article 11, shall include its successors and assigns.

     

    “Company
      Order”
means
      a
      written order signed in the name of the Company, signed by any two
      Officers.

     

    “Company
      Put Right Notice”
shall
      have the meaning specified in Section 15.01(b).

     

    “Company
      Put Right Notice Date”
shall
      have the meaning specified in Section 15.01(b).

     

    “Conversion
      Agent”
shall
      have the meaning specified in Section 4.03.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    “Conversion
      Date”
shall
      have the meaning specified in Section 14.03(c).

     

    “Conversion
      Notice”
shall
      have the meaning specified in Section 14.03(c).

     

    “Conversion
      Obligation”
shall
      have the meaning specified in Section 14.01(a).

     

    “Conversion
      Price”
means
      as of any date US$1,000 divided by the Conversion Rate as of such
      date.

     

    “Conversion
      Rate”
shall
      have the meaning specified in Section 14.01(a).

     

    “Corporate
      Trust Office”
or
      other similar term means the principal corporate trust office of the Trustee
      at
      which at any particular time its corporate trust business shall be principally
      administered, which office is, at the date as of which this Indenture is dated,
      located at 101 Barclay Street, Floor 4 East, New York, NY 10286, United States
      of America, Attention: Global Corporate Trust, which may be acting through
      The
      Bank of New York, Level 12, Three Pacific Place, 1 Queen's Road East, Hong
      Kong
      or such other address as the Trustee may designate from time to time by notice
      to the Holders and the Company, or the principal corporate trust officer of
      any
      successor Trustee (or such other address as such successor Trustee may designate
      from time to time by notice to the Holders and the Company).

     

    “Custodian”
means
      The Bank of New York, as custodian for The Depository Trust Company, with
      respect to the Notes in global form, or any successor entity
      thereto.

     

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

     

    “Defaulted
      Interest”
shall
      have the meaning specified in Section 4.01.

     

    “Definitive
      Notes”
shall
      have the meaning specified in Section 2.06(e).

     

    “Depositary”
means,
      with respect to the Notes issuable or issued in whole or in part in global
      form,
      the person specified in Section 2.06(e) as the Depositary with respect to
      such Notes, until a successor shall have been appointed and become such pursuant
      to the applicable provisions of this Indenture, and thereafter, “Depositary”
shall
      mean or include such successor.

     

    “Distributed
      Property”
shall
      have the meaning specified in Section 14.04(c).

     

    “DTC”
means
      The Depository Trust Company and its successors.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    “Effective
      Date”
shall
      have the meaning specified in Section 14.01(b).

     

    “Event
      of Default”
means,
      with respect to the Notes, any event specified in
      Section 6.01.

     

    “Ex-Dividend
      Date”
means,
      with respect to any issuance or distribution on the Shares or any other equity
      security, the first date on which the Shares or such other equity security
      trade
      on the applicable exchange or in the applicable market, regular way, without
      the
      right to receive such issuance, dividend or distribution.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, and the rules and regulations
      promulgated thereunder.

     

    “Fundamental
      Change”
shall
      be deemed to have occurred upon a Change in Control or a Termination of
      Trading.

     

    “Fundamental
      Change Control Notice”
shall
      have the meaning specified in Section 15.02(b).

     

    “Fundamental
      Change Expiration Time”
shall
      have the meaning specified in Section 15.02(b).

     

    “Fundamental
      Change Purchase Date”
shall
      have the meaning specified in Section 15.02(a).

     

    “Fundamental
      Change Purchase Notice”
shall
      have the meaning specified in Section 15.02(a)(i).

     

    “Fundamental
      Change Purchase Price”
shall
      have the meaning specified in Section 15.02(a).

     

    “Global
      Note”
shall
      have the meaning specified in Section 2.06(b).

     

    “IAI
      Notes” shall
      have the meaning specified in Section 2.02.

     

    “Indebtedness”
means
      obligations for money borrowed.

     

    “Indenture”
means
      this instrument as originally executed or, if amended or supplemented as herein
      provided, as so amended or supplemented.

     

    “Initial
      Purchasers”
means
      Oppenheimer & Co., Inc., Roth Capital Partners, LLC and Brean Murray, Carret
& Co., LLC.

     

    “Institutional
      Accredited Investor”
or
      “IAI” means an institution that is an “accredited investor” as that term is
      defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
      Act.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    “interest”
on
      a
      Note means the interest on such Note (including any Additional Amounts payable
      by the Company in respect of such interest). 

     

    “Interest
      Payment Date”
means
      June 1 and December 1 of each year, beginning on December 1,
      2008.

     

    “Last
      Reported Sale Price”
means,
      with respect to the Shares or any other securities for which a Last Reported
      Sale Price must be determined, on any date, the closing sale price per Share
      or
      unit of such other securities (or, if no closing sale price is reported, the
      average of the bid and ask prices or, if more than one in either case, the
      average of the average bid and the average ask prices) on such date as reported
      on the Nasdaq or other principal U.S. securities exchange on which the Shares
      or
      such other securities are traded. If the Shares or such other securities are
      not
      listed for trading on a United States national or regional securities exchange
      and not reported by the Nasdaq on the relevant date, the Last Reported Sale
      Price of the Shares or such other securities shall be the last quoted bid price
      per Share or such other securities are in the over-the-counter market on the
      relevant date, as reported by the National Quotation Bureau or similar
      organization. If the Shares or such other securities are not quoted, the Last
      Reported Sale Price of the Shares or such other securities shall be the average
      of the mid-point of the last bid and asked prices for the Shares or such other
      securities on the relevant date from each of at least three U.S. nationally
      recognized independent investment banking firms selected from time to time
      by
      the Board of Directors for that purpose. The Last Reported Sale Price shall
      be
      determined without reference to extended or after hours trading.

     

    “Make-Whole
      Cash Amount”
shall
      have the meaning specified in Section 14.02(e).

     

    “Make-Whole
      Change in Control”
means
      either of (a)
      any
      person or group, other than the Company, its Subsidiaries or any employee
      benefit plan of Company or its Subsidiaries, files a Schedule 13D or
      Schedule TO (or any successor schedule, form or report) pursuant to the Exchange
      Act disclosing that such person or group has become the beneficial owner of
      the
      Company’s Capital Stock with a majority of the total voting power of all of the
      Company’s outstanding Voting Securities, unless such beneficial ownership (i)
      arises solely as a result of a revocable proxy delivered in response to a proxy
      or consent solicitation made pursuant to the applicable rules and regulations
      under the Exchange Act, and (ii) is not also then reportable on
      Schedule 13D (or any successor schedule) under the Exchange Act
      or
      (b)
the
      Company consolidates with or merges with or into another person (other than
      one
      of its Subsidiaries), or sells, conveys, transfers or leases all or
      substantially all of its properties and assets to any person (other than one
      of
      its Subsidiaries), or any person (other than one of its Subsidiaries)
      consolidates with or merges with or into the Company, and the Company’s
      outstanding Voting Securities are reclassified into, converted for or converted
      into the right to receive any property or security. Notwithstanding
      the foregoing, it will not constitute a Make-Whole Change in Control if at
      least
      90% of the consideration for the Company’s Shares (excluding cash payments for
      fractional shares and cash payments made in respect of dissenters’ appraisal
      rights and cash payment of the required cash payment, if any) in the transaction
      or transactions constituting the Make-Whole Change in Control consists of
      securities traded or quoted on a United States national securities exchange,
      or
      which will be so traded when issued or exchanged in connection with the
      Make-Whole Change in Control, and as a result of such transaction or
      transactions the Notes become convertible solely into such
      securities.
      For
      purposes of this definition, (1) the terms “person” and “group” have the
      meanings given by Sections 13(d) and 14(d) of the Exchange Act or any
      successor provisions, (2) the term “group” includes any group acting for the
      purpose of acquiring, holding or disposing of securities within the meaning
      of
      Rule 13d-5(b)(1) under the Exchange Act or any successor provision and (c)
      the term “beneficial owner” shall be determined in accordance with
      Rules 13d-3 and 13d-5 under the Exchange Act or any successor provisions,
      except that a person will be deemed to have beneficial ownership of all shares
      of Capital Stock that person has the right to acquire irrespective of whether
      that right is exercisable immediately or only after the passage of
      time.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    “Make-Whole
      Interest”
shall
      have the meaning specified in Section 14.03(a).

     

    “Market
      Disruption Event”
means
      the occurrence or existence for more than a one-half hour period in the
      aggregate on any Trading Day for the Shares of any suspension or limitation
      imposed on trading (by reason of movements in price exceeding limits permitted
      by the stock exchange or otherwise) in the Shares or in any options, contracts
      or future contracts relating solely to the Shares, and such suspension or
      limitation occurs or exists at any time before 1:00 p.m. (New York City time)
      on
      such day.

     

    “Maturity
      Date”
means
      June 1, 2018.

     

    “Merger
      Event”
shall
      have the meaning specified in Section 14.06.

     

    “Nasdaq”
means
      the Nasdaq Stock Market LLC.

     

    “Note”
or
      “Notes”
means
      any note or notes, as the case may be, authenticated and delivered under this
      Indenture.

     

    “Noteholder”
or
      “holder,”
as
      applied to any Note, or other similar terms (but excluding the term “beneficial
      holder”), means any person in whose name at the time a particular Note is
      registered on the Note register.

     

    “Note
      Register”
shall
      have the meaning specified in Section 2.06(a).

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    “Note
      Registrar”
shall
      have the meaning specified in Section 2.06(a).

     

    “Officer”
means
      the president or chief executive officer, any vice president, the chief
      financial officer of the Company, or any other Person duly appointed by the
      shareholders of the Company, or the Board of Directors to perform corporate
      duties.

     

    “Officers’
      Certificate,”
when
      used with respect to the Company, means a certificate signed by any two Officers
      of the Company and delivered to the Trustee.

     

    “Offering
      Memorandum”
means
      the final offering memorandum dated May 22, 2008 relating to the offering
      by the Company of the Notes.

     

    “Opinion
      of Counsel”
means
      an opinion in writing signed by legal counsel, who may be an employee of or
      counsel to the Company, or other counsel, which opinion shall be reasonably
      acceptable to the Trustee, which is delivered to the Trustee. Each such opinion
      shall include the statements provided for in Section 16.06 if and to the
      extent required by the provisions of such Section.

     

    “outstanding,”
when
      used with reference to Notes, shall, subject to the provisions of
      Section 8.04, mean, as of any particular time, all Notes authenticated and
      delivered by the Trustee under this Indenture, except:

     

    (i) Notes
      theretofore cancelled by the Trustee or accepted by the Trustee for
      cancellation;

     

    (ii) Notes,
      or
      portions thereof, for the payment or repurchase of which monies in the necessary
      amount shall have been deposited in trust with the Trustee or with any Paying
      Agent (other than the Company) or shall have been set aside and segregated
      in
      trust by the Company (if the Company shall act as its own Paying
      Agent);

     

    (iii) Notes
      in
      lieu of which, or in substitution for which, other Notes shall have been
      authenticated and delivered pursuant to the terms of Section 2.08 unless
      proof satisfactory to the Trustee is presented that any such Notes are held
      by
      protected purchasers in due course; and

     

    (iv) Notes
      converted pursuant to Article 14.

     

    “Paying
      Agent”
shall
      have the meaning specified in Section 4.03.

     

    “Permitted
      Indebtedness”
shall
      have the meaning specified in Section 4.11.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

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

     

    “PRC”
means
      the People’s Republic of China.

     

    “Predecessor
      Note”
of
      any
      particular Note means every previous Note evidencing all or a portion of the
      same debt as that evidenced by such particular Note; and, for the purposes
      of
      this definition, any Note authenticated and delivered under Section 2.08 in
      lieu of a lost, destroyed or stolen Note shall be deemed to evidence the same
      debt as the lost, destroyed or stolen Note that it replaces.

     

    “Principal Paying
      Agent”
means
      The Bank of New York, and its successors and any corporation resulting from
      or
      surviving any consolidation or merger to which it or its successors may be
      a
      party or such other paying agent as the Company shall appoint. 

     

    “Process
      Agent”
shall
      have the meaning assigned to it in Section 16.05.

     

    “Purchase
      Agreement”
means
      that certain Purchase Agreement, dated May 22, 2008, between the Company
      and the Initial Purchasers.

     

    “Put
      Right Purchase Date”
shall
      have the meaning assigned to it in Section 15.01(a).

     

    “Put
      Right Purchase Notice”
shall
      have the meaning assigned to it in Section 15.01(a)(i).

     

    “Put
      Right Purchase Price”
shall
      have the meaning assigned to it in Section 15.01(a).

     

    “QIB”
means
      any “qualified institutional buyer” (as such term is defined in
      Rule 144A).

     

    “record
      date,”
with
      respect to any Interest Payment Date, shall have the meaning specified in
      Section 4.01.

     

    “Redemption
      Date”
means
      the date fixed by the Company for the redemption of all or any portion of the
      Notes in accordance with the provision of Article 3.

     

    “Redemption
      Price”
shall
      have the meaning specified in Section 3.01.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    “Reference
      Property”
shall
      have the meaning specified in Section 14.06(b).

     

    “Registration
      Rights Agreement”
means
      the Registration Rights Agreement dated as of the date hereof among the Company
      and the Initial Purchasers.

     

    “Relevant
      Taxing Jurisdiction”
has
      the
      meaning specified in Section 4.07.

     

    “Responsible
      Officer,”
when
      used with respect to the Trustee, shall mean any officer within the Corporate
      Trust Office, including any managing director, director, vice president,
      assistant vice president, assistant secretary, assistant treasurer, trust
      officer or any other officer of the Trustee who customarily performs functions
      similar to those performed by the Persons who at the time shall be such
      officers, respectively, or to whom any corporate trust matter is referred
      because of such person's knowledge of and familiarity with the particular
      subject and who shall have direct responsibility for the administration of
      this
      Indenture.

     

    “Restricted
      Securities”
shall
      have the meaning specified in Section 2.03.

     

    “Restricted
      Securities Legend”
shall
      have the meaning specified in Section 2.03.

     

    “Rule 144”
means
      Rule 144 under the Securities Act.

     

    “Rule 144A”
means
      Rule 144A under the Securities Act.

     

    “Section 4
      (1-1/2) Transaction”
means
      an offering of securities pursuant to a Section 4(1-1/2) exemption under
      the Securities Act.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder.

     

    “Shares”
means
      shares of the Company, par value US$0.00001 per share, at the date of this
      Indenture or shares of any class or classes resulting from any reclassification
      or reclassifications thereof and that have preference in respect of dividends
      or
      of amounts payable in the event of any voluntary or involuntary liquidation,
      dissolution or winding up of the Company and that are not subject to redemption
      by the Company; provided
      that if
      at any time there shall be more than one such resulting class, the shares of
      each such class then so issuable shall be substantially in the proportion which
      the total number of shares of such class resulting from all such
      reclassifications bears to the total number of shares of all such classes
      resulting from all such reclassifications. 

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    “Share
      Settlement Averaging Period”
shall
      have the meaning specified in Section 14.02(e).

     

    “Spin-Off”
shall
      have the meaning specified in Section 14.04(c).

     

    “Subsidiary”
of
      the
      Company means (i) a corporation a majority of whose Capital Stock with
      voting power, under ordinary circumstances, to elect directors is at the time,
      directly or indirectly, owned by the Company, by the Company and one or more
      Subsidiaries of the Company or by one or more Subsidiaries of the Company or
      (ii) any other person (other than a corporation) in which the Company, one
      or more Subsidiaries of the Company or the Company and one or more Subsidiaries
      of the Company, directly or indirectly, at the date of determination thereof,
      has greater than a 50% ownership interest.

     

    “Successor
      Company”
shall
      have the meaning specified in Section 11.01(a).

     

    “Termination
      of Trading”
shall
      be deemed to have occurred if the Shares, or other securities into which the
      Notes are then convertible, are not listed for trading on a U.S. national
      securities exchange, except as a result of a merger involving the Company or
      a
      tender offer or exchange offer for the Shares or other securities into which
      the
      Notes are then convertible.

     

    “Trading
      Day”
means
      a
      day during which (a) trading in the Shares generally occurs, (b) there is no
      Market Disruption Event and (c) a Last Reported Sale Price for the Shares (other
      than a Last Reported Sale Price referred to in the third sentence of such
      definition) is available for such day; provided
      that if
      the Shares are not admitted for trading or quotation on or by any exchange,
      bureau or other organization referred to in the definition of Last Reported
      Sale
      Price (excluding the third sentence of that definition), Trading Day shall
      mean
      any Business Day.

     

    “Trigger
      Event”
shall
      have the meaning specified in Section 14.04(c).

     

    “Trust
      Indenture Act”
means
      the Trust Indenture Act of 1939, as amended, as it was in force at the date
      of
      execution of this Indenture; provided,
      however,
      that in
      the event the Trust Indenture Act of 1939 is amended after the date hereof,
      the
      term “Trust
      Indenture Act”
shall
      mean, to the extent required by such amendment, the Trust Indenture Act of
      1939,
      as so amended.

     

    “Trustee”
means
      The Bank of New York, a New York banking corporation, and its successors and
      any
      corporation resulting from or surviving any consolidation or merger to which
      it
      or its successors may be a party and any successor trustee at the time serving
      as successor trustee hereunder.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    “U.S.
      Dollars”
and
      “US$”
each
      mean the currency of the United States of America.

     

    “Valuation
      Period”
shall
      have the meaning specified in Section 14.04(c).

     

    “Voting
      Securities”
shall
      have the meaning specified in the definition of “Change in Control” in this
      Section 1.01.

     

    “VWAP”
shall
      have the meaning specified in Section 14.02(e).

     

    “VWAP
      Market Disruption Event”
shall
      have the meaning specified in Section 14.02(e).

     

    “VWAP
      Trading Day”
shall
      have the meaning specified in Section 14.02(e).

     

    SECTION 1.02.
      Incorporation
      by Reference of Trust Indenture Act.

     

    This
      Indenture is subject to the mandatory provisions of the Trust Indenture Act,
      which are incorporated by reference in and made a part of this Indenture. The
      following Trust Indenture Act terms have the following meanings:

     

    “indenture
      securities”
means
      the Notes.

     

    “indenture
      security holder”
means
      a
      holder.

     

    “indenture
      to be qualified”
means
      this Indenture.

     

    “indenture
      trustee”
or
      “institutional
      trustee”
means
      the Trustee.

     

    “obligor”
on
      the
      indenture securities means the Company and any other obligor on the indenture
      securities.

     

    All
      other
      terms in this Indenture that are defined by the Trust Indenture Act, defined
      by
      it by reference to another statute or defined by Commission rule have the
      meanings assigned to them by such definitions. If any provision hereof limits,
      qualifies or conflicts with another provision hereof which is required to be
      included in this Indenture by the Trust Indenture Act, such required provision
      shall control.

     

    ARTICLE 2

    Issue,
      Description, Execution, Registration and Exchange of Notes

     

    SECTION 2.01.
      Designation
      and Amount.
      The
      Notes
      shall be designated as the “6.0% Convertible Senior Notes due 2018.” The
      aggregate principal amount of Notes that may be authenticated and delivered
      under this Indenture is initially limited to US$100,000,000 (or US$115,000,000
      if the Initial Purchasers exercise their option to purchase additional Notes
      in
      full as set forth in the Purchase Agreement), subject to Section 2.12 and
      except for Notes authenticated and delivered upon registration or transfer
      of,
      or in exchange for, or in lieu of other Notes pursuant to Section 2.06,
      Section 2.08, Section 3.06, Section 10.04, Section 14.03,
      Section 15.01 and Section 15.02 hereof.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    SECTION 2.02.
      Form
      of Notes.
      The
      Notes
      and the Trustee’s certificate of authentication to be borne by such Notes shall
      be substantially in the form set forth in Exhibit A, with such applicable
      legends as are provided for in Section 2.03(a).

     

    Any
      of
      the Notes may have such letters, numbers or other marks of identification and
      such notations, legends or endorsements as the officers executing the same
      may
      approve (execution thereof to be conclusive evidence of such approval) and
      as
      are not inconsistent with the provisions of this Indenture, or as may be
      required to comply with any law or with any rule or regulation made pursuant
      thereto or with any rule or regulation of any securities exchange or automated
      quotation system on which the Notes may be listed or designated for issuance,
      or
      to conform to usage or to indicate any special limitations or restrictions
      to
      which any particular Notes are subject.

     

    The
      Notes
      offered and sold pursuant to Rule 144A shall be issued initially in the form
      of
      one or more permanent Global Notes with the applicable legends as provided
      in
      Section 2.03. Each Global Note shall represent such principal amount of the
      outstanding Notes as shall be specified therein and shall provide that it shall
      represent the aggregate principal amount of outstanding Notes from time to
      time
      endorsed thereon and that the aggregate principal amount of outstanding Notes
      represented thereby may from time to time be increased or reduced to reflect
      purchases, conversions, transfers or exchanges permitted hereby. Any endorsement
      of a Global Note to reflect the amount of any increase or decrease in the amount
      of outstanding Notes represented thereby shall be made by the Trustee or the
      Custodian, at the direction of the Company, in such manner and upon instructions
      given by the registered holder of such Notes in accordance with this Indenture.
      Payment of principal and accrued and unpaid interest on the Global Note shall
      be
      made to the registered holder of such Note on the date of payment, unless a
      record date or other means of determining holders eligible to receive payment
      is
      provided for herein.

     

    Notes
      offered and sold to Institutional Accredited Investors pursuant to an exemption
      from registration under the Securities Act other than Rule 144A shall be issued
      in definitive, fully registered and certificated form without interest coupons,
      with the applicable legends as provided in Section 2.03 (the "IAI
      Notes").
      IAI
      Notes shall be delivered to such Institutional Accredited Investor(s) only
      upon
      the execution and delivery to the Initial Purchasers, the Company and the
      Trustee of an Accredited Investor Letter, substantially in the form of the
      letter attached as Annex B to the Offering Memorandum. Notes shall cease to
      be
      IAI Notes upon certain transfers as provided in Section 2.07.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    The
      terms
      and provisions contained in the forms of Note attached as Exhibit A hereto
      are
      incorporated herein and shall constitute, and are hereby expressly made, a
      part
      of this Indenture and to the extent applicable, the Company and the Trustee,
      by
      their execution and delivery of this Indenture, expressly agree to such terms
      and provisions and to be bound thereby.

     

    SECTION 2.03.
      Legends.
      Each
      Note
      issued hereunder and each Share issued upon conversion of such Note
      (collectively, the “Restricted
      Securities”)
      shall,
      upon issuance, bear the legend set forth in Section 2.03(a) or 2.03(b), as
      applicable (each a “Restricted
      Securities Legend”),
      and
      such legend shall not be removed except as provided in Section 2.03(c).
      Each such Restricted Security that bears or is required to bear the applicable
      Restricted Securities Legend shall be subject to the restrictions on transfer
      set forth in this Section 2.03 (including the Restricted Securities Legend
      set forth below), and the holder of each such Restricted Security, by such
      holder’s acceptance thereof, shall be deemed to have agreed to be bound by all
      such restrictions on transfer.

     

    As
      used
      in Section 2.03, the term “transfer”
      encompasses any sale, pledge, transfer or other disposition whatsoever of any
      Restricted Security.

     

    (a) Restricted
      Securities Legend for the Notes.
      Except
      as provided in Section 2.03(c), any certificate evidencing such Note (and
      all Notes issued in exchange therefor or substitution thereof) shall bear a
      Restricted Securities Legend in substantially the following form:

     

    THIS
      NOTE
      HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
      TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION
      HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

     

    (1) REPRESENTS
      THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS (A) A “QUALIFIED
      INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
      ACT) OR (B) AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN
      RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT), AND THAT IT
      EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,
      AND

     

    (2) AGREES
      FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE
      TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT
      IS
      THE LATER OF (X) ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
      AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS
      THE
      OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS SECURITY) AND (Y) SUCH LATER
      DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT ONLY:

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    (A) TO
      THE
      COMPANY OR ANY SUBSIDIARY THEREOF, OR

     

    (B) PURSUANT
      TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES
      ACT,
      OR

     

    (C) TO
      A
      QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
      SECURITIES ACT, OR

     

    (D) TO
      AN
      INSTITUTIONAL ACCREDITED INVESTOR, OR

     

    (E) PURSUANT
      TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
      ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
      THE
      SECURITIES ACT.

     

    PRIOR
      TO
      THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) or (2)(D) ABOVE,
      A
      DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM
      THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. PRIOR TO THE REGISTRATION OF
      ANY
      TRANSFER IN ACCORDANCE WITH (2)(E) ABOVE, THE COMPANY AND THE TRUSTEE
      RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS
      OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT
      THE
      PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND
      APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE
      AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT.

     

    IN
      ANY
      CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY ENGAGE IN ANY HEDGING
      TRANSACTIONS WITH REGARD TO THE NOTES OR THE SHARES ISSUABLE UPON CONVERSION
      OF
      THE NOTE EXCEPT AS PERMITTED UNDER THE SECURITIES ACT. 

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    (b) Restricted
      Securities Legend for the Shares Issued Upon Conversion of the
      Notes.
      Each
      Share issued upon conversion of Notes bearing a Restricted Securities Legend
      will, subject to the availability of a Registration Statement (as defined in
      the
      Registration Rights Agreement) and registration thereunder as set forth in
      the
      Registration Rights Agreement, bear the following legend:

     

    THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
      1933,
      AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
      EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
      HOLDER AGREES (1) THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY
      EVIDENCED HEREBY, EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THERE; (B)
      PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE
      SECURITIES ACT; (C) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED
      INSTITUTIONAL BUYER THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
      OF
      ANOTHER QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
      SECURITIES ACT; (D) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN
      RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT); OR (E) PURSUANT
      TO
      ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT; AND (2) IT WILL, PRIOR TO ANY TRANSFER OF THIS SECURITY FURNISH
      TO THE TRANSFER AGENT AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR
      OTHER INFORMATION AS MAY BE REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING
      MADE
      PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

     

    (c) Removal
      of the Restricted Securities Legends.
      The
      Restricted Securities Legend may be removed from any Note or any Share issued
      upon conversion of any Note if there is delivered to the Company such
      satisfactory evidence, which may include an opinion of independent counsel,
      as
      may be reasonably required by the Company, that neither such legend nor the
      restrictions on transfer set forth therein are required to ensure that transfers
      of such Note or Shares issued upon conversion of Notes, as the case may be,
      will
      not violate the registration requirements of the Securities Act or the
      qualification requirements under any state securities laws. Upon provision
      of
      such satisfactory evidence, at the written direction of the Company, (x) in
      the
      case of a Note, the Trustee shall authenticate and deliver in exchange for
      such
      Note another Note or Notes having an equal aggregate principal amount that
      does
      not bear such legend or (y) in the case of a Share, the Company shall
      authenticate and deliver in exchange for Shares bearing such legend, one or
      more
      new Shares that do not bear such legend. If the Restricted Securities Legend
      has
      been removed from a Note or Share issued upon conversion of any Note as provided
      above, no other Note issued in exchange for all or any part of such Note, or
      no
      other Share issued in exchange for such Share, shall bear such legend, unless
      the Company has reasonable cause to believe that such other Note is a
“restricted security” (or such Shares are “restricted securities”) within the
      meaning of Rule 144 and instructs the Trustee in writing to cause a
      Restricted Securities Legend to appear thereon.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    Any
      Note
      (or Note issued in exchange or substitution therefor) as to which the conditions
      for removal of the Restricted Securities Legend set forth in
      Section 2.03(a) as set forth therein have been satisfied may, upon
      surrender of such Note for exchange to the Note Registrar in accordance with
      the
      provisions of Section 2.06(a), be exchanged for a new Note or Notes, of
      like tenor and aggregate principal amount, which shall not bear the Restricted
      Securities Legend required by Section 2.03(a).

     

    Any
      Share
      issued upon conversion of any Note as to which the conditions for removal of
      the
      Restricted Securities Legend set forth in Section 2.03(b) have been
      satisfied may, upon surrender of the Share for exchange, be exchanged for a
      new
      Share, which shall not bear the Restricted Securities Legend.

     

    (d) Global
      Note Legend.
      Each
      Global Note shall also bear the following legend (the “Global
      Note Legend”)
      on the
      face thereof:

     

    UNLESS
      THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
      TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
      COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
      ANY
      CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
      NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
      IS
      MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
      REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
      OR
      OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
      HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

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

     

    (e) Legend
      for Definitive Notes.
      Definitive Notes, in addition to the legend set forth in Section 2.03(a),
      will also bear a legend substantially in the following form:

     

    THIS
      SECURITY WILL NOT BE ACCEPTED IN EXCHANGE FOR A BENEFICIAL INTEREST IN A GLOBAL
      NOTE UNLESS THE HOLDER OF THIS SECURITY, SUBSEQUENT TO SUCH EXCHANGE, WILL
      HOLD
      NO NOTES.

     

    SECTION 2.04.
      Date
      and Denomination of Notes.
      The
      Notes
      shall be issuable initially in registered form without coupons in denominations
      of $1,000 principal amount and integral multiples thereof. Each Note shall
      be
      dated the date of its authentication and shall bear interest from the date
      specified on the face of the form of Note attached as Exhibit
      A
      hereto,
      as applicable. 

     

    SECTION 2.05.
      Execution,
      Authentication and Delivery of Notes.
      The
      Notes
      shall be signed in the name and on behalf of the Company by the manual or
      facsimile signature of its
      Chief
      Executive Officer together with any of its executive Officers; or any two of
      its
      executive Officers.

     

    At
      any
      time and from time to time after the execution and delivery of this Indenture,
      the Company may deliver Notes executed by the Company to the Trustee for
      authentication, together with a Company Order for the authentication and
      delivery of such Notes, and the Trustee in accordance with such Company Order
      shall authenticate and deliver such Notes, without any further action by the
      Company hereunder; provided
      that the
      Trustee shall have the right to decline to authenticate and deliver any such
      Notes that the Trustee in good faith determines that such authentication or
      delivery may not lawfully be taken.

     

    Only
      such
      Notes as shall bear thereon a certificate of authentication substantially in
      the
      form set forth on the form of Note attached as Exhibit
      A
      hereto,
      manually executed by the Trustee (or an authenticating agent appointed by the
      Trustee as provided by Section 16.11), shall be entitled to the benefits of
      this Indenture or be valid or obligatory for any purpose. Such certificate
      by
      the Trustee (or such an authenticating agent) upon any Note executed by the
      Company shall be conclusive evidence that the Note so authenticated has been
      duly authenticated and delivered hereunder and that the holder is entitled
      to
      the benefits of this Indenture.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

    In
      case
      any officer of the Company who shall have signed any of the Notes shall cease
      to
      be such officer before the Notes so signed shall have been authenticated and
      delivered by the Trustee, or disposed of by the Company, such Notes nevertheless
      may be authenticated and delivered or disposed of as though the person who
      signed such Notes had not ceased to be such officer of the Company; and any
      Note
      may be signed on behalf of the Company by such persons as, at the actual date
      of
      the execution of such Note, shall be the proper officers of the Company,
      although at the date of the execution of this Indenture any such person was
      not
      such an officer.

     

    SECTION 2.06.
      Exchange
      and Registration of Transfer of Notes; Transfer Generally;
      Depositary.

     

    (a) The
      Company shall cause to be kept at the Corporate Trust Office a register (the
      register maintained in such office and in any other office or agency of the
      Company designated pursuant to Section 4.03 being herein sometimes
      collectively referred to as the “Note
      Register”)
      in
      which, subject to such reasonable regulations as it may prescribe, the Company
      shall provide for the registration of Notes and of transfers of Notes. Such
      register shall be in written form or in any form capable of being converted
      into
      written form within a reasonable period of time. The Trustee is hereby initially
      appointed “Note
      Registrar”
for
      the
      purpose of registering Notes and transfers of Notes as herein provided. The
      Company may appoint one or more co-registrars in accordance with
      Section 4.03.

     

    Upon
      surrender for registration of transfer of any Note to the Note Registrar or
      any
      co-registrar, and satisfaction of the requirements for such transfer set forth
      in this Section 2.06, the Company shall execute, and the Trustee shall
      authenticate and deliver, in the name of the designated transferee or
      transferees, one or more new Notes of any authorized denominations and of a
      like
      aggregate principal amount and bearing such restrictive legends as may be
      required by this Indenture.

     

    Notes
      may
      be exchanged for other Notes of any authorized denominations and of a like
      aggregate principal amount, upon surrender of such Notes to be exchanged at
      any
      such office or agency maintained by the Company pursuant to Section 4.03.
      Whenever any Notes are so surrendered for exchange, the Company shall execute,
      and the Trustee shall authenticate and deliver, the Notes which the Noteholder
      making the exchange is entitled to receive, bearing registration numbers not
      contemporaneously outstanding.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    All
      Notes
      presented or surrendered for registration of transfer or for exchange,
      repurchase or conversion shall (if so required by the Company, the Trustee,
      the
      Note Registrar or any co-registrar) be duly endorsed, or be accompanied by
      a
      written instrument or instruments of transfer in form satisfactory to the
      Company and duly executed, by the Noteholder thereof or his attorney-in-fact
      duly authorized in writing.

     

    No
      service charge shall be charged to the Noteholder for any exchange or
      registration of transfer of Notes, but the Company may require payment of a
      sum
      sufficient to cover any tax, assessments or other governmental charges that
      may
      be imposed in connection therewith.

     

    None
      of
      the Company, the Trustee, the Note Registrar or any co-registrar shall be
      required to exchange or register a transfer of (a) any Notes surrendered for
      conversion or, if a portion of any Note is surrendered for conversion, such
      portion thereof surrendered for conversion or (b) any Notes, or a portion of
      any
      Note, surrendered for repurchase (and not withdrawn) except in accordance with
      Article 14 for conversion and Article 15 for repurchase hereof,
      respectively.

     

    All
      Notes
      issued upon any registration of transfer or exchange of Notes in accordance
      with
      this Indenture shall be the valid obligations of the Company, evidencing the
      same debt, and entitled to the same benefits under this Indenture as the Notes
      surrendered upon such registration of transfer or exchange.

     

    (b) So
      long
      as the Notes are eligible for book-entry settlement with the Depositary, unless
      otherwise required by law, all Notes shall be represented by one or more Notes
      in global form (each, a “Global
      Note”)
      registered in the name of the Depositary or the nominee of the Depositary.
      The
      transfer and exchange of beneficial interests in a Global Note, which does
      not
      involve the issuance of a Definitive Note, shall be effected through the
      Depositary (but not the Trustee or the Custodian) in accordance with this
      Indenture (including the restrictions on transfer set forth herein) and the
      procedures of the Depositary therefor.

     

    (c) Any
      Global Note shall initially bear (i) the Restricted Securities Legend set forth
      in Section 2.03(a) and (ii) the Global Note Legend set forth in
      Section 2.03(d), and may be endorsed with or have incorporated in the text
      thereof such legends or recitals or changes not inconsistent with the provisions
      of this Indenture as may be required by the Custodian, the Depositary or by
      the
      Financial Industry Regulatory Authority, Inc. to comply with any applicable
      law
      or any regulation thereunder or with the rules and regulations of any securities
      exchange or automated quotation system upon which the Notes may be listed or
      traded or designated for issuance or to conform with any usage with respect
      thereto, or to indicate any special limitations or restrictions to which any
      particular Notes are subject.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    (d) Notwithstanding
      any other provisions of this Indenture, a Global Note may not be transferred
      as
      a whole or in part except by the Depositary to a nominee of the Depositary
      or by
      a nominee of the Depositary to the Depositary or another nominee of the
      Depositary or by the Depositary or any such nominee to a successor Depositary
      or
      a nominee of such successor Depositary and except (i) as set forth in the second
      paragraph of Section 2.06(e) and (ii) transfers of portions thereof in
      definitive form may be made upon request of an Agent Member (for itself or
      on
      behalf of a beneficial owner) by written notice given to the Trustee by or
      on
      behalf of the Depositary in accordance with customary procedures of the
      Depositary and in compliance with this Section.

     

    Agent
      Members will have no rights under this Indenture with respect to any Global
      Note
      held on their behalf by the Depositary, and the Depositary may be treated by
      the
      Company, the Trustee and any agent of the Company or the Trustee as the absolute
      owner and Holder of such Global Note for all purposes whatsoever.
      Notwithstanding the foregoing, the Depositary or its nominee may grant proxies
      and otherwise authorize any Person (including any Agent Member and any Person
      that holds a beneficial interest in a Global Note through an Agent Member)
      to
      take any action which a Holder is entitled to take under this Indenture or
      the
      Notes, and nothing herein will impair, as between the Depositary and its Agent
      Members, the operation of customary practices governing the exercise of the
      rights of a holder of any security.

     

    (e) The
      Depositary shall be a clearing agency registered under the Exchange Act. The
      Company initially appoints The Depository Trust Company to act as Depositary
      with respect to each Global Note. Initially, each Global Note shall be issued
      to
      the Depositary, registered in the name of Cede & Co., as the nominee of the
      Depositary, and deposited with the Trustee as custodian for Cede &
Co.

     

    If
      at any
      time the Depositary for a Global Note (i) notifies the Company that it is
      unwilling or unable to continue as Depositary for such Note or (ii) ceases
      to be
      registered as a clearing agency under the Exchange Act, the Company may appoint
      a successor Depositary with respect to such Note. If (1) a successor Depositary
      for such Global Note is not appointed by the Company within 90 days after the
      Company receives such notice or the Depositary ceasing to be a registered
      clearing agency; (2) the Company, at its option, notifies the Trustee in writing
      that it elects to cause the issuance of Notes in definitive (“Definitive
      Notes”)
      form
      in exchange for all or any part of the Notes represented by a Global Note,
      subject to the procedures of the Depositary; or (3) an Event of Default has
      occurred and is continuing and the Trustee has received a written request from
      the Depositary for the issuance of Definitive Notes in exchange for a Global
      Note, the Company will execute, and the Trustee, upon receipt of an Officers’
Certificate for the authentication and delivery of Notes, will authenticate
      and
      deliver Definitive Notes in an aggregate principal amount equal to the principal
      amount of such Global Note, in exchange for such Global Note, and upon delivery
      of the Global Note to the Trustee such Global Note shall be
      canceled.

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    Definitive
      Notes issued in exchange for all or a part of the Global Note pursuant to this
      Section 2.06 shall be registered in such names and in such authorized
      denominations as the Depositary, pursuant to instructions from its direct or
      indirect participants or otherwise, shall instruct the Trustee in writing.
      Upon
      execution and authentication, the Trustee shall deliver such Definitive Notes
      to
      the persons in whose names such Definitive Notes are so registered.

     

    At
      such
      time as all interests in a Global Note have been converted, canceled,
      repurchased or transferred, such Global Note shall be, upon receipt thereof,
      canceled by the Trustee in accordance with standing procedures and instructions
      existing between the Depositary and the Custodian. At any time prior to such
      cancellation, if any interest in a Global Note is exchanged for Definitive
      Notes, converted, canceled, repurchased or transferred to a transferee who
      receives Definitive Notes therefor or any Definitive Note is exchanged or
      transferred for part of such Global Note, the principal amount of such Global
      Note shall, in accordance with the standing procedures and instructions existing
      between the Depositary and the Custodian, be appropriately reduced or increased,
      as the case may be, and an endorsement shall be made on such Global Note, by
      the
      Trustee or the Custodian, at the direction of the Trustee, to reflect such
      reduction or increase.

     

    SECTION 2.07.
      Special
      Transfer Provisions.
      Unless
      a
      Note is no longer a Restricted Security, the following provisions shall apply
      to
      any sale, pledge or other transfer of such Notes:

     

    (a) Transfer
      of Notes to a QIB.
      The
      following provisions shall apply with respect to the registration of any
      proposed transfer of Notes to a QIB:

     

    (i) If
      the
      Notes to be transferred consist of a beneficial interest in the Global Notes,
      the transfer of such interest may be effected only through the book-entry
      systems maintained by DTC.

     

    (ii) If
      the
      Notes to be transferred consist of Definitive Notes, the Note Registrar shall
      register the transfer if such transfer is being made by a proposed transferor
      who has checked the box provided for on the form of Note stating (or has
      otherwise advised the Company and the Registrar in writing) that the sale has
      been made in compliance with the provisions of Rule 144A to a transferee
      who has signed a certification stating or has otherwise advised the Company
      and
      the Note Registrar in writing that:

     

    ShengdaTech,
      Inc.

    Indenture

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

    (A) it
      is
      purchasing the Notes for its own account or an account with respect to which
      it
      exercises sole investment discretion;

     

    (B) it
      and
      any such account is a QIB within the meaning of Rule 144A;

     

    (C) it
      is
      aware that the sale to it is being made in reliance on
      Rule 144A;

     

    (D) it
      acknowledges that it has received such information regarding the Company as
      it
      has requested pursuant to Rule 144A or has determined not to request such
      information; and

     

    (E) it
      is
      aware that the transferor is relying upon its foregoing representations in
      order
      to claim the exemption from registration provided by
      Rule 144A.

     

    (iii) If
      the
      Notes to be transferred consist of IAI Notes, upon the registration of such
      transfer pursuant to this Section 2.07(a), such Notes shall cease to be IAI
      Notes and may be evidenced by interests in a Global Note.

     

    (b) Transfer
      of Notes to a Non-QIB Institutional Accredited Investor.
      The
      following provisions shall apply with respect to the registration of any
      proposed transfer of Notes to any Institutional Accredited Investor which is
      not
      a QIB:

     

    (i) the
      Note
      Registrar shall register the transfer of any Note, whether or not such Note
      bears the legend required by Sections 2.03(a), if (A) the requested transfer
      is
      after the later of (1) one year after the later of the original issuance date
      of
      the Notes and the last date on which the Company or any affiliate of the Company
      as the owner of such Note (or any predecessor of the Note) and (2) such later
      late date, if any, as may be required by applicable law, or (B) the proposed
      transferee has delivered to the Note Registrar a certificate substantially
      in
      the form of Exhibit B hereto, together with such other certifications, legal
      opinions or other information as the Company may reasonably require to confirm
      that such transfer is being made pursuant to an exemption from, or in a
      transaction not subject to, the registration requirements of the Securities
      Act;
      and

     

    (ii) if
      the
      proposed transferor is a member of, or participant in, the Depositary, holding
      a
      beneficial interest in the Global Note, upon receipt by the Note Registrar
      of
      (A) the certificate, if any, required by clause (b)(i) above and (B)
      instructions given in accordance with the Depositary's and the Note Registrar's
      procedures, whereupon (1) the Note Registrar shall reflect on its books and
      records the date and a decrease in the principal amount of the Global Note
      in an
      amount equal to the principal amount of the beneficial interest in the Global
      Note to be transferred and (2) the Company shall execute and the Trustee shall
      authenticate and deliver one or more IAI Notes of like tenor and
      amount.

     

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    (iii) If
      the
      Notes to be transferred consist of IAI Notes, upon the registration of such
      transfer such Notes shall continue to be IAI Notes.

     

    (c) General.
      By its
      acceptance of any Note bearing the Restricted Securities Legend, each holder
      of
      such Note acknowledges the restrictions on transfer of such Note set forth
      in
      this Indenture and agrees that it will transfer such Note only as provided
      in
      this Indenture. The Note Registrar shall not register a transfer of any Note
      unless such transfer complies with the restrictions on transfer of such Note
      set
      forth in this Indenture. The Note Registrar shall be entitled to receive and
      rely on written instructions from the Company verifying that such transfer
      complies with such restrictions on transfer. In connection with any transfer
      of
      Notes, each holder agrees by its acceptance of the Notes to furnish the Note
      Registrar or the Company such certifications, legal opinions or other
      information as either of them may reasonably require to confirm that such
      transfer is being made pursuant to an exemption from, or a transaction not
      subject to, the registration requirements of the Securities Act; provided
      that the
      Note Registrar shall not be required to determine (but may rely on a
      determination made by the Company with respect to) the sufficiency of any such
      certifications, legal opinions or other information.

     

    The
      Note
      Registrar shall retain copies of all certifications, letters, notices and other
      written communications received pursuant to Section 4.01 hereof or this
      Section 2.07. The Company shall have the right to inspect and make copies
      of all such letters, notices or other written communications at any reasonable
      time upon the giving of reasonable written notice to the Note
      Registrar.

     

    SECTION 2.08.
      Mutilated,
      Destroyed, Lost or Stolen Notes.
      In
      case
      any Note shall become mutilated or be destroyed, lost or stolen, the Company
      in
      its discretion may execute, and upon its written request the Trustee or an
      authenticating agent appointed by the Trustee shall authenticate and deliver,
      a
      new Note, bearing a number not contemporaneously outstanding, in exchange and
      substitution for the mutilated Note, or in lieu of and in substitution for
      the
      Note so destroyed, lost or stolen. In every case the applicant for a substituted
      Note shall furnish to the Company, to the Trustee and, if applicable, to such
      authenticating agent such security or indemnity as may be required by them
      to
      save each of them harmless from any loss, liability, cost or expense caused
      by
      or connected with such substitution, and, in every case of destruction, loss
      or
      theft, the applicant shall also furnish to the Company, to the Trustee and,
      if
      applicable, to such authenticating agent evidence to their satisfaction of
      the
      destruction, loss or theft of such Note and of the ownership
      thereof.

     

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    The
      Trustee or such authenticating agent may authenticate any such substituted
      Note
      and deliver the same upon the receipt of such security or indemnity as the
      Trustee, the Company and, if applicable, such authenticating agent may require.
      Upon the issuance of any substituted Note, the Company may require the payment
      by the holder of a sum sufficient to cover any tax, assessment or other
      governmental charge that may be imposed in relation thereto and any other
      expenses (including the fees and expenses of the Trustee) connected therewith.
      In case any Note which has matured or is about to mature or has been tendered
      for purchase upon a Fundamental Change or is about to be converted into Shares
      shall become mutilated or be destroyed, lost or stolen, the Company may, in
      its
      sole discretion, instead of issuing a substitute Note, convert or authorize
      the
      conversion of the same (without surrender thereof except in the case of a
      mutilated Note), as the case may be, if the applicant for such conversion shall
      furnish to the Company, to the Trustee and, if applicable, to such
      authenticating agent such security or indemnity as may be required by them
      to
      save each of them harmless for any loss, liability, cost or expense caused
      by or
      connected with such substitution, and, in every case of destruction, loss or
      theft, evidence satisfactory to the Company, the Trustee and, if applicable,
      any
      Paying Agent or Conversion Agent evidence of their satisfaction of the
      destruction, loss or theft of such Note and of the ownership
      thereof.

     

    Every
      substitute Note issued pursuant to the provisions of this Section 2.08 by
      virtue of the fact that any Note is destroyed, lost or stolen shall constitute
      an additional contractual obligation of the Company, whether or not the
      destroyed, lost or stolen Note shall be found at any time, and shall be entitled
      to all the benefits of (but shall be subject to all the limitations set forth
      in) this Indenture equally and proportionately with any and all other Notes
      duly
      issued hereunder. To the extent permitted by law, all Notes shall be held and
      owned upon the express condition that the foregoing provisions are exclusive
      with respect to the replacement, conversion, redemption or repurchase of
      mutilated, destroyed, lost or stolen Notes and shall preclude any and all other
      rights or remedies notwithstanding any law or statute existing or hereafter
      enacted to the contrary with respect to the replacement, conversion, redemption
      or repurchase of negotiable instruments or other securities without their
      surrender.

     

    SECTION 2.09.
      Temporary
      Notes.
      Pending
      the preparation of Notes in certificated form, the Company may execute and
      the
      Trustee or an authenticating agent appointed by the Trustee shall, upon written
      request of the Company, authenticate and deliver temporary Notes (printed or
      lithographed). Temporary Notes shall be issuable in any authorized denomination,
      and substantially in the form of the Notes in certificated form but with such
      omissions, insertions and variations as may be appropriate for temporary Notes,
      all as may be determined by the Company. Every such temporary Note shall be
      executed by the Company and authenticated by the Trustee or such authenticating
      agent upon the same conditions and in substantially the same manner, and with
      the same effect, as the Notes in certificated form. Without unreasonable delay
      the Company will execute and deliver to the Trustee or such authenticating
      agent
      Notes in certificated form (other than in the case of Notes in global form)
      and thereupon any or all temporary Notes (other than any Global Note) may be
      surrendered in exchange therefor, at each office or agency maintained by the
      Company pursuant to Section 4.03 and the Trustee or such authenticating
      agent shall authenticate and deliver in exchange for such temporary Notes an
      equal aggregate principal amount of Notes in certificated form. Such exchange
      shall be made by the Company at its own expense and without any charge therefor.
      Until so exchanged, such temporary Notes shall in all respects be entitled
      to
      the same benefits and subject to the same limitations under this Indenture
      as
      Notes in certificated form authenticated and delivered hereunder.

     

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    SECTION 2.10.
      Cancellation
      of Notes Paid, Etc.
      All
      Notes
      surrendered for the purpose of payment, repurchase, conversion, exchange or
      registration of transfer, shall, if surrendered to the Company or any Paying
      Agent or any Note Registrar or any Conversion Agent, be surrendered to the
      Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall
      be
      promptly canceled by it, and no Notes shall be issued in lieu thereof except
      as
      expressly permitted by any of the provisions of this Indenture. The Trustee
      shall destroy canceled Notes in accordance with its customary procedures and,
      after such destruction, shall deliver a certificate of such destruction to
      the
      Company, at the Company’s written request. If the Company shall acquire any of
      the Notes, such acquisition shall not operate as satisfaction of the
      indebtedness represented by such Notes unless and until the same are delivered
      to the Trustee for cancellation.

     

    SECTION 2.11.
      CUSIP
      Numbers.
      The
      Company in issuing the Notes may use “CUSIP” numbers (if then generally in use),
      and, if so, the Trustee shall use “CUSIP” numbers in Company Notices as a
      convenience to holders of the Notes; provided
      that any
      such notice may state that no representation is made as to the correctness
      of
      such numbers either as printed on the Notes or Company Notice and that reliance
      may be placed only on the other identification numbers printed by the Company
      on
      the Notes. The Company will promptly notify the Trustee or Paying Agent in
      writing of any change in the “CUSIP” numbers.

     

    SECTION 2.12.
      Additional
      Notes; Repurchases.
      The
      Company may, without the consent of the Noteholders and notwithstanding
      Section 2.01, reopen this Indenture and issue additional Notes hereunder
      with the same terms and with the same CUSIP number as the Notes initially issued
      hereunder in an unlimited aggregate principal amount, which will form the same
      series with the Notes initially issued hereunder; provided
      that no
      such additional Notes may be issued by the Company unless the Company has
      determined that they are fungible with the Notes initially issued hereunder
      for
      U.S. federal income tax purposes. The Company may also from time to time
      repurchase the Notes in open market purchases or negotiated transactions without
      prior notice to Noteholders.

     

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    ARTICLE 3

    Redemption

     

    SECTION 3.01.
      Right
      to
      Redeem; Notice to Trustee. 

     

    (a) (i)
      At
      any time on or after June 1, 2011 until and including May 31, 2013,
      the Company shall have the right to redeem the Notes, in whole or from time
      to
      time in part, in integral multiples of US$1,000, at a price equal to 100% of
      the
      principal amount of the Notes being redeemed, plus accrued and unpaid interest
      to, but excluding, the Redemption Date, if (as determined by the Company) the
      Last Reported Sale Price of the Shares for at least 20 Trading Days in a
      period of 30 consecutive Trading Days, the last of which occurs no more
      than five Trading Days prior to the date upon which notice of such redemption
      is
      published, is at least 150% of the applicable Conversion Price per Share in
      effect on such Trading Day; (ii) At any time on or after June 1, 2013,
      the Company shall have the right to redeem the Notes, in whole or from time
      to
      time in part, in integral multiples of US$1,000, at a price equal to 100% of
      the
      principal amount of the Notes being redeemed, plus accrued and unpaid interest
      to, but excluding, the Redemption Date; provided
      however
      that under this Section 3.01(a), if the Redemption Date occurs after a
      record date and on or prior to the corresponding Interest Payment Date, the
      Company shall pay the full amount of accrued and unpaid interest due on such
      Interest Payment Date to the Noteholder on the record date corresponding to
      such
      Interest Payment Date, and the Redemption Price payable to the Noteholder who
      presents the Note for redemption shall be 100% of the principal amount of such
      Note and shall not include any accrued and unpaid interest. The price at which
      the Notes shall be redeemable on any Redemption Date pursuant to this
      Section 3.01(a) is hereinafter referred to as a “Redemption
      Price.”

     

    (b) If
      the
      Company elects to redeem the Notes, it shall notify the Trustee in writing
      at
      least 30 days and no more than 60 days prior to the Redemption Date of the
      Redemption Date and of the principal amount of Notes to be redeemed (unless
      a
      shorter notice period shall be satisfactory to the Trustee). If fewer than
      all
      of the Notes are to be redeemed, the record date relating to such redemption
      shall be selected by the Company and given to the Trustee, which record date
      shall not be less than 10 days after the date of notice to the
      Trustee.

     

    SECTION 3.02.
      Selection
      of Notes to Be Redeemed. 

     

    (a) If
      less
      than all of the Notes are to be redeemed, unless the procedures of the
      Depositary provide otherwise, the Trustee shall, at least 30 days but not more
      than 60 days prior to the Redemption Date, select the Notes to be redeemed.
      The
      Trustee shall make the selection from the Notes of that series outstanding
      and
      not previously called for redemption, by lot, on a pro rata basis in accordance
      with any method customarily used by the Trustee and the procedures of the
      applicable clearing system. Notes in denominations of US$1,000 may only be
      redeemed in whole. The Trustee may select for redemption portions (equal to
      US$1,000 or any integral multiple thereof) of the principal of Notes that have
      denominations larger than US$1,000. Provisions of this Indenture that apply
      to
      Notes called for redemption also apply to portions of Notes called for
      redemption.

     

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    (b) If
      any
      Note selected for partial redemption is converted in part before termination
      of
      the conversion right with respect to the portion of the Note so selected, the
      converted portion of such Note shall be deemed to be part of the portion
      selected for redemption. Notes which have been converted subsequent to the
      Trustee commencing selection of Notes to be redeemed but prior to redemption
      of
      such Notes shall be treated by the Trustee as outstanding for the purpose of
      such selection.

     

    SECTION 3.03.
      Notice
      of Redemption. 

     

    At
      least
      30 days but not more than 60 days before a Redemption Date, the Company shall
      mail or cause to be mailed a notice of redemption to each holder of Notes to
      be
      redeemed at such holder’s address as it appears on the registrar’s
      books.

     

    The
      notice shall identify the Notes (including CUSIP numbers) to be redeemed and
      shall state:

     

    (a) the
      Redemption Date;

     

    (b) the
      Redemption Price;

     

    (c) the
      then
      current Conversion Price;

     

    (d) the
      name
      and address of each Paying Agent and Conversion Agent;

     

    (e) that
      Notes called for redemption must be presented and surrendered to a Paying Agent
      to collect the Redemption Price;

     

    (f) that
      holders who wish to convert Notes must surrender such Notes for conversion
      no
      later than the close of business on the Business Day immediately preceding
      the
      Redemption Date and must satisfy the other requirements set forth
      herein;

     

    
      
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    (g) that,
      unless the Company defaults in making the payment of the Redemption Price,
      interest on Notes called for redemption shall cease to accrue on and after
      the
      Redemption Date and the only remaining right of the holder shall be to receive
      payment of the Redemption Price plus accrued and unpaid interest, upon
      presentation and surrender to a Paying Agent of the Notes; and

     

    (h) if
      any
      Note is being redeemed in part, the portion of the principal amount of such
      Note
      to be redeemed and that, after the Redemption Date, upon presentation and
      surrender of such Note, a new Note or Notes in aggregate principal amount equal
      to the unredeemed portion thereof will be issued.

     

    If
      any of
      the Notes to be redeemed is in global form, then the Company shall modify such
      notice to the extent necessary to accord with the procedures of the Depositary
      applicable to redemptions. At the Company’s written request, which request shall
      (i) be irrevocable once given and (ii) set forth all relevant information
      required by clauses (a) through (h) of the preceding paragraph, the Trustee
      shall give the notice of redemption to each registered holder in the Company’s
      name and at the Company’s expense.

     

    SECTION 3.04.
      Effect
      of Notice of Redemption. 

     

    Once
      notice of redemption is mailed, Notes called for redemption become due and
      payable on the Redemption Date and at the Redemption Price stated in the notice,
      together with accrued and unpaid interest and Additional Amounts, if any. On
      or
      after the Redemption Date and upon presentation and surrender to a Paying Agent,
      Notes called for redemption shall be paid at the Redemption Price, plus any
      accrued and unpaid interest and Additional Amounts, if any, up to but not
      including the Redemption Date. 

     

    SECTION 3.05.
      Deposit
      of Redemption Price. 

     

    No
      later
      than 10:00 a.m., New York City time, 2 Business Days before the Redemption
      Date,
      the Company shall deposit with a Paying Agent (or, if the Company acts as Paying
      Agent, shall segregate and hold in trust) an amount of money (in immediately
      available funds if deposited on such Redemption Date) sufficient to pay the
      Redemption Price of, and any accrued and unpaid interest and Additional Amounts,
      if any, on, all Notes to be redeemed on that date, other than Notes or portions
      thereof called for redemption on that date which have been delivered by the
      Company to the Trustee for cancellation or have been converted. The Paying
      Agent
      shall as promptly as practicable return to the Company any money not required
      for that purpose because of the conversion of Notes pursuant to Article 14,
      or, if such money is then held by the Company in trust and is not required
      for
      such purpose, it shall be discharged from the trust.

     

    
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    SECTION 3.06.
      Notes
      Redeemed in Part. 

     

    Upon
      presentation and surrender of a Note that is redeemed in part, the Company
      shall
      execute and the Trustee shall authenticate and deliver to the holder a new
      Note
      equal in principal amount to the unredeemed portion of the Note
      surrendered.

     

    ARTICLE 4

    Particular
      Covenants of the Company

     

    SECTION 4.01.
      Payment
      of Principal, Premium and Interest.
      The
      Company covenants and agrees that it will cause to be paid the principal of,
      premium, if any, and accrued and unpaid interest (including Additional Interest
      and Make-Whole Interest, if any) on each of the Notes and if applicable, the
      Conversion Obligation and Additional Shares, at the places, at the respective
      times and in the manner provided herein and in the Notes. The payment of the
      principal of, premium, if any, and accrued and unpaid interest (including
      Make-Whole Interest, if any,) on each of the Notes will be exclusively in such
      coin or currency of the United States as at the time of payment will be legal
      tender for the payment of public and private debts. The Company shall, through
      the Principal Paying Agent, pay the principal of the Notes at the office or
      agency designated by the Company in the Borough of Manhattan, the City of New
      York. Each installment of accrued and unpaid interest on the Notes due on any
      Interest Payment Date may be paid by mailing checks for the amount payable
      to or
      upon the written order of the Noteholders entitled thereto as they shall appear
      on the registry books of the Company; provided
      that
      with respect to any Noteholder with an aggregate principal amount in excess
      of
      US$5,000,000, at the application of such holder in writing to the Note Registrar
      not later than the relevant record date, any accrued and unpaid interest on
      such
      holder’s Notes shall be paid by wire transfer in immediately available funds to
      such holder’s account in the United States supplied by such holder from time to
      time to the Trustee and Paying Agent (if different from Trustee); provided
      further
      that
      payments in respect of the Global Note shall be paid by wire transfer in
      immediately available funds to the accounts specified by the Depository in
      accordance with such wire transfer instructions and other procedures provided
      by
      the Depositary from time to time.

     

    Interest
      on the Notes shall be computed on the basis of a 360-day year comprised of
      twelve 30-day months.

     

    The
      person in whose name any Note (or its Predecessor Note) is registered on the
      Note Register at the close of business on any record date with respect to any
      Interest Payment Date shall be entitled to receive the interest payable on
      such
      Interest Payment Date. The term “record
      date”
with
      respect to any Interest Payment Date shall mean the May 15 or
      November 15 preceding the applicable June 1 or December 1
      Interest Payment Date, respectively.

     

    
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    Any
      interest on any Note which is payable, but is not punctually paid or duly
      provided for, on any Interest Payment Date (herein called “Defaulted
      Interest”)
      shall
      forthwith cease to be payable to the Noteholder on the relevant record date
      by
      virtue of his having been such Noteholder, and the Company shall make a payment
      of such Defaulted Interest to the relevant Noteholder as determined through
      clause (a) or clause (b) below, the choice of which clause to so utilize being
      the Company’s:

     

    (a) The
      Company may elect to make payment of any Defaulted Interest to the persons
      in
      whose names the Notes (or their respective Predecessor Notes) are registered
      at
      the close of business on a special record date for the payment of such Defaulted
      Interest, which shall be fixed in the following manner. The Company shall notify
      the Trustee and the Principal Paying Agent in writing of the amount of Defaulted
      Interest proposed to be paid on each Note and the date of the proposed payment
      (which shall be not less than 25 days after the receipt by the Trustee and
      the
      Principal Paying Agent of such notice, unless the Trustee consents to an earlier
      date), and at the same time the Company shall deposit with the Principal Paying
      Agent an amount of money equal to the aggregate amount to be paid in respect
      of
      such Defaulted Interest or shall make arrangements satisfactory to the Trustee
      for such deposit on or prior to the date of the proposed payment, such money
      when deposited to be held in trust for the benefit of the persons entitled
      to
      such Defaulted Interest as in this clause provided. Thereupon the Company shall
      fix a special record date for the payment of such Defaulted Interest which
      shall
      be not more than 15 days and not less than 10 days prior to the date of the
      proposed payment, and not less than 10 days after the receipt by the Trustee
      and
      the Principal Paying Agent of the notice of the proposed payment. The Company
      shall promptly notify the Trustee and the Principal Paying Agent in writing
      of
      such special record date and the Trustee, in the name and at the expense of
      the
      Company, shall cause notice of the proposed payment of such Defaulted Interest
      and the special record date therefor to be mailed, first-class postage prepaid,
      to each holder at his address as it appears in the Note Register, not less
      than
      10 days prior to such special record date. Notice of the proposed payment of
      such Defaulted Interest and the special record date therefor having been so
      mailed, such Defaulted Interest shall be paid to the persons in whose names
      the
      Notes (or their respective Predecessor Notes) are registered at the close of
      business on such special record date and shall no longer be payable pursuant
      to
      the following clause (b) of this Section 4.01.

     

    (b) The
      Company may make payment of any Defaulted Interest in any other lawful manner
      not inconsistent with the requirements of any securities exchange or automated
      quotation system on which the Notes may be listed or designated for issuance,
      and upon such notice as may be required by such exchange or automated quotation
      system, if, after notice given by the Company to the Trustee and the Principal
      Paying Agent of the proposed payment pursuant to this clause, such manner of
      payment shall be deemed practicable by the Trustee and the Principal Paying
      Agent.

     

    
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    SECTION 4.02.
      Additional
      Interest.
      If
      Additional Interest is payable by the Company pursuant to the Registration
      Rights Agreement, the Company shall deliver to the Trustee an Officers’
Certificate to that effect stating (i) the amount of such Additional Interest
      that is payable and (ii) the date on which such Additional Interest is payable.
      Unless and until a Responsible Officer receives such a certificate, the Trustee
      may assume without inquiry that no Additional Interest is payable. If the
      Company has paid Additional Interest directly to the persons entitled to it,
      the
      Company shall deliver to the Trustee an Officers’ Certificate setting forth the
      particulars of such payment.

     

    SECTION 4.03.
      Maintenance
      of Office or Agency.
      The
      Company will designate in the Borough of Manhattan, The City of New York, an
      office or agency where the Notes may be surrendered for registration of transfer
      or exchange or for presentation for payment (through the Principal Paying
      Agent), redemptions or repurchase (“Paying
      Agent”)
      or for
      conversion (“Conversion
      Agent”)
      and
      where notices and demands to or upon the Company in respect of the Notes and
      this Indenture may be served. The Company will give prompt written notice to
      the
      Trustee of the location, and any change in the location, of such office or
      agency not designated or appointed by the Trustee. If at any time the Company
      shall fail to maintain any such required office or agency or shall fail to
      furnish the Trustee with the address thereof, such presentations, surrenders,
      notices and demands may be made or served at the Corporate Trust Office or
      the
      office or agency of the Trustee in the Borough of Manhattan, The City of New
      York.

     

    The
      Company may also from time to time designate one or more other offices or
      agencies where the Notes may be presented or surrendered for any or all such
      purposes and may from time to time rescind such designations; provided
      that no
      such designation or rescission shall in any manner relieve the Company of its
      obligation to maintain an office or agency in the Borough of Manhattan, The
      City
      of New York, for such purposes. The Company will give prompt written notice
      to
      the Trustee of any such designation or rescission and of any change in the
      location of any such other office or agency. The terms Paying Agent and
      Conversion Agent include any such additional or other offices or agencies,
      as
      applicable.

     

    The
      Company hereby initially designates the Trustee as Principal Paying Agent,
      Note
      Registrar, Custodian and Conversion Agent and the Corporate Trust Office shall
      be considered as one such office or agency of the Company for each of the
      aforesaid purposes. So long as the Trustee is the Note Registrar, the Trustee
      agrees to mail, or cause to be mailed, the notices set forth in
      Section 7.10(a) and the third paragraph of Section 7.11.

     

    
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    SECTION 4.04.
      Appointments
      to Fill Vacancies in Trustee’s Office.
      The
      Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
      will appoint, in the manner provided in Section 7.10, a Trustee, so that
      there shall at all times be a Trustee hereunder.

     

    SECTION 4.05.
      Provisions
      as to Paying Agent. 

     

    (a) If
      the
      Company shall appoint a Paying Agent other than the Trustee or the Principal
      Paying Agent or if the Trustee shall appoint such a Paying Agent, the Company
      will cause such Paying Agent to execute and deliver to the Trustee an instrument
      in which such agent shall agree with the Trustee, subject to the provisions
      of
      this Section 4.05:

     

    (i) that
      it
      will hold all sums held by it as such agent for the payment of the principal
      of
      and premium, if any, and accrued and unpaid interest (including any Additional
      Interest and Make-Whole Interest, if any) on the Notes (whether such sums have
      been paid to it by the Company or by any other obligor on the Notes) in trust
      for the benefit of the holders of the Notes;

     

    (ii) that
      it
      will give the Trustee written notice of any failure by the Company (or by any
      other obligor on the Notes) to make any payment of the principal of and premium,
      if any, and accrued and unpaid interest (including Additional Interest and
      Make-Whole Interest, if any) on the Notes when the same shall be due and
      payable; and

     

    (iii) that
      at
      any time during the continuance of an Event of Default, upon request of the
      Trustee, it will forthwith pay to the Trustee all sums so held in
      trust.

     

    The
      Company shall, no later than 10 a.m., New York City time, 2 Business Days before
      each due date of the principal of, or premium, if any, or accrued and unpaid
      interest (including Additional Interest) on the Notes, deposit with the Paying
      Agent a sum sufficient to pay such principal, premium, if any, or accrued and
      unpaid interest and (unless such Paying Agent is the Trustee) the Company will
      promptly notify the Trustee in writing of any failure to take such
      action.

     

    (b) If
      the
      Company shall act as its own Paying Agent, it will, on or before each due date
      of the principal of, premium, if any, and accrued and unpaid interest (including
      Additional Interest and Make-Whole Interest, if any) on the Notes, set aside,
      segregate and hold in trust for the benefit of the holders of the Notes a sum
      sufficient to pay such principal, premium, if any, and accrued and unpaid
      interest, so becoming due and will notify the Trustee in writing of any failure
      to take such action and of any failure by the Company (or any other obligor
      under the Notes) to make any payment of the principal of, premium, if any,
      and
      accrued and unpaid interest (including Additional Interest and Make-Whole
      Interest, if any) on the Notes when the same shall become due and
      payable.

     

    
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    (c) Anything
      in this Section 4.05 to the contrary notwithstanding, the Company may, at
      any time, for the purpose of obtaining a satisfaction and discharge of this
      Indenture, or for any other reason, pay or cause to be paid to the Trustee
      all
      sums held in trust by the Company or any Paying Agent hereunder as required
      by
      this Section 4.05, such sums to be held by the Trustee upon the trusts
      herein contained and upon such payment by the Company or any Paying Agent to
      the
      Trustee, the Company and such Paying Agent shall be released from all further
      liability with respect to such sums.

     

    (d) Anything
      in this Section 4.05 to the contrary notwithstanding, the agreement to hold
      sums in trust as provided in this Section 4.05 is subject to
      Section 12.03 and Section 12.04.

     

    SECTION 4.06.
      Existence.
      Subject
      to Article 11, the Company will do or cause to be done all things necessary
      to preserve and keep in full force and effect its corporate
      existence.

     

    SECTION 4.07.
      Payment
      of Additional Amounts.
      All
      payments made by the Company or any successor to the Company under or with
      respect to the Notes including payments of cash or delivery of Shares upon
      conversion, will be made without withholding or deduction for, or on account
      of,
      any present or future taxes, duties, assessments or governmental charges of
      whatever nature imposed or levied by or within any jurisdiction in which the
      Company, or its successors, are organized or resident for tax purposes or
      through which payment is made (or any political subdivision or taxing authority
      thereof or therein) (each, as applicable, a “Relevant
      Taxing Jurisdiction”),
      unless such withholding or deduction is required by law or by regulation or
      governmental policy having the force of law. In the event that any such
      withholding or deduction is so required, the Company or any successor to the
      Company will pay to the holder of each Note such additional amounts
      (“Additional
      Amounts”)
      as may
      be necessary to ensure that the net amount received by the holder after such
      withholding or deduction (and after deducting any taxes on the Additional
      Amounts) shall equal the amounts which would have been received by such holder
      had no such withholding or deduction been required, except that no Additional
      Amount shall be payable:

     

    (i) 
      for or
      on account of:

     

    
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    (A) any
      tax,
      duty, assessment or other governmental charge that would not have been imposed
      but for:

     

    (1) the
      existence of any present or former connection between the Noteholder (or between
      a fiduciary, settlor, beneficiary, member or partner of, or possessor of a
      power
      over, such Noteholder, if such Noteholder is an estate, trust or partnership)
      or
      beneficial owner of such Note and the Relevant Taxing Jurisdiction other than
      merely holding such Note or the receipt of payments thereunder, including,
      without limitation, such Noteholder (or such fiduciary, settlor, beneficiary,
      member, partner, or possessor) or beneficial owner being or having been a
      national, domiciliary or resident of such Relevant Taxing Jurisdiction or
      treated as a resident thereof or being or having been physically present or
      engaged in a trade or business therein, or having had a permanent establishment
      therein or making or having made an election the effect of which is to subject
      such Noteholder or beneficial owner (or such fiduciary, settlor, beneficiary,
      member, partner, or possessor) to such tax, assessment or other governmental
      charge;

     

    (2) the
      presentation of such Note (in cases in which presentation is required) more
      than
      30 days after the later of the date on which the payment of the principal of,
      premium, if any, and interest (including Make-Whole Interest, if any) on, such
      Note became due and payable pursuant to the terms thereof or was made or duly
      provided for; or

     

    (3) the
      failure of the Noteholder or beneficial owner of such Note to comply with any
      requirement (including any certification, identification or information
      reporting requirements) under income tax treaties, statutes and regulations
      or
      administrative practice of the Relevant Taxing Jurisdiction to establish
      entitlement to exemption from or reduction of such tax, assessment or other
      governmental charge; provided,
      however,
      that,
      in the case of any taxes imposed by a jurisdiction other than the United States,
      the Company has given a timely request for such requirement; or

     

    (4) such
      Noteholder’s present or former status as a personal holding company with respect
      to the United States, or a controlled foreign corporation for United States
      tax
      purposes or a corporation which accumulates earnings to avoid United States
      federal income tax;

     

    
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    (B) any
      estate, inheritance, gift, sale, transfer, capital gains, excise, personal
      property or similar tax, assessment or other governmental charge;

     

    (C) any
      tax,
      duty, assessment or other governmental charge that is payable otherwise than
      by
      withholding from payments under or with respect to the Notes; 

     

    (D) any
      tax,
      duty, assessment or other governmental charge imposed by the United States
      on
      interest received as a result of: (1) a person’s actual or constructive
      ownership of 10 percent or more of the total combined voting power of all
      classes of the Company’s stock entitled to vote; (2) such Noteholder being a
      bank receiving interest described in section 881(c)(3)(A) of the Code; or (3)
      such Noteholder being a “controlled foreign corporation” that is related to the
      Company by stock ownership described in section 881(c)(3)(C) of the Code;
      or

     

    (E) any
      combination of taxes, duties, assessments or other governmental charges referred
      to in the preceding clauses (A), (B), (C) or (D); or

     

    (ii) with
      respect to any payment of the principal of, or premium, if any, or interest
      (including Make-Whole Interest, if any) on, such Note to a Noteholder, if the
      Noteholder is a fiduciary, partnership or person other than the sole beneficial
      owner of that payment to the extent that such payment would be required to
      be
      included in the income under the laws of the Relevant Taxing Jurisdiction,
      for
      tax purposes, of a beneficiary or settlor with respect to the fiduciary, a
      member of that partnership or a beneficial owner who would not have been
      entitled to such Additional Amounts had that beneficiary, settlor, partner
      or
      beneficial owner been the Noteholder thereof.

     

    (b) The
      Notes
      are subject in all cases to any tax, fiscal or other law or regulation or
      administrative or judicial interpretation. Except as specifically provided
      above
      or otherwise herein, the Company shall not be required to make a payment with
      respect to any tax, assessment or governmental charge imposed by any government
      or a political subdivision or taxing authority thereof or therein.

     

    
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    (c) In
      the
      event that Additional Amounts actually paid with respect to the Notes are based
      on rates of deduction or withholding of withholding taxes in excess of the
      appropriate rate applicable to the holder of such Notes, and, as a result
      thereof such holder is entitled to make claim for a refund or credit of such
      excess from the authority imposing such withholding tax, then such holder shall,
      by accepting such Notes, be deemed to have assigned and transferred all right,
      title, and interest to any such claim for a refund or credit of such excess
      to
      the Company.

     

    (d) Any
      reference in this Indenture or the Notes to principal, interest (including
      Make-Whole Interest, if any) or any other amount payable in respect of the
      Notes
      by the Company (including conversion into Shares, if any) will be deemed also
      to
      refer to any Additional Amounts, unless the context requires otherwise, that
      may
      be payable with respect to that amount under the obligations referred to in
      this
      Section.

     

    For
      the
      avoidance of doubt, Additional Amounts shall not be payable in connection with
      dividends on the Shares following a Conversion or any constructive
      dividends.

     

    (e) The
      foregoing obligation will survive termination or discharge of the
      Indenture.

     

    SECTION 4.08.
      Stay,
      Extension and Usury Laws.
      The
      Company covenants (to the extent that it may lawfully do so) that it shall
      not
      at any time insist upon, plead, or in any manner whatsoever claim or take the
      benefit or advantage of, any stay, extension or usury law or other law which
      would prohibit or forgive the Company from paying all or any portion of the
      principal of or interest (including Additional Interest and Make-Whole Interest,
      if any) on the Notes as contemplated herein, wherever enacted, now or at any
      time hereafter in force, or which may affect the covenants or the performance
      of
      this Indenture. The Company (to the extent it may lawfully do so) hereby
      expressly waives all benefit or advantage of any such law, and covenants that
      it
      will not, by resort to any such law, hinder, delay or impede the execution
      of
      any power herein granted to the Trustee, but will suffer and permit the
      execution of every such power as though no such law had been
      enacted.

     

    SECTION 4.09.
      Compliance
      Certificate; Statements as to Defaults.
      The
      Company shall deliver to the Trustee within 120 days after the end of each
      fiscal year of the Company (beginning with the fiscal year ending on
      December 31, 2008) an Officers’ Certificate stating whether or not the
      signer thereof has knowledge of any failure by the Company to comply with all
      conditions and covenants then required to be performed under this Indenture
      and,
      if so, specifying each such failure and the nature thereof.

     

    
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    In
      addition, the Company shall deliver to the Trustee, as soon as possible and
      in
      any event within 30 days after the Company becomes aware of the occurrence
      of any Event of Default or Default, an Officers’ Certificate setting forth the
      details of such Event of Default or Default, its status and the action which
      the
      Company proposes to take with respect thereto.

     

    SECTION 4.10.
      Further
      Instruments and Acts.
      Upon
      request of the Trustee, the Company will execute and deliver such further
      instruments and do such further acts as may be reasonably necessary or proper
      to
      carry out more effectively the purposes of this Indenture.

     

    SECTION 4.11.
      Limitation
      on Incurrence of Indebtedness. 

     

    (a) The
      Company shall not, and it shall not permit any of its Subsidiaries to, incur,
      directly or indirectly, any Indebtedness; provided,
      however,
      that
      the Company may incur additional unsecured Indebtedness (the “Permitted
      Indebtedness”)
      which
      ranks equal in right of payment to the Notes in an amount not to exceed
      US$15,000,000; provided
      further
      that
      such Permitted Indebtedness does not require any repayment prior to the next
      Put
      Right Purchase Date at the time of such incurrence;

     

    (b) The
      Company shall be permitted to issue equity securities, including common stock
      and preferred stock, and any securities which rank junior in right of payment
      to
      the Notes; provided
      that in
      the case of preferred stock, such preferred stock shall not be redeemable or
      otherwise repayable prior to the Maturity Date so long as 25% or more of the
      initial aggregate principal amount of Notes authenticated and delivered under
      the Indenture (including any Notes authenticated and delivered under the
      Indenture pursuant to the Initial Purchaser exercise of their option to purchase
      additional Notes in full as set forth in the Purchase Agreement) is outstanding;
      and

     

    (c) The
      limitation set forth in this Section 4.11 shall cease to be in effect at
      such point as either of the following conditions is met: (i) the aggregate
      principal amount of Notes outstanding is less than 25% of the initial aggregate
      principal amount of Notes authenticated and delivered under the Indenture
      (including any Notes authenticated and delivered under the Indenture pursuant
      to
      the Initial Purchaser exercise of their option to purchase additional Notes
      in
      full as set forth in the Purchase Agreement) or (ii) if the Last Reported
      Sale Price of the Shares issuable upon conversion of the Notes for at least
      20
      Trading Days in a period of 30 consecutive Trading Days is greater than
      165% of the applicable Conversion Price per Share in effect on such Trading
      Day,
      subject to the Notes and the Shares issuable upon conversion of the Notes
      becoming subject to registration statement which become effective under the
      Securities Act or exempt from registration requirements of the Securities Act
      pursuant to Rule 144.

     

    
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    ARTICLE 5

    Lists
      of
      Noteholders and Reports by the Company and the Trustee

     

    SECTION 5.01.
      Lists
      of Noteholders.
      The
      Company covenants and agrees that it will furnish or cause to be furnished
      to
      the Trustee, semi-annually, not more than 15 days after each May 15 and November
      15 in each year beginning with November 15, 2008, and at such other times as
      the
      Trustee may request in writing, within 30 days after receipt by the Company
      of
      any such request (or such lesser time as the Trustee may reasonably request
      in
      order to enable it to timely provide any notice to be provided by it hereunder),
      a list in such form as the Trustee may require of the names and addresses of
      the
      Noteholders as of a date not more than 15 days (or such other date as the
      Trustee may reasonably request in order to so provide any such notices) prior
      to
      the time such information is furnished,
      except
      that no such list need be furnished so long as the Trustee is acting as Note
      Registrar.

     

    SECTION 5.02.
      Preservation
      and Disclosure of Lists. 

     

    (a) The
      Trustee shall preserve, in as current a form as is reasonably practicable,
      all
      information as to the names and addresses of the Noteholders contained in the
      most recent list furnished to it as provided in Section 5.01 or maintained
      by the Trustee in its capacity as Note Registrar, if so acting. The Trustee
      may
      destroy any list furnished to it as provided in Section 5.01 upon receipt
      of a new list so furnished.

     

    (b) The
      rights of Noteholders to communicate with other Noteholders with respect to
      their rights under this Indenture or under the Notes and the corresponding
      rights and duties of the Trustee, shall be as provided by the Trust Indenture
      Act.

     

    (c) Every
      Noteholder, by receiving and holding the same, agrees with the Company and
      the
      Trustee that neither the Company nor the Trustee nor any agent of either of
      them
      shall be held accountable by reason of any disclosure of information as to
      names
      and addresses of Noteholders made pursuant to the Trust Indenture
      Act.

     

    SECTION 5.03.
      Reports
      by Trustee. 

     

    (a) The
      Trustee shall transmit to Noteholders such reports dated as of May 15 of each
      year in which such reports are made concerning the Trustee and its actions
      under
      this Indenture as may be required pursuant to the Trust Indenture Act at the
      times and in the manner provided pursuant thereto. Reports so required to be
      transmitted at stated intervals of not more than 12 months shall be transmitted
      no later than August 1 in each calendar year, beginning with the year 2008
      and
      for so long as the Notes remain outstanding. Each such report shall be dated
      as
      of a date not more than 60 days prior to the date of transmission.

     

    
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    (b) A
      copy of
      such report shall, at the time of such transmission to Noteholders, be filed
      by
      the Trustee with each stock exchange and automated quotation system upon which
      the Notes are listed, with the Commission and with the Company. The Company
      will
      notify the Trustee in writing within a reasonable time when the Notes are listed
      on any stock exchange or automated quotation system and when any such listing
      is
      discontinued.

     

    SECTION 5.04.
      Reports
      by Company. 

     

    (a) The
      Company shall file with the Trustee and the Commission, and transmit to
      Noteholders, such information, documents and other reports and such summaries
      thereof, as may be required pursuant to the Trust Indenture Act at the times
      and
      in the manner provided pursuant to such Act; provided
      that any
      such information, documents or reports required to be filed with the Commission
      pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
      Trustee within 15 days after the same is filed with the Commission.

     

    (b) In
      the
      event and for so long as the Company is not subject to Section 13 or 15(d)
      of the Exchange Act, it shall file with the Trustee and cause to be mailed
      to
      each holder at such holder’s registered address, upon the request of any holder
      or beneficial holder of the Notes or the Shares issued upon conversion thereof,
      and make available to such holder or beneficial holder of such Notes or Shares
      in connection with any sale thereof and any prospective purchaser of Notes
      or
      Shares designated by such holder or beneficial holder, the information required
      pursuant to Rule 144A(d)(4) under the Securities Act and it will take such
      further action as any holder or beneficial holder of such Notes or Shares may
      reasonably request, all to the extent required from time to time to enable
      such
      holder or beneficial holder to sell its Notes or Shares without registration
      under the Securities Act within the limitation of the exemption provided by
      Rule 144A, as such Rule may be amended from time to time.

     

    (c) Delivery
      of such reports, information and documents to the Trustee is for informational
      purposes only, and the Trustee’s receipt of such shall not constitute
      constructive notice of any information contained therein or determinable from
      information contained therein, including the Company’s compliance with any of
      its covenants hereunder (as to which the Trustee is entitled to conclusively
      rely exclusively on an Officers’ Certificate).

     

    
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    ARTICLE 6

    Defaults
      and Remedies

     

    SECTION 6.01.
      Events
      of Default.
      The
      following events shall be Events of Default with respect to the
      Notes:

     

    (a) default
      in any payment of interest, including any related Additional Amounts, on any
      Note when due and payable and the default continues for a period of 30
      days;

     

    (b) default
      in the payment of principal of any Note, including any related Additional
      Amounts, when due and payable on the Maturity Date, upon redemption, required
      repurchase, declaration or otherwise;

     

    (c) failure
      by the Company to comply with its obligations to convert the Notes into Shares
      upon exercise of a holder’s conversion right;

     

    (d) failure
      by the Company to issue a Fundamental Change Control Notice in accordance with
      Section 15.02;

     

    (e) failure
      by the Company for 60 days to comply with any of its other agreements (other
      than a covenant or warranty or default in whose performance or whose breach
      is
      elsewhere in this Section specifically provided for) contained in the Notes
      or
      this Indenture after written notice of such default from the Trustee or the
      holders of at least 25% in aggregate principal amount of the Notes then
      outstanding has been received by the Company;

     

    (f) failure
      by the Company or any Subsidiary of the Company to make any payment of the
      principal or interest on any mortgage, agreement or other instrument under
      which
      there may be outstanding, or by which there may be secured or evidenced, any
      debt for money borrowed in excess of US$10 million in the aggregate of the
      Company and/or any such Subsidiary, whether such debt now exists or shall
      hereafter be created, resulting in such debt becoming due and
      payable
      before
      the date on which it would otherwise have become due and payable, if such
      failure is not cured or waived, or
      such
      acceleration is
      not
      rescinded,
      within
60
      days
      after notice
      to
      the Company by the Trustee or to the Company and the Trustee by the holders
      of
      at least 25% in aggregate principal amount of the Notes then outstanding, in
      accordance with this Indenture;

     

    (g) failure
      by the Company or any Subsidiary of the Company, within 60 days, to pay, bond
      or
      otherwise discharge any judgments or orders for the payment of money the total
      uninsured amount of which for the Company or any Subsidiary of the Company
      exceeds $10 million, which are not stayed on appeal; or

     

    
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    (h) the
      Company or any Subsidiary of the Company, pursuant to, or within the meaning
      of,
      any Bankruptcy Law, insolvency law, or other similar law now or hereafter in
      effect or otherwise, either:

     

    (A) commences
      a voluntary case,

     

    (B) consents
      to the entry of an order for relief against it in an involuntary
      case,

     

    (C) consents
      to the appointment of a custodian of it or for all or substantially all of
      its
      property, or

     

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

     

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

     

    (A) is
      for
      relief against the Company or any Subsidiary of the Company in an involuntary
      case or proceeding, or adjudicates the Company or any Subsidiary of the Company
      insolvent or bankrupt,

     

    (B) appoints
      a custodian of the Company or any Subsidiary of the Company for all or
      substantially all of the property of the Company or any Subsidiary of the
      Company, as the case may be, or

     

    (C) orders
      the winding up or liquidation of the Company or any Subsidiary of the
      Company,

     

    and,
      in
      the case of each of the foregoing clauses (A), (B) and (C) of this
      clause (i), the order or decree remains unstayed and in effect for at least
      90 consecutive days.

     

    (j) any
      event
      occurs that under the laws of the United States or any political subdivision
      thereof or any other country has substantially the same effect as any of the
      events referred to in any of clause (h) or (i) (an Event of Default
      specified in clause (h), (i) or this clause (i), a “Bankruptcy
      Default”).

     

    In
      this
      Section 6.01, the term “Bankruptcy Law”
means
      the bankruptcy laws of the respective jurisdictions of incorporation of the
      Company and any Subsidiary of the Company for the relief of debtors, and the
      term “custodian”
means
      any receiver, trustee, assignee, liquidator or similar official under any
      Bankruptcy Law.

     

    
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    In
      case
      one or more Events of Default shall have occurred and be continuing (whatever
      the reason for such Event of Default and whether it shall be voluntary or
      involuntary or be effected by operation of law or pursuant to any judgment,
      decree or order of any court or any order, rule or regulation of any
      administrative or governmental body), then, and in each and every such case
      (other than a Bankruptcy Default with respect to the Company), unless the
      principal of all of the Notes shall have already become due and payable, either
      the Trustee or the holders of at least 25% in aggregate principal amount of
      the
      Notes then outstanding determined in accordance with Section 8.04, by
      notice in writing to the Company (and to the Trustee if given by Noteholders),
      may declare 100% of the principal of and premium, if any, and accrued and unpaid
      interest, including any Additional Amounts and Additional Interest, if any,
      on
      all the Notes to be due and payable immediately, and upon any such declaration
      the same shall become and shall be immediately due and payable, anything in
      this
      Indenture or in the Notes contained to the contrary notwithstanding. If a
      Bankruptcy Default occurs and is continuing with respect to the Company, the
      principal of, and premium, if any, and accrued and unpaid interest, including
      Additional Amounts and Additional Interest, if any, on all the Notes shall
      be
      immediately due and payable, regardless of any prior action by any Noteholder
      or
      the Trustee. This provision, however, is subject to the conditions that if,
      at
      any time after the principal of the Notes shall have been so declared due and
      payable, and before any judgment or decree for the payment of the monies due
      shall have been obtained or entered as hereinafter provided, the Company shall
      pay or shall deposit with the Trustee a sum sufficient to pay installments
      of
      accrued and unpaid interest, including Additional Amounts and Additional
      Interest, if any, upon all Notes and the principal of and premium, if any,
      on
      any and all Notes that shall have become due otherwise than by acceleration
      (with interest on overdue installments of accrued and unpaid interest (to the
      extent that payment of such interest is enforceable under applicable law),
      including Additional Amounts and Additional Interest, if any, and on such
      principal and premium, if any, at the rate borne by the Notes during the period
      of such Default) and amounts due to the Trustee pursuant to Section 7.06,
      and if (1) rescission would not conflict with any judgment or decree of a court
      of competent jurisdiction and (2) any and all Events of Defaults under this
      Indenture, other than the nonpayment of principal of and premium, if any, and
      accrued and unpaid interest, including Additional Amounts and Additional
      Interest, if any, on Notes that shall have become due solely by such
      acceleration, shall have been cured or waived pursuant to Section 6.07,
      then and in every such case the holders of a majority in aggregate principal
      amount of the Notes then outstanding, by written notice to the Company and
      to
      the Trustee, may waive all defaults or Events of Default with respect to the
      Notes and rescind and annul such declaration and its consequences and such
      default shall cease to exist, and any Event of Default arising therefrom shall
      be deemed to have been cured for every purpose of this Indenture; but no such
      waiver or rescission and annulment shall extend to or shall affect any
      subsequent default or Event of Default, or shall impair any right consequent
      thereon. 

     

    
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    In
      case
      the Trustee shall have proceeded to enforce any right under this Indenture
      and
      such proceedings shall have been discontinued or abandoned because of such
      waiver or rescission and annulment or for any other reason or shall have been
      determined adversely to the Trustee, then and in every such case the Company,
      the Noteholders, and the Trustee shall, subject to any determination in such
      proceeding, be restored respectively to their several positions and rights
      hereunder, and all rights, remedies and powers of the Company, the Noteholders,
      and the Trustee shall continue as though no such proceeding had been
      instituted.

     

    SECTION 6.02.
      Payments
      of Notes on Default; Suit Therefor.
      In
      the
      event that the Trustee or the holders of not less than 25% in aggregate
      principal amount of the Notes then outstanding hereunder have declared the
      principal of, and premium, if any, and accrued and unpaid interest, including
      Additional Amounts and Additional Interest, on the Notes, to be due and payable
      immediately in accordance with Section 6.01, and the Company shall have
      failed forthwith to pay such amounts, the Trustee, in its own name and as
      trustee of an express trust, after being furnished indemnity or security to
      its
      satisfaction pursuant to Section 7.01, shall be entitled and empowered to
      institute any actions or proceedings at law or in equity for the collection
      of
      the sums so due and unpaid (including such further amounts as shall be
      sufficient to cover the costs and expenses of collection, including compensation
      to the Trustee (which for purposes of this Section 6.02 shall include its
      directors, officers, employees and agents,) and each predecessor Trustee, their
      respective agents, attorneys and in-house counsel, and any expenses or
      liabilities incurred, and all advances made by the Trustee and each predecessor
      Trustee hereunder other than through its gross negligence or bad faith), and
      may
      prosecute any such action or proceeding to judgment or final degree, and may
      enforce any such judgment or final decree against the Company or any other
      obligor on the Notes and collect in the manner provided by law out of the
      property of the Company or any other obligor on the Notes wherever situated
      the
      monies adjudged or decreed to be payable.

     

    
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    In
      case
      there shall be pending proceedings for the bankruptcy or for the reorganization
      of the Company or any other obligor on the Notes under Title 11 of the
      United States Bankruptcy Code, or any other applicable law, or in case a
      receiver, assignee, administrator or trustee in bankruptcy or reorganization,
      liquidator, sequestrator or similar official shall have been appointed for
      or
      taken possession of the Company or such other obligor, the property of the
      Company or such other obligor, or in the case of any other judicial proceedings
      relative to the Company or such other obligor upon the Notes, or to the
      creditors or property of the Company or such other obligor, the Trustee,
      irrespective of whether the principal of the Notes shall then be due and payable
      as therein expressed or by declaration or otherwise and irrespective of whether
      the Trustee shall have made any demand pursuant to the provisions of this
      Section 6.02, shall be entitled and empowered, by intervention in such
      proceedings or otherwise, to file and prove a claim or claims for the whole
      amount of principal premium, if any, and accrued and unpaid interest, including
      Additional Amounts and Additional Interest, if any, in respect of the Notes,
      and, in case of any judicial proceedings, to file such proofs of claim and
      other
      papers or documents and to take such other actions as it may deem necessary
      or
      advisable in order to have the claims of the Trustee (including any claim for
      the compensation, expenses, disbursements and advances of the Trustee, and
      each
      predecessor Trustee, and their respective agents, attorneys and in-house counsel
      and for all expenses and liabilities incurred, and all advances made, by the
      Trustee and each predecessor Trustee) and of the Noteholders allowed in such
      judicial proceedings relative to the Company or any other obligor on the Notes,
      its or their creditors, or its or their property, and to collect and receive
      any
      monies or other property payable or deliverable on any such claims, and to
      distribute the same after the deduction of any amounts due the Trustee under
      Section 7.06; and any receiver, assignee, administrator, or trustee in
      bankruptcy or reorganization, liquidator, custodian or similar official is
      hereby authorized by each of the Noteholders to make such payments to the
      Trustee, as administrative expenses, and, in the event that the Trustee shall
      consent to the making of such payments directly to the Noteholders, to first
      pay
      to the Trustee any amount due it for compensation, expenses, advances and
      disbursements, including agents attorneys and in-house counsel fees, and
      including any other amounts due to the Trustee and any predecessor Trustee
      under
      Section 7.06 hereof, incurred by it up to the date of such distribution. To
      the extent that such payment of compensation, expenses, advances and
      disbursements out of the estate in any such proceedings shall be denied for
      any
      reason, payment of the same shall be secured by a lien on, and shall be paid
      out
      of, any and all distributions, dividends, monies, securities and other property
      which the holders of the Notes may be entitled to receive in such proceedings,
      whether in liquidation or under any plan of reorganization or arrangement or
      otherwise.

     

    Nothing
      herein contained shall be deemed to authorize the Trustee to authorize or
      consent to or accept or adopt on behalf of any Noteholder any plan of
      reorganization, arrangement, adjustment or composition affecting the Noteholder
      or the rights of any Noteholder thereof, or to authorize the Trustee to vote
      in
      respect of the claim of any Noteholder in any such proceeding.

     

    All
      rights of action and of asserting claims under this Indenture, or under any
      of
      the Notes, may be enforced by the Trustee without the possession of any of
      the
      Notes, or the production thereof at any trial or other proceeding relative
      thereto, and any such suit or proceeding instituted by the Trustee shall be
      brought in its own name as trustee of an express trust, and any recovery of
      judgment shall, after provision for the payment of the compensation, expenses,
      disbursements and advances of the Trustee, and each predecessor Trustee and
      their respective agents, attorneys, and in-house counsel, be for the ratable
      benefit of the holders of the Notes.

     

    
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    In
      any
      proceedings brought by the Trustee (and in any proceedings involving the
      interpretation of any provision of this Indenture to which the Trustee shall
      be
      a party) the Trustee shall be held to represent all the holders of the Notes,
      and it shall not be necessary to make any holders of the Notes parties to any
      such proceedings.

     

    SECTION 6.03.
      Application
      of Monies Collected by Trustee.
      Any
      monies collected by the Trustee pursuant to this Article 6 with respect to
      the Notes shall be applied in the order following, at the date or dates fixed
      by
      the Trustee for the distribution of such monies, upon presentation of the
      several Notes, and stamping thereon the payment, if only partially paid, and
      upon surrender thereof, if fully paid:

     

    First,
      to
      the payment of all amounts due the Trustee under Section 7.06;

     

    Second,
      in case the principal of the outstanding Notes shall not have become due and
      be
      unpaid, to the payment of interest (including Additional Amounts and Additional
      Interest and Make-Whole Interest, if any) on the Notes in default in the order
      of the maturity of the installments of such interest, with interest (to the
      extent that such interest has been collected by the Trustee) upon the overdue
      installments of interest at the rate borne by the Notes, such payments to be
      made ratably to the Persons entitled thereto;

     

    Third,
      in
      case the principal of the outstanding Notes shall have become due, by
      declaration or otherwise, and be unpaid to the payment of the whole amount
      (including, if applicable, payments in respect of the Conversion Obligation
      and
      Additional Shares) then owing and unpaid upon the Notes for principal and
      premium, if any, and interest (including Additional Amounts and Additional
      Interest, if any) with interest at the rate borne by the Notes, on the overdue
      principal and premium, if any, and (to the extent that such interest has been
      collected by the Trustee) upon overdue installments of interest and in case
      such
      monies shall be insufficient to pay in full the whole amounts so due and unpaid
      upon the Notes, then to the payment of such principal and premium, if any,
      and
      interest without preference or priority of principal and premium, if any, over
      interest, or of interest over principal and premium, if any, or of any
      installment of interest over any other installment of interest, or of any Note
      over any other Note, ratably to the aggregate of such principal and premium,
      if
      any, and accrued and unpaid interest; and

     

    Fourth,
      to the payment of the remainder, if any, to the Company or any other Person
      lawfully entitled thereto.

     

    
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    SECTION 6.04.
      Proceedings
      by Noteholders.
      No
      holder
      of any Note shall have any right by virtue of or by availing of any provision
      of
      this Indenture to institute any suit, action or proceeding in equity or at
      law
      upon or under or with respect to this Indenture, or for the appointment of
      a
      receiver, trustee, liquidator, custodian or other similar official, or for
      any
      other remedy hereunder, unless such holder previously shall have given to the
      Trustee written notice of an Event of Default and of the continuance thereof,
      as
      hereinbefore provided, and unless also the holders of not less than 25% in
      aggregate principal amount of the Notes then outstanding shall have made written
      request to the Trustee to institute such action, suit or proceeding in its
      own
      name as Trustee hereunder and shall have offered to the Trustee such security
      or
      indemnity satisfactory to it against any loss, liability or expense to be
      incurred therein or thereby, and the Trustee for 60 days after its receipt
      of such notice, request and offer of indemnity, shall have neglected or refused
      to institute any such action, suit or proceeding and no direction that, in
      the
      opinion of the Trustee, is inconsistent with such written request shall have
      been given to the Trustee by the holders of a majority in principal amount
      of
      the Notes outstanding pursuant to Section 6.07; it being understood and
      intended, and being expressly covenanted by the holder of every Note with every
      other holder and the Trustee, that no one or more Noteholders shall have any
      right in any manner whatsoever by virtue of or by availing of any provision
      of
      this Indenture to affect, disturb or prejudice the rights of any other
      Noteholder, or to obtain or seek to obtain priority over or preference to any
      other such holder, or to enforce any right under this Indenture, except in
      the
      manner herein provided and for the equal, ratable and common benefit of all
      Noteholders (except as otherwise provided herein). For the protection and
      enforcement of this Section 6.04, each and every Noteholder and the Trustee
      shall be entitled to such relief as can be given either at law or in
      equity.

     

    Notwithstanding
      any other provision of this Indenture and any provision of any Note, the right
      of any Noteholder to receive payment of the principal of and premium, if any,
      and accrued and unpaid interest, including Additional Amounts and Additional
      Interest, if any, on such Note, on or after the respective due dates expressed
      in such Note or in the notice of redemption, or to institute suit for the
      enforcement of any such payment on or after such respective dates against the
      Company shall not be impaired or affected without the consent of such
      Noteholder.

     

    Anything
      in this Indenture or the Notes to the contrary notwithstanding, the holder
      of
      any Note, without the consent of either the Trustee or the holder of any other
      Note, in his own behalf and for his own benefit, may enforce, and may institute
      and maintain any proceeding suitable to enforce, his rights of conversion as
      provided herein.

     

    SECTION 6.05.
      Proceedings
      by Trustee.
      In
      case
      of an Event of Default the Trustee may in its discretion proceed to protect
      and
      enforce the rights vested in it by this Indenture by such appropriate judicial
      proceedings as are necessary to protect and enforce any of such rights, either
      by suit in equity or by action at law or by proceeding in bankruptcy or
      otherwise, whether for the specific enforcement of any covenant or agreement
      contained in this Indenture or in aid of the exercise of any power granted
      in
      this Indenture, or to enforce any other legal or equitable right vested in
      the
      Trustee by this Indenture or by law.

     

    
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    SECTION 6.06.
      Remedies
      Cumulative and Continuing.
      Except
      as
      provided in the last paragraph of Section 2.08, all powers and remedies
      given by this Article 6 to the Trustee or to the Noteholders shall, to the
      extent permitted by law, be deemed cumulative and not exclusive of any thereof
      or of any other powers and remedies available to the Trustee or the holders
      of
      the Notes, by judicial proceedings or otherwise, to enforce the performance
      or
      observance of the covenants and agreements contained in this Indenture, and
      no
      delay or omission of the Trustee or of any holder of any of the Notes to
      exercise any right or power accruing upon any default or Event of Default shall
      impair any such right or power, or shall be construed to be a waiver of any
      such
      default or any acquiescence therein; and, subject to the provisions of
      Section 6.04, every power and remedy given by this Article 6 or by law
      to the Trustee or to the Noteholders may be exercised from time to time, and
      as
      often as shall be deemed expedient, by the Trustee or by the
      Noteholders.

     

    SECTION 6.07.
      Direction
      of Proceedings and Waiver of Defaults by Majority of
      Noteholders.
      The
      holders of a majority in aggregate principal amount of the Notes at the time
      outstanding determined in accordance with Section 8.04 shall have the right
      to direct the time, method, and place of conducting any proceeding for any
      remedy available to the Trustee or exercising any trust or power conferred
      on
      the Trustee with respect to Notes; provided,
      however,
      that
      such direction shall not be in conflict with any rule of law or with this
      Indenture, and the Trustee may take any other action deemed proper by the
      Trustee that is not inconsistent with such direction. The Trustee may refuse
      to
      follow any direction that it determines is unduly prejudicial to the rights
      of
      any other holder or that would involve the Trustee in personal liability or
      to
      the extent that the Trustee does not receive indemnification to its
      satisfaction. The holders of a majority in aggregate principal amount of the
      Notes at the time outstanding determined in accordance with Section 8.04
      may on behalf of the holders of all of the Notes and subject to the provisions
      of Section 6.01 waive any past default or Event of Default hereunder and
      its consequences except (i) a default in the payment of premium, accrued and
      unpaid interest, including Additional Amounts, on, or the principal of, the
      Notes when due which has not been cured pursuant to the provisions of
      Section 6.01, (ii) a failure by the Company to deliver cash and, if
      applicable, Shares (and cash in lieu of fractional Shares) upon conversion
      of
      the Notes, or (iii) a default in respect of a covenant or provisions hereof
      which under Article 10 cannot be modified or amended without the consent of
      each holder of an outstanding Note affected thereby. Upon any such waiver the
      Company, the Trustee and the holders of the Notes shall be restored to their
      former positions and rights hereunder; but no such waiver shall extend to any
      subsequent or other default or Event of Default or impair any right consequent
      thereon. Whenever any Default or Event of Default hereunder shall have been
      waived as permitted by this Section 6.07, said default or Event of Default
      shall for all purposes of the Notes and this Indenture be deemed to have been
      cured and to be not continuing; but no such waiver shall extend to any
      subsequent or other default or Event of Default or impair any right consequent
      thereon.

     

    
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    SECTION 6.08.
      Notice
      of Defaults.
      The
      Trustee shall, within 90 days after the occurrence and continuance of a Default
      of which a Responsible Officer receives written notice, mail to all Noteholders
      as the names and addresses of such holders appear upon the Note Register, notice
      of all Defaults known to a Responsible Officer, unless such Defaults shall
      have
      been cured or waived before the giving of such notice; and provided
      that
      except in the case of a Default in the payment of the principal of, or premium,
      if any, and accrued and unpaid interest (including Additional Amounts and
      Make-Whole Interest, if any), on any of the Notes, then in any such event the
      Trustee shall be protected in withholding such notice if and so long as a
      Responsible Officer or a committee of trust officers of the Trustee in good
      faith determine that the withholding of such notice is in the interests of
      the
      Noteholders.

     

    The
      Trustee shall not be charged with knowledge of any default or Event of Default
      with respect to the Notes, unless either (i) a Responsible Officer shall have
      actual knowledge of such default or Event of Default or (ii) written notice
      of
      such default or Event of Default shall have been delivered to a Responsible
      Officer of the Trustee by the Company or by any holder of the
      Notes.

     

    SECTION 6.09.
      Undertaking
      to Pay Costs.
      All
      parties to this Indenture agree, and each holder of any Note by his acceptance
      thereof shall be deemed to have agreed, that any court may, in its discretion,
      require, in any suit for the enforcement of any right or remedy under this
      Indenture, or in any suit against the Trustee for any action taken or omitted
      by
      it as Trustee, the filing by any party litigant in such suit of an undertaking
      to pay the costs of such suit and that such court may in its discretion assess
      reasonable costs, including reasonable attorneys’ fees, against any party
      litigant in such suit, having due regard to the merits and good faith of the
      claims or defenses made by such party litigant; provided
      that the
      provisions of this Section 6.09 (to the extent permitted by law) shall not
      apply to any suit instituted by the Trustee, to any suit instituted by any
      Noteholder, or group of Noteholders, holding in the aggregate more than 10%
      in
      principal amount of the Notes at the time outstanding determined in accordance
      with Section 8.04, or to any suit instituted by any Noteholder for the
      enforcement of the payment of the principal of or premium, if any, and accrued
      and unpaid interest, including Additional Amounts, on any Note on or after
      the
      due date expressed in such Note or to any suit for the enforcement of the right
      to convert any Note in accordance with the provisions of
      Article 14.

     

    
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    ARTICLE 7

    Concerning
      the Trustee

     

    SECTION 7.01.
      Duties
      and Responsibilities of Trustee.
      The
      Trustee, prior to the occurrence of an Event of Default and after the curing
      or
      waiver of all Events of Default which may have occurred, undertakes to perform
      such duties and only such duties as are specifically set forth in this
      Indenture. In case an Event of Default has occurred (which has not been cured
      or
      waived) the Trustee shall exercise such of the rights and powers vested in
      it by
      this Indenture, and no implied covenants or obligations shall be read into
      this
      Indenture against the Trustee, and use the same degree of care and skill in
      their exercise, as a prudent person would exercise or use under the
      circumstances in the conduct of such person’s own affairs; provided
      that if
      an Event of Default occurs and is continuing, the Trustee will be under no
      obligation to exercise any of the rights or powers under this Indenture at
      the
      request or direction of any of the holders unless such holders have offered
      to
      the Trustee indemnity or security against loss, liability or expense to its
      satisfaction.

     

    No
      provision of this Indenture shall be construed to relieve the Trustee from
      liability for its own negligent action, its own negligent failure to act, its
      own bad faith, or its own willful misconduct, except that: 

     

    (a) prior
      to
      the occurrence of an Event of Default and after the curing or waiving of all
      Events of Default which may have occurred:

     

    (i) the
      duties and obligations of the Trustee shall be determined solely by the express
      provisions of this Indenture and, after it has been qualified thereunder, the
      Trust Indenture Act, and the Trustee shall not be liable except for the
      performance of such duties and obligations as are specifically set forth in
      this
      Indenture and no implied covenants or obligations shall be read into this
      Indenture and the Trust Indenture Act against the Trustee; and

     

    (ii) in
      the
      absence of bad faith, gross negligence and willful misconduct on the part of
      the
      Trustee, the Trustee may conclusively rely, as to the truth of the statements
      and the correctness of the opinions expressed therein, upon any statements,
      certificates or opinions furnished to the Trustee and conforming to the
      requirements of this Indenture; but, in the case of any such statements,
      certificates or opinions which by any provisions hereof are specifically
      required to be furnished to the Trustee, the Trustee shall be under a duty
      to
      examine the same to determine whether or not they conform to the requirements
      of
      this Indenture;

     

    (b) the
      Trustee shall not be liable for any error of judgment made in good faith by
      a
      Responsible Officer or Officers of the Trustee, unless it shall be established
      by an appellate court of competent jurisdiction in a final non-appealable order
      that the Trustee was negligent in ascertaining the pertinent facts;

     

    
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    (c) the
      Trustee shall not be liable for the performance by any third party appointed
      by
      the Company in relation to the Notes and, unless notified in writing to the
      contrary, shall be entitled to assume due performance by such
      parties;

     

    (d) the
      Trustee shall not be liable with respect to any action taken or omitted to
      be
      taken by it in good faith in accordance with the direction of the holders of
      not
      less than a majority in principal amount of the Notes at the time outstanding
      determined as provided in Section 8.04 relating to the time, method and
      place of conducting any proceeding for any remedy available to the Trustee,
      or
      exercising any trust or power conferred upon the Trustee, under this
      Indenture;

     

    (e) whether
      or not therein provided, every provision of this Indenture relating to the
      conduct or affecting the liability of, or affording protection to, the Trustee
      shall be subject to the provisions of this Section;

     

    (f) the
      Trustee shall not be liable in respect of any payment (as to the correctness
      of
      amount, entitlement to receive or any other matters relating to payment) or
      notice effected by the Company or any Paying Agent or any records maintained
      by
      any co-registrar with respect to the Notes;

     

    (g) the
      Trustee shall have no obligation or duty to monitor, determine or inquire as
      to
      compliance with any covenants or obligations of the Company under this
      Indenture;

     

    (h) in
      the
      absence of written investment direction from the Company, all cash received
      by
      the Trustee shall be placed in a non-interest bearing trust account. In no
      event
      shall the Trustee be liable for the selection of investments or for investment
      losses incurred thereon or for losses incurred as a result of the liquidation
      of
      any such investments prior to its stated maturity or the failure of the party
      directing such investments prior to its stated maturity or the failure of the
      party directing such investment to provide timely written investment direction,
      and the Trustee shall have no obligation to invest or reinvest any amounts
      held
      hereunder in the absence of such written investment direction from the Company;
      

     

    (i) In
      no
      event shall the Trustee be responsible or liable for any failure or delay in
      the
      performance of its obligations hereunder arising out of or caused by, directly
      or indirectly, forces beyond its control, including, without limitation,
      strikes, work stoppages, accidents, acts of war or terrorism, civil or military
      disturbances, nuclear or natural catastrophes or acts of God, and interruptions,
      loss or malfunctions of utilities, communications or computer (software and
      hardware) services; it being understood that the Trustee shall use reasonable
      efforts which are consistent with accepted practices in the banking industry
      to
      resume performance as soon as practicable under the circumstances;

     

    
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    (j) the
      Trustee and any of its branches, subsidiaries, representative offices affiliates
      or agents may transfer and disclose any relevant information concerning the
      Notes, Noteholders or this Indenture as required by any law, court order, or
      regulatory authority; and as may be required, the Trustee shall have the right,
      in connection with the establishment of anti-money-laundering procedures by
      the
      Secretary of the United States Department of the Treasury, to share information
      with governmental authorities with respect to investors in the Notes and to
      request such information and take such actions as might be necessary to enable
      the Trustee to comply with the Uniting and Strengthening America by Providing
      Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
      or
      any anti-money-laundering laws in any other relevant jurisdiction;
      and

     

    (k) in
      the
      event that the Trustee is also acting as Custodian, Note Registrar, Paying
      Agent, Conversion Agent or transfer agent hereunder, the rights, privileges,
      protections, immunities and benefits given to the Trustee, including without
      limitation, its right to be indemnified pursuant to this Article 7 shall
      also be afforded to it in its capacity as such and other Person employed by
      the
      Trustee to act hereunder.

     

    None
      of
      the provisions contained in this Indenture shall require the Trustee to expend
      or risk its own funds or otherwise incur personal financial liability in the
      performance of any of its duties or in the exercise of any of its rights,
      discretions or powers.

     

    SECTION 7.02.
      Reliance
      on Documents, Opinions, Etc.
      Except
      as
      otherwise provided in Section 7.01:

     

    (a) the
      Trustee may conclusively rely and shall be fully protected in acting, or
      refraining from acting, upon any resolution, officer’s certificate or any other
      certificate, statement, instrument, opinion, report, notice, request, consent,
      order, bond, note, coupon or other paper or document believed by it in good
      faith to be genuine and to have been signed or presented by the proper party
      or
      parties;

     

    (b) any
      request, direction, order or demand of the Company mentioned herein shall be
      sufficiently evidenced by an Officers’ Certificate (unless other evidence in
      respect thereof be herein specifically prescribed); and any resolution of the
      Board of Directors may be evidenced to the Trustee by a copy thereof certified
      by a director or executive officer of the Company;

     

    
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    (c) the
      Trustee shall be entitled to receive and the Company shall deliver to it an
      Officers’ Certificate setting forth the names of individuals authorized at such
      time to take specified actions pursuant to this Indenture;

     

    (d) the
      Trustee may consult with counsel and require an Officers’ Certificate or an
      Opinion of Counsel and any advice of such counsel or Opinion of Counsel shall
      be
      full and complete authorization and protection in respect of any action taken
      or
      omitted by it hereunder in good faith and in accordance with such advice
      Officers’ Certificate or Opinion of Counsel;

     

    (e) the
      Trustee shall be under no obligation to exercise any of the rights or powers
      vested in it by this Indenture at the request, order or direction of any of
      the
      Noteholders pursuant to the provisions of this Indenture, unless such
      Noteholders shall have offered to the Trustee security or indemnity satisfactory
      to it against the fees, costs, expenses and liabilities which may be incurred
      therein or thereby;

     

    (f) the
      Trustee shall not be bound to make any investigation into the facts or matters
      stated in any resolution, certificate, statement, instrument, opinion, report,
      notice, request, direction, consent, order, bond, debenture or other paper
      or
      document, but the Trustee, in its discretion, may make such further inquiry
      or
      investigation into such facts or matters as it may see fit, and, if the Trustee
      determines to make such further inquiry or investigation, it shall be entitled
      to examine the books, records and premises of the Company, personally or by
      agent or attorney; provided,
      however,
      that if
      the payment within a reasonable time to the Trustee of the costs, expenses
      or
      liabilities likely to be incurred by it in the making of such investigation
      is,
      in the opinion of the Trustee, not assured to the Trustee by the security
      afforded to it by the terms of this Indenture, the Trustee may require security
      or indemnity satisfactory to the Trustee from the Noteholders against properly
      incurred expenses or liability as a condition to so proceeding; the expenses
      of
      every such examination shall be paid by the Company or, if paid by the Trustee
      or any predecessor Trustee, shall be repaid by the Company upon
      demand;

     

    (g) the
      Trustee may execute any of the trusts or powers hereunder or perform any duties
      hereunder either directly or by or through agents, custodians, nominees or
      attorneys and the Trustee shall not be responsible for any misconduct or
      negligence on the part of any agent, custodian, nominee or attorney appointed
      by
      it with due care hereunder; 

     

    (h) the
      Trustee shall not be liable for any action taken or omitted by it in good faith
      and believed by it to be authorized or within the discretion, rights, or powers
      conferred upon it by this Indenture, and shall in no way be liable for any
      action taken by the Noteholders exclusive of the Trustee; 

     

    
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    (i) the
      Trustee shall not be liable if prevented or delayed in performing any of its
      duties by reason of any present or future law applicable to it, by any
      governmental or regulatory authority; and

     

    (j) the
      permissive rights of the Trustee enumerated herein shall not be construed as
      duties.

     

    In
      no
      event shall the Trustee be liable for any special, indirect, punitive or
      consequential loss or damage of any kind whatsoever (including but not limited
      to lost profits), whether foreseeable or not, even if the Trustee has been
      advised of the likelihood of such loss or damage and regardless of the form
      of
      action other than through the Trustee’s bad faith, willful misconduct or gross
      negligence. 

     

    SECTION 7.03.
      No
      Responsibility for Recitals, Etc.
      The
      recitals contained herein and in the Notes (except in the Trustee’s certificate
      of authentication) shall be taken as the statements of the Company, and the
      Trustee assumes no responsibility for the correctness of the same. The Trustee
      makes no representations as to the validity or sufficiency of this Indenture,
      the Shares, the Conversion Price, the Referenced Property, or of the Notes.
      The
      Trustee shall not be accountable for the use or application by the Company
      of
      any Notes or the proceeds of any Notes authenticated and delivered by the
      Trustee in conformity with the provisions of this Indenture. The Trustee shall
      not be responsible or liable for any loss suffered in connection with any
      investment of funds made by it in accordance with this Indenture or at the
      direction of the Company. Except for information provided by the Trustee
      concerning the Trustee, the Trustee shall have no responsibility for any
      information in any offering memorandum, prospectus or other disclosure material
      distributed with respect to the Notes.

     

    SECTION 7.04.
      Trustee,
      Paying Agents, Conversion Agents or Registrar May Own Notes.
      The
      Trustee, any Paying Agent, any Conversion Agent or Note Registrar, in its
      individual or any other capacity, may become the owner or pledgee of Notes
      with
      the same rights it would have if it were not Trustee, Paying Agent, Conversion
      Agent or Note Registrar and may otherwise deal with the Company and receive,
      collect, hold and retain collections from the Company with the same rights
      it
      would have if it were not the Trustee or such agent.

     

    SECTION 7.05.
      Monies
      to Be Held in Trust.
      Subject
      to the provisions of Section 12.04, all monies received by the Trustee
      shall, until used or applied as herein provided, be held in trust for the
      purposes for which they were received. Money held by the Trustee in trust
      hereunder need not be segregated from other funds except to the extent required
      by law. The Trustee or its agents shall be under no liability for interest
      on
      any money received by it hereunder.

     

    
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    SECTION 7.06.
      Compensation
      and Indemnification of Trustee.
      The
      Company covenants and agrees to pay to the Trustee (including in any other
      agent
      roles it may perform as Conversion Agent and Principal Payment Agent) from
      time
      to time, and the Trustee shall be entitled to, such compensation for all
      services rendered by it hereunder in any capacity (which shall not be limited
      by
      any provision of law in regard to the compensation of a trustee of an express
      trust) as mutually agreed to in writing between the Trustee and the Company,
      and
      the Company covenants and agrees to pay or reimburse the Trustee upon its
      request for all properly incurred expenses, disbursements and advances properly
      incurred or made by or on behalf of it in accordance with any of the provisions
      of this Indenture (including the compensation and the properly incurred expenses
      and disbursements of its agents, attorneys and in-house counsel and of all
      persons not regularly in its employ) except any such expense, disbursement
      or
      advance as may arise from its negligence (which for purposes of this
      Section 7.06 shall be deemed to include its officers, agents, employees,
      directors, attorneys and in-house counsel), willful misconduct, or bad faith.
      Without prejudice to any right of indemnity by law given to trustees, the
      Company also covenants to indemnify the Trustee and any predecessor Trustee
      in
      any capacity under this Indenture and any other document or transaction entered
      into in connection herewith and its agents (including anyone appointed by it
      or
      to whom any of its functions may be delegated by it or to whom any of its
      functions may be delegated by it in carrying out its functions in the
      fulfillment of its obligations under this Indenture) and any authenticating
      agent for, and to hold them harmless against, any loss, liability, damages,
      claim, judgment, liability or expense (including litigation by the Company)
      incurred without gross negligence, willful misconduct or bad faith on the part
      of the Trustee, its officers, directors, agents, attorneys or in-house counsel,
      or employees, or such agent or authenticating agent, as the case may be, and
      arising out of or in connection with the acceptance or administration of this
      trust or in any other capacity hereunder, including, without limitation, taxes,
      duties, levies, other charges, value added tax or similar tax charged or
      chargeable thereon (excluding any franchise, income or similar taxes) and the
      costs and expenses of defending themselves against any claim of liability in
      the
      premises. The obligations of the Company under this Section 7.06 to
      compensate or indemnify the Trustee and to pay or reimburse the Trustee for
      expenses, disbursements and advances shall be secured by a lien prior to that
      of
      the Notes upon all property and funds held or collected by the Trustee as such,
      except, subject to the effect of Section 6.03, funds held in trust herewith
      for the benefit of the holders of particular Notes prior to the date of the
      accrual of such unpaid compensation or indemnifiable claim. The Trustee’s right
      to receive payment of any amounts due under this Section 7.06 shall not be
      subordinate to any other liability or indebtedness of the Company (even though
      the Notes may be so subordinated). The obligation of the Company under this
      Section 7.06 shall survive the satisfaction and discharge of this Indenture
      and the earlier resignation or removal of the Trustee. The Company need not
      pay
      for any settlement made without its consent, which consent shall not be
      unreasonably withheld. The indemnification provided in this Section 7.06
      shall extend to the officers, directors, agents and employees of the
      Trustee.

     

    
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    If
      an
      Event of Default shall have occurred or if the Trustee is requested by the
      Company to undertake duties which are of an exceptional nature or otherwise
      outside the scope of the Trustee’s normal duties under this Indenture, the
      Company will pay such additional remuneration as they may agree or, failing
      such
      agreement, as determined by an independent international merchant or investment
      bank (acting as an expert) selected by the Trustee and approved by the Company.
      The expenses involved in such nomination and such merchant or investment bank’s
      fee will be paid by the Company. The determination of such merchant or
      investment bank will be conclusive and binding on the Company, the Trustee
      and
      the Noteholders.

     

    When
      the
      Trustee and its agents and any authenticating agent incur expenses or render
      services after an Event of Default specified in Section 6.01(e) or
      Section 6.01(f) occurs, the expenses and the compensation for the services
      are intended to constitute expenses of administration under any bankruptcy,
      insolvency or similar laws.

     

    SECTION 7.07.
      Officers’
      Certificate as Evidence.
      Except
      as
      otherwise provided in Section 7.01, whenever in the administration of the
      provisions of this Indenture the Trustee shall deem it necessary or desirable
      that a matter be proved or established prior to taking or omitting any action
      hereunder, such matter (unless other evidence in respect thereof be herein
      specifically prescribed) may, in the absence of negligence, willful misconduct,
      and bad faith on the part of the Trustee, be deemed to be conclusively proved
      and established by an Officers’ Certificate delivered to the Trustee, and such
      Officers’ Certificate, in the absence of gross negligence, willful misconduct,
      and bad faith on the part of the Trustee, shall be full warrant to the Trustee
      for any action taken or omitted by it under the provisions of this Indenture
      upon the faith thereof.

     

    SECTION 7.08.
      Conflicting
      Interests of Trustee.
      If
      the
      Trustee has or shall acquire a conflicting interest within the meaning of the
      Trust Indenture Act, the Trustee shall either eliminate such interest or resign,
      to the extent and in the manner provided by, and subject to the provisions
      of,
      the Trust Indenture Act and this Indenture.

     

    SECTION 7.09.
      Eligibility
      of Trustee.
      There
      shall at all times be a Trustee hereunder which shall be a Person that is
      eligible pursuant to the Trust Indenture Act to act as such and has a combined
      capital and surplus of at least US$50,000,000. If such Person publishes reports
      of condition at least annually, pursuant to law or to the requirements of any
      supervising or examining authority, then for the purposes of this Section,
      the
      combined capital and surplus of such Person shall be deemed to be its combined
      capital and surplus as set forth in its most recent report of condition so
      published. If at any time the Trustee shall cease to be eligible in accordance
      with the provisions of this Section, it shall resign immediately in the manner
      and with the effect hereinafter specified in this Article.

     

    
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    SECTION 7.10.
      Resignation
      or Removal of Trustee. 

     

    (a) The
      Trustee may at any time resign by giving written notice of such resignation
      to
      the Company and by mailing notice thereof to the Noteholders at their addresses
      as they shall appear on the Note register. Upon receiving such notice of
      resignation, the Company shall promptly appoint a successor trustee by written
      instrument, in duplicate, executed by order of the Board of Directors, one
      copy
      of which instrument shall be delivered to the resigning Trustee and one copy
      to
      the successor trustee. Any expenses properly incurred prior to the delivery
      of
      such written notice of resignation (including the reasonable fees and expenses
      of counsel) shall be payable by the Company. If no successor trustee shall
      have
      been so appointed and have accepted appointment 60 days after the mailing of
      such notice of resignation to the Noteholders, the resigning Trustee may at
      the
      expense of the Company petition any court of competent jurisdiction for the
      appointment of a successor trustee, or any Noteholder who has been a bona fide
      holder of a Note or Notes for at least six months may, subject to the provisions
      of Section 6.09, on behalf of himself and all others similarly situated,
      petition any such court for the appointment of a successor trustee. Such court
      may thereupon, after such notice, if any, as it may deem proper and prescribe,
      appoint a successor trustee.

     

    (b) In
      case
      at any time any of the following shall occur:

     

    (i) the
      Trustee shall fail to comply with Section 7.08 within a reasonable time
      after written request therefor by the Company or by any Noteholder who has
      been
      a bona fide holder of a Note or Notes for at least six months, or

     

    (ii) the
      Trustee shall cease to be eligible in accordance with the provisions of
      Section 7.09 and shall fail to resign after written request therefor by the
      Company or by any such Noteholder, or

     

    (iii) the
      Trustee shall become incapable of acting, or shall be adjudged bankrupt or
      insolvent, or a receiver of the Trustee or of its property shall be appointed,
      or any public officer shall take charge or control of the Trustee or of its
      property or affairs for the purpose of rehabilitation, conservation or
      liquidation,

     

    then,
      in
      any such case, the Company may by a Board Resolution remove the Trustee and
      appoint a successor trustee by written instrument, in duplicate, executed by
      order of the Board of Directors, one copy of which instrument shall be delivered
      to the Trustee so removed and one copy to the successor trustee, or, subject
      to
      the provisions of Section 6.09, any Noteholder who has been a bona fide
      holder of a Note or Notes for at least six months may, on behalf of himself
      and
      all others similarly situated, petition any court of competent jurisdiction
      for
      the removal of the Trustee and the appointment of a successor trustee. Such
      court may thereupon, after such notice, if any, as it may deem proper and
      prescribe, remove the Trustee and appoint a successor trustee.

     

    
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    (c) The
      holders of a majority in aggregate principal amount of the Notes at the time
      outstanding, as determined in accordance with Section 8.04, may at any time
      remove the Trustee and nominate a successor trustee which shall be deemed
      appointed as successor trustee unless within 10 days after notice to the Company
      of such nomination the Company objects thereto, in which case the Trustee so
      removed or any Noteholder, upon the terms and conditions and otherwise as in
      Section 7.10(a) provided, may petition any court of competent jurisdiction
      for an appointment of a successor trustee.

     

    (d) Any
      resignation or removal of the Trustee and appointment of a successor trustee
      pursuant to any of the provisions of this Section 7.10 shall become
      effective upon acceptance of appointment by the successor trustee as provided
      in
      Section 7.11.

     

    SECTION 7.11.
      Acceptance
      by Successor Trustee.
      Any
      successor trustee appointed as provided in Section 7.10 shall execute,
      acknowledge and deliver to the Company and to its predecessor trustee an
      instrument accepting such appointment hereunder, and thereupon the resignation
      or removal of the predecessor trustee shall become effective and such successor
      trustee, without any further act, deed or conveyance, shall become vested with
      all the rights, powers, duties and obligations of its predecessor hereunder,
      with like effect as if originally named as trustee herein; but, nevertheless,
      on
      the written request of the Company or of the successor trustee, the trustee
      ceasing to act shall, upon payment of any amounts then due it pursuant to the
      provisions of Section 7.06, execute and deliver an instrument transferring
      to such successor trustee all the rights and powers of the trustee so ceasing
      to
      act. Upon request of any such successor trustee, the Company shall execute
      any
      and all instruments in writing for more fully and certainly vesting in and
      confirming to such successor trustee all such rights and powers. Any trustee
      ceasing to act shall, nevertheless, retain a lien upon all property and funds
      held or collected by such trustee as such, except for funds held in trust for
      the benefit of holders of particular Notes, to secure any amounts then due
      it
      pursuant to the provisions of Section 7.06.

     

    No
      successor trustee shall accept appointment as provided in this Section 7.11
      unless at the time of such acceptance such successor trustee shall be qualified
      under the provisions of Section 7.08 and be eligible under the provisions
      of Section 7.09.

     

    
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    Upon
      acceptance of appointment by a successor trustee as provided in this
      Section 7.11, each of the Company and the successor trustee, at the written
      direction and at the expense of the Company shall mail or cause to be mailed
      notice of the succession of such trustee hereunder to the Noteholders at their
      addresses as they shall appear on the Note register. If the Company fails to
      mail such notice within 10 days after acceptance of appointment by the successor
      trustee, the successor trustee shall cause such notice to be mailed at the
      expense of the Company.

     

    SECTION 7.12.
      Succession
      by Merger, Etc.
      Any
      corporation or other entity into which the Trustee may be merged or converted
      or
      with which it may be consolidated, or any corporation resulting from any merger,
      conversion or consolidation to which the Trustee shall be a party, or any
      corporation or other entity succeeding to all or substantially all of the
      corporate trust business of the Trustee (including the administration of this
      Indenture), shall be the successor to the Trustee hereunder without the
      execution or filing of any paper or any further act on the part of any of the
      parties hereto; provided
      that in
      the case of any corporation succeeding to all or substantially all of the
      corporate trust business of the Trustee such corporation shall be qualified
      under the provisions of Section 7.08 and eligible under the provisions of
      Section 7.09.

     

    In
      case
      at the time such successor to the Trustee shall succeed to the trusts created
      by
      this Indenture, any of the Notes shall have been authenticated but not
      delivered, any such successor to the Trustee may adopt the certificate of
      authentication of any predecessor trustee or authenticating agent appointed
      by
      such predecessor trustee, and deliver such Notes so authenticated; and in case
      at that time any of the Notes shall not have been authenticated, any successor
      to the Trustee or an authenticating agent appointed by such successor trustee
      may authenticate such Notes either in the name of any predecessor trustee
      hereunder or in the name of the successor trustee; and in all such cases such
      certificates shall have the full force which it is anywhere in the Notes or
      in
      this Indenture; provided,
      however,
      that
      the right to adopt the certificate of authentication of any predecessor Trustee
      or to authenticate Notes in the name of any predecessor Trustee shall apply
      only
      to its successor or successors by merger, conversion or
      consolidation.

     

    SECTION 7.13.
      Limitation
      on Rights of Trustee as Creditor.
      If
      and
      when the Trustee shall be or become a creditor of the Company (or any other
      obligor upon the Notes), the Trustee shall be subject to the provisions of
      the
      Trust Indenture Act regarding the collection of the claims against the Company
      (or any such other obligor).

     

    
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    SECTION 7.14.
      Trustee’s
      Application for Instructions from the Company.
      Any
      application by the Trustee for written instructions from the Company (other
      than
      with regard to any action proposed to be taken or omitted to be taken by the
      Trustee that affects the rights of the holders of the Notes under this
      Indenture) may, at the option of the Trustee, set forth in writing any action
      proposed to be taken or omitted by the Trustee under this Indenture and the
      date
      on and/or after which such action shall be taken or such omission shall be
      effective. The Trustee shall not be liable for any action taken by, or omission
      of, the Trustee in accordance with a proposal included in such application
      on or
      after the date specified in such application (which date shall not be less
      than
      three Business Days after the date any officer of the Company actually receives
      such application, unless any such officer shall have consented in writing to
      any
      earlier date), unless, prior to taking any such action (or the effective date
      in
      the case of any omission), the Trustee shall have received written instructions
      in response to such proposal specifying the action to be taken or
      omitted.

     

    ARTICLE 8

    Concerning
      the Noteholders

     

    SECTION 8.01.
      Action
      by Noteholders.
      Whenever
      in this Indenture it is provided that the holders of a specified percentage
      in
      aggregate principal amount of the Notes may take any action (including the
      making of any demand or request, the giving of any notice, consent or waiver
      or
      the taking of any other action), the fact that at the time of taking any such
      action, the holders of such specified percentage have joined therein may be
      evidenced by any instrument or any number of instruments of similar tenor
      executed by Noteholders in person or by agent or proxy appointed in writing,
      or
      by the record of the Noteholders voting in favor thereof at any meeting of
      Noteholders duly called and held in accordance with the provisions of
      Article 9, or by a combination of such instrument or instruments and any
      such record of such a meeting of Noteholders. Whenever the Company or the
      Trustee solicits the taking of any action by the holders of the Notes, the
      Company or the Trustee may fix, but shall not be required to, in advance of
      such
      solicitation, a date as the record date for determining Noteholders entitled
      to
      take such action. The record date if one is selected shall be not more than
      15
      days prior to the date of commencement of solicitation of such
      action.

     

    SECTION 8.02.
      Proof
      of Execution by Noteholders.
      Subject
      to the provisions of Section 7.01, Section 7.02 and Section 9.05,
      proof of the execution of any instrument by a Noteholder or his agent or proxy
      shall be sufficient if made in accordance with such rules and regulations as
      may
      be prescribed by the Trustee or in such manner as shall be satisfactory to
      the
      Trustee. The holding of Notes shall be proved by the Note register or by a
      certificate of the Note Registrar. The record of any Noteholders’ meeting shall
      be proved in the manner provided in Section 9.06.

     

    
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    SECTION 8.03.
      Who
      Are Deemed Absolute Owners.
      The
      Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion
      Agent and any Note Registrar may deem the person in whose name such Note shall
      be registered upon the Note Register to be, and may treat him as, the absolute
      owner of such Note (whether or not such Note shall be overdue and
      notwithstanding any notation of ownership or other writing thereon made by
      any
      Person other than the Company or any Note Registrar) for the purpose of
      receiving payment of or on account of the principal of, premium, if any, and
      accrued and unpaid interest on such Note, for conversion of such Note and for
      all other purposes; and neither the Company nor the Trustee nor any Paying
      Agent
      nor any Conversion Agent nor any Note Registrar shall be affected by any notice
      to the contrary. All such payments so made to any holder for the time being,
      or
      upon his order, shall be valid, and, to the extent of the sum or sums so paid,
      effectual to satisfy and discharge the liability for monies payable upon any
      such Note. Notwithstanding anything to the contrary in this Indenture or the
      Notes following an Event of Default, any holder of a beneficial interest in
      a
      Global Note may directly enforce against the Company, without the consent,
      solicitation, proxy, authorization or any other action of the Depositary or
      any
      other person, such holder’s right to exchange such beneficial interest for a
      Note in certificated form in accordance with the provisions of this
      Indenture.

     

    SECTION 8.04.
      Company-Owned
      Notes Disregarded.
      In
      determining whether the holders of the requisite aggregate principal amount
      of
      Notes have concurred in any direction, consent, waiver or other action under
      this Indenture, Notes that are owned by the Company or any other obligor on
      the
      Notes or by any person directly or indirectly controlling or controlled by
      or
      under direct or indirect common control with the Company or any other obligor
      on
      such Notes shall be disregarded and deemed not to be outstanding for the purpose
      of any such determination; provided
      that for
      the purposes of determining whether the Trustee shall be protected in relying
      on
      any such direction, consent, waiver or other action only Notes that a
      Responsible Officer knows are so owned shall be so disregarded. Notes so owned
      that have been pledged in good faith may be regarded as outstanding for the
      purposes of this Section 8.04 if the pledgee shall establish to the
      satisfaction of the Trustee the pledgee’s right to vote such Notes and that the
      pledgee is not the Company, any other obligor on the Notes or a person directly
      or indirectly controlling or controlled by or under direct or indirect common
      control with the Company or any such other obligor. In the case of a dispute
      as
      to such right, any decision by the Trustee taken upon the advice of counsel
      shall be full protection to the Trustee. Upon request of the Trustee, the
      Company shall furnish to the Trustee promptly an Officers’ Certificate listing
      and identifying all Notes, if any, known by the Company to be owned or held
      by
      or for the account of any of the above described persons; and, subject to
      Section 7.01, the Trustee shall be entitled to accept such Officers’
Certificate as conclusive evidence of the facts therein set forth and of the
      fact that all Notes not listed therein are outstanding for the purpose of any
      such determination.

     

    
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    SECTION 8.05.
      Revocation
      of Consents; Future Holders Bound.
      At
      any
      time prior to (but not after) the evidencing to the Trustee, as provided in
      Section 8.01, of the taking of any action by the holders of the percentage
      in aggregate principal amount of the Notes specified in this Indenture in
      connection with such action, any holder of a Note that is shown by the evidence
      to be included in the Notes the holders of which have consented to such action
      may, by filing written notice with the Trustee at its Corporate Trust Office
      and
      upon proof of holding as provided in Section 8.02, revoke such action so
      far as concerns such Note. Except as aforesaid, any such action taken by the
      holder of any Note shall be conclusive and binding upon such holder and upon
      all
      future holders and owners of such Note and of any Notes issued in exchange
      or
      substitution therefor, irrespective of whether any notation in regard thereto
      is
      made upon such Note or any Note issued in exchange or substitution
      therefor.

     

    ARTICLE 9

    Noteholders’
      Meetings

     

    SECTION 9.01.
      Purpose
      of Meetings.
      A
      meeting
      of Noteholders may be called at any time and from time to time pursuant to
      the
      provisions of this Article 9 for any of the following
      purposes:

     

    (a) to
      give
      any notice to the Company or to the Trustee or to give any directions to the
      Trustee permitted under this Indenture, or to consent to the waiving of any
      default or Event of Default hereunder and its consequences, or to take any
      other
      action authorized to be taken by Noteholders pursuant to any of the provisions
      of Article 6;

     

    (b) to
      remove
      the Trustee and nominate a successor trustee pursuant to the provisions of
      Article 7;

     

    (c) to
      consent to the execution of an indenture or indentures supplemental hereto
      pursuant to the provisions of Section 10.02; or

     

    (d) to
      take
      any other action authorized to be taken by or on behalf of the holders of any
      specified aggregate principal amount of the Notes under any other provision
      of
      this Indenture or under applicable law.

     

    SECTION 9.02.
      Call
      of Meetings by Trustee.
      The
      Trustee may at any time at the expense of the Company call a meeting of
      Noteholders to take any action specified in Section 9.01, to be held at
      such time and at such place as the Trustee shall determine. Notice of every
      meeting of the Noteholders, setting forth the time and the place of such meeting
      and in general terms the action proposed to be taken at such meeting and the
      establishment of any record date pursuant to Section 8.01, shall be mailed
      to holders of such Notes at their addresses as they shall appear on the Note
      register. Such notice shall also be mailed to the Company. Such notices shall
      be
      mailed not less than 20 nor more than 90 days prior to the date fixed for the
      meeting.

     

    
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    Any
      meeting of Noteholders shall be valid without notice if the holders of all
      Notes
      then outstanding are present in person or by proxy or if notice is waived before
      or after the meeting by the holders of all Notes outstanding, and if the Company
      and the Trustee are either present by duly authorized representatives or have,
      before or after the meeting, waived notice.

     

    SECTION 9.03.
      Call
      of Meetings by Company or Noteholders.
      In
      case
      at any time the Company, pursuant to a resolution of its Board of Directors,
      or
      the holders of at least 10% in aggregate principal amount of the Notes then
      outstanding, shall have requested the Trustee to call a meeting of Noteholders,
      by written request setting forth in reasonable detail the action proposed to
      be
      taken at the meeting, and the Trustee shall not have mailed the notice of such
      meeting within 20 days after receipt of such request, then the Company or such
      Noteholders may determine the time and the place for such meeting and may call
      such meeting to take any action authorized in Section 9.01,
      by
      mailing notice thereof as provided in Section 9.02.

     

    SECTION 9.04.
      Qualifications
      for Voting.
      To
      be
      entitled to vote at any meeting of Noteholders a person shall be a holder of
      one
      or more Notes on the record date pertaining to such meeting or be a person
      appointed by an instrument in writing as proxy by a holder of one or more Notes.
      The only persons who shall be entitled to be present or to speak at any meeting
      of Noteholders shall be the persons entitled to vote at such meeting and their
      counsel and any representatives of the Trustee and its counsel and any
      representatives of the Company and its counsel.

     

    SECTION 9.05.
      Regulations.
      Notwithstanding
      any other provisions of this Indenture, the Trustee may make such reasonable
      regulations as it may deem advisable for any meeting of Noteholders, in regard
      to proof of the holding of Notes and of the appointment of proxies, and in
      regard to the appointment and duties of inspectors of votes, the submission
      and
      examination of proxies, certificates and other evidence of the right to vote,
      and such other matters concerning the conduct of the meeting as it shall think
      fit.

     

    The
      Trustee shall, by an instrument in writing, appoint a temporary chairman of
      the
      meeting, unless the meeting shall have been called by the Company or by
      Noteholders as provided in Section 9.03,
      in
      which case the Company or the Noteholders calling the meeting, as the case
      may
      be, shall in like manner appoint a temporary chairman. A permanent chairman
      and
      a permanent secretary of the meeting shall be elected by vote of the holders
      of
      a majority in principal amount of the Notes represented at the meeting and
      entitled to vote at the meeting.

     

    
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    Subject
      to the provisions of Section 8.04,
      at any
      meeting of Noteholders each Noteholder or proxyholder shall be entitled to
      one
      vote for each US$1,000 principal amount of Notes held or represented by him;
      provided,
      however,
      that no
      vote shall be cast or counted at any meeting in respect of any Note challenged
      as not outstanding and ruled by the chairman of the meeting to be not
      outstanding. The chairman of the meeting shall have no right to vote other
      than
      by virtue of Notes held by him or instruments in writing as aforesaid duly
      designating him as the proxy to vote on behalf of other Noteholders. Any meeting
      of Noteholders duly called pursuant to the provisions of Section 9.02
      or
Section 9.03
      may be
      adjourned from time to time by the holders of a majority of the aggregate
      principal amount of Notes represented at the meeting, whether or not
      constituting a quorum, and the meeting may be held as so adjourned without
      further notice.

     

    SECTION 9.06.
      Voting.
      The
      vote
      upon any resolution submitted to any meeting of Noteholders shall be by written
      ballot on which shall be subscribed the signatures of the Noteholders or of
      their representatives by proxy and the principal amount of the Notes held or
      represented by them. The permanent chairman of the meeting shall appoint two
      inspectors of votes who shall count all votes cast at the meeting for or against
      any resolution and who shall make and file with the secretary of the meeting
      their verified written reports in duplicate of all votes cast at the meeting.
      A
      record in duplicate of the proceedings of each meeting of Noteholders shall
      be
      prepared by the secretary of the meeting and there shall be attached to said
      record the original reports of the inspectors of votes on any vote by ballot
      taken thereat and affidavits by one or more persons having knowledge of the
      facts setting forth a copy of the notice of the meeting and showing that said
      notice was mailed as provided in Section 9.02.
      The
      record shall show the principal amount of the Notes voting in favor of or
      against any resolution. The record shall be signed and verified by the
      affidavits of the permanent chairman and secretary of the meeting and one of
      the
      duplicates shall be delivered to the Company and the other to the Trustee to
      be
      preserved by the Trustee, the latter to have attached thereto the ballots voted
      at the meeting.

     

    Any
      record so signed and verified shall be conclusive evidence of the matters
      therein stated.

     

    SECTION 9.07.
      No
      Delay of Rights by Meeting.
      Nothing
      contained in this Article 9
      shall be
      deemed or construed to authorize or permit, by reason of any call of a meeting
      of Noteholders or any rights expressly or impliedly conferred hereunder to
      make
      such call, any hindrance or delay in the exercise of any right or rights
      conferred upon or reserved to the Trustee or to the Noteholders under any of
      the
      provisions of this Indenture or of the Notes.

     

    
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    ARTICLE 10

    Supplemental
      Indentures

     

    SECTION 10.01.
      Supplemental
      Indentures without Consent of Noteholders.
      (i)
      Notwithstanding anything herein to the contrary, the Company and the Trustee,
      without notice to or the consent of any holder and at the Company’s expense, may
      from time to time and at any time enter into an indenture or indentures
      supplemental hereto for one or more of the following purposes:

     

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

     

    (b) to
      provide for the assumption by a Successor Company, partnership, trust or limited
      liability company of the obligations of the Company under this Indenture and
      the
      Notes pursuant to Article 11;

     

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

     

    (d) to
      add
      guarantees with respect to the Notes;

     

    (e) to
      secure
      the Company’s obligations in respect of the Notes;

     

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

     

    (g) to
      make
      any changes or modifications to this Indenture necessary in connection with
      the
      registration of the public offer and sale of the Notes under the Securities
      Act
      pursuant to the Registration Rights Agreement or the qualification of this
      Indenture under the Trust Indenture Act;

     

    (h) to
      evidence and provide for the acceptance of the appointment of a successor
      Trustee under the Indenture;

     

    (i) to
      make
      any change that does not materially adversely affect the rights of any holder;
      provided
      that any
      amendment made solely to conform the provisions of this Indenture or the Notes
      to the “Description of Notes” as set forth in the Offering Memorandum will not
      be deemed to materially adversely affect the rights of any holder;
      or

     

    (j) to
      make
      any changes of a formal, minor or technical nature or necessary to correct
      a
      manifest error to comply with mandatory provisions of applicable law as
      evidenced by an Opinion of Counsel so long as such change does not adversely
      affect the rights of Noteholders in any material respect;

     

    
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    (ii) Except
      as
      provided in this Indenture, the holders of a majority in aggregate principal
      amount of the outstanding Notes, by written notice to the Trustee, generally
      may:

     

    (a) waive
      compliance by the Company with any provisions of this Indenture or the Notes;
      and

     

    (b) waive
      any
      past Default or Event of Default and its consequences, except a Default or
      Event
      of Default:

     

    (A) in
      the
      payment of principal of, premium, if any, or interest (including Additional
      Interest, if any) on, any Note or in the payment of the Fundamental Change
      Repurchase Price,

     

    (B) arising
      from the Company’s failure to convert any Note in accordance with this
      Indenture, or 

     

    (C) in
      respect of any provision under this Indenture that cannot be modified or amended
      without the consent of the holders of each outstanding Note
      affected.

     

    Upon
      the
      written request of the Company, accompanied by a Board Resolution authorizing
      the execution of such supplemental indenture, the Trustee is hereby authorized
      to join with the Company in the execution of any such supplemental indenture,
      to
      make any further appropriate agreements and stipulations which may be therein
      contained and to accept the conveyance, transfer and assignment of any property
      thereunder, but the Trustee shall not be obligated to enter into any
      supplemental indenture which affects the Trustee’s own rights, duties or
      immunities under this Indenture or otherwise.

     

    Any
      supplemental indenture authorized by the provisions of this Section 10.01
      may be
      executed by the Company and the Trustee without the consent of the holders
      of
      any of the Notes at the time outstanding.

     

    SECTION 10.02.
      Supplemental
      Indentures with Consent of Noteholders.
      With
      the
      consent (evidenced as provided in Article 8)
      of the
      holders of at least a majority in aggregate principal amount of the Notes at
      the
      time outstanding (determined in accordance with Article 8
      and
      including, without limitation, consents obtained in connection with a purchase
      of, or tender offer or exchange offer for, Notes), the Company, when authorized
      by the resolutions of the Board of Directors, and the Trustee may from time
      to
      time and at any time enter into an indenture or indentures supplemental hereto
      for the purpose of adding any provisions to or changing in any manner or
      eliminating any of the provisions of this Indenture or any supplemental
      indenture or of modifying in any manner the rights of the holders of the Notes;
      provided,
      however,
      that no
      such supplemental indenture shall:

     

    
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    (a) reduce
      the percentage in aggregate principal amount of Notes the holders of which
      must
      consent to an amendment;

     

    (b) reduce
      the rate, or extend the stated time for payment, of interest (including
      Additional Interest and Make-Whole Interest, if any) on any Note;

     

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

     

    (d) change
      the place, manner or currency of payment of principal or interest (including
      Make-Whole Interest, if any) in respect of any Note;

     

    (e) make
      any
      change that adversely affects the conversion rights of any Notes;

     

    (f) reduce
      the Fundamental Change Purchase Price, Redemption Price or Put Right Purchase
      Price of any Note or amend or modify in any manner adverse to the holders of
      the
      Notes the Company’s obligation to make such payments, whether through an
      amendment or waiver of provisions in the covenants, definitions or
      otherwise;

     

    (g) impair
      the right of any holder to receive payment of principal of, and interest
      (including Additional Interest and Make-Whole Interest, if any) on, such
      holder’s Notes on or after the due dates therefor or to institute suit for the
      enforcement of any payment on or with respect to such holder’s
      Note;

     

    (h) make
      any
      change to the provisions of this Article 10
      that
      require each holder’s consent or in the waiver provisions in Section 6.01
      and
Section 6.07;

     

    (i) change
      the Company’s obligation to pay Additional Amounts; or

     

    (j) modify
      the ranking provisions of this Indenture in a manner adverse to Noteholders,
      in
      each case without the consent of each holder of an outstanding Note
      affected.

     

    
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    Upon
      the
      written request of the Company, accompanied by a copy of the Board Resolutions
      authorizing the execution of any such supplemental indenture, and upon the
      filing with the Trustee of evidence of the consent of Noteholders as aforesaid,
      the Trustee shall join with the Company in the execution of such supplemental
      indenture unless such supplemental indenture affects the Trustee’s own rights,
      duties or immunities under this Indenture or otherwise, in which case the
      Trustee may in its discretion, but shall not be obligated to, enter into such
      supplemental indenture.

     

    It
      shall
      not be necessary for the consent of the Noteholders under this Section 10.02
      to
      approve the particular form of any proposed supplemental indenture, but it
      shall
      be sufficient if such consent shall approve the substance thereof. After an
      amendment under this Indenture becomes effective, the Company shall mail to
      the
      holders a notice briefly describing such amendment. However, the failure to
      give
      such notice to all the holders, or any defect in the notice, will not impair
      or
      affect the validity of the amendment.

     

    SECTION 10.03.
      Effect
      of Supplemental Indentures.
      Any
      supplemental indenture executed pursuant to the provisions of this Article 10
      shall
      comply with the Trust Indenture Act, as then in effect, provided that this
      Section 10.03
      shall
      not require such supplemental indenture or the Trustee to be qualified under
      the
      Trust Indenture Act prior to the time such qualification is in fact required
      under the terms of the Trust Indenture Act, nor shall it constitute any
      admission or acknowledgment by any party to such supplemental indenture that
      any
      such qualification is required prior to the time such qualification is in fact
      required under the terms of the Trust Indenture Act. Upon the execution of
      any
      supplemental indenture pursuant to the provisions of this Article 10,
      this
      Indenture shall be and be deemed to be modified and amended in accordance
      therewith and the respective rights, limitation of rights, obligations, duties
      and immunities under this Indenture of the Trustee, the Company and the
      Noteholders shall thereafter be determined, exercised and enforced hereunder
      subject in all respects to such modifications and amendments and all the terms
      and conditions of any such supplemental indenture shall be and be deemed to
      be
      part of the terms and conditions of this Indenture for any and all
      purposes.

     

    SECTION 10.04.
      Notation
      on Notes.
      Notes
      authenticated and delivered after the execution of any supplemental indenture
      pursuant to the provisions of this Article 10
      may bear
      a notation in form approved by the Trustee as to any matter provided for in
      such
      supplemental indenture. If the Company shall so determine, new Notes so modified
      as to conform, in the opinion of the Trustee and the Board of Directors, to
      any
      modification of this Indenture contained in any such supplemental indenture
      may,
      at the Company’s expense, be prepared and executed by the Company, authenticated
      by the Trustee (or an authenticating agent duly appointed by the Trustee
      pursuant to Section 16.11)
      and
      delivered in exchange for the Notes then outstanding, upon surrender of such
      Notes then outstanding.

     

    
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    SECTION 10.05.
      Evidence
      of Compliance of Supplemental Indenture to Be Furnished to
      Trustee.
      In
      addition to the documents required by Section 16.06,
      the
      Trustee shall receive an Officers’ Certificate and an Opinion of Counsel as
      conclusive evidence that any supplemental indenture executed pursuant hereto
      complies with the requirements of this Article 10,
      the
      Trust Indenture Act and as to such other matters as the Trustee may
      request.

     

    The
      Trustee shall have no duty to determine whether a supplemental indenture need
      be
      entered into or whether any provisions of any supplemental indenture are
      correct.

     

    ARTICLE 11

    Consolidation,
      Merger, Sale, Conveyance and Lease

     

    SECTION 11.01.
      Company
      May Consolidate, Etc. on Certain Terms

     

    Subject
      to the provisions of Section 11.02,
      the
      Company shall not consolidate with, merge with or into, or convey, transfer
      or
      lease all or substantially all of its assets and properties to another Person,
      unless:

     

    (a) the
      resulting, surviving or transferee person (the “Successor
      Company”)
      if not
      the Company shall be a person organized and existing under the laws of the
      United States of America, any State thereof or the District of Columbia and
      the
      Successor Company (if not the Company) shall expressly assume, by supplemental
      indenture, executed and delivered to the Trustee, in form satisfactory to the
      Trustee, all the obligations of the Company under the Notes and this Indenture
      and, to the extent that it is otherwise still operative, shall expressly assume
      all the obligations of the Company under the Registration Rights Agreement;
      and

     

    (b) immediately
      after giving effect to such transaction, no Default or Event of Default shall
      have occurred and be continuing.

     

    For
      purposes of this Section 11.01,
      the
      sale, lease, conveyance, assignment, transfer, or other disposition of all
      or
      substantially all of the properties and assets of one or more Subsidiaries
      of
      the Company, which properties and assets, if held by the Company instead of
      such
      Subsidiaries, would constitute all or substantially all of the properties and
      assets of the Company on a consolidated basis, shall be deemed to be the
      transfer of all or substantially all of the properties and assets of the
      Company.

     

    
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    SECTION 11.02.
      Successor
      Corporation to Be Substituted.
      In
      case
      of any such consolidation, merger, conveyance, transfer or lease and upon the
      assumption by the Successor Company, by supplemental indenture, executed and
      delivered to the Trustee and satisfactory in form to the Trustee, of the due
      and
      punctual payment of the principal of and premium, if any, and accrued and unpaid
      interest on all of the Notes, the due and punctual conversion of the Notes
      and
      the due and punctual performance of all of the covenants and conditions of
      this
      Indenture to be performed by the Company, such Successor Company shall succeed
      to and be substituted for the Company and the Company shall be released from
      those obligations, with the same effect as if it had been named herein as the
      party of the first part. Such Successor Company thereupon may cause to be
      signed, and may issue either in its own name or in the name of the Company
      any
      or all of the Notes issuable hereunder which theretofore shall not have been
      signed by the Company and delivered to the Trustee; and, upon the order of
      such
      Successor Company instead of the Company and subject to all the terms,
      conditions and limitations in this Indenture prescribed, the Trustee shall
      authenticate and shall deliver, or cause to be authenticated and delivered,
      any
      Notes which previously shall have been signed and delivered by the officers
      of
      the Company to the Trustee for authentication, and any Notes which such
      Successor Company thereafter shall cause to be signed and delivered to the
      Trustee for that purpose. All the Notes so issued shall in all respects have
      the
      same legal rank and benefit under this Indenture as the Notes theretofore or
      thereafter issued in accordance with the terms of this Indenture as though
      all
      of such Notes had been issued at the date of the execution hereof. In the event
      of any such consolidation, merger, conveyance, transfer or lease, the person
      named as the “Company” in the first paragraph of this Indenture or any successor
      which shall thereafter have become such in the manner prescribed in this
Article 11
      may be
      dissolved, wound up and liquidated at any time thereafter and such person shall
      be released from its liabilities as obligor and maker of the Notes and from
      its
      obligations under this Indenture.

     

    In
      case
      of any such consolidation, merger, conveyance, transfer or lease, such changes
      in phraseology and form (but not in substance) may be made in the Notes
      thereafter to be issued as may be appropriate.

     

    SECTION 11.03.
      Officers’
      Certificate and Opinion of Counsel to be Given Trustee.
      No
      merger, consolidation, sale transfer or lease shall be effective unless the
      Trustee shall receive an Officers’ Certificate and an Opinion of Counsel as
      conclusive evidence that any such consolidation, merger, conveyance, transfer
      or
      lease and any such assumption complies with the provisions of this Article 11.

     

    
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    ARTICLE 12

    Satisfaction
      and Discharge of Indenture

     

    SECTION 12.01.
      Discharge
      of Indenture.
      When
      the
      Company shall deliver to the Note Registrar for cancellation all Notes
      theretofore authenticated (other than any Notes that have been destroyed, lost
      or stolen and in lieu of or in substitution for which other Notes shall have
      been authenticated and delivered) and not theretofore canceled, or all the
      Notes
      not theretofore canceled or delivered to the Note Registrar for cancellation
      shall have become due and payable, whether on the Maturity Date or on any
      earlier Fundamental Change Purchase Date, Put Right Purchase Date or Redemption
      Date, or otherwise, and the Company shall deposit with the Trustee, in trust,
      cash or securities, as applicable, sufficient to pay at maturity all of the
      Notes (other than any Notes that shall have been mutilated, destroyed, lost
      or
      stolen and in lieu of or in substitution for which other Notes shall have been
      authenticated and delivered) not theretofore canceled or delivered to the
      Trustee for cancellation, including principal and premium, if any, and accrued
      and unpaid interest (including any Additional Interest) due thereon, and if
      the
      Company shall also pay or cause to be paid all other sums payable hereunder
      by
      the Company, then this Indenture shall cease to be of further effect except
      as
      to (i)
      the
      right of holders to receive payments of principal of and premium, if any, and
      accrued and unpaid interest if any (including any Additional Interest), and
      any
      unpaid Conversion Obligation and Additional Shares, if any, on the Notes and
      the
      other rights, duties and obligations of Noteholders, as beneficiaries hereof
      with respect to the amounts, if any, so deposited with the Trustee, (ii)
      the
      rights, obligations and immunities of the Trustee hereunder and (iii)
      the
      obligations of the Company under Section 7.06,
      and the
      Trustee, on written demand of the Company accompanied by an Officers’
Certificate and an Opinion of Counsel as required by Section 16.06
      and at
      the cost and expense of the Company, shall execute proper instruments
      acknowledging satisfaction of and discharging this Indenture; the Company,
      however, hereby agrees to reimburse the Trustee for any costs or expenses
      thereafter properly incurred by the Trustee and to compensate the Trustee for
      any services thereafter reasonably and properly rendered by the Trustee in
      connection with this Indenture or the Notes.
      For the
      avoidance of doubt, the obligations of the Company to reimburse the Trustee
      under this Section 12.01
      shall
      survive the satisfaction and discharge of this Indenture.

     

    SECTION 12.02.
      Deposited
      Monies to Be Held in Trust by Trustee.
      Subject
      to Section 12.04,
      all
      monies deposited with the Trustee pursuant to Section 12.01
      shall be
      held in trust and applied by it to the payment, either directly or through
      any
      Paying Agent (including the Company if acting as its own Paying Agent), to
      the
      holders of the particular Notes for the payment of which such monies have been
      deposited with the Trustee, of all sums due thereon for principal and premium
      and accrued and unpaid interest.

     

    
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    SECTION 12.03.
      Paying
      Agent to Repay Monies Held.
      Upon
      the
      satisfaction and discharge of this Indenture, all monies then held by any Paying
      Agent of the Notes (other than the Trustee) shall, upon written request of
      the
      Company, be repaid to it or paid to the Trustee, and thereupon such Paying
      Agent
      shall be released from all further liability with respect to such
      monies.

     

    SECTION 12.04.
      Return
      of Unclaimed Monies.
      Subject
      to the requirements of applicable law, any monies deposited with or paid to
      the
      Trustee or any Paying Agent for payment of the principal of, premium, if any,
      or
      accrued and unpaid interest on Notes and not applied but remaining unclaimed
      by
      the Noteholders for two years after the date upon which the principal of,
      premium, if any, or accrued and unpaid interest on such Notes, as the case
      may
      be, shall, unless otherwise required by mandatory provisions of applicable
      abandoned property laws have become due and payable, shall be repaid to the
      Company by the Trustee or such Paying Agent on written request and all liability
      of the Trustee or any Paying Agent shall thereupon cease with respect to such
      monies; and the holder of any of the Notes shall thereafter look only to the
      Company for any payment which such holder may be entitled to collect unless
      an
      applicable abandoned property law designates another person. The Trustee shall,
      promptly after such payment of the principal of, premium, if any, or accrued
      and
      unpaid interest on Notes, as described in this Section 12.04
      and upon
      written request of the Company, return to the Company any funds in excess of
      the
      amount required for such payment.

     

    SECTION 12.05.
      Reinstatement.
      If
      (iv)
      the
      Trustee or the Paying Agent is unable to apply any money in accordance with
      Section 12.02
      by
      reason of any order or judgment of any court or governmental authority
      enjoining, restraining or otherwise prohibiting such application and
(v)
      the
      holders of at least a majority in principal amount of the then outstanding
      Notes
      so request by written notice to the Trustee, the Company’s obligations under
      this Indenture shall be revived and reinstated as though no deposit had occurred
      pursuant to Section 12.01
      until
      such time as the Trustee or the Paying Agent is permitted to apply all such
      money in accordance with Section 12.02;
      provided,
      however,
      that if
      the Company makes any payment of interest (including any Additional Interest)
      on
      or principal of any Note following the reinstatement of its obligations, the
      Company shall be subrogated to the rights of the Noteholders to receive such
      payment from the money held by the Trustee or Paying Agent.

     

    ARTICLE 13

    Immunity
      of Incorporators, Stockholders, Officers and Directors

     

    SECTION 13.01.
      Indenture
      and Notes Solely Corporate Obligations.
      No
      recourse for the payment of the principal of or premium, if any, or accrued
      and
      unpaid interest on any Note, or for any claim based thereon or otherwise in
      respect thereof, and no recourse under or upon any obligation, covenant or
      agreement of the Company in this Indenture or in any supplemental indenture
      or
      in any Note, or because of the creation of any indebtedness represented thereby,
      shall be had against any past, present or future incorporator, stockholder,
      employee, agent, officer or director or Subsidiary of the Company as such or
      of
      any successor corporation, either directly or through the Company or any
      successor corporation, whether by virtue of any constitution, statute or rule
      of
      law, or by the enforcement of any assessment or penalty or otherwise; it being
      expressly understood that all such liability is hereby expressly waived and
      released as a condition of, and as a consideration for, the execution of this
      Indenture and the issue of the Notes.

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        73

        
          

        

      

      
        
        

      

    

     

    ARTICLE 14

    Conversion
      of Notes

     

    SECTION 14.01.
      Conversion
      Privilege. 

     

    (a) Subject
      to the conditions described below and prior repurchase or redemption, and upon
      compliance with the provisions of this Article 14,
      a
      Noteholder shall have the right, at such holder’s option, to convert all or any
      portion (if the portion to be converted is US$1,000 principal amount or an
      integral multiple thereof) of such Note at any time prior to the close of
      business on the Business Day immediately preceding the Maturity Date at a rate
      (the “Conversion
      Rate”)
      of
      100.6036 Shares (subject to adjustment by the Company as provided in
Section 14.01(b)
      and
Section 14.04)
      per
      US$1,000 principal amount Note (the “Conversion
      Obligation”)
      under
      the circumstances and during the periods set forth below. The
      Conversion Rate and the Conversion Price in effect at any given time are
      referred to herein as the “applicable
      Conversion Rate”
and
      the
“applicable
      Conversion Price,”
      respectively.

     

    (i) The
      Notes
      shall be convertible at any time prior to the close of business on the Business
      Day prior to the Redemption Date, even if the Notes are not otherwise
      convertible at such time, if such Notes have been called for redemption pursuant
      to Article 3
      hereof.
      Notes in respect of which a holder has delivered a Put Right Purchase Notice
      or
      a Fundamental Change Purchase Notice may not be surrendered for conversion
      until
      the holder has withdrawn such relevant notice in accordance with Article 15.

     

    (b) Article 2
      If a
      Make-Whole Change in Control occurs prior to the Maturity Date and a Noteholder
      elects to convert Notes in connection with a Make-Whole Change in Control,
      the
      Conversion Rate applicable to each US$1,000 principal amount of Notes so
      converted shall be increased by an additional number of Shares (the
“Additional
      Shares”)
      as
      described below. Settlement of Notes tendered for conversion to which Additional
      Shares shall be added to the Conversion Rate as provided in this subsection
      shall be settled pursuant to Section 14.03(d)
      below.
      For
      purposes of this Section 14.01(b),
      a
      conversion shall be deemed to be “in connection” with a Make-Whole
      Change in Control if the Conversion Notice with respect to such Notes is
      received by the Conversion Agent from,
      and
      including,
      the
      Effective Date of the
      Make-Whole
      Change
in
      Control up to,
      and
      including
      the
      Business
      Day
      immediately
      prior to
      the related Fundamental Change Purchase Date
      (or,
      in
      the
      case of an event that would have been a Change in Control but for the
proviso
      in
      clause (b) of the definition thereof, the 35th Trading Day immediately
      following the Effective Date of such Make-Whole Change in Control) and specifies
      that such Conversion Notice is “in connection” with such Make-Whole Change in
      Control.

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        74

        
          

        

      

      
        
        

      

    

     

    On
      or
      before the 15th day after the occurrence of a Make-Whole Change in Control
      that
      does not also constitute a Change in Control, the Company will mail to the
      Trustee and to all holders of Notes at their addresses shown in the Note
      Register, and to Beneficial Owners of Notes, as required by applicable law,
      a
      notice indicating that a Make-Whole Change in Control has occurred.

     

    (ii) The
      number of Additional Shares by which the Conversion Rate will be increased
      shall
      be determined by reference to the table attached as Schedule
      A
      hereto,
      based on the date on which the Make-Whole Change in Control occurs or becomes
      effective (the “Effective
      Date”),
      and
      the Common Stock Price; provided
      that if
      the actual Common Stock Price is between two Common Stock Price amounts in
      the
      table or the Effective Date is between two Effective Dates in the table, the
      number of Additional Shares shall be determined by a straight-line interpolation
      between the number of Additional Shares set forth for the next higher and next
      lower Common Stock Price amounts and the two nearest Effective Dates set forth
      in such table, as applicable, based on a 365-day year; provided
      further
      that if
(1) the
      Common Stock Price is greater than US$20.00 per Share (subject to
      adjustment in the same manner as set forth in Section 14.04),
      no
      Additional Shares will be added to the Conversion Rate, and (2)
      the
      Common Stock Price is less than US$8.42 per Share (subject to adjustment in
      the same manner as set forth in Section 14.04),
      no
      Additional Shares will be added to the Conversion Rate. Notwithstanding the
      foregoing, in no event will the total number of Shares issuable upon conversion
      exceed 121.9813 per US$1,000 principal amount of Notes (subject to
      adjustment in the same manner as set forth in Section 14.04).

     

    (iii) The
      Common Stock Prices set forth in the first row of the table in Schedule
      A
      hereto
      shall be adjusted as of any date on which the Conversion Rate of the Notes
      is
      otherwise adjusted. The adjusted Common Stock Prices shall equal the Common
      Stock Prices applicable immediately prior to such adjustment, multiplied by
      a
      fraction, the numerator of which is the Conversion Rate in effect immediately
      prior to the adjustment giving rise to the Common Stock Price adjustment and
      the
      denominator of which is the Conversion Rate as so adjusted. The number of
      Additional Shares within the table shall be adjusted in the same manner as
      the
      Conversion Rate as set forth in Section 14.04
      (other
      than by operation of an adjustment to the Conversion Rate by adding Additional
      Shares).

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        75

        
          

        

      

      
        
        

      

    

     

    (iv) The
      Company shall obtain its shareholders’ approval for (i) any Make-Whole Change in
      Control prior to the consummation thereof and (ii) any issuance of Shares
      (including the Additional Shares after giving effect to the adjustment to the
      Conversion Rate pursuant to this Section 14.01(b)) upon conversion of the Notes
      in connection with such Make-Whole Change in Control, which results in an
      issuance of Shares or voting power at a price level that would require an
      approval of the Company’s shareholders under the Nasdaq Market Place Rule
      4350(i), prior to such issuance in accordance with the terms of the
      Indenture.

     

    SECTION 14.02.
       Make-Whole
      Interest. 

     

    (a) If
      a
      Noteholder elects to convert any Notes at any time prior to June 1, 2011,
      the Company shall pay additional interest in cash or, at its option, in Shares
      to Noteholders converting under this Section 14.02. The amount of this
      additional interest shall be equal to the interest due and payable from the
      date
      of issuance until and including June 1, 2011, less
      any
      interest actually paid or provided for prior to the date of such conversion
      (the
“Make-Whole
      Interest”),
      subject to clause (f) below.

     

    (b) If
      the
      Company elects to settle any portion of the Make-Whole Interest in Shares,
      the
      Company shall notify the Noteholders converting (i) of the amount of the
      Make-Whole Interest to be settled in Shares or (ii) that the Company will settle
      the entire Make-While Interest in cash, within one VWAP Trading Day of the
      applicable Conversion Date; provided
      that if
      the Company does not provide any notice within the time period described in
      this
      clause (b) as to how it intends to settle the Make-Whole Interest owed, the
      Company shall satisfy its obligations with respect to the Make-Whole Interest
      in
      cash only. The Company shall treat Noteholders converting with the same
      Conversion Date in the same manner under this clause (b), but will not,
      however, have any obligation to treat Noteholders with different Conversion
      Dates in the same manner under this clause (b).

     

    (c) If
      the
      Company elects to settle the Make-Whole Interest in cash only, such settlement
      shall occur simultaneously with its settlement of the related conversion, which
      will occur as soon as practicable, but in any event within three business days
      of the applicable Conversion Date.

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        76

        
          

        

      

      
        
        

      

    

     

    (d) If
      the
      Company elects to settle all or any portion of the Make-Whole Interest in
      Shares, such settlement shall occur on the third business day following the
      final VWAP trading day of the related Share Settlement Averaging Period.

     

    (e) The
      amount of cash and/or number of Shares, as the case may be, due with respect
      to
      the Make-Whole Interest shall be determined as follows:

     

    (i) If
      the
      Company elects to settle the Make-Whole Interest in cash only, the Company
      shall
      deliver to the Noteholders converting the amount of cash equal to the Make-Whole
      Interest;

     

    (ii) If
      the
      Company elects to settle the Make-Whole Interest in shares only, the Company
      shall deliver to the Noteholders converting the number of shares equal to (A)
      the amount of Make-Whole Interest due with respect to such Notes, divided
      by (B)
      95% of the average daily VWAP during the Share Settlement Averaging
      Period;

     

    (iii) If
      the
      Company elects to settle the Make-Whole Interest in a combination of cash and
      Shares, the Company shall deliver to the Noteholders converting:

     

    (A) cash
      (the
“Make-Whole
      Cash Amount”)
      in an
      amount equal to the portion of the Make-Whole Interest with respect to such
      Notes the Company elects to settle in cash; and

     

    (B) the
      number of shares equal to (1) the amount of Make-Whole Interest due with respect
      to such Notes minus
      the
      Make-Whole Cash Amount, divided
      by (B)
      95% of the average daily VWAP during the Share Settlement Averaging
      Period.

     

    The
      “Share
      Settlement Averaging Period”
means
      the 10 consecutive VWAP Trading Day period beginning on the second VWAP Trading
      Day following the applicable Conversion Date.

     

    “VWAP”
for
      the
      Company’s Shares means, for each of the 10 consecutive VWAP Trading Days during
      any Share Settlement Averaging Period, the per share volume-weighted average
      price as displayed under the heading “Bloomberg VWAP” on Bloomberg page [SDTH
<equity> VWAP] (or any equivalent successor page if such page is not
      available) in respect of the period from the scheduled open of trading on the
      principal trading market for the Company’s Shares to the scheduled close of
      trading on such market on such VWAP Trading Day, or if such volume-weighted
      average price is unavailable, the market value of one Share on such VWAP Trading
      Day as the Company’s board of directors determines in good faith using a
      volume-weighted method.

     

    A
      “VWAP
      Trading Day”
means
      a
      day during which (i) trading in the Company’s Shares generally occurs on the
      principal U.S. national securities exchange on which such Shares is listed
      and
      (ii) there is no VWAP Market Disruption Event. If the Company’s Shares are not
      so listed, then “VWAP Trading Day” means a Business Day.

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        77

        
          

        

      

      
        
        

      

    

     

    A
      “VWAP
      Market Disruption Event”
means
      (i) a failure by the principal U.S. national securities exchange or market
      on
      which the Company’s Shares are listed to open for trading during its regular
      trading session or (ii) the occurrence or existence prior to 1:00 p.m. on any
      scheduled trading day for the Company’s Shares for an aggregate one half-hour
      period of any suspension or limitation imposed on trading (by reason of
      movements in price exceeding limits permitted by the stock exchange or
      otherwise) in the Company’s Shares or in any options contracts or futures
      contracts relating to such Shares.

     

    (f) If
      a
      Noteholder that purchased Notes pursuant to Rule 144A converts such Notes
      prior to the earliest of (i) the sale of such Notes pursuant to Rule 144
      under the Securities Act, (ii) the date falling one year after the latest date
      of original issuance of the Notes and (iii) the sale of such Notes pursuant
      to a
      registration statement which become effective under the Securities Act, then
      the
      aggregate Make-Whole Interest such Noteholder will receive upon conversion
      of
      each US$1,000 original principal amount of Notes shall not exceed US$68.21,
      which is the amount determined pursuant to the following formula:

     

    1000
      -
      1.1(CR * OP)

     

    where
      CR
      is 100.6036, the Conversion Rate, and OP is US$8.42, the Last Reported Sale
      Price of the Shares on May 22, 2008; provided,
      however,
      that if
      any Noteholder is an Institutional Accredited Investor that elected in writing
      to purchase Notes through a Section 4 (1-1/2) Transaction under the
      Securities Act and not pursuant to Rule 144A, then the restriction set
      forth in this clause (f) shall not apply; provided
      further
      that if
      the Notes held by such an Institutional Accredited Investor are subsequently
      resold pursuant to Rule 144A prior to the expiration the period set forth
      in this clause (f), then the restriction set forth in this clause (f)
      shall apply to such Notes.

     

    SECTION 14.03.
      Conversion
      Procedure

     

    (a) Subject
      to Section 14.03(b),
      the
      Company will satisfy the Conversion Obligation with respect to each US$1,000
      principal amount of Notes tendered for conversion in fully paid Shares, if
      any,
      by delivering, on or prior to the third Trading Day after the relevant
      Conversion Date, to the holder of a number of Shares equal to (i) (A) the
      aggregate principal amount of Notes to be converted, divided
      by (B)
      1,000, multiplied
      by (ii)
      the applicable Conversion Rate; provided
      that the
      Company will deliver cash in lieu of fractional Shares as set forth pursuant
      to
      clause (k)
      below.

     

    (b) Notwithstanding
      Section 14.03(a),
      the
      Company shall satisfy the Conversion Obligation with respect to each US$1,000
      principal amount of Notes tendered for conversion to which Additional Shares
      shall be added to the Conversion Rate as set forth in Section 14.01(b)
      in the
      manner provided in Section 14.03(a)
      (based
      on the Conversion Rate as increased by the applicable Additional
      Shares).

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        78

        
          

        

      

      
        
        

      

    

     

    (c) Before
      any holder of a Note shall be entitled to convert the same as set forth above,
      such holder shall (B)
      in the
      case of a Global Note, comply with the procedures of the Depositary in effect
      at
      that time and, if required, pay funds equal to interest (including Make-Whole
      Interest, if any) payable on the next Interest Payment Date to which such holder
      is not entitled as set forth in Section 14.03(i),
      and
(C)
      in the
      case of a Note issued in certificated form, (1)
      complete
      and manually sign and deliver an irrevocable written notice to the Conversion
      Agent in the form on the reverse of such certificated Note (or a facsimile
      thereof) attached hereto as part of Exhibit
      A
      (a
“Conversion
      Notice”)
      at the
      office of the Conversion Agent and shall state in writing therein the principal
      amount of Notes to be converted and the name or names (with addresses) in which
      such holder wishes the certificate or certificates for any Shares, if any,
      to be
      delivered upon settlement of the Conversion Obligation to be registered,
(2)
      surrender such Notes, duly endorsed to the Company or in blank (and accompanied
      by appropriate endorsement and transfer documents), at the office of the
      Conversion Agent, and (3)
      if
      required, pay funds equal to interest payable on the next Interest Payment
      Date
      to which such holder is not entitled as set forth in Section 14.03(i).
      A Note
      shall be deemed to have been converted immediately prior to the close of
      business on the date (the “Conversion
      Date”)
      that
      the holder has complied with the requirements set forth in this Section 14.03(c).

     

    No
      Conversion Notice with respect to any Notes may be tendered by a holder thereof
      if such holder has also tendered a Put Right Purchase Notice or a Fundamental
      Change Purchase Notice and not validly withdrawn such Put Right Purchase Notice
      or Fundamental Change Purchase Notice in accordance with the applicable
      provisions of Section 15.01
      or
15.02,
      as the
      case may be.

     

    If
      more
      than one Note shall be surrendered for conversion at one time by the same
      holder, the Conversion Obligation with respect to such Notes, if any, that
      shall
      be payable upon conversion shall be computed on the basis of the aggregate
      principal amount of the Notes (or specified portions thereof to the extent
      permitted thereby) so surrendered.

     

    (d) Delivery
      of the Shares to be delivered in satisfaction of the Conversion Obligation
      shall
      be made by the Company in no event later than the date specified in Section 14.03(a).
      The
      Company shall make such delivery by issuing, or causing to be issued, and
      delivering to the Conversion Agent or to such holder, or such holder’s nominee
      or nominees, certificates or a book-entry transfer through the Depositary for
      the number of full Shares to which such holder shall be entitled as part of
      such
      Conversion Obligation (together with any cash in lieu of fractional
      Shares).

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

      

    

     

    (e) In
      case
      any Note shall be surrendered for partial conversion, the Company shall execute
      and the Trustee shall authenticate and deliver to or upon the written order
      of
      the holder of the Note so surrendered, without charge to such holder, a new
      Note
      or Notes in authorized denominations in an aggregate principal amount equal
      to
      the unconverted portion of the surrendered Notes.

     

    (f) If
      a
      holder submits a Note for conversion, the Company will pay (i) all
      documentary stamp or similar issue or transfer tax, if any, which may be imposed
      by a Relevant Taxing Jurisdiction or the PRC or any political subdivision
      thereof or taxing authority thereof or therein with respect to the issuance
      and
      delivery of Shares, if any, upon the conversion; provided
      that,
      the holder shall pay any such tax which is due because the holder requests
      any
      Shares to be issued in a name other than the holder’s name, (ii) any taxes or
      duties due from the holder or the Company in a Relevant Taxing Jurisdiction
      or
      the PRC upon the issuance and delivery of any Shares to the holder upon
      conversion and any capital gain or withholding tax related to the conversion
      of
      the Notes into Shares, (iii) any issuance fees associated with delivery and
      receipt of Shares, which shall be payable concurrently with the issuance and
      delivery of Shares by the Company and (iv) any other costs or expenses incurred
      in connection with the issuance and delivery of any Shares upon conversion.
      The
      Conversion Agent may refuse to deliver the certificates representing the Shares
      being issued in a name other than the holder’s name until the Trustee receives
      written certification that a sum sufficient to pay any tax which is due because
      the Shares are to be issued in a name other than the holder’s name has been
      paid. The Conversion Agent shall be entitled to assume, without duty to enquire,
      each converting holder has, as a condition precedent to exercising its
      conversion right, paid all stamp, issue, registration, and similar taxes or
      duties or transfer costs which it is required to pay. None of the Conversion
      Agent or the Trustee shall be responsible or liable for: (i) determining whether
      a holder or the Company is liable to pay any taxes or the amounts payable (if
      any), (ii) any failure by any holder or the Company to make any such payment
      to
      the relevant authorities; or (iii) determining the sufficiency or insufficiency
      of any amounts so paid, nor shall the Conversion Agent have any obligation
      to
      pay such taxes.

     

    (g) Except
      as
      provided in Section 14.04,
      no
      adjustment shall be made for dividends on any Shares issued upon the conversion
      of any Note as provided in this Article.

     

    (h) Upon
      the
      conversion of an interest in a Global Note, the Trustee, or the Custodian at
      the
      direction of the Trustee, shall make a notation on such Global Note as to the
      reduction in the principal amount represented thereby. The Company shall notify
      the Trustee in writing of any conversion of Notes effected through any
      Conversion Agent other than the Trustee.

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        80

        
          

        

      

      
        
        

      

    

     

    (i) Upon
      conversion, a Noteholder will not receive any separate cash payment for accrued
      and unpaid interest (including Make-Whole Interest, if any), except as set
      forth
      below. The Company’s settlement of the Conversion Obligations as described above
      shall be deemed to satisfy its obligation to pay the principal amount of the
      Note and accrued and unpaid interest and Additional Interest and Make-Whole
      Interest, if any, to, but not including, the Conversion Date. As a result,
      accrued and unpaid interest and Additional Interest and Make-Whole Interest,
      if
      any, to, but not including, the Conversion Date shall be deemed to be paid
      in
      full rather than cancelled, extinguished or forfeited. Notwithstanding the
      preceding sentence, if Notes are converted after the close of business on a
      regular record date and prior to the opening of business of the next succeeding
      Interest Payment Date, holders of such Notes as of the close of business on
      a
      regular record date will receive the interest (including any Additional Interest
      and Make-Whole Interest, if any) payable on such Notes on the corresponding
      Interest Payment Date notwithstanding the conversion. Notes surrendered for
      conversion during the period from the close of business on any regular record
      date to the opening of business on the next succeeding Interest Payment Date
      must be accompanied by payment of an amount equal to the interest (including
      any
      Additional Interest and Make-Whole Interest, if any) payable on the Notes so
      converted; provided,
      however,
      that no
      such payment need be made (4)
      if the
      Company has specified a Redemption Date that is after a regular record date
      but
      on or prior to the next succeeding Interest Payment Date; (5)
      if the
      Company has specified a Fundamental Change Purchase Date that is after a regular
      record date but on or prior to the next succeeding Interest Payment Date,
(6)
      in
      respect of any conversion that occurs after the record date immediately
      preceding the applicable Maturity Date or (7)
      to the
      extent of any overdue interest (including Additional Interest) existing at
      the
      time of conversion with respect to such Note. Except as described above, no
      payment or adjustment will be made for accrued interest on converted
      Notes.

     

    (j) The
      Person in whose name the certificate for any Shares issued upon conversion
      is
      registered shall be treated as a record holder of Shares on and after the
      Conversion Date; provided,
      however,
      that no
      surrender of Notes on any date when the stock transfer books of the Company
      shall be closed shall be effective to constitute the Person or Persons entitled
      to receive the Shares upon such conversion as the record holder or holders
      of
      such Shares on such date, but such surrender shall be effective to constitute
      the Person or Persons entitled to receive such Shares as the record holder
      or
      holders thereof for all purposes at the close of business on the next succeeding
      day on which such stock transfer books are open; such conversion shall be at
      the
      Conversion Rate in effect on the date that such Notes shall have been
      surrendered for conversion, as if the stock transfer books of the Company had
      not been closed. Upon conversion of Notes, such Person shall no longer be a
      Noteholder.

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        81

        
          

        

      

      
        
        

      

    

     

    (k) No
      fractional Shares shall be issued upon conversion of any Note or Notes. If
      more
      than one Note shall be surrendered for conversion at one time by the same
      holder, the number of full Shares that shall be issued upon conversion thereof
      shall be computed on the basis of the aggregate principal amount of the Notes
      (or specified portions thereof) so surrendered. Instead of any fractional Share
      that would otherwise be issued upon conversion of any Note or Notes (or
      specified portions thereof), the Company shall pay a cash adjustment in respect
      of such fraction (calculated to the nearest one-100th of a Share) in an amount
      equal to the same fraction of the Last Reported Sale Price of the Shares on
      the
      relevant Conversion Date.

     

    SECTION 14.04.
      Adjustment
      of Conversion Rate.
      The
      Conversion Rate shall be adjusted from time to time by the Company as
      follows:

     

    (a) In
      case
      the Company shall issue Shares as a dividend or distribution to holders of
      the
      outstanding Shares (including a Share bonus or as a result of the capitalization
      of profit or reserves), or shall effect a subdivision into a greater number
      of
      Shares or combination into a lesser number of Shares, the Conversion Rate shall
      be adjusted based on the following formula:

     

    

     

    where

     

    
      	 	
              CR0

            	
              =

            	
              the
                Conversion Rate in effect immediately prior to the Record Date for
                such
                dividend or distribution, or the effective date of such Share subdivision
                or Share combination, as the case may
                be;

            

    

     

    
      	 	
              CR ́

            	
              =

            	
              the
                Conversion Rate in effect immediately after the close of business
                on the
                Record Date for such dividend or distribution, or the effective date
                of
                such Share subdivision or Share combination, as the case may
                be;

            

    

     

    
      	 	
              OS0

            	
              =

            	
              the
                number of Shares outstanding immediately prior to the Record Date
                for such
                dividend or distribution, or the effective date of such Share subdivision
                or Share combination, as the case may be;
                and

            

    

     

    
      	 	
              OS ́

            	
              =

            	
              the
                number of Shares outstanding immediately after the close of business
                on
                the Record Date for such dividend or distribution, or the effective
                date
                of such Share subdivision or Share combination, as the case may
                be.

            

    

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        82

        
          

        

      

      
        
        

      

    

     

    Such
      adjustment shall become effective immediately prior to 9:00 a.m., New York
      City
      time, on the Ex-Dividend Date for such dividend or distribution or the effective
      date of such Share subdivision or Shares combination, as the case may be. If
      any
      dividend or distribution of the type described in this Section 14.04(a)
      is
      declared but not so paid or made, or the outstanding Shares are not subdivided
      or combined, as the case may be, the Conversion Rate shall be immediately
      readjusted, effective as of the date the Board of Directors determines not
      to
      pay such dividend or distribution, or subdivide or combine the outstanding
      Shares, as the case may be, to the Conversion Rate that would then be in effect
      if such dividend, distribution, subdivision or combination had not been
      declared.

     

    (b) In
      case
      the Company shall issue to all or substantially all holders of its outstanding
      Shares rights (including subscription bonuses) or warrants entitling them (for
      a
      period expiring within 45 calendar days from the Record Date for such
      distribution) to subscribe for or purchase Shares at a price per Share less
      than
      the Last Reported Sale Price of the Shares on the Trading Day immediately
      preceding the date of announcement of such distribution, the Conversion Rate
      shall be adjusted based on the following formula:

     

    

     

    where

     

    
      	 	
              CR0

            	
              =

            	
              the
                Conversion Rate in effect immediately prior to the Record Date for
                such
                distribution;

            

    

     

    
      	 	
              CR ́

            	
              =

            	
              the
                Conversion Rate in effect immediately after the close of business
                on the
                Record Date for such distribution;

            

    

     

    
      	 	
              OS0

            	
              =

            	
              the
                number of Shares outstanding immediately prior to the Ex-Dividend
                Date for
                such distribution;

            

    

     

    
      	 	
              X

            	
              =

            	
              the
                total number of Shares issuable pursuant to such rights;
                and

            

    

     

    
      	 	
              Y

            	
              =

            	
              the
                number of Shares equal to the aggregate price payable to exercise
                such
                rights or warrants divided
                by
                the average of the Last Reported Sale Prices of Shares over the 10
                consecutive Trading-Day period ending on the Business Day immediately
                preceding the Record Date for such
                distribution.

            

    

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        83

        
          

        

      

      
        
        

      

    

     

    Such
      adjustment shall be successively made whenever any such rights or warrants
      are
      issued and shall become effective immediately prior to 9:00 a.m., New York
      City
      time, on the Ex-Dividend Date for such distribution. If such rights or warrants
      are not so issued, the Conversion Rate shall again be adjusted to be the
      Conversion Rate that would then be in effect if such Record Date for such
      distribution had not been fixed. To the extent that such rights or warrants
      are
      not exercised prior to their expiration or Shares are not delivered after the
      expiration of such rights or warrants, the Conversion Rate shall be readjusted
      to the Conversion Rate that would then be in effect had the adjustments made
      upon the issuance of such rights or warrants been made on the basis of delivery
      of only the number of Shares actually delivered.

     

    In
      determining whether any rights or warrants entitle the holders to subscribe
      for
      or purchase Shares at less than such Last Reported Sale Price, and in
      determining the aggregate offering price of such Shares, there shall be taken
      into account any consideration received by the Company for such rights or
      warrants and any amount payable on exercise thereof, the value of such
      consideration, if other than cash, to be determined by the Board of
      Directors.

     

    (c) In
      case
      the Company shall, by dividend or otherwise, distribute to all or substantially
      all holders of its Shares of any class of Capital Stock of the Company (other
      than Shares as covered by Section 14.04(a)),
      evidences of its indebtedness or other assets or property or rights to acquire
      Capital Stock or other securities of the Company (including securities, but
      excluding rights or warrants covered by Section 14.04(b)
      or
      dividends or distributions covered by Section 14.04(a)
      and
14.04(d)
      and
      distributions described below in this paragraph (c)
      with
      respect to Spin-Offs) (any of such shares of Capital Stock, indebtedness, or
      other asset or property hereinafter in this Section 14.04(c)
      called
      the “Distributed
      Property”),
      then,
      in each such case the Conversion Rate shall be adjusted based on the following
      formula:

     

    

     

    where

     

    
      	 	
              CR0

            	
              =

            	
              the
                Conversion Rate in effect immediately prior to the Record Date for
                such
                distribution;

            

    

     

    
      	 	
              CR ́

            	
              =

            	
              the
                Conversion Rate in effect immediately after the close of business
                on the
                Record Date for such distribution;

            

    

     

    
      	 	
              SP0

            	
              =

            	
              the
                average of the Last Reported Sale Prices of the Shares over the 10
                consecutive Trading-Day period ending on the Trading Day immediately
                preceding the Ex-Dividend Date for such distribution;
                and

            

    

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        84

        
          

        

      

      
        
        

      

    

     

    
      	 	
              FMV

            	
              =

            	
              the
                fair market value (as determined by the Board of Directors) of the
                Distributed Property distributed with respect to each outstanding
                Share on
                the Record Date for such
                distribution.

            

    

     

    Such
      adjustment shall become effective immediately prior to 9:00 a.m., New York
      City
      time, on the Ex-Dividend Date for such distribution; provided
      that if
      the then fair market value (as so determined) of the portion of the Distributed
      Property so distributed applicable to one Share is equal to or greater than
      SP0
      as set
      forth above, in lieu of the foregoing adjustment, adequate provision shall
      be
      made so that each Noteholder shall have the right to receive, for each US$1,000
      principal amount of Notes upon conversion, the amount of Distributed Property
      such holder would have received had such holder owned a number of Shares equal
      to the Conversion Rate on the Record Date. If such dividend or distribution
      is
      not so paid or made, the Conversion Rate shall again be adjusted to be the
      Conversion Rate that would then be in effect if such dividend or distribution
      had not been declared. If the Board of Directors determines the fair market
      value of any distribution for purposes of this Section 14.04(c)
      by
      reference to the actual or when issued trading market for any securities, it
      must in doing so consider the prices in such market over the same period used
      in
      determining SP0
      above.

     

    With
      respect to an adjustment pursuant to this Section 14.04(c)
      where
      there has been a payment of a dividend or other distribution on the Shares
      in
      shares of Capital Stock of any class or series, or similar equity interest,
      of
      or relating to a Subsidiary or other business unit (a “Spin-Off”),
      the
      Conversion Rate will be adjusted based on the following formula:

     

    

     

    where

     

    
      	 	
              CR0

            	
              =
                

            	
              the
                Conversion Rate in effect immediately prior to the end of the Valuation
                Period;

            

    

     

    
      	 	
              CR ́

            	
              =
                

            	
              the
                Conversion Rate in effect immediately after the end of the Valuation
                Period;

            

    

     

    
      	 	
              FMV0 

            	
              =
                

            	
              the
                average of the Last Reported Sale Prices of the Capital Stock or
                similar
                equity interest distributed to holders of Shares applicable to one
                Share
                over the first 10 consecutive Trading-Day period beginning on and
                including the fifth Trading Day after the effective date of the Spin-Off
                (the “Valuation
                Period”);
                and

            

    

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        85

        
          

        

      

      
        
        

      

    

     

    
      	 	
              MP0

            	
              =
                

            	
              the
                average of the Last Reported Sale Prices of Shares over the Valuation
                Period.

            

    

     

    Such
      adjustment shall occur on the close of business on the 15th Trading Day
      immediately following, and including, the effective date of the Spin-Off. As
      a
      result, any conversion within the 15th Trading Days following the effective
      date
      of any Spin-Off will be deemed not to have occurred until the end of such 15
      Trading Day period.

     

    Rights
      or
      warrants distributed by the Company to all holders of Shares, entitling the
      holders thereof to subscribe for or purchase shares of the Company’s Capital
      Stock, including Shares (either initially or under certain circumstances),
      which
      rights or warrants, until the occurrence of a specified event or events
      (“Trigger
      Event”):
      (i)
      are deemed to be transferred with such Shares; (ii) are not exercisable; and
      (iii) are also issued in respect of future issuances of Shares, shall be deemed
      not to have been distributed for purposes of this Section 14.04(c)
      (and no
      adjustment to the Conversion Rate under this Section 14.04(c)
      will be
      required) until the occurrence of the earliest Trigger Event, whereupon such
      rights and warrants shall be deemed to have been distributed and an appropriate
      adjustment (if any is required) to the Conversion Rate shall be made under
      this
Section 14.04(c).
      If any
      such rights or warrants, including any such existing rights or warrants
      distributed prior to the date of this Indenture, are subject to events, upon
      the
      occurrence of which such rights or warrants become exercisable to purchase
      different securities, evidences of indebtedness or other assets, property,
      rights or warrants, then the date of the occurrence of any and each such event
      shall be deemed to be the date of distribution and Ex-Dividend Date with respect
      to new rights or warrants with such rights (and a termination or expiration
      of
      the existing rights or warrants without exercise by any of the holders thereof).
      In addition, in the event of any distribution (or deemed distribution) of rights
      or warrants, or any Trigger Event or other event (of the type described in
      the
      preceding sentence) with respect thereto that was counted for purposes of
      calculating a distribution amount for which an adjustment to the Conversion
      Rate
      under this Section 14.04(c)
      was
      made, (1) in the case of any such rights or warrants that shall all have been
      redeemed or repurchased without exercise by any holders thereof, the Conversion
      Rate shall be readjusted upon such final redemption or repurchase to give effect
      to such distribution or Trigger Event, as the case may be, as though it were
      a
      cash distribution, equal to the per Share redemption or repurchase price
      received by a holder or holders of Shares with respect to such rights or
      warrants (assuming such holder had retained such rights or warrants), made
      to
      all holders of Shares as of the date of such redemption or repurchase, and
      (2)
      in the case of such rights or warrants that shall have expired or been
      terminated without exercise by any holders thereof, the Conversion Rate shall
      be
      readjusted as if such rights and warrants had not been issued.

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        86

        
          

        

      

      
        
        

      

    

     

    For
      purposes of this Section 14.04(c),
      Section 14.04(a)
      and
Section 14.04(b),
      any
      dividend or distribution to which this Section 14.04(c)
      is
      applicable that also includes Shares to which Section 14.04(a)
      applies
      or rights or warrants to subscribe for or purchase Shares to which Section 14.04(a)
      or
Section 14.04(b)
      applies
      (or both), shall be deemed instead to be (1) a dividend or distribution of
      the
      evidences of indebtedness, assets, property or shares of capital stock other
      than such Shares or rights or warrants to which Section 14.04(b)
      applies
      (and any Conversion Rate adjustment required by this Section 14.04(c)
      with
      respect to such dividend or distribution shall then be made) immediately
      followed by (2) a dividend or distribution of such Shares or such rights or
      warrants (and any further Conversion Rate adjustment required by Section 14.04(a)
      and
Section 14.04(b)
      with
      respect to such dividend or distribution shall then be made), except (A) the
      Ex-Dividend Date of such dividend or distribution shall be substituted as “the
      Ex-Dividend Date for such dividend or distribution” and “the Ex-Dividend Date
      for such distribution” within the meaning of Section 14.04(a)
      and
Section 14.04(b)
      and (B)
      any Shares included in such dividend or distribution shall not be deemed
“outstanding immediately prior to the Ex-Dividend Date for such dividend or
      distribution” within the meaning of Section 14.04(a).

     

    (d) In
      case
      the Company shall pay a dividend or make a distribution consisting exclusively
      of cash to all or substantially all holders of its Shares (including as a result
      of capital reductions and Share redemptions or amortizations), the Conversion
      Rate shall be adjusted based on the following formula:

     

    

     

    where

     

    
      	 	
              CR0

            	
              =

            	
              the
                Conversion Rate in effect immediately prior to the Record for such
                dividend or distribution;

            

    

     

    
      	 	
              CR ́

            	
              =

            	
              the
                Conversion Rate in effect immediately after the close of business
                on the
                Record Date for such dividend or
                distribution;

            

    

     

    
      	 	
              SP0

            	
              =

            	
              the
                average of Last Reported Sale Prices of the Shares over the 10 consecutive
                Trading-Day period ending on the Trading Day immediately preceding
                the
                Record Date for such distribution;
                and

            

    

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        87

        
          

        

      

      
        
        

      

    

     

    
      	 	
              C

            	
              =

            	
              the
                full amount of such dividend or distribution per Share the Company
                distributes to holders of the
                Shares.

            

    

     

    Such
      adjustment shall become effective immediately prior to 9:00 a.m., New York
      City
      time, on the Ex-Dividend Date for such dividend or distribution; provided
      that if
      the portion of the cash so distributed applicable to one Share is equal to
      or
      greater than SP0
      as
      above, in lieu of the foregoing adjustment, adequate provision shall be made
      so
      that each Noteholder shall have the right to receive upon conversion of a Note
      (or any portion thereof) the amount of cash such holder would have received
      had
      such holder owned a number of Shares equal to the Conversion Rate on the Record
      Date. If such dividend or distribution is not so paid or made, the Conversion
      Rate shall again be adjusted to be the Conversion Rate that would then be in
      effect if such dividend or distribution had not been declared.

     

    For
      the
      avoidance of doubt, for purposes of this Section 14.04(d),
      in the
      event of any reclassification of the Shares, as a result of which the Notes
      become convertible into more than one class of Shares, if an adjustment to
      the
      Conversion Rate is required pursuant to this Section 14.04(d),
      references in this Section to one Share or Last Reported Sale Price of one
      Share
      shall be deemed to refer to a unit or to the price of a unit consisting of
      the
      number of shares of each class of Shares into which the Notes are then
      convertible equal to the numbers of shares of such class issued in respect
      of
      one Share in such reclassification. The above provisions of this paragraph
      shall
      similarly apply to successive reclassifications.

     

    (e) In
      case
      the Company or any of its Subsidiaries makes a payment in respect of a tender
      offer or exchange offer for all or any portion of the Shares, if (x) the cash
      and value of any other consideration included in the payment per Share exceeds
      (y) the Last Reported Sale Price of the Shares on the Trading Day immediately
      following the last date on which tenders or exchanges may be made pursuant
      to
      such tender or exchange offer (as it may be amended), the Conversion Rate shall
      be adjusted based on the following formula:

     

    

     

    where

     

    
      	 	
              CR0

            	
              =

            	
              the
                Conversion Rate in effect on the date immediately prior to the effective
                date of the adjustment;

            

    

     

    
      	 	
              CR ́

            	
              =

            	
              the
                Conversion Rate in effect on the second day immediately following
                the
                effective date of the adjustment;

            

    

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        88

        
          

        

      

      
        
        

      

    

     

    
      	 	
              AC

            	
              =

            	
              the
                aggregate value of all cash and any other consideration (as determined
                by
                the Board of Directors) paid or payable for Shares purchased in such
                tender or exchange offer;

            

    

     

    
      	 	
              OS0

            	
              =

            	
              the
                number of Shares outstanding immediately prior to the date such tender
                or
                exchange offer expires;

            

    

     

    
      	 	
              OS ́

            	
              =

            	
              the
                number of Shares outstanding immediately after the date such tender
                or
                exchange offer expires; and

            

    

     

    
      	 	
              SP ́

            	
              =

            	
              the
                average of the Last Reported Sale Prices of Shares over the 10 consecutive
                Trading-Day period commencing on the Trading Day immediately after
                the
                date such tender or exchange offer
                expires,

            

    

     

    such
      adjustment to become effective at the close of business on the 10th Trading
      Day
      from and including the Trading Day immediately following the date such tender
      or
      exchange offer expires. As a result, any conversion within such 10 Trading
      Day period will be deemed not to have occurred until the end of such 10 Trading
      Day period.
      If the
      Company is obligated to purchase Shares pursuant to any such tender or exchange
      offer, but the Company is permanently prevented by applicable law from effecting
      all or any such purchases or all or any portion of such purchases are rescinded,
      the Conversion Rate shall again be adjusted to be the Conversion Rate that
      would
      then be in effect if such tender or exchange offer had not been made or had
      only
      been made in respect of the purchases that had been effected.

     

    (f) The
      applicable Conversion Rate will not be adjusted:

     

    (i) if
      (other
      than in connection with a share combination) the application of the foregoing
      formulae set forth in paragraph (a), (b), (c), (d) or (e) of this
Section 14.04
      would
      result in a decrease in the Conversion Rate;

     

    (ii) upon
      the
      issuance of any Shares to any present or future plan providing for the
      reinvestment of dividends or interest payable on the Company’s securities and
      the investment of additional optional amounts in Shares under any such
      plan;

     

    (iii) upon
      the
      issuance of any Shares or options or rights to purchase those Shares pursuant
      to
      any present or future employee, director or consultant benefit plan or program
      of or assumed by the Company or any of the Company’s Subsidiaries;

     

    (iv) upon
      the
      issuance of any Shares pursuant to any option, warrant, right or exercisable,
      exchangeable or convertible security not described in Section 14.04(c)
      and
      outstanding as of the date the Notes were first issued;

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        89

        
          

        

      

      
        
        

      

    

     

    (v) for
      a
      change in the par value of the Shares;

     

    (vi) for
      accrued and unpaid interest and Make-Whole Interest, if any; 

     

    (vii) if
      holders of the Notes participate, as a result of holding the Notes, at the
      same
      time and in the same manner as holders of Shares, as if such holders of the
      Notes held a number of Shares equal to the then-applicable Conversion Rate,
      in
      any of the transactions described in paragraph (a),
      (b),
      (c),
      (d)
      or
(e)
      of this
Section 14.04
      without
      having to convert their Notes; or

     

    (viii) if
      holders of Shares are not eligible to participate in any of the transactions
      described in paragraph (a),
      (b),
      (c),
      (d)
      or
(e)
      of this
Section 14.04.

     

    (g) For
      purposes of this Section 14.04
      the term
“Record
      Date”
shall
      mean, with respect to any dividend, distribution or other transaction or event
      in which the holders of Shares have the right to receive any cash, securities
      or
      other property or in which the Shares (or other applicable security) is
      exchanged for or converted into any combination of cash, securities or other
      property, the date fixed for determination of stockholders entitled to receive
      such cash, securities or other property (whether such date is fixed by the
      Board
      of Directors or by statute, contract or otherwise).

     

    (h) In
      addition to those required by clauses (a),
      (b),
      (c),
      (d)
      and
(e)
      of this
Section 14.04,
      and to
      the extent permitted by applicable law and subject to the applicable rules
      of
      the Nasdaq, the Company from time to time may increase the Conversion Rate
      by
      any amount for a period of at least 20 days if the Board of Directors determines
      that such increase would be in the Company’s best interest. In addition, the
      Company may also (but is not required to) increase the Conversion Rate to avoid
      or diminish any income tax to holders of Shares or rights to purchase Shares
      in
      connection with any dividend or distribution of Shares (or rights to acquire
      Shares ) or similar event. Whenever the Conversion Rate is increased pursuant
      to
      the preceding sentence, the Company shall mail to the holder of each Note at
      his
      last address appearing on the Note register provided for in Section 2.06
      a notice
      of the increase at least 15 days prior to the date the increased Conversion
      Rate
      takes effect, and such notice shall state the increased Conversion Rate and
      the
      period during which it will be in effect.

     

    (i) All
      calculations and other determinations under this Article 14
      shall be
      made by the Company (and not by the Conversion Agent or Trustee) and shall
      be
      made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of
      a
      Share, as the case may be. The Company shall make all these calculations in
      good
      faith and, absent manifest error, its calculations shall be final and binding
      on
      holders of Notes, the Conversion Agent and the Trustee. The Company shall
      provide a schedule of its calculations to each of the Trustee and the Conversion
      Agent, and each of the Trustee and the Conversion Agent is entitled to rely
      conclusively upon the accuracy of such calculations without independent
      verification, and shall have no liability in connection with the foregoing.
      The
      Trustee shall forward such calculations to any holder of Notes upon the request
      of that holder without any representation or warranty. No adjustment shall
      be
      made for the Company’s issuance of Shares or any securities convertible into or
      exchangeable for Shares or rights to purchase Shares or such convertible or
      exchangeable securities, other than as provided in this Section 14.04.
      No
      adjustment shall be made to the Conversion Rate unless such adjustment would
      require a change of at least 1% in the Conversion Rate then in effect at such
      time. The Company shall carry forward any adjustments that are less than 1%
      of
      the Conversion Rate and make such carried forward adjustments, regardless of
      whether the aggregate adjustment is less than 1%, within one year of the first
      such adjustment carried forward, upon a Fundamental Change, upon any call of
      the
      notes for redemption or upon maturity.

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        90

        
          

        

      

      
        
        

      

    

     

    (j) Whenever
      the Conversion Rate is adjusted as herein provided, the Company shall promptly
      file with the Trustee and the Conversion Agent an Officers’ Certificate setting
      forth the Conversion Rate after such adjustment and setting forth a brief
      statement of the facts requiring such adjustment. The Trustee and Conversion
      Agent may conclusively rely on the accuracy of the Conversion Rate adjustment
      provided by the Company. Unless and until a Responsible Officer of the Trustee
      shall have received such Officers’ Certificate, the Trustee shall not be deemed
      to have knowledge of any adjustment of the Conversion Rate and may assume
      without inquiry that the last Conversion Rate of which it has been notified
      by
      the Company in writing is still in effect. Promptly after delivery of such
      certificate, the Company shall prepare a notice of such adjustment of the
      Conversion Rate setting forth the adjusted Conversion Rate and the date on
      which
      each adjustment becomes effective and shall mail such notice of such adjustment
      of the Conversion Rate to the holder of each Note at his last address appearing
      on the Note Register provided for in Section 2.06
      of this
      Indenture, within 20 days of the effective date of such adjustment. Failure
      to
      deliver such notice shall not affect the legality or validity of any such
      adjustment.

     

    (k) In
      any
      case in which this Section 14.04
      provides
      that an adjustment shall become effective at the close of business on the 10th
      Trading Day from and including the Trading Day immediately following the date
      such tender or exchange offer expires pursuant to Section 14.04(e)
      (the
“Adjustment
      Determination Date”),
      the
      Company may elect to defer until the occurrence of the Adjustment Event (as
      hereinafter defined) (x) issuing to the holder of any Note converted after
      such
      Adjustment Determination Date and before the occurrence of such Adjustment
      Event, the additional cash and, if applicable, Shares or other securities
      issuable upon such conversion by reason of the adjustment required by such
      Adjustment Event over and above the amounts deliverable upon such conversion
      before giving effect to such adjustment and (y) paying to such holder any amount
      in cash in lieu of any fraction pursuant to Section 14.04.
      For
      purposes of this Section 14.04(k),
      the
      term “Adjustment
      Event”
shall
      mean
      the date
      a sale or exchange of Shares pursuant to such tender or exchange offer is
      consummated and becomes irrevocable.

     

    
      ShengdaTech,
        Inc.

      Indenture

    

    
      
        
        

      

      
        91

        
          

        

      

      
        
        

      

    

     

    (l) For
      purposes of this Section 14.04,
      the
      number of Shares at any time outstanding, means shares that are outstanding
      for
      purposes of Nevada law and, shall not include Shares held in the treasury of
      the
      Company, but shall include Shares issuable in respect of scrip certificates
      issued in lieu of fractions of Shares.

     

    SECTION 14.05.
      Shares
      to Be Fully Paid.
      The
      Company shall provide, free from preemptive rights, out of its authorized but
      unissued Shares or Shares held in treasury, sufficient Shares to provide for
      conversion of the Notes from time to time as such Notes are presented for
      conversion.

     

    SECTION 14.06.
      Effect
      of Reclassification, Consolidation, Merger or Sale. 

     

    If
      any of
      the following events occur, namely (i) any reclassification or change of the
      outstanding Shares (other than a change in par value, or from par value to
      no
      par value, or from no par value to par value, or as a result of a split,
      subdivision or combination), (ii) any consolidation, merger or combination
      of
      the Company with another person, or (iii) any sale or conveyance of all or
      substantially all of the property and assets of the Company to any other person,
      in either case as a result of which holders of Shares shall be entitled to
      receive cash, securities or other property or assets with respect to or in
      exchange for such Shares (any such event a “Merger
      Event”),
      then:

     

    (a) the
      Company or the successor or purchasing person, as the case may be, shall execute
      with the Trustee a supplemental indenture (which shall comply with the Trust
      Indenture Act as in force at the date of execution of such supplemental
      indenture if such supplemental indenture is then required to so comply)
      permitted under Section 10.01(a)
      providing for the conversion and settlement of the Notes as set forth in this
      Indenture. Such supplemental indenture shall provide for adjustments which
      shall
      be as nearly equivalent as may be practicable to the adjustments provided for
      in
      this Article and the Trustee and Conversion Agent may conclusively rely on
      the
      determination by the Company of the equivalency of such adjustments. If, in
      the
      case of any Merger Event, the Reference Property (as defined below) includes
      shares of stock or other securities and assets of a corporation other than
      the
      successor or purchasing corporation, as the case may be, in such
      reclassification, change, consolidation, merger, combination, sale or
      conveyance, then such supplemental indenture shall also be executed by such
      other corporation and shall contain such additional provisions to protect the
      interests of the holders of the Notes as the Board of Directors shall reasonably
      consider necessary by reason of the foregoing, including to the extent required
      by the Board of Directors and practicable the provisions providing for the
      repurchase rights set forth in Article 15
      herein.

     

    
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    In
      the
      event the Company shall execute a supplemental indenture pursuant to this
Section 14.06,
      the
      Company shall promptly file with the Trustee an Officers’ Certificate briefly
      stating the reasons therefor, the kind or amount of cash, securities or property
      or asset that will constitute the Reference Property (as defined below) after
      any such Merger Event, any adjustment to be made with respect thereto and that
      all conditions precedent have been complied with, and shall promptly mail notice
      thereof to all Noteholders.

     

    (b) Notwithstanding
      the provisions of Section 14.03(a)
      and
Section 14.03(b),
      and
      subject to the provisions of Section 14.01,
      at the
      effective time of such Merger Event, the right to convert each US$1,000
      principal amount of Notes will be changed to a right to convert such Note by
      reference to the kind and amount of cash, securities or other property or assets
      that a holder of a number of Shares equal to the Conversion Rate immediately
      prior to such transaction would have owned or been entitled to receive (the
      “Reference
      Property”)
      such
      that from and after the effective time of such transaction, a Noteholder will
      be
      entitled thereafter to convert its Notes into the same type (and in the same
      proportion) of Reference Property, based on the number of Shares that would
      have
      been deliverable upon conversion had such Merger Event not occurred. For
      purposes of determining the constitution of Reference Property, the type and
      amount of consideration that a holder of Shares would have been entitled to
      in
      the case of reclassifications, consolidations, mergers, sales or conveyance
      of
      assets or other transactions that cause the Shares to be converted into the
      right to receive more than a single type of consideration (determined based
      in
      part upon any form of shareholder election) will be deemed to be the weighted
      average of the types and amounts of consideration received by the holders of
      Shares that affirmatively make such an election. The Company shall not become
      a
      party to any such transaction unless its terms are consistent with the
      preceding. None of the foregoing provisions shall affect the right of a holder
      of Notes to convert its Notes in accordance with the provisions of Article 14
      hereof
      prior to the effective date.

     

    
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    (c) The
      Company shall cause notice of the execution of such supplemental indenture
      to be
      mailed to each Noteholder, at his address appearing on the Note register
      provided for in this Indenture, within 20 days after execution thereof. Failure
      to deliver such notice shall not affect the legality or validity of such
      supplemental indenture.

     

    (d) The
      above
      provisions of this Section shall similarly apply to successive Merger
      Events.

     

    SECTION 14.07.
      Certain
      Covenants. 

     

    (a) Before
      taking any action which would cause an adjustment reducing the Conversion Price
      below the then par value, if any, of the Shares issuable upon conversion of
      the
      Notes, the Company shall take all corporate action which may, in the opinion
      of
      its counsel, be necessary in order that the Company may validly and legally
      issue such Shares at such adjusted Conversion Price.

     

    (b) The
      Company covenants that all Shares issued upon conversion of Notes will be fully
      paid and non-assessable by the Company and free from all taxes, liens and
      changes with respect to the issue thereof.

     

    (c) The
      Company covenants that it will use its best efforts to ensure that it maintains
      a listing or quotation for all Shares, including the Shares issued on conversion
      of the Notes, on the Nasdaq or any other U.S. national securities exchange
      or
      automated quotation system.

     

    SECTION 14.08.
      Responsibility
      of Trustee.
      The
      Trustee and any Conversion Agent shall not at any time be under any duty or
      responsibility to any Noteholder to determine the Conversion Rate or whether
      any
      facts exist which may require any adjustment of the Conversion Rate, or with
      respect to the nature or extent or calculation of any such adjustment when
      made,
      or with respect to the method employed, or herein or in any supplemental
      indenture provided to be employed, in making the same. The Trustee and any
      Conversion Agent shall not be accountable with respect to the validity or value
      (or the kind or amount) of any Shares, or of any securities or, Reference
      Property or other property, which may at any time be issued or delivered upon
      the conversion of any Note; and the Trustee and any Conversion Agent make no
      representations with respect thereto. Neither the Trustee nor any Conversion
      Agent shall be responsible for any failure of the Company to issue, transfer
      or
      deliver any Shares or stock certificates or other securities or property or
      cash
      upon the surrender of any Note for the purpose of conversion or to comply with
      any of the duties, responsibilities or covenants of the Company contained in
      this Article.

     

    Without
      limiting the generality of the foregoing, neither the Trustee nor any Conversion
      Agent shall be under any responsibility to determine the correctness of any
      provisions contained in any supplemental indenture entered into pursuant to
      Section 14.06
      relating
      either to the kind or amount of shares of stock or securities or property
      (including cash) receivable by Noteholders upon the conversion of their Notes
      after any event referred to in such Section 14.06
      or to
      any adjustment to be made with respect thereto, but, subject to the provisions
      of Section 7.01,
      may
      accept as conclusive evidence of the correctness of any such provisions, and
      shall be protected in relying upon, the Officers’ Certificate (which the Company
      shall be obligated to file with the Trustee prior to the execution of any such
      supplemental indenture) and Opinion of Counsel with respect
      thereto.

     

    
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    Notwithstanding
      any other provision herein, neither the Trustee nor the Conversion Agent has
      any
      duty to determine how or when an adjustment under this Article 14 should be
      made. Neither the Trustee nor the Conversion Agent shall be responsible for
      the
      Company’s failure to comply with this Article 14.

     

    SECTION 14.09.
      Notice
      to Holders Prior to Certain Actions. 

     

    In
      case:

     

    (a) the
      Company shall declare a dividend (or any other distribution) on its Shares
      that
      would require an adjustment in the Conversion Rate pursuant to Section 14.04;
      or

     

    (b) the
      Company shall authorize the granting to all or substantially all of the holders
      of its Shares of rights or warrants to subscribe for or purchase any share
      of
      any class or any other rights or warrants that would require an adjustment
      in
      the Conversion Rate pursuant to Section 14.04;
      or

     

    (c) of
      any
      reclassification of the Shares of the Company (other than a subdivision or
      combination of its outstanding Shares, or a change in par value, or from par
      value to no par value, or from no par value to par value), or of any
      consolidation or merger to which the Company is a party and for which approval
      of any shareholders of the Company is required, or of the sale or transfer
      of
      all or substantially all of the assets of the Company; or

     

    (d) of
      the
      voluntary or involuntary dissolution, liquidation or winding-up of the
      Company;

     

    the
      Company shall cause to be filed with the Trustee and the Conversion Agent and
      to
      be mailed to each Noteholder at his address appearing on the Note register,
      provided for in Section 2.06
      of this
      Indenture, as promptly as possible but in any event at least 20 days prior
      to
      the applicable date specified in clause (x) or (y) below, as the case may
      be, a notice stating (x) the date on which a record is to be taken for the
      purpose of such dividend, distribution or rights or warrants, or, if a record
      is
      not to be taken, the date as of which the holders of Shares of record to be
      entitled to such dividend, distribution or rights are to be determined, or
      (y)
      the date on which such reclassification, consolidation, merger, sale, transfer,
      dissolution, liquidation or winding-up is expected to become effective or occur,
      and the date as of which it is expected that holders of Shares of record shall
      be entitled to exchange their Shares for securities or other property
      deliverable upon such reclassification, consolidation, merger, sale, transfer,
      dissolution, liquidation or winding-up. Failure to give such notice, or any
      defect therein, shall not affect the legality or validity of such dividend,
      distribution, reclassification, consolidation, merger, sale, transfer,
      dissolution, liquidation or winding-up.

     

    
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    SECTION 14.10.
      Share
      Rights Plans.
      To
      the
      extent that the Company has a Share rights plan, upon conversion of the Notes,
      the holders shall receive, in addition to any Shares, the associated rights
      issued under the Share rights plan unless, prior to conversion, the rights
      have
      separated from the Shares, in which case the Conversion Rate will be adjusted
      at
      the time of separation as if the Company distributed to all holders of Shares,
      shares of the Company’s Capital Stock, evidences of indebtedness, assets,
      property, rights or warrants as described under Section 14.03(c),
      subject
      to readjustment in the event of the expiration, termination or redemption of
      such rights. If, and only if, the holders receive rights under such shareholder
      rights plans as described in the preceding sentence upon conversion of their
      Notes, then no other adjustment pursuant to this Article 14
      shall be
      made in connection with such Share rights plans.

     

    ARTICLE 15

    Purchase
      of Notes at Option of Holders

     

    SECTION 15.01.
      Purchase
      of Notes at Option of the Holder on Specified Dates. 

     

    (a) At
      the
      option of the holder thereof, Notes shall be purchased by the Company in
      accordance with the provisions of the Notes on June 1, 2011 and
      June 1, 2013 (the “Put
      Right Purchase Date”)
      at a
      purchase price per Note equal to 100% of the aggregate principal amount of
      the
      Notes being purchased, together with any accrued and unpaid interest up to,
      but
      excluding, such Put Right Purchase Date (the “Put
      Right Purchase Price”).
      However,
      the Company shall, on the Put Right Purchase Date, pay the accrued and unpaid
      interest to, but excluding, such date to the holder of record at the close
      of
      business on the immediately preceding record date. The holder submitting a
      Note
      for purchase shall not receive this accrued and unpaid interest unless that
      holder was also the holder of record at the close of business on the immediately
      preceding record date.

     

    Purchases
      of Notes by the Company pursuant to this Section 15.01
      shall be
      made, at the option of the holder thereof, upon:

     

    
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    (i) delivery
      to the Trustee (or other Paying Agent appointed by the Company) and the Company
      by the holder of a written notice of purchase (a “Put
      Right Purchase Notice”)
      in the
      form set forth on the reverse of the Note at any time from the opening of
      business on the date that is 25 Business Days prior to the applicable Put Right
      Purchase Date until the close of business on the fifth Business Day prior to
      such Put Right Purchase Date stating:

     

    (A) if
      certificated, the certificate numbers of the Notes to be delivered for
      repurchase;

     

    (B) the
      principal amount of the Notes to be repurchased, which must be US$1,000 or
      an
      integral multiple thereof, and

     

    (C) that
      the
      Notes are to be repurchased as of the applicable Put Right Purchase Date
      pursuant to the terms and conditions specified in the Notes and in this
      Indenture, and

     

    (ii) delivery
      of such Note to the Paying Agent at any time after delivery of the applicable
      Put Right Purchase Notice and prior to the close of business on the Business
      Day
      immediately preceding the applicable Put Right Purchase Date (together with
      all
      necessary endorsements) at the offices of the Paying Agent, such delivery being
      a condition to receipt by the holder of the Put Right Purchase Price therefor,
      which shall be so paid pursuant to this Section 15.01
      only if
      the Note so delivered to the Paying Agent shall conform in all respects to
      the
      description thereof in the related Put Right Purchase Notice, as determined
      by
      the Company.

     

    The
      Company shall purchase from the holder thereof, pursuant to this Section 15.01,
      a
      portion of a Note if the principal amount of such portion is US$1,000 or an
      integral multiple of US$1,000. Provisions of this Indenture that apply to the
      purchase of all of a Note also apply to the purchase of such portion of such
      Note.

     

    Any
      purchase by the Company contemplated pursuant to the provisions of this
Section 15.01
      shall be
      consummated by the delivery of the consideration to be received by the holder
      promptly following the later of the Put Right Purchase Date and the time of
      delivery of the Note.

     

    The
      Trustee (or other Paying Agent appointed by the Company) shall promptly notify
      the Company of the receipt by it of any Put Right Purchase Notice or written
      notice of withdrawal thereof in accordance with the provisions of Section 15.01(d).

     

    
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    In
      connection with any purchase by the Company contemplated pursuant to the
      provisions of this Section 15.01,
      the
      Company shall (a) comply with the provisions of Rule 13e-4, Rule 14e-1
      and any other tender offer rules under the Exchange Act; (b) file a Schedule
      TO
      or any successor or similar schedule, if required, under the Exchange Act;
      and
      (c) otherwise comply with all federal and state securities laws in connection
      with any offer by the Company to purchase the Notes.

     

    Any
      Note
      that is to be repurchased only in part shall be surrendered to the Trustee
      (with, if the Company or the Trustee so requires, due endorsement by, or a
      written instrument of transfer in form satisfactory to the Company and the
      Trustee duly executed by the holder thereof or his attorney duly authorized
      in
      writing), and the Company shall execute, and the Trustee shall authenticate
      and
      make available for delivery to the holder of such Note without service charge,
      a
      new Note or Notes, containing identical terms and conditions, each in an
      authorized denomination in aggregate principal amount equal to and in exchange
      for the unrepurchased portion of the principal of the Note so
      surrendered.

     

    (b) In
      connection with any purchase of Notes pursuant to this Section 15.01,
      the
      Company shall give written notice of the Put Right Purchase Date to the holders
      (the “Company
      Put Right Notice”).

     

    The
      Company Put Right Notice shall be sent by first-class mail to the Trustee and
      to
      each holder (and to each beneficial owner as required by applicable law) not
      less than 25 Business Days prior to any Put Right Purchase Date (the
“Company
      Put Right Notice Date”).
      Each
      Company Put Right Notice shall include a form of Put Right Purchase Notice
      to be
      completed by a Noteholder and shall state:

     

    (i) the
      Put
      Right Purchase Price and the Conversion Price;

     

    (ii) the
      name
      and address of the Paying Agent and the Conversion Agent;

     

    (iii) that
      Notes as to which a Put Right Purchase Notice has been given may be converted
      only in accordance with Article 14
      hereof
      if the applicable Put Right Purchase Notice has been withdrawn in accordance
      with the terms of this Indenture;

     

    (iv) that
      Notes must be surrendered to the Paying Agent to collect payment;

     

    (v) that
      the
      Put Right Purchase Price for any Note as to which a Put Right Purchase Notice
      has been given and not withdrawn will be paid promptly following the later
      of
      the Put Right Purchase Date and the time of surrender of such Note as described
      in subclause (iv) above;

     

    
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    (vi) the
      procedures the holder must follow to exercise rights under this Section and
      a
      brief description of those rights;

     

    (vii) briefly,
      the conversion rights of the Notes;

     

    (viii) the
      procedures for withdrawing a Put Right Purchase Notice (including pursuant
      to
      the terms of Section 15.01(d));

     

    (ix) that,
      unless the Company defaults in making payment on Notes for which a Put Right
      Purchase Notice has been submitted, interest on the Notes in respect of which
      a
      Put Right Purchase Notice has been delivered and not withdrawn will cease to
      accrue on the Put Right Purchase Date; and

     

    (x) the
      CUSIP
      number of the Notes.

     

    If
      any of
      the Notes are to be redeemed in the form of a Global Note, the Company shall
      modify such notice to the extent necessary to accord with the procedures of
      the
      Depositary applicable to redemptions.

     

    At
      the
      Company’s written request, the Trustee shall give such Company Put Right Notice
      in the Company’s name and at the Company’s expense; provided,
      however,
      that,
      in all cases, the text of such Company Put Right Notice shall be prepared by
      the
      Company.

     

    (c) Upon
      receipt by the Trustee (or other Paying Agent appointed by the Company) of
      the
      Put Right Purchase Notice specified in Section 15.01(a), the holder of the
      Note in respect of which such Put Right Purchase Notice was given shall (unless
      such Put Right Purchase Notice is withdrawn as specified in
      Section 15.01(d)) thereafter be entitled to receive solely the Put Right
      Purchase Price with respect to such Note. Such Put Right Purchase Price shall
      be
      paid to such holder, subject to receipt of funds by the Paying Agent, promptly
      following the later of (x) the Put Right Purchase Date with respect to such
      Note
      (provided
      the
      conditions in Section 15.01(a) have been satisfied) and (y) the time of
      delivery of such Note to the Paying Agent by the holder thereof in the manner
      required by Section 15.01(a). Notes in respect of which a Put Right
      Purchase Notice has been given by the holder thereof may not be converted
      pursuant to Article 14 hereof on or after the date of the delivery of such
      Put Right Purchase Notice, unless such Put Right Purchase Notice has first
      been
      validly withdrawn as specified in Section 15.01(d).

     

    (d) A
      Put
      Right Purchase Notice may be withdrawn by means of a written notice of
      withdrawal delivered to the office of the Paying Agent in accordance with the
      Put Right Purchase Notice at any time prior to the close of business on the
      Business Day prior to the Put Right Purchase Date specifying:

     

    
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    (i) if
      certificated Notes have been issued, the certificate numbers of the withdrawn
      Notes,

     

    (ii) the
      principal amount of the Notes with respect to which such notice of withdrawal
      is
      being submitted, and

     

    (iii) the
      principal amount, if any, of such Notes that remains subject to the original
      Put
      Right Purchase Notice, which portion must be in principal amounts of US$1,000
      or
      an integral multiple of US$1,000;

     

    provided,
      however,
      that if
      the Notes are not in certificated form, the notice must comply with appropriate
      procedures of the Depositary.

     

    A
      written
      notice of withdrawal of a Put Right Purchase Notice shall be in the form set
      forth in the preceding paragraph.

     

    Upon
      receipt of a written notice of withdrawal, the Paying Agent shall promptly
      return to the holders thereof any Notes in respect of which a Put Right Purchase
      Notice has been withdrawn in accordance with the provisions of
      Section 15.01(e).

     

    (e) There
      shall be no purchase of any Notes pursuant to this Section 15.01 if there
      has occurred (prior to, on or after, as the case may be, the giving, by the
      holders of such Notes, of the required Put Right Purchase Notice) and is
      continuing an Event of Default (other than a default in the payment of the
      Put
      Right Purchase Price with respect to such Notes). The Paying Agent will promptly
      return to the respective holders thereof any Notes held by it during the
      continuance of an Event of Default (other than a default in the payment of
      the
      Put Right Purchase Price with respect to such Notes), in which case, upon such
      return, the Put Right Purchase Notice with respect thereto shall be deemed
      to
      have been withdrawn.

     

    (f) No
      later
      than 10 a.m., New York City time, 2 Business Days before the Put Right Purchase
      Date, the Company shall deposit with the Trustee (or other Paying Agent
      appointed by the Company or if the Company is acting as its own Paying Agent,
      set aside, segregate and hold in trust as provided in Section 4.05) an
      amount (in immediately available funds if deposited on such Business Day)
      sufficient to pay the aggregate Put Right Purchase Price of all the Notes or
      portions thereof which are to be purchased as of the Put Right Purchase Date.
      The manner in which the deposit required by this Section 15.01(f) is made
      by the Company shall be by wire in immediately available funds.

     

    If
      the
      Trustee (or other Paying Agent appointed by the Company) holds, in accordance
      with the terms hereof, money sufficient to pay the Put Right Purchase Price
      of
      any Note on the Business Day after the Put Right Purchase Date, then on and
      after the Put Right Purchase Date, (i) such Note will cease to be outstanding,
      (ii) interest will cease to accrue (whether or not book-entry transfer of
      the Notes is made or whether or not the Notes are delivered to the Transfer
      or
      Paying Agent) and (iii) all the rights of the holder in respect thereof shall
      terminate (other than the right to receive the Put Right Purchase Price upon
      delivery of the Notes).

     

    
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    To
      the
      extent that the aggregate amount of cash deposited by the Company pursuant
      to
      this Section 15.01(f) exceeds the aggregate Put Right Purchase Price of the
      Notes or portions thereof that the Company is obligated to purchase, then
      promptly after the Put Right Purchase Date the Trustee or a Paying Agent, as
      the
      case may be, shall return any such excess cash to the Company.

     

    SECTION 15.02.
      Purchase
      at Option of Holders Upon a Fundamental Change. 

     

    (a) If
      a
      Fundamental Change occurs at any time, then each Noteholder shall have the
      right, at such holder’s option, to require the Company to purchase all of such
      holder’s Notes or any portion thereof that is a multiple of US$1,000 principal
      amount, for cash on the date (the “Fundamental
      Change Purchase Date”)
      specified by the Company that is not less than 20 Business Days and not more
      than 35 Business Days after the date of the Fundamental Change Control Notice
      (as defined below) at a purchase price equal to 100% of the principal amount
      thereof, together with accrued and unpaid interest (including Make-Whole
      Interest, if any) thereon to, but excluding, the Fundamental Change Purchase
      Date (the “Fundamental
      Change Purchase Price”).
      However,
      if the Fundamental Change Purchase Date occurs after a record date and on or
      prior to the corresponding Interest Payment Date, the Company shall pay the
      full
      amount of accrued and unpaid interest (including Make-Whole Interest, if any)
      due on such Interest Payment Date to the record holder on the record date
      corresponding to such Interest Payment Date, and the Fundamental Change Purchase
      Price payable to the holder who presents the note for purchase will be 100%
      of
      the principal amount of such note and will not include any accrued and unpaid
      interest (including Make-Whole Interest, if any).

     

    Repurchases
      of Notes under this Section 15.02 shall be made, at the option of the
      holder thereof, upon:

     

    (i) delivery
      to the Trustee (or other Paying Agent appointed by the Company) by a holder
      of a
      duly completed notice (the “Fundamental
      Change Purchase Notice”)
      in the
      form set forth on the reverse of the Note by the close of business on or before
      the fifth Business Day prior to the Fundamental Change Purchase Date;
      and

     

    (ii) delivery
      or book-entry transfer of the Notes to the Trustee (or other Paying Agent
      appointed by the Company) at any time after delivery of the Fundamental Change
      Purchase Notice (together with all necessary endorsements) at the Corporate
      Trust Office of the Trustee (or other Paying Agent appointed by the Company)
      in
      the Borough of Manhattan, such delivery being a condition to receipt by the
      holder of the Fundamental Change Purchase Price therefor; provided
      that
      such Fundamental Change Purchase Price shall be so paid pursuant to this
      Section 15.02 only if the Note so delivered to the Trustee (or other Paying
      Agent appointed by the Company) shall conform in all respects to the description
      thereof in the related Fundamental Change Purchase Notice.

     

    
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    The
      Fundamental Change Purchase Notice shall state:

     

    (A) if
      certificated, the certificate numbers of Notes to be delivered for
      purchase;

     

    (B) the
      principal amount of Notes to be purchased, which must be US$1,000 or an integral
      multiple thereof; and

     

    (C) that
      the
      Notes are to be purchased by the Company pursuant to the applicable provisions
      of the Notes and this Indenture.

     

    Any
      purchase by the Company contemplated pursuant to the provisions of this
      Section 15.02 shall be consummated by the delivery of the consideration to
      be received by the holder promptly following the later of the Fundamental Change
      Purchase Date and the time of delivery of the Note.

     

    The
      Trustee (or other Paying Agent appointed by the Company) shall promptly notify
      the Company of the receipt by it of any Fundamental Change Purchase Notice
      or
      written notice of withdrawal thereof in accordance with the provisions of
      Section 15.02(c).

     

    In
      connection with any purchase by the Company contemplated pursuant to the
      provisions of this Section 15.02, the Company shall (a) comply with the
      provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules
      under the Exchange Act; (b) file a Schedule TO or any successor or similar
      schedule, if required, under the Exchange Act; and (c) otherwise comply with
      all
      federal and state securities laws in connection with any offer by the Company
      to
      purchase the Notes.

     

    Any
      Note
      that is to be purchased only in part shall be surrendered to the Trustee (with,
      if the Company or the Trustee so requires, due endorsement by, or a written
      instrument of transfer in form satisfactory to the Company and the Trustee
      duly
      executed by the holder thereof or his attorney duly authorized in writing),
      and
      the Company shall execute, and the Trustee shall authenticate and make available
      for delivery to the holder of such Note, a new Note or Notes, containing
      identical terms and conditions, each in an authorized denomination in aggregate
      principal amount equal to and in exchange for the unpurchased portion of the
      principal of the Note so surrendered. Any expenses in connection therewith
      shall
      be payable by the Company.

     

    
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    (b) On
      or
      before the 20th Business Day after the occurrence of a Fundamental Change,
      the
      Company shall provide to all holders of record of the Notes and the Trustee
      and
      Paying Agent a notice (the “Fundamental
      Change Control Notice”)
      of the
      occurrence of such Fundamental Change and of the purchase right at the option
      of
      the holders arising as a result thereof. Such mailing shall be by first class
      mail. Simultaneously with providing such Fundamental Change Control Notice,
      the
      Company shall publish a notice containing the information included therein
      once
      in a newspaper of general circulation in The City of New York or publish such
      information on the Company’s website or through such other public medium as the
      Company may use at such time.

     

    Each
      Fundamental Change Control Notice shall specify:

     

    (i) the
      events causing the Fundamental Change;

     

    (ii) the
      date
      of the Fundamental Change;

     

    (iii) the
      Fundamental Change Purchase Date and the last date on which a holder may
      exercise the purchase right;

     

    (iv) the
      Fundamental Change Purchase Price;

     

    (v) the
      name
      and address of the Paying Agent and the Conversion Agent;

     

    (vi) the
      applicable Conversion Rate and any adjustments to the applicable Conversion
      Rate
      (including the number of Additional Shares, if any);

     

    (vii) that
      the
      Notes with respect to which a Fundamental Change Purchase Notice has been
      delivered by a holder may be converted only if the holder withdraws the
      Fundamental Change Purchase Notice in accordance with the terms of this
      Indenture;

     

    (viii) that
      the
      holder must exercise the purchase right on or prior to the close of business
      on
      the fifth Business Day prior to the Fundamental Change Purchase Date (the
“Fundamental
      Change Expiration Time”);

     

    (ix) that
      the
      holder shall have the right to withdraw any Notes surrendered prior to the
      close
      of business on the Business Day prior to the Fundamental Change Expiration
      Time;
      and

     

    
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    (x) the
      procedures that holders must follow to require the Company to purchase their
      Notes.

     

    No
      failure of the Company to give the foregoing notices and no defect therein
      shall
      limit the Noteholders’ purchase rights or affect the validity of the proceedings
      for the purchase of the Notes pursuant to this Section 15.02.

     

    (c) A
      Fundamental Change Purchase Notice may be withdrawn by means of a written notice
      of withdrawal delivered to the Paying Agent in accordance with the Fundamental
      Change Control Notice at any time prior to the close of business on the Business
      Day prior to the Fundamental Change Purchase Date, specifying:

     

    (i) if
      certificated Notes have been issued, the certificate numbers of the withdrawn
      Notes,

     

    (ii) the
      principal amount of the Note with respect to which such notice of withdrawal
      is
      being submitted, and

     

    (iii) the
      principal amount, if any, of such Note that remains subject to the original
      Fundamental Change Purchase Notice, which portion must be in principal amounts
      of US$1,000 or an integral multiple of US$1,000;

     

    provided,
      however,
      that if
      the Notes are not in certificated form, the notice must comply with appropriate
      procedures of the Depositary.

     

    (d) No
      later
      than 10 a.m., New York City time, 2 Business Days before the Fundamental Change
      Purchase Date, the Company shall deposit with the Trustee (or other Paying
      Agent
      appointed by the Company or if the Company is acting as its own Paying Agent,
      set aside, segregate and hold in trust as provided in Section 4.05) an
      amount of cash sufficient to purchase on the Fundamental Change Purchase Date
      all of the Notes to be purchased on such date at the Fundamental Change Purchase
      Price. Subject to receipt of funds and/or Notes by the Trustee (or other Paying
      Agent appointed by the Company), payment for Notes surrendered for purchase
      (and
      not withdrawn) prior to the Fundamental Change Expiration Time will be made
      promptly after the later of (x) the Fundamental Change Purchase Date with
      respect to such Note (provided
      the
      holder has satisfied the conditions to the payment of the Fundamental Change
      Purchase Price in Section 15.02), and (y) the time of book-entry transfer
      or the delivery of such Note to the Trustee (or other Paying Agent appointed
      by
      the Company) by the holder thereof in the manner required by Section 15.02
      by mailing checks for the amount payable to the holders of such Notes entitled
      thereto as they shall appear in the Note Register; provided,
      however,
      that
      payments to the Depositary shall be made by wire transfer of immediately
      available funds to the account of the Depositary or its nominee. The Trustee
      shall, promptly after such payment and upon written demand by the Company,
      return to the Company any funds in excess of the Fundamental Change Purchase
      Price.

     

    
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    (e) If
      the
      Trustee (or other Paying Agent appointed by the Company) holds money or
      securities sufficient to pay the Fundamental Change Purchase Price of any Note
      on the Business Day following the Fundamental Change Purchase Date, then on
      and
      after the Fundamental Change Purchase Date (i) such Notes will cease to be
      outstanding, (ii) interest (including Additional Interest and Make-Whole
      Interest, if any) will cease to accrue on such Notes (whether or not book-entry
      transfer of the Notes has been made or the Notes have been delivered to the
      Trustee or Paying Agent), and (iii) all other rights of the holders of such
      Notes will terminate (other than the right to receive the Fundamental Change
      Purchase Price upon delivery of the Notes).

     

    (f) There
      shall be no purchase of any Notes pursuant to this Section 15.02 if there
      has occurred (prior to, on or after, as the case may be, the giving, by the
      holders of such Notes, of the required Fundamental Change Purchase Notice)
      and
      is continuing an Event of Default (other than a default in the payment of the
      Fundamental Change Purchase Price with respect to such Notes). The Paying Agent
      will promptly return to the respective holders thereof any Notes held by it
      during the continuance of an Event of Default (other than a default in the
      payment of the Fundamental Change Purchase Price with respect to such Notes),
      in
      which case, upon such return, the Fundamental Change Purchase Notice with
      respect thereto shall be deemed to have been withdrawn.

     

    ARTICLE 16

    Miscellaneous
      Provisions

     

    SECTION 16.01.
      Provisions
      Binding on Company’s Successors.
      All
      the
      covenants, stipulations, promises and agreements of the Company contained in
      this Indenture shall bind its successors and assigns whether so expressed or
      not.

     

    SECTION 16.02.
      Official
      Acts by Successor Corporation.
      Any
      act
      or proceeding by any provision of this Indenture authorized or required to
      be
      done or performed by any board, committee or officer of the Company shall and
      may be done and performed with like force and effect by the like board,
      committee or officer of any corporation that shall at the time be the lawful
      sole successor of the Company.

     

    SECTION 16.03.
      Addresses
      for Notices, Etc.
      Any
      notice or demand which by any provision of this Indenture is required or
      permitted to be given or served by the Trustee Conversion Agent or by the
      Noteholders or by the Company shall be deemed to have been sufficiently given
      or
      made, for all purposes if given or served by being in writing, in the English
      language, deposited postage prepaid by registered or certified mail in a post
      office letter box, or by courier service, or by facsimile addressed (until
      another address is filed by the Company with the Trustee) to:

     

    
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    ShengdaTech,
      Inc.
Youth Pioneer Park
Tai’an Economic and Technological Development
      Zone
Tai’an City, Shangdong Province 271000
PRC
Attention: Xiangzhi
      Chen
Fax No.: 86-538-856-0687

     

    with
      a
      copy to:

     

    Cadwalader
      Wickersham & Taft LLP
2301 China Central Place Tower 2
No. 79 Jianguo
      Road

    Beijing
      100025, PRC

    Attention:
      Jiannan Zhang, Esq.

    Fax
      No.:
      +86.10.6599.7300

     

    Any
      notice, direction, request or demand hereunder to or upon the Trustee,
      Conversion Agent, and Principal Paying Agent shall be deemed to have been
      sufficiently given or made, for all purposes, if given or served by being in
      writing, in the English language, deposited postage prepaid by registered or
      certified mail in a post office letter box, or by courier service, or by
      facsimile addressed to the Corporate Trust Office,
      with a
      copy to: 

     

    The
      Bank
      of New York

    Level
      12,
      Three Pacific Place

    1
      Queen’s
      Road East

    Hong
      Kong

    Attention:
      Global Corporate Trust

    Fax
      No.:
      +852.2295.3283

    

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

     

    Any
      notice or communication mailed to a Noteholder shall be mailed to him by first
      class mail, postage prepaid, at his address as it appears on the Note Register
      or by courier and shall be sufficiently given to him if so mailed within the
      time prescribed.

     

    
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    Failure
      to mail a notice or communication to a Noteholder or any defect in it shall
      not
      affect its sufficiency with respect to other Noteholders. If a notice or
      communication is mailed in the manner provided above, it is duly given, whether
      or not the addressee receives it.

     

    SECTION 16.04.
      Governing
      Law.
      THIS
      INDENTURE AND EACH NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS
      OF
      THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS ENTERED INTO
      AND
      TO BE PERFORMED THEREIN.

     

    SECTION 16.05.
      Submission
      to Jurisdiction; Waiver of Immunity.
      Each of
      the parties hereto hereby irrevocably submits to the non-exclusive jurisdiction
      of any New York state or U.S. federal court sitting in the Borough of Manhattan
      in The City of New York with respect to actions brought against it as a
      defendant in respect of any suit, action or proceeding or arbitral award arising
      out of or relating to this Indenture or the Notes or any transaction
      contemplated hereby or thereby (a “Proceeding”),
      and
      irrevocably accepts for itself and in respect of its property, generally and
      unconditionally, the jurisdiction of the aforesaid courts. Each of the parties
      hereto irrevocably waives, to the fullest extent it may do so under applicable
      law, trial by jury and any objection which it may now or hereafter have to
      the
      laying of the venue of any such Proceeding brought in any such court and any
      claim that any such Proceeding brought in any such court has been brought in
      an
      inconvenient forum. The Company irrevocably appoints CT Corporation System
      (the
“Process
      Agent”),
      with
      an office at 111 Eighth Avenue, New York, New York 10011, as its authorized
      agent to receive on behalf of it and its property service of copies of the
      summons and complaint and any other process which may be served in any
      Proceeding. If for any reason such Person shall cease to be such agent for
      service of process, the Company shall forthwith appoint a new agent of
      recognized standing for service of process in the State of New York and deliver
      to the Trustee a copy of the new agent’s acceptance of that appointment within
      30 days. Nothing herein shall affect the right of the Trustee, any agent or
      any
      holder to serve process in any other manner permitted by law or to commence
      legal proceedings or otherwise proceed against the Company in any other court
      of
      competent jurisdiction.

     

    The
      Company hereby irrevocably appoints the Process Agent as its agent to receive,
      on behalf of itself and its property, service of copies of the summons and
      complaint and any other process which may be served in any such suit, action
      or
      proceeding brought in such New York state or U.S. federal court sitting in
      the
      Borough of Manhattan in The City of New York. Such service shall be made by
      delivering by hand a copy of such process to the Company in care of the Process
      Agent at the address specified above. The Company hereby irrevocably authorizes
      and directs the Process Agent to accept such service on its behalf. Failure
      of
      the Process Agent to give notice to the Company, or failure of the Company
      to
      receive notice of such
      service
      of process shall not affect in any way the validity of such service on the
      Process Agent or the Company. As an alternative method of service, the Company
      also irrevocably consents to the service of any and all process in any such
      Proceeding by the delivery by hand of copies of such process to the Company,
      at
      its address specified in or at any other address previously furnished in writing
      by the Company to the Trustee. The Company covenants and agrees that it shall
      take any and all reasonable action, including the execution and filing of any
      and all documents, that may be necessary to continue the designation of the
      Process Agent above in full force and effect during the term of the Notes,
      and
      to cause the Process Agent to continue to act as such.

     

    
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    Nothing
      in this Indenture shall affect the right of any party, including the Trustee,
      any Agent or any holder, to serve legal process in any other manner permitted
      by
      law or affect the right of any party to bring any action or proceeding against
      any other party or its property in the courts of other competent
      jurisdictions.

     

    The
      Company irrevocably agrees that, in any proceedings anywhere (whether for an
      injunction, specific performance or otherwise), no immunity (to the extent
      that
      it may at any time exist, whether on the grounds of sovereignty or otherwise)
      from such proceedings, from attachment (whether in aid of execution, before
      judgment or otherwise) of its assets or from execution of judgment shall be
      claimed by it or on its behalf or with respect to its assets, except to the
      extent required by applicable law, any such immunity being irrevocably waived,
      to the fullest extent permitted by applicable law. The Company irrevocably
      agrees that, where permitted by applicable law, it and its assets are, and
      shall
      be, subject to such proceedings, attachment or execution in respect of its
      obligations under this Indenture or the Notes.

     

    EACH
      OF
      THE COMPANY, THE TRUSTEE, THE PRINCIPAL PAYING AGENT AND THE CONVERSION AGENT
      HEREBY WAIVE ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM
      BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS INDENTURE.

     

    SECTION 16.06.
      Evidence
      of Compliance with Conditions Precedent; Certificates and Opinions of Counsel
      to
      Trustee.
      Upon
      any
      application or demand by the Company to the Trustee to take any action under
      any
      of the provisions of this Indenture, the Company shall furnish to the Trustee
      an
      Officers’ Certificate stating that all conditions precedent, if any, provided
      for in this Indenture relating to the proposed action have been complied with,
      and an Opinion of Counsel stating that, in the opinion of such counsel, all
      such
      conditions precedent have been complied with,
      and
      such other statement as the Trustee may request.

     

    
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    Each
      certificate or opinion provided for by or on behalf of the Company in this
      Indenture and delivered to the Trustee with respect to compliance with a
      condition or covenant provided for in this Indenture shall include (1) a
      statement that the person making such certificate or opinion has read such
      covenant or condition; (2) a brief statement as to the nature and scope of
      the
      examination or investigation upon which the statement or opinion contained
      in
      such certificate or opinion is based; (3) a statement that, in the opinion
      of
      such person, he has made such examination or investigation as is necessary
      to
      enable him to express an informed opinion as to whether or not such covenant
      or
      condition has been complied with; and (4) a statement as to whether or not,
      in
      the opinion of such person, such condition or covenant has been complied with;
      and such other statements as the Trustee may request.

     

    SECTION 16.07.
      Legal
      Holidays.
      In
      any
      case where any Interest Payment Date, Redemption Date, Fundamental Change
      Purchase Date, Put Right Purchase Date, Conversion Date or Maturity Date will
      not be a Business Day, then any action to be taken on such date need not be
      taken on such date, but may be taken on the next succeeding Business Day with
      the same force and effect as if taken on such date, and no interest shall accrue
      for the period from and after such date to the next succeeding Business
      Day.

     

    SECTION 16.08.
      No
      Security Interest Created.
      Nothing
      in this Indenture or in the Notes, expressed or implied, shall be construed
      to
      constitute a security interest under the Uniform Commercial Code or similar
      legislation, as now or hereafter enacted and in effect, in any
      jurisdiction.

     

    SECTION 16.09.
      Benefits
      of Indenture.
      Nothing
      in this Indenture or in the Notes, expressed or implied, shall give to any
      person, other than the parties hereto, any Paying Agent, any authenticating
      agent, any Note Registrar and their successors hereunder, the Noteholders,
      any
      benefit or any legal or equitable right, remedy or claim under this
      Indenture.

     

    SECTION 16.10.
      Table
      of Contents, Headings, Etc.
      The
      table
      of contents and the titles and headings of the articles and sections of this
      Indenture have been inserted for convenience of reference only, are not to
      be
      considered a part hereof, and shall in no way modify or restrict any of the
      terms or provisions hereof.

     

    SECTION 16.11.
      Authenticating
      Agent.
      The
      Trustee may appoint an authenticating agent which shall be authorized to act
      on
      its behalf and subject to its direction in the authentication and delivery
      of
      Notes in connection with the original issuance thereof and transfers and
      exchanges of Notes hereunder, including under Section 2.05,
      Section 2.06, Section 2.08 and Section 2.09, as fully to all
      intents and purposes as though the authenticating agent had been expressly
      authorized by this Indenture and those Sections to authenticate and deliver
      Notes. For all purposes of this Indenture, the authentication and delivery
      of
      Notes by the authenticating agent shall be deemed to be authentication and
      delivery of such Notes “by the Trustee” and a certificate of authentication
      executed on behalf of the Trustee by an authenticating agent shall be deemed
      to
      satisfy any requirement hereunder or in the Notes for the Trustee’s certificate
      of authentication. Such authenticating agent shall at all times be a person
      eligible to serve as trustee hereunder pursuant to
      Section 7.09.

     

    
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    Any
      corporation into which any authenticating agent may be merged or converted
      or
      with which it may be consolidated, or any corporation resulting from any merger,
      consolidation or conversion to which any authenticating agent shall be a party,
      or any corporation succeeding to the corporate trust business of any
      authenticating agent, shall be the successor of the authenticating agent
      hereunder, if such successor corporation is otherwise eligible under this
      Section, without the execution or filing of any paper or any further act on
      the
      part of the parties hereto or the authenticating agent or such successor
      corporation.

     

    Any
      authenticating agent may at any time resign by giving written notice of
      resignation to the Trustee and to the Company. The Trustee may at any time
      terminate the agency of any authenticating agent by giving written notice of
      termination to such authenticating agent and to the Company. Upon receiving
      such
      a notice of resignation or upon such a termination, or in case at any time
      any
      authenticating agent shall cease to be eligible under this Section, the Trustee
      shall promptly appoint a successor authenticating agent (which may be the
      Trustee), shall give written notice of such appointment to the Company and
      shall
      mail notice of such appointment to all Noteholders as the names and addresses
      of
      such holders appear on the Note register.

     

    The
      Company agrees to pay to the authenticating agent from time to time compensation
      for its services although the Company may terminate the authenticating agent,
      if
      it determines such agent’s fees to be unreasonable.

     

    The
      provisions of Section 7.02, Section 7.03, Section 7.04,
      Section 8.03 and this Section 16.11 shall be applicable to any
      authenticating agent.

     

    SECTION 16.12.
      Currency
      Indemnity.
      U.S.
      Dollars are the sole currency of account and payment for all sums payable by
      the
      Company under or in connection with the Notes, including damages. Any amount
      received or recovered in a currency other than U.S. Dollars (whether as a result
      of, or of the enforcement of, a judgment or order of a court of any
      jurisdiction, in the winding-up or dissolution of the Company or otherwise)
      by
      any holder of a Note or by the Trustee (including in its other agency capacities
      hereunder) in respect of any sum expressed to be due to it from the Company
      shall only constitute a discharge to the Company to the extent of the U.S.
      Dollar amount which the recipient is able to purchase with the amount so
      received or recovered in that other currency on the date of that receipt or
      recovery (or, if it is not practicable to make that purchase on that date,
      on
      the first date on which it is practicable to do so). If that U.S. Dollar amount
      is less than the U.S. Dollar amount expressed to be due to the recipient under
      any Note, the Company shall indemnify such holder or the Trustee or the agents
      against any loss sustained by it as a result, and if the amount of U.S. Dollars
      so purchased is greater than the sum originally due to such holder, such holder
      shall, by accepting a Note, be deemed to have agreed to repay such excess.
      In
      any event, the Company shall indemnify the recipient against the cost of making
      any such purchase. 

     

    
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    For
      the
      purposes of this Section 16.12, it shall be sufficient for the holder of a
      Note or the Trustee or such agent to certify in a satisfactory manner
      (indicating the sources of information used) that it would have suffered a
      loss
      had an actual purchase of U.S. Dollars been made with the amount so received
      in
      that other currency on the date of receipt or recovery (or, if a purchase of
      U.S. Dollars on such date had not been practicable, on the first date on which
      it would have been practicable, it being required that the need for a change
      of
      date be certified in the manner mentioned above). These indemnities constitute
      a
      separate and independent obligation from the other obligations of the Company,
      shall give rise to a separate and independent cause of action, shall apply
      irrespective of any indulgence granted by any holder of a Note or the Trustee
      or
      such agent and shall continue in full force and effect despite any other
      judgment, order, claim or proof for a liquidated amount in respect of any sum
      due under any Note.

    

    SECTION 16.13.
      Execution
      in Counterparts.
      This
      Indenture may be executed in any number of counterparts, each of which shall
      be
      an original, but such counterparts shall together constitute but one and the
      same instrument.

     

    SECTION 16.14.
      Qualification
      of Indenture.
      The
      Company shall qualify this Indenture under the Trust Indenture Act in accordance
      with the terms and conditions of the Registration Rights Agreement and shall
      pay
      all reasonable costs and expenses (including attorneys’ fees and expenses for
      the Company, the Trustee and the holders) incurred in connection therewith,
      including, but not limited to, costs and expenses of qualification of this
      Indenture and the Notes and the printing of this Indenture and the
      Notes.

     

    SECTION 16.15.
      Calculations.
      Except
      as
      otherwise provided herein, the Company shall be responsible for making all
      calculations called for under this Indenture and the Notes and the Trustee
      shall
      not be required to confirm any such calculations. The Company shall make all
      such calculations in good faith and, absent manifest error, its calculations
      shall be final and binding on holders. The Company upon request will provide
      a
      schedule of its calculations to each of the Trustee and the Conversion Agent,
      and each of the Trustee and Conversion Agent is entitled to rely conclusively
      upon the accuracy of the Company’s calculations without independent
      verification. The Trustee will deliver a copy of such schedule to any holder
      upon the written request of such holder.

     

    
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    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
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    IN
      WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
      executed as of the date first written above.

     

    
      	
              SHENGDATECH,
                INC.

            
	 	 
	
              By:

            	
              /s/
                Xiangzhi Chen

            
	 	
              Name:
                Xiangzhi Chen

            
	 	
              Title:
                Chief Executive Officer

            
	 	 
	
              THE
                BANK OF NEW YORK 

              as
                Trustee

            
	 	 
	
              By:

            	/s/
              Mandy
              Li
	 	
              Name:
                Mandy Li

            
	 	
              Title:
                Assistant Vice President

            
	 	 
	 	 
	
              THE
                BANK OF NEW YORK 

              as
                Principal Paying Agent

            
	 	 
	
              By:

            	/s/
Mandy
              Li
	 	
              
                Name:
                  Mandy Li

              

            
	 	
              
                Title:
                  Assistant Vice President

              

            
	 	 
	
              THE
                BANK OF NEW YORK 

              as
                Conversion Agent

            
	 	 
	
              By:

            	/s/
Mandy
              Li
	 	
              
                Name:
                  Mandy Li

              

            
	 	
              
                Title:
                  Assistant Vice
                  President

              

            

    

     

    
      SIGNATURE
        PAGE TO INDENTURE

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    Schedule
      A

    

    
      	
              Effective
                Date

            	 	
              Common
                Stock Price (US$)

            	 
	 	 	
              $

            	
              8.42

            	 	
              $

            	
              9.26

            	 	
              $

            	
              9.94

            	 	
              $

            	
              11.00

            	 	
              $

            	
              12.50

            	 	
              $

            	
              14.00

            	 	
              $

            	
              15.50

            	 	
              $

            	
              17.00

            	 	
              $

            	
              18.50

            	 	
              $

            	
              20.00

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              May 28,
                2008

            	 	 	
              21.38

            	 	 	
              19.44

            	 	 	
              18.11

            	 	 	
              16.36

            	 	 	
              14.40

            	 	 	
              12.86

            	 	 	
              11.61

            	 	 	
              10.59

            	 	 	
              9.73

            	 	 	
              9.00

            	 
	
              June 1,
                2009

            	 	 	
              14.25

            	 	 	
              12.96

            	 	 	
              12.07

            	 	 	
              10.91

            	 	 	
              9.60

            	 	 	
              8.57

            	 	 	
              7.74

            	 	 	
              7.06

            	 	 	
              6.49

            	 	 	
              6.00

            	 
	
              June 1,
                2010

            	 	 	
              7.13

            	 	 	
              6.48

            	 	 	
              6.04

            	 	 	
              5.45

            	 	 	
              4.80

            	 	 	
              4.29

            	 	 	
              3.87

            	 	 	
              3.53

            	 	 	
              3.24

            	 	 	
              3.00

            	 
	
              June 1,
                2011

            	 	 	
              0.00

            	 	 	
              0.00

            	 	 	
              0.00

            	 	 	
              0.00

            	 	 	
              0.00

            	 	 	
              0.00

            	 	 	
              0.00

            	 	 	
              0.00

            	 	 	
              0.00

            	 	 	
              0.00

            	 

    

     

    
      ShengdaTech,
        Inc.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    [FORM
      OF
      FACE OF NOTE]

     

    [Include
      only for Global Notes]

     

    [UNLESS
      THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
      TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
      COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
      ANY
      CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
      NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
      IS
      MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
      REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
      OR
      OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
      HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     

    TRANSFERS
      OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
      TO
      NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND
      TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE
      IN
      ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO IN
      THE
      TERMS OF THE NOTE ATTACHED HERETO.]

     

    [Include
      only for Notes in certificated form]

     

    [UNLESS
      THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
      TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
      COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
      ANY
      CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
      NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
      IS
      MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
      REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
      OR
      OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
      HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

     

    [Include
      only for Definitive Notes]

     

    [THIS
      SECURITY WILL NOT BE ACCEPTED IN EXCHANGE FOR A BENEFICIAL INTEREST IN A GLOBAL
      NOTE UNLESS THE HOLDER OF THIS SECURITY, SUBSEQUENT TO SUCH EXCHANGE, WILL
      HOLD
      NO NOTES.]

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    [Include
      only for Notes that are Restricted Securities]

     

    [THIS
      NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
      TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION
      HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

     

    (1) REPRESENTS
      THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS (A) A “QUALIFIED
      INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
      ACT) OR (B) AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN
      RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT), AND THAT IT
      EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,
      AND

     

    (2) AGREES
      FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE
      TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT
      IS
      THE LATER OF (X) ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
      AND
      THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
      OWNER
      OF THIS NOTE (OR ANY PREDECESSOR OF THIS SECURITY) AND (Y) SUCH LATER DATE,
      IF
      ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT ONLY:

     

    
      	 	
              (A)

            	
              TO
                THE COMPANY OR ANY SUBSIDIARY THEREOF,
                OR

            

    

     

    
      	 	
              (B)

            	
              PURSUANT
                TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE
                SECURITIES ACT, OR

            

    

     

    
      	 	
              (C)

            	
              TO
                A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER
                THE SECURITIES ACT, OR

            

    

     

    
      	 	
              (D)

            	
              TO
                AN INSTITUTIONAL ACCREDITED INVESTOR,
                OR

            

    

     

    
      	 	
              (E)

            	
              PURSUANT
                TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
                SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
                REQUIREMENTS OF THE SECURITIES ACT.

            

    

     

    PRIOR
      TO
      THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) OR (2)(D) ABOVE,
      A
      DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM
      THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. PRIOR TO THE REGISTRATION OF
      ANY
      TRANSFER IN ACCORDANCE WITH (2)(E) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE
      THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR
      OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE
      PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND
      APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE
      AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT.

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    IN
      ANY
      CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY ENGAGE IN ANY HEDGING
      TRANSACTIONS WITH REGARD TO THE NOTES OR THE SHARES ISSUABLE UPON CONVERSION
      OF
      THE NOTE EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.]

     

    [Include
      only for Shares that are Restricted Securities]

     

    [THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
      1933,
      AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
      EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
      HOLDER AGREES (1) THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY
      EVIDENCED HEREBY, EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THERE; (B)
      PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE
      SECURITIES ACT; (C) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED
      INSTITUTIONAL BUYER THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
      OF
      ANOTHER QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
      SECURITIES ACT; (D) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN
      RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT); OR (E) PURSUANT
      TO
      ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT; AND (2) IT WILL, PRIOR TO ANY TRANSFER OF THIS SECURITY FURNISH
      TO THE TRANSFER AGENT AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR
      OTHER INFORMATION AS MAY BE REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING
      MADE
      PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.]

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    SHENGDATECH,
      INC.

     

    6.0%
      Convertible Senior Notes due 2018

     

    
      	
              No.___________

            	
              US$___________

            

    

     

    CUSIP
      No.
      ___________

     

    SHENGDATECH,
      INC., a Nevada corporation (herein called the “Company,”
which
      term includes any successor corporation under the Indenture referred to on
      the
      reverse hereof), for value received hereby promises to pay to [CEDE & CO.],
      or registered assigns, the principal sum of [·]
      U.S.
      Dollars [or such other principal amount as shall be set forth on the Schedule
      I
      hereto].

     

    This
      Note
      shall bear interest at the rate of 6.0% per year from May 28, 2008, or from
      the
      most recent date to which interest had been paid or provided. Interest is
      payable semi-annually in arrears on each June 1 and December 1,
      commencing December 1, 2008, to holders of record at the close of business
      on the preceding May 15 and November 15, respectively. Interest
      payable on each Interest Payment Date shall equal the amount of interest accrued
      from and including the immediately preceding Interest Payment Date (or from
      and
      including May 28, 2008 if no interest has been paid hereon) to but
      excluding such Interest Payment Date.

     

    The
      payment of the principal of, premium, if any, and accrued and unpaid interest
      on
      the Notes will be exclusively in such coin or currency of the United States
      as
      at the time of payment will be legal tender for the payment of public and
      private debts. The Company shall, through the Principal Paying Agent, pay the
      principal of the Notes at the office or agency designated by the Company in
      the
      Borough of Manhattan, The City of New York. Each installment of accrued and
      unpaid interest on the Notes due on any Interest Payment Date may be paid by
      mailing checks for the amount payable to or upon the written order of the
      Noteholders entitled thereto as they shall appear on the registry books of
      the
      Company; provided
      that
      with respect to any Noteholder with an aggregate principal amount in excess
      of
      US$5,000,000, at the application of such holder in writing to the Note Registrar
      not later than the relevant record date and accrued and unpaid interest on
      such
      holder’s Notes shall be paid by wire transfer in immediately available funds to
      such holder’s account in the United States supplied by such holder from time to
      time to the Trustee and Paying Agent (if different from Trustee); provided
      further
      that
      payments in respect of a Global Note shall be paid by wire transfer in
      immediately available funds to the accounts specified by the Depositary in
      accordance with such wire transfer instructions and other procedures provided
      by
      the Depositary from time to time.

     

    Reference
      is made to the further provisions of this Note set forth on the reverse hereof,
      including, without limitation, provisions giving the holder of this Note the
      right to convert this Note into Shares or cash and Shares, if any, of the
      Company on the terms and subject to the limitations referred to on the reverse
      hereof and as more fully specified in the Indenture. Such further provisions
      shall for all purposes have the same effect as though fully set forth at this
      place.

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

    This
      Note
      shall be deemed to be a contract made under the laws of the State of New York,
      and for all purposes shall be construed in accordance with the laws of the
      State
      of New York applicable to contracts entered into and to be performed
      therein.

     

    This
      Note
      shall not be valid or become obligatory for any purpose until the certificate
      of
      authentication hereon shall have been manually signed by the Trustee or a duly
      authorized authenticating agent under the Indenture.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Note to be duly
      executed.

     

    
      	
              SHENGDATECH,
                INC.

            
	 
	
              By:

            	 

	 	
              Name: 

            
	 	
              Title: 

            
	 	 
	
              By:

            	 

	 	
              Name: 

            
	 	
              Title: 

            

    

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

    TRUSTEE’S
      CERTIFICATE OF AUTHENTICATION

     

    THE
      BANK
      OF NEW YORK, as Trustee, certifies that this is one of the Notes described
      in
      the within-named Indenture.

    

    
      	
              By:

            	 

	 	
              Name: 

            
	 	
              Title: 

            

    

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

    

    [FORM
      OF
      REVERSE OF NOTE]

     

    SHENGDATECH,
      INC.

    6.0%
      Convertible Senior Notes due 2018

     

    This
      Note
      is one of a duly authorized issue of Notes of the Company, designated as its
      6.0% Convertible Senior Notes due 2018 (herein called the “Notes”),
      issued under and pursuant to an Indenture dated as of May 28, 2008 (herein
      called the “Indenture”),
      between the Company, The Bank of New York, as Trustee (herein called the
“Trustee”),
      as
      Conversion Agent and as Principal Paying Agent (herein called the “Principal
      Paying Agent”),
      to
      which Indenture and all indentures supplemental thereto reference is hereby
      made
      for a description of the rights, limitations of rights, obligations, duties
      and
      immunities thereunder of the Trustee, the Principal Paying Agent, the Company
      and the holders of the Notes. Additional Notes may be issued in an unlimited
      aggregate principal amount, subject to certain conditions specified in the
      Indenture.

     

    In
      case
      an Event of Default, as defined in the Indenture, shall have occurred and be
      continuing, the principal of, premium, if any, and interest on all Notes may
      be
      declared, and upon said declaration shall become, due and payable, in the
      manner, with the effect and subject to the conditions provided in the
      Indenture.

     

    Subject
      to the terms and conditions of the Indenture, the Notes may be redeemed at
      the
      election of the Company, in whole or in part, at a price equal to 100% of the
      principal amount of the Notes being redeemed, plus accrued and unpaid interest
      up to, but excluding, the Redemption Date (i) at any time on or after
      June 1, 2011 until and including May 31, 2013, if the Last Reported
      Sale Price of the Shares for at least 20 Trading Days in a period of
      30 consecutive Trading Days, the last of which occurs no more than five
      Trading Days prior to the date upon which notice of such redemption is
      published, is at least 150% of the applicable Conversion Price per Share in
      effect on such Trading Day, and (ii) on or after June 1, 2013. Any
      such redemption shall be upon at least 30 days and no more than
      60 days notice to holders of the Notes.

     

    Subject
      to the terms and conditions of the Indenture, Additional Amounts will be paid
      in
      connection with any payments in respect of the Notes so that the net amount
      a
      holder receives after applicable withholding tax will equal the amount that
      the
      holder would have received if no withholding tax had been applicable in certain
      circumstances.

     

    Subject
      to the terms and conditions of the Indenture, the Company will make all payments
      and deliveries in respect of the Fundamental Change Purchase Price, the Put
      Right Purchase Price and the principal amount on the Maturity Date, as the
      case
      may be, to the holder who surrenders a Note to a Paying Agent to collect such
      payments in respect of the Note.

     

    The
      Indenture contains provisions permitting the Company and the Trustee in certain
      circumstances, without the consent of the holders of the Notes, and in other
      circumstances, with the consent of the holders of not less than a majority
      in
      aggregate principal amount of the Notes at the time outstanding, evidenced
      as in
      the Indenture provided, to execute supplemental indentures adding any provisions
      to or changing in any manner or eliminating any of the provisions of the
      Indenture or of any supplemental indenture or modifying in any manner the rights
      of the holders of the Notes; provided,
      however,
      that no
      such supplemental indenture shall make any of the changes set forth in
      Section 10.02 of the Indenture, without the consent of each holder of an
      outstanding Note affected thereby. It is also provided in the Indenture that,
      prior to any declaration accelerating the maturity of the Notes, the holders
      of
      a majority in aggregate principal amount of the Notes at the time outstanding
      may on behalf of the holders of all of the Notes waive any past default or
      Event
      of Default under the Indenture and its consequences except as provided in the
      Indenture. Any such consent or waiver by the holder of this Note (unless revoked
      as provided in the Indenture) shall be conclusive and binding upon such holder
      and upon all future holders and owners of this Note and any Notes which may
      be
      issued in exchange or substitution hereof, irrespective of whether or not any
      notation thereof is made upon this Note or such other Notes.

     

    
      
        
        

      

      
        A-8

        
          

        

      

      
        
        

      

    

     

    No
      reference herein to the Indenture and no provision of this Note or of the
      Indenture shall alter or impair the obligation of the Company, which is absolute
      and unconditional, to pay the principal of, premium, if any, and accrued and
      unpaid interest on this Note at the place, at the respective times, at the
      rate
      and in the lawful money herein prescribed.

     

    The
      Notes
      are issuable in registered form without coupons in denominations of US$1,000
      principal amount and integral multiples thereof. At the office or agency of
      the
      Company referred to on the face hereof, and in the manner and subject to the
      limitations provided in the Indenture, without payment of any service charge
      but
      with payment of a sum sufficient to cover any tax or other governmental charge
      that may be imposed in connection with any registration or exchange of Notes,
      Notes may be exchanged for a like aggregate principal amount of Notes of other
      authorized denominations.

     

    The
      Notes
      are not subject to redemption through the operation of any sinking
      fund.

     

    Upon
      the
      occurrence of a Fundamental Change, the holder has the right, at such holder’s
      option, to require the Company to repurchase all of such holder’s Notes or any
      portion thereof (in principal amounts of US$1,000 or integral multiples thereof)
      on the Fundamental Change Purchase Date at a price equal to 100% of the
      principal amount of the Notes such holder elects to require the Company to
      repurchase, together with accrued and unpaid interest, to but excluding the
      Fundamental Change Purchase Date. The Company or, at the written request of
      the
      Company, the Trustee shall mail to all holders of record of the Notes a notice
      of the occurrence of a Fundamental Change and of the repurchase right arising
      as
      a result thereof on or before the 20th day after the occurrence of any
      Fundamental Change.

     

    On
      June 1, 2011 and June 1, 2013, the holder has the right, at such
      holder’s option, to require the Company to repurchase all of such holder’s Notes
      or any portion thereof (in principal amounts of US$1,000 or integral multiples
      thereof) at a price equal to 100% of the principal amount of the Notes such
      holder elects to require the Company to repurchase, together with accrued and
      unpaid interest, to but excluding the Put Right Purchase Date. Holders shall
      submit their Notes for repurchase to the Paying Agent at any time from the
      opening of business on the date that is 25 Business Days prior to the applicable
      Put Right Purchase Date until the close of business on the fifth Business Day
      prior to the Put Right Purchase Date.

     

    
      
        
        

      

      
        A-9

        
          

        

      

      
        
        

      

    

     

    Subject
      to the provisions of the Indenture, the holder hereof has the right, at its
      option, prior to the close of business on the Business Day immediately preceding
      the Maturity Date, to convert any Notes or portion thereof which is US$1,000
      or
      an integral multiple thereof, into cash and, if applicable, Shares, in each
      case
      at the Conversion Rate specified in the Indenture, as adjusted from time to
      time
      as provided in the Indenture, upon surrender of this Note, together with a
      Conversion Notice, a form of which is attached to the Note, as provided in
      the
      Indenture and this Note, to the Company at the office or agency of the Company
      maintained for that purpose in the Borough of Manhattan, The City of New York,
      or at the option of such holder, the Corporate Trust Office, and, unless the
      Shares issuable on conversion are to be issued in the same name as this Note,
      duly endorsed by, or accompanied by instruments of transfer in form satisfactory
      to the Company duly executed by, the holder or by his duly authorized attorney.
      The initial Conversion Rate shall be 100.6036 Shares for each US$1,000 principal
      amount of Notes. No fractional Shares will be issued upon any conversion, but
      an
      adjustment in cash will be paid to the holder, as provided in the Indenture,
      in
      respect of any fraction of a Share which would otherwise be issuable upon the
      surrender of any Note or Notes for conversion. No adjustment shall be made
      for
      dividends or any Shares issued upon conversion of such Note except as provided
      in the Indenture.

     

    If
      the
      holder hereof converts any Notes at any time prior to June 1, 2011, the
      Company will pay Make-Whole Interest in cash or, at the Company’s option, in
      Shares, to holders of the Notes being converted. Payment of the Make-Whole
      Interest to holders that purchased this Note pursuant to Rule 144A is subject
      to
      certain limitations as set forth in the Indenture.

     

    Upon
      due
      presentment for registration of transfer of this Note at the office or agency
      of
      the Company in the Borough of Manhattan, The City of New York, a new Note or
      Notes of authorized denominations for an equal aggregate principal amount will
      be issued to the transferee in exchange thereof, subject to the limitations
      provided in the Indenture, without charge except for any tax, assessments or
      other governmental charge imposed in connection therewith.

     

    The
      Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion
      Agent and any Note Registrar may deem and treat the registered holder hereof
      as
      the absolute owner of this Note (whether or not this Note shall be overdue
      and
      notwithstanding any notation of ownership or other writing hereon), for the
      purpose of receiving payment hereof, or on account hereof, for the conversion
      hereof and for all other purposes, and neither the Company nor the Trustee
      nor
      any other authenticating agent nor any Paying Agent nor any other Conversion
      Agent nor any Note Registrar shall be affected by any notice to the contrary.
      All payments made to or upon the order of such registered holder shall, to
      the
      extent of the sum or sums paid, satisfy and discharge liability for monies
      payable on this Note.

     

    
      
        
        

      

      
        A-10

        
          

        

      

      
        
        

      

    

     

    No
      recourse for the payment of the principal of, or any premium, or accrued and
      unpaid interest (including Make-Whole Interest, if any) on, this Note, or for
      any claim based hereon or otherwise in respect hereof, and no recourse under
      or
      upon any obligation, covenant or agreement of the Company in the Indenture
      or
      any indenture supplemental thereto or in any Note, or because of the creation
      of
      any indebtedness represented thereby, shall be had against any incorporator,
      stockholder, employee, agent, officer, director or subsidiary, as such, past,
      present or future, of the Company or of any successor corporation, either
      directly or through the Company or any successor corporation, whether by virtue
      of any constitution, statute or rule of law or by the enforcement of any
      assessment or penalty or otherwise, all such liability being, by the acceptance
      hereof and as part of the consideration for the issue hereof, expressly waived
      and released.

     

    Terms
      used in this Note and defined in the Indenture are used herein as therein
      defined.

     

    Customary
      abbreviations may be used in the name of a holder or an assignee, such as TEN
      COM (=tenants in common), TENANT (=tenants by the entireties), JT TEN (=joint
      tenants with right of survivorship and not as tenants in common), CUST
      (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

     

    
      
        
        

      

      
        A-11

        
          

        

      

      
        
        

      

    

    [FORM
      OF
      CONVERSION NOTICE]

     

    To:
      SHENGDATECH, INC.

     

    c/o:
      THE
      BANK OF NEW YORK

    101
      Barclay Street, Floor 4 East

    New
      York,
      NY 10286

    U.S.A.

    Attention:
      Global Corporate Trust

    Facsimile
      No.: 212.815.5802 OR 212.815.5803

     

    With
      a
      copy to:

     

    THE
      BANK
      OF NEW YORK

    Level
      12,
      Three Pacific Place

    1
      Queen’s
      Road East

    Hong
      Kong

    Facsimile
      No.: 852.2295.3283

    Attention:
      Global Corporate Trust

     

    The
      undersigned registered owner of this Note hereby exercises the option to convert
      this Note, or the portion hereof (which is US$1,000 principal amount or an
      integral multiple thereof) below designated, into cash and Shares, if any,
      in
      accordance with the terms of the Indenture referred to in this Note, and directs
      that the Shares issuable and deliverable upon such conversion, if any, together
      with any check in payment of the cash in respect of the remaining Conversion
      Obligation (as defined in the Indenture) and for fractional Shares and any
      Notes
      representing any unconverted principal amount hereof, be issued and delivered
      to
      the registered holder hereof unless a different name has been indicated below.
      If Shares or any portion of this Note not converted are to be issued in the
      name
      of a person other than the undersigned, the undersigned will pay all transfer
      taxes payable with respect thereto. Any amount required to be paid to the
      undersigned on account of interest accompanies this Note.

     

    
      	
              Dated:

            	  	 	  
	 	
              Your
                Name (Print):

            	 	
              Your
                Signature:

            
	 	 	 	 
	
              Signature
                Guarantee*:

            	 
	 	 
	
              Social
                Security or 

              other
                Taxpayer 

              Identification
                Number: 

            	 	 	 

    

     

    *Signature(s)
      must be guaranteed by an eligible Guarantor Institution (banks, stock brokers,
      savings and loan associations and credit unions) with membership in an approved
      signature guarantee medallion program pursuant to Rule 17Ad-15 under the
      Securities Exchange Act of 1934, as amended, if Shares are to be issued, or
      Notes to be delivered, other than to and in the name of the registered
      holder.

     

    
      
        
        

      

      
        A-12

        
          

        

      

      
        
        

      

    

    Fill
      in
      for registration of Shares if to be issued, and Notes if to be delivered, other
      than to and in the name of the registered holder:

    
      	 

	
              (Name –
                Print)

            
	 
	 

	
              (Street
                Address – Print)

            
	 
	 

	
              (City,
                State and Zip Code)

            

    

     

    Principal
      amount to be converted (if less than all): US$

     

    CUSIP
      number of Securities:

     

    Representations:

     

    
      	
              1.

            	
              I/We
                hereby declare that any applicable condition to conversion of the
                Notes,
                if any, has been complied with by
                me/us.

            

    

     

    
      	
              2.

            	
              I/We
                hereby declare that all stamp, issue, registration or similar taxes
                and
                duties payable on conversion, issue or delivery of Shares of any
                other
                property or cash have been paid.

            

    

     

    
      
        
        

      

      
        A-13

        
          

        

      

      
        
        

      

    

    [FORM
      OF
      PUT RIGHT PURCHASE NOTICE]

     

    To:
      SHENGDATECH, INC. (the “Company”)

     

    c/o:
      THE
      BANK OF NEW YORK

    101
      Barclay Street, Floor 4 East

    New
      York,
      NY 10286

    U.S.A.

    Attention:
      Global Corporate Trust

    Facsimile
      No.: 212.815.5802 OR 212.815.5803

     

    With
      a
      copy to:

     

    THE
      BANK
      OF NEW YORK

    Level
      12,
      Three Pacific Place

    1
      Queen’s
      Road East

    Hong
      Kong

    Facsimile
      No.: 852.2295.3283

    Attention:
      Global Corporate Trust

     

    The
      undersigned hereby requests and instructs the Company to repay the entire
      principal amount of this Note, or a portion hereof (which is US$1,000 principal
      amount or an integral multiple thereof) below designated, on  
  ,
               
      in
      accordance with the terms of the Indenture referred to in this Note at the
      applicable Put Right Purchase Price, to the registered holder
      hereof.

     

    
      	
              Dated:

            	 	 	 
	 	
              Your
                Name (Print):

               

            	 	
              Your
                Signature:

            
	
              Social
                Security or 

              other
                Taxpayer 

              Identification
                Number: 

               

            	 	 	 

    

    NOTICE:
      The above signatures of the holder(s) hereof must correspond with the name
      as
      written upon the face of the Note in every particular without alteration or
      enlargement or any change whatever.

     

    Principal
      amount to be repurchased (if less than all): US$ 

     

    Note
      Certificate Number (if applicable):

     

    
      
        
        

      

      
        A-14

        
          

        

      

      
        
        

      

    

    [FORM
      OF
      FUNDAMENTAL CHANGE PURCHASE NOTICE]

     

    To:
      SHENGDATECH, INC. (the “Company”)

     

    c/o:
      THE
      BANK OF NEW YORK

    101
      Barclay Street, Floor 4 East

    New
      York,
      NY 10286

    U.S.A.

    Attention:
      Global Corporate Trust

    Facsimile
      No.: 212.815.5802 OR 212.815.5803

     

    With
      a
      copy to:

     

    THE
      BANK
      OF NEW YORK

    Level
      12,
      Three Pacific Place

    1
      Queen’s
      Road East

    Hong
      Kong

    Facsimile
      No.: 852.2295.3283

    Attention:
      Global Corporate Trust

     

    The
      undersigned registered owner of this Note hereby acknowledges receipt of a
      notice from the Company as to the occurrence of a Fundamental Change with
      respect to the Company and requests and instructs the Company to repay the
      entire principal amount of this Note, or the portion thereof (which is US$1,000
      principal amount or an integral multiple thereof) below designated, in
      accordance with the terms of the Indenture referred to in this Note, to the
      registered holder hereof.

     

    
      	
              Dated:

            	  	 	  
	 	
              Your
                Name (Print):

               

            	 	
              Your
                Signature:

            
	
              Social
                Security or 

              other
                Taxpayer 

              Identification
                Number: 

               

            	 	 	 

    

    NOTICE:
      The above signatures of the holder(s) hereof must correspond with the name
      as
      written upon the face of the Note in every particular without alteration or
      enlargement or any change whatever.

     

    Principal
      amount to be repurchased (if less than all): US$ 

     

    Note
      Certificate Number (if applicable):

    

    
      
        
        

      

      
        A-15

        
          

        

      

      
        
        

      

    

    [FORM
      OF
      CERTIFICATE OF TRANSFER]

    

    ASSIGNMENT
      FORM

     

    To
      assign
      this Note, fill in the form below:

    I
      or we
      assign and transfer this Note to

     

    
      
        

      

    

    (Print
      or
      type assignee’s name, address and zip code)

     

    
      
        

      

    

    (Insert
      assignee’s soc. sec. or tax I.D. No.)

    and
      irrevocably appoint ___________ agent to transfer this Note on the books of
      the
      Company. The agent may substitute another to act for him.

    
      	 	 
	
               

              Date:
                __________________________

            	
               

              Your
                Signature: ____________________

            

    

    

    

    Signature
      Guarantee*: ____________________________________________________

    (Signature
      must be guaranteed)

     

    
      
        

      

    

    Sign
      exactly as your name appears on the other side of this Note.

    

    *The
      signature(s) should be guaranteed by an eligible guarantor institution (banks,
      stockbrokers, savings and loan associations and credit unions) with membership
      in an approved signature guarantee medallion program, pursuant to
      Rule 17Ad-15 under the Securities Exchange Act of 1934, as
      amended.

     

    In
      connection with any transfer or exchange of any of the Notes evidenced by this
      certificate occurring prior to the date that is one year after the later of
      the
      date of original issuance of such Notes and the last date, if any, on which
      such
      Notes were owned by the Company or any Affiliate of the Company, the undersigned
      confirms that such Notes are being:

     

    CHECK
      ONE
      BOX BELOW:

    
      	
               

               ̈

            	
               

              1

            	
               

              acquired
                for the undersigned’s own account, or an account with respect to which the
                undersigned exercises sole investment discretion, without transfer;
                or

            
	
               

               ̈

            	
               

              2

            	
               

              transferred
                to the Company or any subsidiary thereof; or

            
	
               

               ̈

            	
               

              3

            	
               

              transferred
                pursuant to an effective registration statement under the United
                states
                Securities Act of 1933, as amended (the “Securities
                Act”);
                or

            
	
               

               ̈

            	
               

              4

            	
               

              transferred
                to a qualified institutional buyer pursuant to and in compliance
                with
                Rule 144A under the Securities Act; or

            
	
               

               ̈

            	
               

              5

            	
               

              Transferred
                to an institutional “accredited investor” (as defined in Rule 501(a)(1),
                (2), (3) or (7) under the Securities Act) that has furnished to the
                Trustee a duly completed and signed certificate (the form of which
                may be
                obtained from the Trustee); or

            
	
               

               ̈

            	
               

              6

            	
               

              transferred
                pursuant to another available exemption from the registration requirements
                of the Securities Act.

            

    

     

    
      
        
        

      

      
        A-16

        
          

        

      

      
        
        

      

    

     

    Unless
      one of the boxes is checked, the Trustee will refuse to register any of the
      Notes evidenced by this certificate in the name of any Person other than the
      registered holder thereof; provided,
      however,
      that if
      box (6) is checked, the Trustee or the Company may require, prior to registering
      any such transfer of the Notes, in their sole discretion, such legal opinions,
      certifications and other information as the Trustee or the Company may
      reasonably request to confirm that such transfer is being made pursuant to
      an
      exemption from, or in a transaction not subject to, the registration
      requirements of the Securities Act of 1933, as amended, such as the exemption
      provided by Rule 144 under such Act.

     

    TO
      BE
      COMPLETED BY PURCHASER IF BOX (1) OR (4) ABOVE IS CHECKED.

    

    The
      undersigned represents and warrants that it is purchasing this Note for its
      own
      account or an account with respect to which it exercises sole investment
      discretion and that it and any such account is a “qualified institutional buyer”
within the meaning of Rule 144A under the Securities Act, and is aware that
      the sale to it is being made in reliance on Rule 144A and acknowledges that
      it has received such information regarding the Company as the undersigned has
      requested pursuant to Rule 144A or has determined not to request such
      information and that it is aware that the transferor is relying upon the
      undersigned’s foregoing representations in order to claim the exemption from
      registration provided by Rule 144A.

    

    
      	
              Dated:

            	 	 	 
	 	
              Your
                Name (Print):

            	 	
              Your
                Signature:

            
	
              Signature
                Guarantee*:

            	 
	 	 

    

    *Signature(s)
      must be guaranteed by an eligible Guarantor Institution (banks, stock brokers,
      savings and loan associations and credit unions) with membership in an approved
      signature guarantee medallion program pursuant to Rule 17Ad-15 under the
      Securities Exchange Act of 1934, as amended.

    
      
        
        

      

      
        A-17

        
          

        

      

      
        
        

      

    

    Schedule
      I*

     

    SHENGDATECH,
      INC.

    6.0%
      Convertible Senior Notes Due 2018

     

    The
      following changes in the aggregate principal amount of Notes represented by
      this
      Note have been made:

     

    
      	
              Date

            	 	
              Principal Amount

            	 	
              Notation Explaining

               Principal Amount 

              Recorded

            	 	
              Authorized

              Signature of Trustee 

              or Custodian

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

    

    

    *This
      schedule, as well as references made to Schedule I in the Note, should be
      included only if the Note is issued in global form.

    
      
        
        

      

      
        A-18

        
          

        

      

      
        
        

      

    

    Form
      of Certificate to be Delivered in Connection with

    Transfers
      to Non-QIB Institutional Accredited Investors

     

    THE
      BANK
      OF NEW YORK

    101
      Barclay Street, 4 East

    New
      York,
      NY 10286

    U.S.A.

    Attention: Global
      Corporate Trust

    Fax
      No.:
 212.815.5802

     
      212.815.5803

     

    
      	Re:	
              SHENGDATECH,
                INC. (the "Company")

            

    

    6.0%
      Convertible Senior Notes due 2018 (the “Notes”)

     

    Ladies
      and Gentlemen:

     

    In
      connection with our proposed purchase of
      US$[                      
]
      aggregate principal amount of the Notes, we confirm that:

     

    1.
       We
      have
      received a copy of the offering memorandum (the “Offering
      Memorandum”),
      dated
      May 22, 2008, relating to the Notes and such other information as we deem
      necessary in order to make our investment decision. We acknowledge that we
      have
      read and agree to the matters stated in the section entitled “Transfer
      Restrictions” of such Offering Memorandum.

     

    2. We
      understand that any subsequent transfer of the Notes is subject to certain
      restrictions and conditions set forth in the Indenture dated as of May 28,
      2008
      (the “Indenture”) relating to the Notes and that any subsequent transfer of the
      Notes is subject to certain restrictions and conditions set forth under
“Transfer Restrictions” and the undersigned agrees to be bound by, and not to
      resell, pledge or otherwise transfer the Notes except in compliance with, such
      restrictions and conditions and the United States Securities Act of 1933, as
      amended (the “Securities
      Act”).

     

    3. We
      understand that the offer and sale of the Notes have not been registered under
      the Securities Act and that the Notes may not be offered or sold except as
      permitted in the following sentence. We agree, on our own behalf and on behalf
      of any accounts for which we are acting as hereinafter stated, that if we should
      sell any Notes, we will do so only (i) to the Company or any subsidiary thereof,
      (ii) pursuant to an effective registration statement under the Securities Act,
      (iii) to a qualified institutional buyer that, prior to such transfer, furnishes
      the Trustee (as defined in the Indenture) with a duly completed and signed
      certificate (the form of which may be obtained from the Trustee), in compliance
      with Rule 144A, (iv) to an institutional “accredited investor” (as defined
      below) that, prior to such transfer, furnishes the Trustee with a duly completed
      and signed certificate (the form of which may be obtained from the Trustee),
      or
      (v) pursuant to the exemption from registration provided by Rule 144 under
      the
      Securities Act (if available) or any other available exemption from registration
      under the Securities Act (including an exemption pursuant to Regulation D),
      and,
      in each case, in accordance with applicable state securities laws and securities
      laws of any other applicable jurisdictions. We further agree to provide to
      any
      person purchasing any of the Notes from us a notice advising such purchaser
      that
      resales of the Notes are restricted as stated herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.
       We
      understand that, on any proposed resale of any Notes, we will be required to
      furnish to the Company and the Trustee such certifications, legal opinions
      and
      other information as the Company and the Trustee may reasonably require to
      confirm that the proposed sale complies with the foregoing restrictions. We
      further understand that the Notes purchased by us will bear a legend to the
      foregoing effect.

     

    5.
       We
      are an
      institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
      (7) under the Securities Act) and have such knowledge and experience in
      financial and business matters as to be capable of evaluating the merits and
      risks of our investment in the Notes, and we and any accounts for which we
      are
      acting are each able to bear the economic risk of our or their
      investment.

     

    6.
       We
      are
      acquiring that Notes purchased by us for our own account or for one or more
      accounts (each of which is an institutional “accredited investor”) as to each of
      which we exercise sole investment discretion.

     

    7. We
      are
      not acquiring the Notes for or on behalf of, and will not transfer the Notes
      to,
      any pension or welfare plan (as defined in Section 3 of the Employee Retirement
      Income Security Act of 1974), except as permitted in the section entitled
      "Transfer Restrictions" of the Offering Memorandum.

     

    You,
      the
      Company and the Initial Purchasers (as defined in the Offering Memorandum)
      are
      entitled to rely upon this letter and are irrevocably authorized to produce
      this
      letter or a copy hereof to any interested party in any administrative or legal
      proceedings or official inquiry with respect to the matters covered
      hereby.

     

    
      	
              Very
                truly yours,

            
	 	 
	
              [Name
                of Transferee]

            
	 
	
              By:

            	 

	
              Authorized
                Signature

            

    

     

    
      
        
        

      

      
        B-2Execution
      Version

    

    ShengdaTech,
      Inc.

     

    $100,000,000

     

    6.00%
      Senior Convertible Notes due 2018

     

    PURCHASE
      AGREEMENT

    

    May
      22,
2008

    

    Oppenheimer
      & Co. Inc.

    300
      Madison Avenue

    New
      York,
      New York 10017

    (as
      Representative of the Initial Purchasers)

    

    Ladies
      & Gentlemen:

     

    ShengdaTech,
      Inc., a Nevada corporation (the “Company”),
      proposes to issue and sell to Oppenheimer & Co. Inc. and the other initial
      purchasers named on Schedule I to this Agreement (the “Initial
      Purchasers”),
      for
      whom Oppenheimer & Co., Inc. is acting as Representative (the “Representative”),
      $100,000,000 in aggregate principal amount of 6.00% Senior Convertible Notes
      due
      2018 (the “Firm Notes”),
      subject to the terms and conditions set forth herein.

     

    1. The
      Transaction.
      Subject
      to the terms and conditions herein contained, the Company proposes to issue
      and
      sell to the Initial Purchasers, severally and not jointly, the Firm Notes which
      are convertible into the common stock, $0.00001 par value per share, of the
      Company (the “Common
      Stock”).
      In
      addition, the Company proposes to grant to the Initial Purchasers an option
      to
      purchase up to an additional $15,000,000 principal amount of Notes from the
      Company (the “Option
      Notes”)
      pursuant to the terms hereof. The Firm Notes and the Option Notes are
      collectively referred to herein as the “Notes.”
The
      Notes are to be issued under an Indenture between the Company and The Bank
      of
      New York, as trustee (the “Trustee”)
      (the
“Indenture”).
      

     

    The
      amount of the Notes to be purchased by each of the several Initial Purchasers
      are set forth opposite their names on Schedule I hereto. 

     

    In
      connection with the sale of the Notes, the Company has prepared a preliminary
      offering memorandum, dated May 14, 2008 (the “Preliminary
      Offering Memorandum”),
      and
      has prepared a final offering memorandum, dated the date hereof (the
“Offering
      Memorandum”),
      each
      setting forth information regarding the Company, the subsidiaries listed on
      Schedule II hereto (the “Subsidiaries”),
      the
      Notes, the terms of the Offering and the transactions contemplated by the
      Transaction Documents (as defined below), and any material developments relating
      to the Company occurring after the date of the most recent financial statements
      included therein. Any references herein to the Preliminary Offering Memorandum
      or the Offering Memorandum shall be deemed to include, in each case, all
      amendments and supplements thereto and any information and/or documents
      incorporated by reference therein. The Company hereby confirms that it has
      authorized the use of the Disclosure Package (as defined below) and the Offering
      Memorandum in connection with the offering and resale of the Notes by the
      Initial Purchasers.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      Company understands that the Initial Purchasers propose to make an offering
      of
      the Notes (the “Exempt
      Resales”)
      only
      on the terms and in the manner set forth in the Disclosure Package and the
      Offering Memorandum, as amended or supplemented, and the terms hereof as soon
      as
      the Initial Purchasers deem advisable after this Agreement has been executed
      and
      delivered, solely to persons in the United States whom the Initial Purchasers
      reasonably believe to be (i) “qualified institutional buyers” (each, a
“QIB”)
      as
      defined in Rule 144A under the Securities Act of 1933, as amended (the
“Securities
      Act”),
      as
      such rule may be amended from time to time (“Rule
      144A”)
      in
      transactions under Rule 144A, or (ii) institutional accredited investors (as
      defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act)
      (“Institutional
      Accredited Investors”)
      that,
      prior to their purchase of the Notes, deliver to the Initial Purchasers a letter
      containing the representations and agreements set forth in Annex B to the
      Offering Memorandum, in transactions pursuant to another exemption of sale
      of
      securities from registration requirements of the Securities Act, including
      pursuant to transactions under “Section 4(1-1/2)”. The QIBs and Institutional
      Accredited Investors are referred to herein from time to time as the
“Eligible
      Purchasers.”
The
      Initial Purchasers will offer the Notes to such Eligible Purchasers initially
      at
      a price equal to 100% of the principal amount thereof. Such price may be changed
      by the Initial Purchasers at any time without notice.

     

    The
      Notes
      are convertible in accordance with their terms and the terms of the Indenture
      into Common Stock (except for any cash in lieu of fractional shares) at an
      initial conversion rate of 100.6036 shares of Common Stock per $1,000 principal
      amount of Notes.

     

    Holders
      of the Notes (including the Initial Purchasers and their direct and indirect
      transferees) will be entitled to the benefits of a Registration Rights
      Agreement, to be dated the Closing Date (as defined below) and substantially
      in
      the form attached hereto as Exhibit A hereto (the "Registration
      Rights Agreement"),
      pursuant to which the Company will agree to file one or more registration
      statements with the Securities and Exchange Commission (the "Commission")
      under
      the conditions set forth therein, to the extent required by the Registration
      Rights Agreement, for the purpose of registration under the Securities Act
      of
      (i) the Registrable Securities referred to (and as defined) in the Registration
      Rights Agreement, which are identical in all material respects to the Notes
      (except that the Registrable Securities will not contain terms with respect
      to
      transfer restrictions) and (ii) the Common Stock issuable upon conversion of
      the
      Notes or for the purpose of registration of the resale of the Notes and the
      Common Stock issuable upon conversion of the Notes.

     

    This
      Agreement, the Notes, the Registration Rights Agreement and the Indenture are
      hereinafter referred to collectively as the “Transaction
      Documents.”
       

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    Capitalized
      terms used herein and not otherwise defined shall have the meanings assigned
      to
      such terms in the Disclosure Package, and if not defined therein, in the
      Indenture.

     

    2. Representations
      and Warranties of the Company.
      The
      Company represents and warrants to, and agrees with, each of the Initial
      Purchasers that:

     

    (a) (i)
      The
      Preliminary Offering Memorandum as of its date did not, (ii) the Preliminary
      Offering Memorandum, as supplemented by the information listed in Schedule
      III
      hereto (the “Pricing
      Supplement”)
      (the
      Preliminary Offering Memorandum and the Pricing Supplement taken together,
      the
“Disclosure
      Package”),
      as of
      the Applicable Time (as defined below) does not, (iii) the Offering Memorandum
      as of its date does not, and as of the Closing Date will not, and (iv) any
      supplement or amendment to any of the documents referenced in clauses (i)
      through (iii) above does not and will not, contain any untrue statement of
      a
      material fact or omit to state any material fact necessary in order to make
      the
      statements therein, in light of the circumstances under which they were made,
      not misleading. Notwithstanding the foregoing, the representations and
      warranties contained in this paragraph shall not apply to statements in or
      omissions from the Preliminary Offering Memorandum or the Offering Memorandum
      (or any supplement or amendment thereto, including the Pricing Supplement)
      made
      in reliance upon and in conformity with Initial Purchaser Information (as such
      term is defined in Section 11 hereof). For purposes of this Agreement, the
      “Applicable
      Time”
means
      5:00 p.m. New York City time on the date of this Agreement.

     

    (b) The
      Disclosure Package and the Offering Memorandum have been or will be prepared
      by
      the Company for use by the Initial Purchasers in connection with the offering
      of
      the Notes.

     

    (c) 
      The
      financial information and statements, including the notes thereto, and the
      supporting schedules, if any, included in the Disclosure Package and the
      Offering Memorandum present fairly the financial position as of the dates
      indicated and the cash flows and results of operations for the periods specified
      of the Company and its Subsidiaries in the Disclosure Package and the Offering
      Memorandum; except as otherwise stated in the Disclosure Package and the
      Offering Memorandum, said financial statements have been prepared in conformity
      with U.S. GAAP applied on a consistent basis throughout the periods involved;
      and the supporting schedules included in the Disclosure Package and the Offering
      Memorandum present fairly the information required to be stated therein. The
      other financial and statistical information included in the Disclosure Package
      and the Offering Memorandum derived from the historical and as adjusted
      financial information and statements, present fairly the information included
      therein and have been prepared on a basis consistent with that of the financial
      statements, historical and as adjusted financial information and statements,
      that are included in the Disclosure Package and the Offering Memorandum and
      the
      books and records of the respective entities presented therein and, to the
      extent such information is a range, projection or estimate, is based on the
      good
      faith belief and estimates of the management of the Company and the
      Subsidiaries.

     

    (d)
       Hansen,
      Barnett & Maxwell, P.C. (the “Auditor”)
      who
      have certified or will certify the financial statements and supporting schedules
      and information of the Company and its Subsidiaries included or to be included
      as part of the Disclosure Package and the Offering Memorandum, are and, during
      the periods covered by their report, were an independent public accounting
      firm
      as required by the Securities Act and the Exchange Act.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (e)
      The
      Company and each of the Subsidiaries are duly organized, validly existing and
      in
      good standing under the laws of their respective jurisdictions of incorporation
      or organization, and each such entity has all requisite power and authority
      to
      carry on its business as it is currently being conducted and as described in
      the
      Disclosure Package and the Offering Memorandum, and to own, lease and operate
      its respective properties. The Company and each of its Subsidiaries is duly
      qualified to do business and is in good standing as a foreign corporation in
      each jurisdiction in which the nature of the business conducted by it or
      location of the assets or properties owned, leased or licensed by it requires
      such qualification, except for those failures to be so qualified or in good
      standing which (individually or in the aggregate) would not reasonably be
      expected to have, individually or in the aggregate, a material adverse effect
      on
      (A) the business, general affairs, management, condition (financial or
      otherwise), results of operations, stockholders’ equity, or properties of the
      Company and the Subsidiaries, individually or taken as a whole, (B) the
      long-term debt or capital stock of the Company or any Subsidiary, (C) the
      issuance or marketability of the Notes or (D) the validity of this Agreement
      or
      any other Transaction Documents or the transactions described in the Disclosure
      Package and the Offering Memorandum under the caption “Use of Proceeds” (any
      such effect being a “Material
      Adverse Effect”).

     

    (f) The
      Subsidiaries listed on Schedule II hereto are the only “subsidiaries” of the
      Company (within the meaning of Rule 405 under the Securities Act). Except for
      the Subsidiaries or as otherwise disclosed in the Disclosure Package and the
      Offering Memorandum, the Company holds no ownership or other interest, nominal
      or beneficial, direct or indirect, in any corporation, partnership, joint
      venture or other business entity. All of the issued shares of capital stock
      of,
      or other ownership interests in, each Subsidiary have been duly and validly
      authorized and issued and are fully paid and non-assessable and are owned,
      directly or indirectly, by the Company, free and clear of any lien, charge,
      mortgage, pledge, security interest, claim, limitation on voting rights, equity,
      trust or other encumbrance, preferential arrangement, defect or restriction
      of
      any kind whatsoever (any “Lien”).

     

    (g) The
      Company and each of the Subsidiaries has all requisite corporate power and
      authority, and all necessary authorizations, approvals, consents, orders,
      licenses, certificates and permits of and from all governmental or regulatory
      bodies or any other person or entity (collectively, the "Permits"),
      to
      own, lease and license its assets and properties and conduct its business,
      all
      of which are valid and in full force and effect, except where the lack of such
      Permits, individually or in the aggregate, would not have a Material Adverse
      Effect. The Company and each of the Subsidiaries has fulfilled and performed
      in
      all material respects all of its obligations with respect to such Permits and
      no
      event has occurred that allows, or after notice or lapse of time would allow,
      revocation or termination thereof or results in any other material impairment
      of
      the rights of the Company thereunder. No Permits are required to enter into,
      deliver and perform this Agreement or any other Transaction Document and to
      issue and sell the Notes. 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (h) Except
      as
      described in the Disclosure Package and the Offering Memorandum, the Company
      and
      each of the Subsidiaries owns or possesses all rights to use all patents, patent
      rights, inventions, trademarks, trademark applications, trade names, service
      marks, copyrights, copyright applications, licenses, know-how and other similar
      rights and proprietary knowledge (collectively, “Intangibles”)
      reasonably necessary for the conduct of its business. Neither the Company nor
      any of the Subsidiaries has received any notice of, or is aware of, any
      infringement of or conflict with asserted rights of others with respect to
      any
      Intangibles.

     

    (i) The
      Company and each of the Subsidiaries has good and marketable title to all real
      property, and good and marketable title, or valid land use rights granted by
      relevant authorities in China to all other property owned by it described in
      the
      Disclosure Package and the Offering Memorandum, in each case free and clear
      of
      all Liens, except such as do not materially affect the value of such property
      and do not materially interfere with the use made or proposed to be made of
      such
      property by the Company and the Subsidiaries. All property held under lease
      by
      the Company and the Subsidiaries is held by them under valid, existing and
      enforceable leases, free and clear of all Liens, except such as are not material
      and do not materially interfere with the use made or proposed to be made of
      such
      property by the Company and the Subsidiaries. Subsequent to the respective
      dates
      as of which information is given in the Disclosure Package and the Offering
      Memorandum, (i) there has not been any event which, individually or in the
      aggregate, would have a Material Adverse Effect; (ii) neither the Company nor
      any of the Subsidiaries has sustained any loss or interference with its assets,
      businesses or properties (whether owned or leased) from fire, explosion,
      earthquake, flood or other calamity, whether or not covered by insurance, or
      from any labor dispute or any court or legislative or other governmental action,
      order or decree which, individually or in the aggregate, would have a Material
      Adverse Effect; and (iii) since the date of the latest balance sheet included
      in
      the Disclosure Package and the Offering Memorandum except as may be disclosed
      in
      the Offering Memorandum, neither the Company nor the Subsidiaries has (A) issued
      any securities or incurred any liability or obligation, direct or contingent,
      for borrowed money, except such liabilities or obligations incurred in the
      ordinary course of business, (B) entered into any transaction not in the
      ordinary course of business or (C) declared or paid any dividend or made any
      distribution on any shares of its stock or redeemed, purchased or otherwise
      acquired or agreed to redeem, purchase or otherwise acquire any shares of its
      capital stock.

     

    (j)  Each
      description of a contract, document or other agreement in the Disclosure Package
      and the Offering Memorandum accurately reflects in all material respects the
      terms of the underlying contract, document or other agreement. Each contract,
      document or other agreement described in the Disclosure Package and the Offering
      Memorandum is in full force and effect and is valid and enforceable by and
      against the Company or the Subsidiary, as the case may be, in accordance with
      its terms. Neither the Company nor any of the Subsidiaries, if a Subsidiary
      is a
      party, nor to the Company's knowledge, any other party is in default in the
      observance or performance of any term or obligation to be performed by it under
      any such agreement, and no event has occurred which with notice or lapse of
      time
      or both would constitute such a default, in any such case which default or
      event, individually or in the aggregate, would have a Material Adverse Effect.
      No default exists, and no event has occurred which with notice or lapse of
      time
      or both would constitute a default, in the due performance and observance of
      any
      term, covenant or condition, by the Company or any Subsidiary, if a Subsidiary
      is a party thereto, of any other agreement or instrument to which the Company
      or
      any of the Subsidiaries is a party or by which Company or its properties or
      business or a Subsidiary or its properties or business may be bound or affected
      which default or event, individually or in the aggregate, would have a Material
      Adverse Effect.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (k)  The
      statistical, industry-related and market related data included in the Disclosure
      Package and the Offering Memorandum are based on or derived from sources that
      the Company believes to be reliable and accurate, and such data agrees with
      the
      sources from which they are derived.

     

    (l) Neither
      the Company nor any Subsidiary (i) is in violation of its certificate or
      articles of incorporation, articles of association, by-laws, certificate of
      formation, limited liability company agreement, partnership agreement or other
      organizational documents, (ii) is in default under, and no event has occurred
      which, with notice or lapse of time, or both, would constitute a default under,
      or result in the creation or imposition of any Lien upon, any property or assets
      of the Company or any Subsidiary pursuant to, any bond, debenture, note,
      indenture, mortgage, deed of trust, loan agreement or other material agreement
      or instrument to which it is a party or by which it is bound or to which any
      of
      its properties or assets is subject or (iii) is in violation of any statute,
      law, rule, regulation, ordinance, directive, judgment, decree or order of any
      judicial, regulatory or other legal or governmental agency or body, foreign
      or
      domestic applicable to it, except (in the case of clauses (ii) and (iii) above)
      for violations or defaults that could not (individually or in the aggregate)
      reasonably be expected to have a Material Adverse Effect and except (in the
      case
      of clause (ii) alone) for any Lien disclosed in the Disclosure Package and
      the
      Offering Memorandum.

     

    (m) The
      Company has the required corporate or other power and authority to execute,
      deliver and perform its obligations under this Agreement and each of the other
      Transaction Documents to which it is a party and to consummate the transactions
      contemplated hereby and thereby, including, without limitation, the corporate
      or
      other power and authority to issue, sell and deliver the Notes.

     

    (n) The
      Notes
      have been duly and validly authorized by the Company for issuance and sale
      to
      the Initial Purchasers pursuant to this Agreement and, when executed by the
      Company and authenticated by the Trustee in accordance with the provisions
      of
      the Indenture and when delivered to and paid for by the Initial Purchasers
      in
      accordance with the terms hereof and thereof, will be duly and validly executed,
      issued and delivered and will constitute valid and legally binding obligations
      of the Company, entitled to the benefits of the Indenture and enforceable
      against the Company in accordance with their terms, except that the enforcement
      thereof may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent
      conveyance, moratorium or other similar laws now or hereafter in effect relating
      to or affecting creditors’ rights generally and (ii) general principles of
      equity. The Notes will conform in all material respects to the descriptions
      thereof in the Disclosure Package and the Offering Memorandum. At the Closing
      Date, the Notes will be in the form contemplated by the
      Indenture.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (o) The
      Indenture has been duly and validly authorized by the Company and, when duly
      executed and delivered by the Company (assuming the due authorization, execution
      and delivery by the Trustee), will constitute a valid and legally binding
      agreement of the Company, enforceable against the Company in accordance with
      its
      terms, except that the enforcement thereof may be limited by (i) bankruptcy,
      insolvency, reorganization, moratorium or other similar laws now or hereafter
      in
      effect relating to or affecting creditors’ rights generally and (ii) general
      principles of equity. The Indenture conforms in all material respects to the
      description thereof in the Disclosure Package and the Offering Memorandum.
      On
      the Closing Date, the Indenture will conform in all material respects to the
      requirements of the Trust Indenture Act of 1939, as amended (the “Trust
      Indenture Act”),
      and
      the rules and regulations of the Commission applicable to an indenture that
      is
      qualified thereunder.

     

    (p) The
      Registration Rights Agreement has been duly and validly authorized by the
      Company and, when duly executed and delivered by the Company (assuming the
      due
      authorization, execution and delivery by the Initial Purchasers), will
      constitute a valid and legally binding agreement of the Company, enforceable
      against the Company in accordance with its terms, except that the enforcement
      thereof may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent
      conveyance, moratorium or other similar laws now or hereafter in effect relating
      to or affecting creditors’ rights generally and (ii) general principles of
      equity. The Registration Rights Agreement conforms in all material respects
      to
      the description thereof in the Disclosure Package and the Offering
      Memorandum.

     

    (q) This
      Agreement has been duly and validly authorized, executed and delivered by the
      Company.

     

    (r)
      On
      the
      Closing Date, the Registrable Securities will
      have
      been duly authorized by the Company and, when duly executed, authenticated,
      issued and delivered as contemplated by the Registration Rights Agreement,
      will
      be duly and validly issued and outstanding and will constitute valid and legally
      binding obligations of the Company, enforceable against the Company in
      accordance with their terms and will be entitled to the benefits of the
      Indenture.

     

    (s) None
      of
      (i) the execution, delivery and performance by the Company of this Agreement
      and
      consummation of the transactions contemplated by the Transaction Documents
      to
      which each of them, respectively, is a party, (ii) the issuance and sale of
      the
      Notes or (iii) the consummation by the Company of the transactions described
      in
      the Disclosure Package and the Offering Memorandum under the caption “Use of
      Proceeds,” will give rise to a right to terminate or accelerate the due date of
      any payment due under, or conflict with or result in the breach of any term
      or
      provision of, or constitute a default (or an event which with notice or lapse
      of
      time or both would constitute a default) under, or require any consent or waiver
      under, or result in the execution or imposition of any lien, charge or
      encumbrance upon any properties or assets of the Company or any Subsidiary
      pursuant to the terms of, any indenture, mortgage, deed of trust or other
      agreement or instrument to which the Company or any Subsidiary is a party or
      by
      which either the Company or any Subsidiary or any of their properties or
      businesses is bound, or any franchise, license, permit, judgment, decree, order,
      statute, rule or regulation applicable to the Company or any Subsidiary or
      violate any provision of the charter or by-laws of the Company or any
      Subsidiary, except for such consents or waivers which have already been obtained
      and are in full force and effect.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (t) The
      Company has authorized and outstanding capital stock as set forth under the
      caption "Capitalization" in the Disclosure Package and the Offering Memorandum.
      All of the issued and outstanding shares of common stock of the Company have
      been duly and validly issued and are fully paid and nonassessable. There are
      no
      statutory preemptive or other similar rights to subscribe for or to purchase
      or
      acquire any shares of common stock of the Company or any of the Subsidiaries
      or
      any such rights pursuant to its charter or by-laws or any agreement or
      instrument to or by which the Company or any of the Subsidiaries is a party
      or
      bound. Except as disclosed in the Disclosure Package and the Offering
      Memorandum, there is no outstanding option, warrant or other right calling
      for
      the issuance of, and there is no commitment, plan or arrangement to issue,
      any
      share of stock of the Company or any of the Subsidiaries or any security
      convertible into, or exercisable or exchangeable for, such stock. All
      outstanding shares of capital stock of each of the Subsidiaries have been duly
      authorized and validly issued, and are fully paid and nonassessable and are
      owned directly by the Company or by another wholly owned subsidiary of the
      Company free and clear of any security interests, liens, encumbrances, equities
      or claims, other than those described in the Disclosure Package and the Offering
      Memorandum.

     

    (u) When
      the
      Notes the Initial Purchasers propose to offer in transactions under Rule 144A
      are issued and delivered pursuant to this Agreement, no securities of the
      Company or any Subsidiary will be (i) of the same class (within the meaning
      of
      Rule 144A) as such Notes the Initial Purchasers propose to offer in transactions
      under Rule 144A and (ii) except for the Common Stock of the Company, listed
      on a
      national securities exchange registered under Section 6 of the Securities
      Exchange Act of 1934, as amended (together with the rules and regulations of
      the
      Securities & Exchange Commission (the “Commission”)
      promulgated thereunder, the “Exchange
      Act”)
      or
      quoted in a United States automated interdealer quotation system.

     

    (v) Except
      as
      described in the Disclosure Package and the Offering Memorandum, no person
      has
      any rights to require registration of any security of the Company by reason
      of
      the execution by the Company of this Agreement or any other Transaction Document
      to which it is a party or the consummation by the Company of the transactions
      contemplated hereby and thereby, or as part or on account of, or otherwise
      in
      connection with the offering of the Notes and any of the other transactions
      contemplated by the Transaction Documents, and any such rights so disclosed
      have
      been effectively waived by the holders thereof, and any such waivers remain
      in
      full force and effect.

     

    (w) None
      of
      the Company or any Subsidiary or any of their respective affiliates (as defined
      in Rule 501(b) of Regulation D under the Securities Act) or representatives
      directly, or through any agent, (i) sold, offered for sale, solicited offers
      to
      buy or otherwise negotiated in respect of any “security” (as defined in the
      Securities Act) which is or could be integrated with the sale of the Notes
      in a
      manner that would require the registration under the Securities Act of the
      Notes
      or (ii) engaged in any form of general solicitation or general advertising
      (as
      those terms are used in Regulation D under the Securities Act) in connection
      with the offer and sale of the Notes or in connection with Exempt Resales of
      the
      Notes, or in any manner involving a public offering within the meaning of
      Section 4(2) of the Securities Act. Assuming the accuracy of the Initial
      Purchasers’ representations and warranties set forth in Section 3 hereof,
      neither (i) the offer and sale of the Notes to the Initial Purchasers in the
      manner contemplated by this Agreement, the Disclosure Package and the Offering
      Memorandum nor (ii) the Exempt Resales require registration under the Securities
      Act and prior to the effectiveness of any Registration Statement. The Indenture
      does not require qualification under the Trust Indenture Act. No securities
      of
      the same class as the Notes have been issued and sold by the Company or any
      Subsidiary within the six-month period immediately prior to the date
      hereof.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (x) Each
      of
      (i) the Preliminary Offering Memorandum as of its date, (ii) the Disclosure
      Package as of the Applicable Time, (iii) the Offering Memorandum as of its
      date
      and as of the Closing Date and (iv) each amendment or supplement to any of
      the
      documents referenced in (i), (ii) or (iii), in each case, as of its date,
      contains the information specified in, and meets the requirements of, Rule
      144A(d)(4) under the Securities Act.

     

    (y) Except
      pursuant to this Agreement, there are no contracts, agreements or understandings
      between or among the Company and the Subsidiaries, and any other person that
      would give rise to a valid claim against the Company or any Subsidiary or the
      Initial Purchasers for a brokerage commission, finder’s fee or like payment in
      connection with the issuance, purchase and sale of the Notes.

     

    (z) There
      are
      no legal or governmental proceedings pending to which the Company or any of
      Subsidiary is a party or of which any property of the Company or any Subsidiary
      is the subject which, if determined adversely to the Company or any of the
      Subsidiaries could individually or in the aggregate have a Material Adverse
      Effect; and, to the knowledge of the Company, no such proceedings are threatened
      or contemplated by governmental authorities or threatened by
      others.

     

    (aa) Neither
      the Company nor any Subsidiary is involved in any labor dispute nor, to the
      knowledge of the Company, is any such dispute threatened, which dispute,
      individually or in the aggregate, would have a Material Adverse Effect. The
      Company is not aware of any existing or imminent labor disturbance by the
      employees of any of its principal suppliers or contractors which, individually
      or in the aggregate, would have a Material Adverse Effect. The Company is not
      aware of any threatened or pending litigation between the Company or any
      Subsidiary and any of its executive officers which, if adversely determined,
      could have, individually or in the aggregate, a Material Adverse Effect and has
      no reason to believe that such officers will not remain in the employment of
      the
      Company.

     

    (bb) Except
      as
      disclosed in the Disclosure Package and the Offering Memorandum, no
      relationship, direct or indirect, exists between or among the Company, any
      Subsidiary or any affiliate of the Company, on the one hand, and any director,
      officer, stockholder, customer or supplier of the Company, any Subsidiary or
      any
      affiliate of the Company, on the other hand, which is required by the Exchange
      Act to be described in the Company’s annual and/or quarterly reports on Forms
      10-K and 10-Q, as applicable, which is not so described and described as
      required in such reports, or which would be required by the Securities Act
      to be
      described in the Disclosure Package and the Offering Memorandum if the
      Disclosure Package and the Offering Memorandum were prospectuses included in
      registration statements on Form S-1 filed with the Commission. 
      There
      are no outstanding loans, advances (except normal advances for business expenses
      in the ordinary course of business) or guarantees of indebtedness by the Company
      to or for the benefit of any of the officers or directors of the Company or
      any
      of their respective family members. The Company has not, in violation of the
      Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
      connection therewith (the “Sarbanes-Oxley
      Act”),
      directly or indirectly, including through a Subsidiary, extended or maintained
      credit, arranged for the extension of credit, or renewed an extension of credit,
      in the form of a personal loan to or for any director or executive officer
      of
      the Company.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (cc) Neither
      the Company nor any of its affiliates (as defined in Rule 144 under the
      Securities Act) has taken, nor will it take, directly or indirectly, any action
      designed to or which might reasonably be expected to cause or result in, or
      which has constituted or which might reasonably be expected to constitute,
      the
      stabilization or manipulation of the price of the Common Stock of the Company
      or
      any other security of the Company to facilitate the sale or resale of any of
      the
      Notes or the Common Stock issuable upon conversion thereof.

     

    (dd) Other
      than U.S. income tax returns, for which the Company has had no reportable income
      for any period and therefore no tax liability, the Company and each of the
      Subsidiaries has filed all tax returns in all jurisdictions which are required
      to be filed through the date hereof, which returns are true and correct in
      all
      material respects or has received timely extensions thereof, and has paid all
      taxes shown on such returns and all assessments received by it to the extent
      that the same are material and have become due. There are no tax audits or
      investigations pending, which if adversely determined would have, individually
      or in the aggregate, a Material Adverse Effect; nor are there any material
      proposed additional tax assessments against the Company or any of the
      Subsidiaries.

     

    (ee) The
      books, records and accounts of the Company and the Subsidiaries accurately
      and
      fairly reflect, the transactions in, and dispositions of, the assets of, and
      the
      results of operations of, the Company and its subsidiaries. The Company and
      each
      of the Subsidiaries maintains a system of internal accounting controls
      sufficient to provide reasonable assurances that (i) transactions are executed
      in accordance with management's general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in accordance with generally accepted accounting principles and
      to
      maintain asset accountability, (iii) access to assets is permitted only in
      accordance with management's general or specific authorization and (iv) the
      recorded accountability for assets is compared with the existing assets at
      reasonable intervals and appropriate action is taken with respect to any
      differences.

     

    (ff) The
      Company and its Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are
      described in the Disclosure Package and the Offering Memorandum; all policies
      of
      insurance and fidelity or surety bonds insuring the Company or any of the
      Subsidiaries or the Company’s or the Subsidiaries’ respective businesses,
      assets, employees, officers and directors are in full force and effect; the
      Company and each of the Subsidiaries are in compliance with the terms of such
      policies and instruments in all material respects; and neither the Company
      nor
      any Subsidiary has any reason to believe that it will not be able to renew
      its
      existing insurance coverage as and when such coverage expires or to obtain
      similar coverage from similar insurers as may be necessary to continue its
      business at a cost that is not materially greater than the current cost. There
      are no material claims by the Company or any Subsidiary under any such policy
      or
      instrument as to which any insurance company is denying liability or defending
      under a reservation of rights clause. Neither the Company nor any of the
      Subsidiaries has been denied any insurance coverage which it has sought or
      for
      which it has applied. 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (gg) Each
      approval, consent, order, authorization, designation, declaration or filing
      of,
      by or with any regulatory, administrative or other governmental body necessary
      in connection with the execution and delivery by the Company of this Agreement
      and the other Transaction Documents and the consummation of the transactions
      herein contemplated required to be obtained or performed by the Company has
      been
      obtained or made and is in full force and effect.

     

    (hh) The
      Company and each Subsidiary is not now and, after sale of the Notes as
      contemplated hereunder and application of the net proceeds of such sale as
      described in the Disclosure Package and the Offering Memorandum under the
      caption “Use of Proceeds,” will not be, required to register as an “investment
      company” under the Investment Company Act of 1940, as amended (the “Investment
      Company Act”)
      and is
      not and will not be an entity “controlled” by an “investment company” within the
      meaning of the Investment Company Act.

     

    (ii) The
      Company or any other person associated with or acting on behalf of the Company
      including, without limitation, any director, or executive officer of the Company
      or the Subsidiaries, has not, directly or indirectly, while acting on behalf
      of
      the Company or the Subsidiaries (i) used any corporate funds for unlawful
      contributions, gifts, entertainment or other unlawful expenses relating to
      political activity; (ii) made any unlawful payment to foreign or domestic
      government officials or employees or to foreign or domestic political parties
      or
      campaigns from corporate funds; or (iii) violated any provision of the Foreign
      Corrupt Practices Act of 1977, as amended.

     

    (jj) The
      operations of the Company and the Subsidiaries are and have been conducted
      at
      all times in compliance with applicable financial recordkeeping and reporting
      requirements of the Currency and Foreign Transactions Reporting Act of 1970,
      as
      amended, the money laundering statutes of all jurisdictions, the rules and
      regulations thereunder and any related or similar rules, regulations or
      guidelines, issued, administered or enforced by any governmental agency
      (collectively, the “Money
      Laundering Laws”)
      and no
      action, suit or proceeding by or before any court or governmental agency,
      authority or body or any arbitrator involving the Company or any of the
      Subsidiaries with respect to the Money Laundering Laws is pending, or to the
      best knowledge of the Company, threatened.

     

    (kk) Neither
      the Company nor any of its Subsidiaries nor, to the knowledge of the Company,
      any director, officer, agent, employee or affiliate of the Company or any of
      the
      Subsidiaries is currently subject to any U.S. sanctions administered by the
      Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”);
      and
      the Company will not directly or indirectly use the proceeds of the offering,
      or
      lend, contribute or otherwise make available such proceeds to any subsidiary,
      joint venture partner or other person or entity, for the purpose of financing
      the activities of any person currently subject to any U.S. sanctions
      administered by OFAC.

     

    (ll) None
      of
      the Company or any of the Subsidiaries nor any of their properties, assets
      or
      revenues are entitled to any right of immunity on the grounds of sovereignty
      from any legal action, suit or proceeding, from set-off or counterclaim, from
      the jurisdiction of any court, from service of process, from attachment prior
      to
      or in aid of execution of judgment or from other legal process or proceeding
      for
      the giving of any relief or for the enforcement of any
      judgment.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (mm) The
      Company has taken all reasonable steps to comply with, and to ensure compliance
      by all of the Company’s shareholders, directors and officers who are PRC
      residents or PRC citizens with any applicable rules and regulations of the
      State
      Administration of Foreign Exchange (the “SAFE
      Rules and Regulations”),
      including without limitation, requiring each shareholder, director and officer
      that is, or is directly or indirectly owned or controlled by, a PRC resident
      or
      PRC citizen to complete any registration and other procedures required under
      applicable SAFE Rules and Regulations.

     

    (nn) The
      Company has fulfilled its obligations, if any, under the minimum funding
      standards of Section 302 of the U.S. Employee Retirement Income Security Act
      of
      1974 (“ERISA”)
      and
      the regulations and published interpretations thereunder with respect to each
      “plan” as defined in Section 3(3) of ERISA and such regulations and published
      interpretations in which its employees are eligible to participate and each
      such
      plan is in compliance in all material respects with the presently applicable
      provisions of ERISA and such regulations and published interpretations. No
      “Reportable Event” (as defined in 12 ERISA) has occurred with respect to any
“Pension Plan” (as defined in ERISA) for which the Company could have any
      liability.

     

    (oo) 
      The
      Company has established and maintains disclosure controls and procedures (as
      such term is defined in Rule 13a-15 under the Exchange Act), which: (i) are
      designed to ensure that material information relating to the Company and the
      Subsidiaries is made known to the Company’s principal executive officer and its
      principal financial officer by others within those entities; (ii) provide for
      the periodic evaluation of the effectiveness of such disclosure controls and
      procedures at the end of the periods in which the periodic reports are required
      to be prepared; and (iii) are effective in all material respects to perform
      the
      functions for which they were established.

     

    (pp) Except
      as
      described in the Disclosure Package and the Offering Memorandum, based on the
      evaluation of its disclosure controls and procedures, the Company is not aware
      of (i) any significant deficiency in the design or operation of internal
      controls which could adversely affect the Company’s ability to record, process,
      summarize and report financial data or any material weaknesses in internal
      controls; or (ii) any fraud, whether or not material, that involves management
      or other employees who have a role in the Company’s internal
      controls.

     

    (qq) Except
      as
      described in the Disclosure Package and the Offering Memorandum, there are
      no
      material off-balance sheet arrangements (as defined in Item 303 of Regulation
      S-K) that, individually or in the aggregate, have or are reasonably likely
      to
      have a material current or future adverse effect on the Company’s financial
      condition, revenues or expenses, changes in financial condition, results of
      operations, liquidity, capital expenditures or capital resources.

    

    (rr) The
      Company’s Board of Directors has validly appointed an audit committee whose
      composition satisfies the requirements of Rule 4350(d)(2) of the Rules of the
      Financial Industry Regulatory Authority (the “FINRA
      Rules”)
      and
      the Board of Directors and/or the audit committee has adopted a charter that
      satisfies the requirements of Rule 4350(d)(1) of the FINRA Rules. The audit
      committee has reviewed the adequacy of its charter within the past twelve
      months.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (ss) There
      is
      and has been no failure on the part of the Company or any of its directors
      or
      officers, in their capacities as such, to comply with any provision of the
      Sarbanes-Oxley Act, including, without limitation, Section 402 related to loans
      and Sections 302 and 906 related to certifications.

     

    (tt) Each
      of
      the Company and the Subsidiaries is in compliance with all rules, laws and
      regulation relating to the use, treatment, storage and disposal of toxic
      substances and protection of health or the environment (“Environmental
      Law”)
      which
      are applicable to its business except as would not reasonable be expected to
      have a Material Adverse Effect. Except as described in the Disclosure Package
      and the Offering Memorandum, neither the Company nor the Subsidiaries has
      received any written notice from any governmental authority or third party
      of an
      asserted claim under Environmental Laws which are applicable to its business.
      Except as described in the Disclosure Package and the Offering Memorandum,
      each
      of the Company and the Subsidiaries has received all permits, licenses or other
      approvals required of it under applicable Environmental Laws to conduct its
      business and is in compliance in all material respects with all terms and
      conditions of any such permit, license or approval. To the Company’s knowledge,
      except as disclosed in the Disclosure Package and Offering Memorandum, no facts
      currently exist that will require the Company or any of the Subsidiaries to
      make
      future material capital or other expenditures to comply with Environmental
      Laws
      which are applicable to its business.

     

    (uu) The
      statements in the Preliminary Offering Memorandum and the Offering Memorandum
      under the headings “Taxation” and “Business – Regulations” insofar as such
      statements summarize legal matters, agreements, documents or proceedings
      discussed therein, are accurate and fair summaries of such legal matters,
      agreements, documents or proceedings.

     

    (vv)
      Each
      director and executive officer of the Company and each stockholder of the
      Company listed on Schedule V hereto has delivered to the Initial Purchasers
      his
      enforceable written lock-up agreement in the form attached to this Agreement
      as
      Exhibit B hereto ("Lock-Up
      Agreement").

     

    (ww)
      Upon
      the Issuance and delivery of the Notes in accordance with this Agreement and
      the
      Indenture, the Notes will be convertible at the option of the holder thereof
      into shares of the Common Stock in accordance with the terms of the Notes and
      the Indenture; the Common Stock issuable upon conversion of the Notes have
      been
      duly authorized and reserved and, when issued upon conversion of the Notes,
      will
      be validly issued, fully paid and non-assessable; and the issuance of the Common
      Stock will not be subject to any preemptive or similar rights.

     

    (xx)
      The
      Company has taken no action designed to, or likely to have the effect of,
      terminating the registration of the Common Stock under the Exchange Act or
      the
      quotation of the Common Stock on the Nasdaq Global Select Market, nor has the
      Company received any notification that the Commission or the Nasdaq Global
      Select Market is contemplating terminating such registration or
      quotation.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (yy)
      Except as described in the Disclosure Package and the Offering Memorandum,
      none
      of the Company or any of the Subsidiaries is in default under any of the
      contracts described in the Disclosure Package and the Offering Memorandum,
      has
      received a written notice or claim of any such default or has knowledge of
      any
      breach of such contracts by the other party or parties thereto, except such
      defaults or breaches as would not, individually or in the aggregate, have a
      Material Adverse Effect.

     

    (zz)
      Neither the Company nor any of the Company’s Subsidiaries has distributed or,
      prior to the later to occur of (i) the Closing Date and (ii) completion of
      the
      distribution of the Notes, will distribute any material in connection with
      the
      offering and sale of the Notes other than the Preliminary Offering Memorandum
      or
      the Offering Memorandum.

     

    Any
      certificate signed by or on behalf of the Company and delivered to the Initial
      Purchasers shall be deemed to be a representation and warranty by the Company
      to
      the Initial Purchasers as to the matters covered thereby.

     

    The
      Company acknowledges that the Initial Purchasers and, for purposes of the
      opinions to be delivered to the Initial Purchasers pursuant to Section 9 hereof,
      counsel for the Company and counsel for the Initial Purchasers, will rely upon
      the accuracy and truth of the foregoing representations and hereby consent
      to
      such reliance.

     

    3. Representations
      and Warranties of the Initial Purchasers.
      Each
      Initial Purchaser, severally and not jointly, represents, warrants and covenants
      to the Company and agrees that:

     

    (a) Such
      Initial Purchaser is a QIB and an accredited investor within the meanings of
      Rule 501(a) of the Securities Act, with such knowledge and experience in
      financial and business matters as are necessary in order to evaluate the merits
      and risks of an investment in the Notes.

     

    (b)
      Such
      Initial Purchaser (i) has not solicited offers for, or offered or sold, and
      will
      not solicit offers for, or offer or sell, the Notes by means of any form of
      general solicitation or general advertising within the meaning of Rule 502(c)
      of
      Regulation D under the Securities Act (“Regulation
      D”)
      or in
      any manner involving a public offering within the meaning of Section 4(2) of
      the
      Securities Act and (ii) it has solicited and will solicit offers for the Notes
      only from, and has offered or sold and will offer, sell or deliver the Notes,
      as
      part of their initial offering, only within the United States to persons whom
      it
      reasonably believes to be (i) QIBs,
      or if
      any such person is buying for one or more institutional accounts for which
      such
      person is acting as fiduciary or agent, only when such person has represented
      to
      it that each such account is a QIB to whom notice has been given that such
      sale
      or delivery is being made in reliance on Rule 144A and in each case, in
      transactions under Rule 144A or (ii) Institutional Accredited Investors that,
      prior to their purchase of the Notes, deliver to the Initial Purchasers a letter
      containing the representations and agreements set forth in Annex B to the
      Offering Memorandum, in transactions pursuant to another exemption from the
      registration requirements of the Securities Act, including pursuant to
      transactions under “Section 4(1-1/2)”.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (c)
      Each
      Initial Purchaser, severally and not jointly, covenants and agrees with the
      Company that such Initial Purchaser will not use or refer to any “Free Writing
      Offering Document” (as defined in Rule 405 under the Securities Act) without the
      prior written consent of the Company where the use of or reference to such
“Free
      Writing Offering Document” would require the Company to file with the Commission
      any “issuer information” (as defined in Rule 433 under the Securities Act).

     

    4. Purchase,
      Sale and Delivery.
      On the
      basis of the representations, warranties, covenants and agreements contained
      in
      this Agreement, and subject to its terms and conditions:

     

    (a)
      The
      Company agrees to issue and sell to the several Initial Purchasers, and each
      of
      the Initial Purchasers agree, severally and not jointly, to purchase from the
      Company,
      at
      a purchase price of 95.50% of the principal amount thereof, plus accrued
      interest, if any, from May 22, 2008 to the Closing Date, as defined below (the
      "Initial
      Price"),
      the
      aggregate amount of Firm Notes. The Company hereby grants to each of the Initial
      Purchasers an option to purchase all or any part of the Option Notes at the
      Initial Price. The aggregate amount of Option Notes to be purchased by each
      of
      the Initial Purchasers shall be the same percentage of the Option Notes to
      be
      purchased by each of the Initial Purchasers as such Initial Purchaser is
      purchasing of the Firm Notes. Such option may be exercised in whole or in part
      at any time on or before 12:00 noon, New York City time, on the business day
      before the Firm Notes Closing Date (as defined below), and from time to time
      thereafter within 30 days after the date of this Agreement, in each case upon
      written, facsimile or telegraphic notice, or verbal or telephonic notice
      confirmed by written, facsimile or telegraphic notice, by each of the Initial
      Purchasers to the Company no later than 12:00 noon, New York City time, on
      the
      business day before the Firm Notes Closing Date or at least two business days
      before the Option Notes Closing Date (as defined below), as the case may be,
      setting forth the aggregate amount of Option Notes to be purchased and the
      time
      and date (if other than the Firm Notes Closing Date) of such
      purchase.

     

    (b)
      Payment of the purchase price for, and delivery of, the Firm Notes shall be
      made
      at the offices of Oppenheimer & Co. Inc., 300 Madison Avenue, New York, New
      York 10017, at 10:00 a.m., New York City time, on the third business day
      following the date of this Agreement or at such time on such other date, not
      later than ten (10) business days after the date of this Agreement, as shall
      be
      agreed upon by the Company and the Representative (such time and date of
      delivery and payment are called the "Firm
      Notes Closing Date”).
      In
      addition, in the event that any or all of the Option Notes are purchased by
      the
      Initial Purchasers, payment of the purchase price, and delivery of the
      certificates, for such Option Notes shall be made at the above-mentioned
      offices, or at such other place as shall be agreed upon by the Initial
      Purchasers and the Company, on each date of delivery as specified in the notice
      from the Initial Purchasers to the Company (such time and date of delivery
      and
      payment are called the “Option
      Notes Closing Date”).
      The
      Firm Notes Closing Date and any Option Notes Closing Dates are called,
      individually, a “Closing
      Date”
and,
      together, the “Closing
      Dates”.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (c)
      Payment for the Notes shall be made to the Company by wire transfer of
      immediately available funds or by certified or official bank check or checks
      payable in New York Clearing House (same day) funds drawn to the order of the
      Company, against delivery of the Notes to the Representative for the respective
      accounts of the Initial Purchasers.

     

    (d)
      On
      each Closing Date, the Company will deliver to the Initial Purchasers, in such
      denomination or denominations and registered in such name or names as the
      Representative requests upon notice to the Company at least 48 hours prior
      to
      the Closing Date, one or more Notes in definitive form, registered in such
      names and in such denominations as the Initial Purchasers shall request, having
      an aggregate amount corresponding to the aggregate principal amount of the
      Notes
      sold pursuant to Exempt Resales to QIBs and Institutional Accredited Investors
      (the “Definitive
      Notes”)
      against payment of the purchase price therefor by wire transfer of same-day
      funds to the account of the Company, previously designated by it in writing.
      The
      Definitive Notes shall be made available to the Initial Purchasers for
      inspection not later than 5:00 p.m., New York City time, on the business day
      immediately preceding each Closing Date.

     

    5. Offering
      by Initial Purchasers.
      The
      Initial Purchasers propose to make an offering of the Notes at the price and
      upon the terms set forth in the Offering Memorandum as soon as practicable
      after
      this Agreement is entered into and as, in the judgment of the Initial
      Purchasers, is advisable.

     

    6. Agreements
      of the Company.
      The
      Company covenants and agrees with the Initial Purchasers that:

     

    (a) The
      Company shall advise the Initial Purchasers promptly and, if requested by the
      Representative, confirm such advice in writing, (i) of the issuance by any
      state
      securities commission or other regulatory authority of any stop order or order
      suspending the qualification or exemption from qualification of any Notes for
      offering or sale in any jurisdiction, or the initiation of any proceeding for
      such purpose by any state securities commission or other regulatory authority
      and (ii) of the happening of any event that makes any statement of a material
      fact made in the Disclosure Package or the Offering Memorandum untrue or that
      requires the making of any additions to or changes in the Disclosure Package
      or
      the Offering Memorandum in order to make the Disclosure Package or the Offering
      Memorandum not misleading in the light of the circumstances existing at the
      time
      it is delivered to an Eligible Purchaser. The Company shall use its best efforts
      to prevent the issuance of any stop order or order suspending the qualification
      or exemption from qualification of any Notes under any state securities or
      blue
      sky laws and, if at any time any state securities commission or other regulatory
      authority shall issue an order suspending the qualification or exemption from
      qualification of any Notes under any state securities or blue sky laws, the
      Company shall use its best efforts to obtain the withdrawal or lifting of such
      order at the earliest possible time.

     

    (b) The
      Company shall, without charge, provide to the Initial Purchasers and to counsel
      to the Initial Purchasers, and to those persons identified by the Initial
      Purchasers to the Company as many copies of the Preliminary Offering Memorandum
      and the Offering Memorandum, and any amendments or supplements thereto, as
      the
      Initial Purchasers may reasonably request. The Company consents to the use
      of
      the Preliminary Offering Memorandum and the Offering Memorandum, and any
      amendments and supplements thereto required pursuant hereto, by the Initial
      Purchasers in connection with Exempt Resales.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (c) The
      Company will not amend or supplement the Preliminary Offering Memorandum or
      the
      Offering Memorandum or any other document used in connection with the offer
      and
      sale of the Notes or any amendment or supplement thereto during such period
      as,
      in the opinion of counsel for the Initial Purchasers, the Preliminary Offering
      Memorandum or the Offering Memorandum is required by law to be delivered in
      connection with Exempt Resales and in connection with market-making activities
      of the Initial Purchasers for so long as any Notes are outstanding unless the
      Initial Purchasers shall previously have been advised thereof and furnished
      a
      copy for a reasonable period of time prior to the proposed amendment or
      supplement and as to which the Initial Purchasers shall not have given their
      consent, which consent shall not be unreasonably withheld. The Company shall
      promptly, upon the request of the Initial Purchasers or counsel to the Initial
      Purchasers, make any amendment or supplement to the Preliminary Offering
      Memorandum or the Offering Memorandum or any other document used in connection
      with the offer and sale of the Notes that may be necessary or advisable in
      connection with such Exempt Resales or such market making
      activities.

     

    (d) If,
      during the period referred to in 6(c) above, any event shall occur as a result
      of which, it is necessary or advisable, in the opinion of counsel for the
      Initial Purchasers, to amend or supplement the Preliminary Offering Memorandum
      or the Offering Memorandum or any other document used in connection with the
      offer and sale of the Notes in order to make such Preliminary Offering
      Memorandum or Offering Memorandum or such other document not misleading in
      the
      light of the circumstances existing at the time it is delivered to an Eligible
      Purchaser, or if for any other reason it shall be necessary or advisable to
      amend or supplement the Preliminary Offering Memorandum or the Offering
      Memorandum or such other document to comply with applicable laws, rules or
      regulations, the Company shall (subject to Section 6(c) hereof) forthwith amend
      or supplement such Preliminary Offering Memorandum or Offering Memorandum or
      such other document at its own expense so that, as so amended or supplemented,
      such Preliminary Offering Memorandum or Offering Memorandum or such other
      document will not include an untrue statement of a material fact or omit to
      state a material fact necessary in order to make the statements therein not
      misleading or so that such Preliminary Offering Memorandum or Offering
      Memorandum or such other document will comply with all applicable laws, rules
      or
      regulations; if, during the period referred to in 6(c) above, the Company
      proposes to file with the Commission an Exchange Act report that is incorporated
      by reference into the Offering Memorandum, a reasonable time prior to the
      proposed filing, the Company shall furnishes a copy of such Exchange Act report
      to the Initial Purchasers for review and comment, and shall not file such
      document with the Commission until the Initial Purchasers have been afforded
      the
      opportunity to review and comment and the Initial Purchasers have not reasonably
      objected to the filing of such Exchange Act report. 

     

    (e) The
      Company shall cooperate with the Initial Purchasers and counsel for the Initial
      Purchasers in connection with the qualification or registration of the Notes
      for
      offering and sale under the securities or blue sky laws of such jurisdictions
      as
      the Representative may designate and shall continue such qualifications in
      effect for as long as may be necessary to complete the Exempt Resales;
provided,
      however,
      that in
      connection therewith the Company shall not be required to qualify as a foreign
      corporation where it is not now so qualified or to execute a general consent
      to
      service of process in any jurisdiction or to take any other action that would
      subject it to general service of process or to taxation in respect of doing
      business in any jurisdiction in which it is not otherwise subject, in each
      case,
      other than as to matters and transactions relating to the Preliminary Offering
      Memorandum, the Offering Memorandum or Exempt Resales.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (f) If
      this
      Agreement shall terminate or shall be terminated after execution because of
      any
      failure or refusal on the part of the Company to comply with the terms or
      fulfill any of the conditions of this Agreement, the Company agrees to reimburse
      the Initial Purchasers for all reasonable out-of-pocket expenses (including
      reasonable fees and expenses of counsel for the Initial Purchasers) incurred
      by
      the Initial Purchasers in connection herewith.

     

    (g) The
      Company shall apply the net proceeds from the sale of the Notes in the manner
      set forth under “Use of Proceeds” in the Disclosure Package and the Offering
      Memorandum.

     

    (h) The
      Company shall not voluntarily claim, and shall actively resist any attempts
      to
      claim, the benefit of any usury laws against the holders of any
      Notes.

     

    (i) The
      Company shall do and perform all things required or necessary to be done and
      performed under this Agreement prior to or after each Closing Date and to
      satisfy all conditions precedent to the delivery of the Notes.

     

    (j) None
      of
      the Company or any of its “affiliates” (as defined in Rule 144 under the
      Securities Act) will sell, offer for sale, solicit offers to buy or otherwise
      negotiate in respect of any “security” (as defined in the Securities Act) that
      could be integrated with the sale of the Notes in a manner that would require
      the registration under the Securities Act of the sale to the Initial Purchasers
      or the Eligible Purchasers of the Notes or to take any other action that would
      result in the Exempt Resales not being exempt from registration under the
      Securities Act.

     

    (k) For
      so
      long as any of the Notes remain outstanding and are “restricted securities”
within the meaning of Rule 144(a)(3) under the Securities Act and are not able
      to be sold in their entirety under Rule 144 under the Securities Act (or any
      successor provision), for the benefit of holders from time to time of Notes,
      the
      Company will furnish at its expense, upon request, to any holder or beneficial
      owner of Notes and prospective purchasers of the Notes, information specified
      in
      Rule 144A(d)(4) under the Securities Act, unless the Company are then subject
      to
      and in compliance with Section 13 or 15(d) of the Exchange Act.

     

    (l) The
      Company shall comply with all of the agreements set forth in the Registration
      Rights Agreement and the representation letters to DTC relating to the approval
      of the Notes by DTC for “book-entry” transfer.

     

    (m) The
      Company shall (i) permit the Notes to be included for quotation on The PORTAL
      Market and (ii) permit the Notes to be eligible for clearance and settlement
      through DTC.

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (n) During
      the period of three years from the Closing Date, the Company shall deliver
      without charge to the Initial Purchasers (i) as soon as available, copies of
      each report and other communication (financial or otherwise) of the Company
      mailed to the Trustee of the holders of the Notes, stockholders or any national
      securities exchange on which any class of securities of the Company may be
      listed (including without limitation, press releases) other than materials
      filed
      with the Commission and (ii) from time to time such other information concerning
      the Company and the Subsidiaries as the Initial Purchasers may reasonably
      request.

     

    (o) The
      Company shall not take, directly or indirectly, any action which constitutes
      or
      is designed to cause or result in, or which could reasonably be expected to
      constitute, cause or result in, the stabilization or manipulation of the price
      of any security of the Company to facilitate the sale or resale of the Notes
      or
      the Common Stock issuable upon conversion thereof, or take any action prohibited
      by Regulation M under the Exchange Act, in connection with the distribution
      of
      the Notes contemplated hereby. The Company will not distribute any (i)
      preliminary offering memorandum, including, without limitation, the Preliminary
      Offering Memorandum, (ii) offering memorandum, including, without limitation,
      the Offering Memorandum or (iii) other offering material in connection with
      the
      offering and sale of the Notes.

     

    (p) For
      so
      long as the Notes constitute “restricted” securities within the meaning of Rule
      144(a)(3) under the Securities Act, the Company shall not, and shall not permit
      any Subsidiary to, solicit any offer to buy or offer to sell the Notes by means
      of any form of general solicitation or general advertising (as those terms
      are
      used in Regulation D under the Securities Act) or in any manner involving a
      public offering within the meaning of Section 4(2) of the Securities
      Act.

     

    (q) During
      the period from the Closing Date until one year after the Closing Date, without
      the prior written consent of the Initial Purchasers, the Company shall not,
      and
      shall not permit any of its “affiliates” (as defined in Rule 144 under the
      Securities Act) to, resell any of the Notes or Common Stock issuable upon
      conversion of the Notes that constitute “restricted securities” under Rule 144
      that have been reacquired by any of them.

     

    (r) Prior
      to
      the Closing Date, the Company shall not issue any press release or other
      communications, directly or indirectly, or hold any press conference with
      respect to the issuance of the Notes, the Company or any of its Subsidiaries,
      the properties, business, results of operations, condition (financial or
      otherwise), affairs or prospects of the Company or any of its Subsidiaries,
      without the prior consent of the Initial Purchasers. In such instance, the
      Company shall furnish a copy of any such release or communication to the Initial
      Purchasers for review and comment a reasonable time prior to its contemplated
      release.

     

    (s) Without
      the prior consent of the Initial Purchasers, not to make any offer relating
      to
      the Notes that would constitute a “free writing prospectus” (if the offering of
      the Notes was made pursuant to a registered offering under the Securities Act)
      as defined in Rule 405 under the Securities Act (a “Free
      Writing Offering Document”);
      any
      such Free Writing Offering Document the use of which has been consented to
      by
      the Initial Purchasers is listed on Schedule IV hereto; if at any time following
      issuance of a Free Writing Offering Document any event occurred or occurs as
      a
      result of which such Free Writing Offering Document would conflict with the
      information in the Preliminary Offering Memorandum or the Offering Memorandum
      or
      would include an untrue statement of a material fact or omit to state any
      material fact necessary in order to make the statements therein, in light of
      the
      circumstances then prevailing, not misleading, the Company will give prompt
      notice thereof to the Initial Purchasers and, if requested by the Initial
      Purchasers, will prepare and furnish without charge to the Initial Purchasers
      a
      Free Writing Offering Document or other document which will correct such
      conflict, statement or omission.

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (t) The
      Company, during the time prior to completion of the distribution of Notes by
      the
Initial
      Purchasers,
      will
      file all reports and other documents required to be filed with the Commission
      pursuant to Section 13, 14 or 15 of the Exchange Act within the time periods
      required by the Exchange Act and the regulations promulgated
      thereunder.

     

    (u)
      Without
      the prior written consent of the Representative, for a period of 90 days after
      the date of this Agreement, the Company shall not issue, sell or register with
      the Commission (other than on Form S-8 or on any successor form), or otherwise
      dispose of, directly or indirectly, any (i) debt
      securities issued or guaranteed by the Company and having a maturity of more
      than one year from the date of issue, or (ii) equity securities of the Company
      (or any securities convertible into, exercisable for or exchangeable for equity
      securities of the Company.

     

    (v) The
      Company shall cause, pursuant to the terms of the Registration Rights Agreement,
      to be registered, to the extent required by the Registration Rights Agreement,
      pursuant to an effective registration statement under the Securities Act, the
      shares of Common Stock issuable upon conversion of the Notes and to use its
      best
      efforts to maintain the effectiveness of such registration statement during
      the
      entire period prescribed in the Registration Rights Agreement.

     

    (w) To
      reserve and keep available at all times, free of preemptive rights, shares
      of
      Common Stock for the purpose of enabling the Company to satisfy any obligations
      to issue shares of its Common Stock upon conversion of the Notes.

     

    (x) The
      Company shall comply with the SAFE Rules and Regulations, and shall use best
      efforts to cause its directors, officers, option holders and shareholders that
      are, or that are directly or indirectly owned or controlled by, PRC residents
      or
      PRC citizens, to comply with the SAFE Rules and Regulations applicable to them
      in connection with the Company, including without limitation, requiring each
      shareholder, option holder, director and officer that is, or is directly or
      indirectly owned or controlled by, a PRC resident or PRC citizen to complete
      any
      registration and other procedures required under applicable SAFE Rules and
      Regulations.

     

    (y) To
      use
      its best efforts to list, subject to notice of issuance, the shares of Common
      Stock issuable upon conversion of the Notes on the Nasdaq Global Select
      Market.

    
      
        
        

      

      
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    7. Expenses.
      Whether
      or not the transactions contemplated by this Agreement are consummated or this
      Agreement becomes effective or is terminated (pursuant to Section 13
      hereof or
      otherwise), the Company hereby agrees to pay all costs and expenses incident
      to
      the performance of their obligations hereunder, including the following: (i)
      the
      negotiation, preparation, printing, typing, filing, reproduction, execution
      and
      delivery of this Agreement and of the other Transaction Documents, any amendment
      or supplement to or modification of any of the foregoing and any and all other
      documents furnished pursuant hereto or thereto or in connection herewith or
      therewith and with the Exempt Resales; (ii) the preparation, printing or
      reproduction of each Preliminary Offering Memorandum, the Offering Memorandum
      (including, without limitation, financial statements), and any other document
      prepared in connection with the offer and sale of the Notes, and all amendments
      and supplements to any of them; (iii) the issuance, transfer and delivery of
      the
      Notes endorsed thereon to the Initial Purchasers; (iv) the registration or
      qualification of the Notes for offer and sale under the securities or blue
      sky
      laws of the several states (including, without limitation, filing fees, the
      cost
      of printing and mailing a preliminary and final blue sky memorandum, and the
      reasonable fees and disbursements of counsel to the Initial Purchasers relating
      to such registration or qualification); (v) the delivery (including postage,
      air
      freight charges and charges for counting and packaging) of such copies of each
      Preliminary Offering Memorandum, the Offering Memorandum and any other document
      used in connection with the offer and sale of the Notes and all amendments
      or
      supplements to any of them as may be requested for use in connection with the
      offering and sale of the Notes and the Exempt Resales; (vi) the preparation,
      printing, authentication, issuance and delivery of certificates for the Notes,
      including any stamp or other issuance or transfer taxes in connection with
      the
      original issuance and sale of the Notes and Trustee’s fees; (vii) the fees,
      disbursements and expenses of the Company’s counsel (including local and special
      counsel, if any) and accountants; (viii) the preparation, reproduction and
      delivery of the preliminary and supplemental blue sky memoranda and all other
      agreements of documents reproduced and delivered in connection with the offering
      of the Notes (including the reasonable fees and disbursements of counsel to
      the
      Initial Purchasers in connection with such preparation); (ix) all fees and
      expenses (including fees and expenses of counsel) of the Company in connection
      with the approval of the Notes by DTC for “book-entry” transfer; (x) the fees
      and expenses of the Trustee and its counsel; (xi) all expenses incurred in
      connection with the performance by the Company of its other obligations under
      this Agreement and the other Transaction Documents; (xii) the transportation
      and
      other “roadshow” expenses incurred by or on behalf of the Company
      representatives in connection with presentations to and related communications
      with prospective purchasers of the Notes; and (xiii) all expenses and listing
      fees incurred in connection with the application for quotation of the Notes
      on
      The PORTAL Market.

     

    8. Indemnification.

     

    (a) The
      Company agrees to indemnify and hold harmless the Initial Purchasers, each
      person, if any, who controls the Initial Purchasers within the meaning of
      Section 15 of the Securities Act or Section 20 of the Exchange Act and any
      affiliates of the Initial Purchasers against any and all losses, claims, damages
      and liabilities, joint or several (including any reasonable investigation,
      legal
      and other expenses incurred in connection with, and any amount paid in
      settlement of, any action, suit or proceeding or any claim asserted), to which
      they, or any of them, may become subject under the Securities Act, the Exchange
      Act or other Federal or state law or regulation, at common law or otherwise,
      insofar as such losses, claims, damages or liabilities arise out of or are
      based
      upon (i) any untrue statement or alleged untrue statement of a material fact
      contained in the Disclosure Package, any Free Writing Offering Document or
      the
      Offering Memorandum, or in any supplement thereto or amendment thereof, or
      in
      any Blue Sky application or other information or other documents executed by
      the
      Company filed in any state or other jurisdiction to qualify any or all of the
      Notes under the securities laws thereof (any such application, document or
      information being hereinafter referred to as a “Blue Sky Application”) or (ii)
      any omission or alleged omission to state therein a material fact required
      to be
      stated therein or necessary to make the statements therein not misleading;
      provided, however, that such indemnity shall not inure to the benefit of the
      Initial Purchasers (or any person controlling the Initial Purchasers or
      affiliate of the Initial Purchasers) on account of any losses, claims, damages
      or liabilities arising from the sale of the Notes to any person by the Initial
      Purchasers if such untrue statement or omission or alleged untrue statement
      or
      omission was made in the Disclosure Package, any Free Writing Offering Document
      or the Offering Memorandum, or in any supplement thereto or amendment thereof,
      or in any Blue Sky Application in reliance upon and in conformity with the
      Initial Purchaser Information (as defined in Section 11 hereto). This indemnity
      agreement will be in addition to any liability which the Company may otherwise
      have.

    
      
        
        

      

      
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    (b) Each
      Initial Purchaser, severally and not jointly, agrees to indemnify and hold
      harmless the Company, each person, if any, who controls the Company within
      the
      meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
      and the officers and directors of the Company, against any losses, claims,
      damages or liabilities to which such party may become subject, under the
      Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
      damages or liabilities (or actions in respect thereof) arise out of or are
      based
      upon an untrue statement or alleged untrue statement of a material fact
      contained in the Disclosure Package, any Free Writing Offering Document or
      the
      Offering Memorandum, or in any supplement thereto or amendment thereof, or
      arise
      out of or are based upon the omission or alleged omission to state therein,
      a
      material fact required to be stated therein or necessary to make the statements
      therein, in light of the circumstances in which they were made, not misleading,
      in each case to the extent, but only to the extent, that such untrue statement
      or alleged untrue statement or omission or alleged omission was made in the
      Disclosure Package, any Free Writing Offering Document or the Offering
      Memorandum, or in any supplement thereto or amendment thereof, in reliance
      upon
      and in conformity with the Initial Purchaser Information; provided, however,
      that the obligation of any Initial Purchasers, jointly and not severally, to
      indemnify the Company (including any controlling person, director or officer
      thereof) shall be limited to the net proceeds received by such Initial Purchaser
      from the Company.

     

    (c) Any
      party
      that proposes to assert the right to be indemnified under this Section will,
      promptly after receipt of notice of commencement of any action, suit or
      proceeding against such party in respect of which a claim is to be made against
      an indemnifying party or parties under this Section, notify each such
      indemnifying party of the commencement of such action, suit or proceeding,
      enclosing a copy of all papers served. No indemnification provided for in
      Section 8(a) or 8(b) shall be available to any party who shall fail to give
      notice as provided in this Section 8(c) if the party to whom notice was not
      given was unaware of the proceeding to which such notice would have related
      and
      was prejudiced by the failure to give such notice but the omission so to notify
      such indemnifying party of any such action, suit or proceeding shall not relieve
      it from any liability that it may have to any indemnified party for contribution
      or otherwise than under this Section. In case any such action, suit or
      proceeding shall be brought against any indemnified party and it shall notify
      the indemnifying party of the commencement thereof, the indemnifying party
      shall
      be entitled to participate in, and, to the extent that it shall wish, jointly
      with any other indemnifying party similarly notified, to assume the defense
      thereof, with counsel reasonably satisfactory to such indemnified party, and
      after notice from the indemnifying party to such indemnified party of its
      election so to assume the defense thereof and the approval by the indemnified
      party of such counsel, the indemnifying party shall not be liable to such
      indemnified party for any legal or other expenses, except as provided below
      and
      except for the reasonable costs of investigation subsequently incurred by such
      indemnified party in connection with the defense thereof. The indemnified party
      shall have the right to employ its counsel in any such action, but the fees
      and
      expenses of such counsel shall be at the expense of such indemnified party
      unless (i) the employment of counsel by such indemnified party has been
      authorized in writing by the indemnifying parties, (ii) the indemnified party
      shall have been advised by counsel that there may be one or more legal defenses
      available to it which are different from or in addition to those available
      to
      the indemnifying party (in which case the indemnifying parties shall not have
      the right to direct the defense of such action on behalf of the indemnified
      party) or (iii) the indemnifying parties shall not have employed counsel to
      assume the defense of such action within a reasonable time after notice of
      the
      commencement thereof, in each of which cases the fees and expenses of counsel
      shall be at the expense of the indemnifying parties. An indemnifying party
      shall
      not be liable for any settlement of any action, suit, and proceeding or claim
      effected without its written consent, which consent shall not be unreasonably
      withheld or delayed. No indemnifying party shall, without the prior written
      consent of the indemnified party, effect any settlement of any proceeding or
      threatened proceeding in respect of which any indemnified party is or could
      have
      been a party and indemnity could have been sought hereunder by such indemnified
      party, unless (i) such settlement includes an unconditional release of such
      indemnified party from all liability on claims that are the subject matter
      of
      such proceeding and (ii) does not contain any factual or legal admission by
      or
      with respect to any indemnified party or any adverse statement with respect
      to
      the character, professionalism, expertise or reputation of any Indemnified
      Party
      or any action or inaction of any Indemnified Party.

    
      
        
        

      

      
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    9. Contribution.
      In
      order to provide for just and equitable contribution in circumstances in which
      the indemnification provided for in Section 8(a) or 8(b) is due in accordance
      with its terms but for any reason is unavailable to or insufficient to hold
      harmless an indemnified party in respect to any losses, liabilities, claims,
      damages or expenses referred to therein, then each indemnifying party shall
      contribute to the aggregate losses, liabilities, claims, damages and expenses
      (including any investigation, legal and other expenses reasonably incurred
      in
      connection with, and any amount paid in settlement of, any action, suit or
      proceeding or any claims asserted, but after deducting any contribution received
      by any person entitled hereunder to contribution from any person who may be
      liable for contribution) incurred by such indemnified party, as incurred, in
      such proportion as is appropriate to reflect the relative benefits received
      by
      the Company, on the one hand, and the Initial Purchasers, on the other hand,
      from the offering of the Notes pursuant to this Agreement or, if such allocation
      is not permitted by applicable law, in such proportion as is appropriate to
      reflect not only the relative benefits referred to above but also the relative
      fault of the Company, on the one hand, and the Initial Purchasers, on the other
      hand, in connection with the statements or omissions which resulted in such
      losses, liabilities, claims, damages or expenses, as well as any other relevant
      equitable considerations. The Company and the Initial Purchasers agree that
      it
      would not be just and equitable if contribution pursuant to this Section 9
      were
      determined by pro rata allocation or by any other method of allocation which
      does not take account of the equitable considerations referred to above. The
      aggregate amount of losses, liabilities, claims, damages and expenses incurred
      by an indemnified party and referred to above shall be deemed to include any
      legal or other expenses reasonably incurred by such indemnified party in
      investigating, preparing or defending against any litigation, or any
      investigation or proceeding by any governmental agency or body, commenced or
      threatened, or any claim whatsoever based upon any such untrue or alleged untrue
      statement or omission or alleged omission. Notwithstanding the provisions of
      this Section 9, no Initial Purchasers shall be required to contribute any amount
      in excess of the amount by which the total price at which the Notes resold
      by it
      to Eligible Purchasers were offered to the public exceeds the amount of damages
      which such Initial Purchaser has otherwise been required to pay by reason of
      any
      such untrue or alleged untrue statement or omission or alleged omission. No
      person guilty of fraudulent misrepresentation (within the meaning of Section
      11(f) of the Securities Act) shall be entitled to contribution from any person
      who was not guilty of such fraudulent misrepresentation. For purposes of this
      Section 9, each person, if any, who controls an Initial Purchaser within the
      meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
      shall have the same rights to contribution as such Initial Purchaser, and each
      director of the Company, each officer of the Company, and each person, if any,
      who controls the Company within the meaning of the Section 15 of the Securities
      Act or Section 20 of the Exchange Act, shall have the same rights to
      contribution as the Company. Any party entitled to contribution will, promptly
      after receipt of notice of commencement of any action, suit or proceeding
      against such party in respect of which a claim for contribution may be made
      against another party or parties under this Section 9, notify such party or
      parties from whom contribution may be sought, but the omission so to notify
      such
      party or parties from whom contribution may be sought shall not relieve the
      party or parties from whom contribution may be sought from any other obligation
      it or they may have hereunder or otherwise than under this Section 9. No party
      shall be liable for contribution with respect to any action, suit, proceeding
      or
      claim settled without its written consent.

    
      
        
        

      

      
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    The
      remedies provided for in Section 8 and this Section 9 are not exclusive and
      shall not limit any rights or remedies which otherwise may be available to
      any
      indemnified party in law or in equity. 

    

    10. Conditions
      of Initial Purchasers’ Obligations.
      The
      obligations of the Initial Purchasers to purchase and pay for the Notes, as
      provided herein, are subject to the absence from any certificates, opinions,
      written statements or letters furnished to the Initial Purchasers pursuant
      to
      this Section 10 of any misstatement or omissions and to the satisfaction of
      the
      following additional conditions unless waived in writing by the
      Representative:

     

    (a) All
      of
      the representations and warranties of the Company contained in this Agreement
      shall be true and correct on the date hereof and on each Closing Date with
      the
      same force and effect as if made on and as of the date hereof and the Closing
      Date, respectively. The Company shall have performed or complied with all of
      the
      agreements and satisfied all conditions on their respective parts to be
      performed, complied with or satisfied hereunder at or prior to each Closing
      Date.

     

    (b) The
      Offering Memorandum shall have been printed and copies distributed to the
      Initial Purchasers not later than 10:00 a.m., New York City time, on the day
      following the date of this Agreement or at such later date and time as to which
      the Representative may agree.

     

    (c) No
      stop
      order suspending the qualification or exemption from qualification of the Notes
      in any jurisdiction referred to in Section 6(e) hereof shall have been issued
      and no proceeding for that purpose shall have been commenced or shall be pending
      or threatened.

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (d) None
      of
      the issuance and sale of the Notes pursuant to this Agreement or any of the
      transactions contemplated by any of the other Transaction Documents shall be
      enjoined (temporarily or permanently) and no restraining order or other
      injunctive order shall have been issued; and there shall not have been any
      legal
      action, statute, order, rule, regulation, decree or other administrative
      proceeding enacted, instituted, adopted, issued or threatened against the
      Company or against any Initial Purchasers relating to the issuance of the Notes
      or the Initial Purchasers’ activities in connection therewith or any other
      transactions contemplated by this Agreement or the Offering Memorandum, or
      the
      other Transaction Documents. No action, suit or proceeding shall have been
      commenced and be pending against or affecting or, to the best of the Company’s
      knowledge, threatened against, the Company or any Subsidiary before any court
      or
      arbitrator or any governmental body, agency or official that, if adversely
      determined, could reasonably be expected, individually or in the aggregate,
      to
      result in a Material Adverse Effect; and no stop order shall have been issued
      preventing the use of the Preliminary Offering Memorandum, any Free Writing
      Offering Document, the Offering Memorandum, or any amendment or supplement
      thereto.

     

    (e) Since
      the
      respective dates as of which information is given in the Disclosure Package,
      (i)
      there shall not have occurred any change, or any development involving a
      prospective change, in or affecting the general affairs, management, business,
      condition (financial or other), properties, prospects, results of operations,
      capital stock, or long-term debt, or a material increase in the short-term
      debt,
      of the Company or any of the Subsidiaries, not contemplated by the Disclosure
      Package and the Offering Memorandum that is, in the sole judgment of the
      Representative, so material and adverse as to make it impracticable or
      inadvisable to proceed with the offering of the Notes on the terms and in the
      manner contemplated by the Transaction Documents, (ii) no dividend or
      distribution of any kind shall have been declared, paid or made by the Company
      or any of the Subsidiaries on any class of its capital stock, other than as
      disclosed in the Disclosure Package and the Offering Memorandum, (iii) none
      of
      the Company or any of the Subsidiaries shall have incurred any liability or
      obligation, direct or contingent, that is material, individually or in the
      aggregate, to the Company and the Subsidiaries, taken as a whole, and that
      is
      required to be disclosed on a balance sheet or notes thereto in accordance
      with
      U.S. GAAP and is not disclosed on the latest balance sheet or notes thereto
      included in the Disclosure Package and the Offering Memorandum and (iv) there
      shall not have occurred any event or development relating to or involving the
      Company or any of the Subsidiaries, or any of their respective officers or
      directors that makes any statement made in the Disclosure Package or the
      Offering Memorandum untrue or that, in the opinion of the Company and its
      counsel or the Initial Purchasers and their counsel, require the making of
      any
      addition to or change in the Disclosure Package or the Offering Memorandum
      in
      order to state a material fact required by any applicable law, rule or
      regulation to be stated therein or necessary in order to make the statements
      made therein not misleading.

     

    (f) At
      each
      Closing Date and after giving effect to the consummation of the transactions
      contemplated by the Transaction Documents, there exists no Default or Event
      of
      Default (as defined in the Indenture).

    
      
        
        

      

      
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    (g) The
      Initial Purchasers shall have received certificates, dated each Closing Date,
      signed by the chief executive officer and the chief financial officer of the
      Company, in form and substance satisfactory to the Representative, confirming,
      as of the Closing Date, the matters set forth in paragraphs (a), (b), (c),
      (d)
      and (e) of this Section 10 and that, as of such Closing Date, the obligations
      of
      the Company to be performed hereunder on or prior thereto have been duly
      performed.

     

    (h) The
      Initial Purchasers shall have received on the Closing Date:

     

    (i) an
      opinion and letter, dated the Closing Date, in form and substance satisfactory
      to the Initial Purchasers, of Cadwalader, Wickersham & Taft LLP and Jolley
      Urga Wirth Woodbury & Standish, United States counsel for the Company, to
      the effect set forth in Exhibit
      C-1
      hereto.

     

    (ii) an
      opinion, dated the Closing Date, in form and substance satisfactory to the
      Initial Purchasers, of Maples and Calder, British Virgin Islands counsel for
      the
      Company, to the effect set forth in Exhibit
      C-2
      hereto.

     

    (iii) an
      opinion, dated the Closing Date, in form and substance satisfactory to the
      Initial Purchasers, of King & Shine Partners, PRC counsel for the Company,
      addressed to the Company with express consent to the release to the Initial
      Purchasers, to the effect set forth in Exhibit
      C-3
      hereto.

     

    (iv) an
      opinion, dated the Closing Date, in form and substance satisfactory to the
      Initial Purchasers, of Haiwen & Partners, PRC counsel for the Initial
      Purchasers, to the effect set forth in Exhibit
      C-4
      hereto.

     

    (v) an
      opinion and letter, dated the Closing Date, in form and substance reasonably
      satisfactory to the Initial Purchasers, of Shearman & Sterling LLP, counsel
      for the Initial Purchasers.

     

    (vi) an
      opinion, dated the Closing Date, in form and substance satisfactory to the
      Initial Purchasers, of Emmet, Marvin & Martin, LLP, counsel for the Trustee,
      to the effect set forth in Exhibit
      C-5
      hereto.

     

    (i) Hansen,
      Barnett & Maxwell, P.C. (the “Auditor”), the independent registered public
      accounting firm for the Company, shall deliver to the Initial Purchasers: (i)
      simultaneously with the execution of this Agreement a signed letter from the
      Auditor addressed to the Initial Purchasers and dated the date of this
      Agreement, in form and substance reasonably satisfactory to the Representative
      and Shearman & Sterling LLP, counsel for the Initial Purchasers, containing
      statements and information of the type ordinarily included in accountants’
“comfort letters” to initial purchasers with respect to the financial statements
      and certain financial information contained in the Preliminary Offering
      Memorandum, and (ii) on each Closing Date, a signed letter from the Auditor
      addressed to the Initial Purchasers and dated the date of such Closing Date(s),
      in form and substance reasonably satisfactory to the Representative and Shearman
      & Sterling LLP, counsel for the Initial Purchasers, containing statements
      and information of the type ordinarily included in accountants' "comfort
      letters" to underwriters with respect to the financial statements and certain
      financial information contained in the Offering Memorandum.

    
      
        
        

      

      
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    (j) The
      Initial Purchasers and Shearman & Sterling LLP, counsel to the Initial
      Purchasers, shall have been furnished with such information, certificates and
      documents, in addition to those set forth above, as they may reasonably require
      for the purpose of enabling them to review or pass upon the matters referred
      to
      in this Section 10 and in order to evidence the accuracy, completeness or
      satisfaction in all material respects of any of the representations, warranties
      or conditions herein contained.

     

    (k) The
      Company and the Trustee shall have entered into the Indenture and the Initial
      Purchasers shall have received counterparts, conformed as executed, thereof
      and
      the Notes shall have been duly executed and delivered by the Company, and the
      Notes shall have been duly authenticated by the Trustee.

     

    (l) On
      or
      after the date hereof (i) there shall not have occurred any downgrading,
      suspension or withdrawal of, nor shall there have been any announcement of
      any
      potential or intended downgrading, suspension or withdrawal of, or of any review
      (or of any potential or intended review) for a possible downgrading, or with
      negative implications, or direction not determined of, any rating of the Company
      or any securities of the Company (including, without limitation, the placing
      of
      any of the foregoing ratings on credit watch with negative or developing
      implications or under review with an uncertain direction) by any “nationally
      recognized statistical rating organization” as such term is defined for purposes
      of Rule 436(g)(2) under the Securities Act, (ii) there shall not have occurred
      any change, nor shall any notice have been given of any potential or intended
      change, in the outlook for any rating of the Company or any securities of the
      Company by any such rating organization and (iii) no such rating organization
      shall have given notice that it has assigned (or is considering assigning)
      a
      lower rating to the Notes than that on which the Notes were
      marketed.

     

    (m) The
      Notes
      shall have been approved for trading on The PORTAL Market.

     

    (n) Each
      of
      the Transaction Documents and each other agreement or instrument executed in
      connection with the transactions contemplated thereby shall be reasonably
      satisfactory in form and substance to the Initial Purchasers and shall have
      been
      executed and delivered by all the respective parties thereto and shall be in
      full force and effect, and there shall have been no material amendments,
      alterations, modifications or waivers of any provision thereof since the date
      of
      this Agreement. 

     

    (o) All
      proceedings taken in connection with the issuance of the Notes and the
      transactions contemplated by this Agreement, the other Transaction Documents
      and
      all documents and papers relating thereto shall be reasonably satisfactory
      to
      the Initial Purchasers and counsel to the Initial Purchasers. The Initial
      Purchasers and counsel to the Initial Purchasers shall have received copies
      of
      such papers and documents as they may reasonably request in connection
      therewith, all in form and substance reasonably satisfactory to
      them.

    
      
        
        

      

      
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    (p) All
      opinions, certificates, letters, schedules, documents or instruments required
      by
      this Section 10 to be delivered by the Company will be in compliance with the
      provisions hereof only if they are reasonably satisfactory in form and substance
      to the Representative and counsel to the Initial Purchasers. The Company shall
      furnish the Initial Purchasers such conformed copies of such opinions,
      certificates, letters, schedules, documents and instruments in such quantities
      as the Initial Purchasers shall reasonably request.

     

    (q) On
      or
      prior to the Closing Date, the Initial Purchasers shall have received a lock
      up
      agreement substantially in the form attached hereto as Exhibit B signed by
      the
      Company’s Executive Officers, Directors and those shareholders listed on
      Schedule V hereto.

     

    (r) On
      or
      prior to the Closing Date, the Initial Purchasers shall have received a letter
      containing the representations and agreements set forth in Annex B to the
      Offering Memorandum from all Institutional Accredited Investors purchasing
      Notes
      pursuant to this Agreement.

     

    11. Initial
      Purchaser Information.
      The
      Company acknowledge that the statements with respect to the offering of the
      Notes set forth in the third, fourteenth and fifteenth paragraphs under the
      heading “Plan of Distribution” in the Preliminary Offering Memorandum and the
      Offering Memorandum constitute the only written information relating to the
      Initial Purchasers furnished to the Company by or on behalf of the Initial
      Purchasers expressly for use in the Preliminary Offering Memorandum, the
      Disclosure Package and the Offering Memorandum, for purposes of Sections 2(a),
      8(a) and 8(b) hereof (the “Initial
      Purchaser Information”).

     

    12. Survival
      of Representations and Agreements.
      The
      respective representations, warranties, covenants, agreements, indemnities
      and
      other statements of the Company their respective officers and the Initial
      Purchasers set forth in this Agreement or made by or on behalf of them,
      respectively pursuant to this Agreement shall remain operative and in full
      force
      and effect regardless of (i) any investigation made by or on behalf of the
      Company, any of its officers of directors, the Initial Purchasers or any
      controlling person referred to in Sections 8 and 9 hereof and (ii) delivery
      of
      and payment for the Notes to and by the Initial Purchasers, and shall be binding
      upon and shall inure to the benefit of, any successors, assigns, heirs, personal
      representatives of the Company, the Initial Purchasers and the indemnified
      parties referred to in Section 8 hereof. The respective representations,
      agreements, covenants, indemnities and other statements set forth in Sections
      7,
      8, 9, 12 and 13 shall survive the termination of this Agreement, regardless
      of
      any termination or cancellation of this Agreement.

     

    13. Effective
      Date of Agreement; Termination.

     

    (a) This
      Agreement shall become effective upon execution and delivery of a counterpart
      hereof by each of the parties hereto.

     

    (b) This
      Agreement may be terminated in the sole discretion of the Initial Purchasers
      by
      notice to the Company from the Representative, without liability (other than
      with respect to Sections 8 and 9 hereof) on the Initial Purchasers’ part to the
      Company in the event that the Company has failed, refused or been unable to
      perform or satisfy all conditions on their respective parts to be performed
      or
      satisfied hereunder on or prior to the Closing Date, or if: 

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    (i) there
      has
      occurred any material adverse change in the securities markets or any event,
      act
      or occurrence that has materially disrupted, or in the opinion of the Initial
      Purchasers, will in the future materially disrupt, the securities markets or
      there shall be such a material adverse change in general financial, political
      or
      economic conditions or the effect of international conditions on the financial
      markets in the United States or elsewhere is such as to make it, in the judgment
      of the Initial Purchasers, inadvisable or impracticable to market the Notes
      or
      enforce contracts for the sale of the Notes; 

     

    (ii) there
      has
      occurred any outbreak or material escalation of hostilities or other calamity
      or
      crisis the effect of which on the financial markets of the United States or
      elsewhere is such as to make it, in the judgment of the Initial Purchasers,
      inadvisable or impracticable to market the Notes or enforce contracts for the
      sale of the Notes; 

     

    (iii) trading
      in any securities of the Company has been suspended or materially limited or
      trading generally on the New York Stock Exchange, the American Stock Exchange
      or
      the Nasdaq Global Select Market shall have been suspended or materially limited,
      or minimum or maximum prices for trading shall have been fixed, or maximum
      ranges for prices for securities shall have been required by any of said
      exchanges or by order of the Commission, the Financial Industry Regulatory
      Authority or other regulatory body or governmental authority having
      jurisdiction;

     

    (iv) a
      banking
      moratorium has been declared by any state or Federal a banking moratorium has
      been declared by any state or Federal authority; 

     

    (v) in
      the
      judgment of the Initial Purchasers, there has been since the time of the
      execution of the Purchase Agreement or since the respective dates as of which
      information is given in the Disclosure Package, any material adverse change
      in
      the assets, properties, condition (financial or otherwise), or in the results
      or
      operations, business affairs or business prospects or cash flows of the Company
      and its Subsidiaries, taken as a whole, whether or not arising in the ordinary
      course of business; or

     

    (vi) any
      debt
      securities of the Company shall have been downgraded or placed on any “watch
      list” for possible downgrading by any “nationally recognized statistical rating
      organization” as defined for purposes of Rule 436(g) under the Securities
      Act.

     

    (c) If
      this
      Agreement shall be terminated pursuant to any of the provisions hereof, or
      if
      the sale of the Securities provided for herein is not consummated because any
      condition to the obligations of the Initial Purchasers set forth herein is
      not
      satisfied or because of any refusal, inability or failure on the part of the
      Company to perform any agreement herein or comply with any provision hereof,
      the
      Company will, subject to demand by the Initial Purchasers, reimburse the Initial
      Purchasers for all out-of-pocket expenses (including the fees and expenses
      of
      the Initial Purchasers’ counsel), incurred by the Initial Purchasers in
      connection herewith, subject to the limit as set forth in the engagement
      agreement between the Company and Oppenheimer. If this Agreement is terminated
      pursuant to Section 14 by reason of the default of one or more of the Initial
      Purchasers, the Company shall not be obligated to reimburse any Initial
      Purchasers on account of such expenses.

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    14. Substitution
      of Initial Purchasers.
      If any
      Initial Purchaser shall default in its obligation to purchase on the Closing
      Date the Notes agreed to be purchased hereunder, the Representative shall have
      the right, within 36 hours thereafter, to make arrangements for one or more
      of
      the non-defaulting Initial Purchasers, or any other Initial Purchasers, to
      purchase such Notes on the terms contained herein. If, however, the
      Representative shall not have completed such arrangements within such 36-hour
      period, then the Company shall be entitled to a further period of 36 hours
      within which to procure another party or other parties satisfactory to the
      Initial Purchasers to purchase such Notes on such terms. 
      If,
      after giving effect to any arrangements for the purchase of the Notes of a
      defaulting Initial Purchaser or Initial Purchasers by the Representative and
      the
      Company as provided above, the aggregate amount of Notes which remains
      unpurchased on the Closing Date does not exceed one-tenth of the aggregate
      amount of all the Notes that all the Initial Purchasers are obligated to
      purchase on such date, then the Company shall have the right to require each
      non-defaulting Initial Purchaser to purchase the aggregate amount of Notes
      which
      such Initial Purchaser agreed to purchase hereunder at such date and, in
      addition, to require each non-defaulting Initial Purchaser to purchase its
      pro
      rata share (based on the aggregate amount of Notes which such Purchaser agreed
      to purchase hereunder) of the Notes of such defaulting Initial Purchaser or
      Initial Purchasers for which such arrangements have not been made; but nothing
      herein shall relieve a defaulting Initial Purchaser from liability for its
      default. In any such case, either the Representative or the Company shall have
      the right to postpone the Closing Date for a period of not more than seven
      days
      in order to effect any necessary changes and arrangements (including any
      necessary amendments or supplements to the Offering Memorandum or any other
      documents). 

     

    If,
      after
      giving effect to any arrangements for the purchase of the Notes of a defaulting
      Initial Purchaser or Initial Purchasers by the Representative and the Company
      as
      provided above, the aggregate amount of such Notes which remains unpurchased
      exceeds 10% of the aggregate amount of all the Notes to be purchased at such
      date, then this Agreement shall terminate, without liability on the part of
      any
      non-defaulting Initial Purchasers to the Company and without liability on the
      part of the Company except as provided in Sections 7, 8, 9 and 13(b). The
      provisions of this Section 14 shall not in any way affect the liability of
      any
      defaulting Initial Purchaser to the Company or the nondefaulting Initial
      Purchasers arising out of such default. The term "Initial Purchaser" as used
      in
      this Agreement shall include any person substituted under this Section 14 with
      like effect as if such person had originally been a party to this Agreement
      with
      respect to such Securities. 

    

    15. Notices.
      All
      communications hereunder shall be in writing and, if sent to the Initial
      Purchasers, shall be hand-delivered, mailed by first-class mail, couriered
      by
      next-day air courier or faxed and confirmed in writing to Oppenheimer & Co.
      Inc., 300 Madison Avenue, New York, New York 10017, Attention: Andrew MacInnes,
      Managing Director, Head of Equity Capital Markets, and with a copy to Shearman
      & Sterling LLP, 12th
      Floor,
      East Tower, Twin Towers, B-12 Jianguomenwai Dajie, Beijing 100022, PRC,
      Attention: Alan Seem, Esq. If sent to the Company, shall be mailed, delivered,
      couriered or faxed and confirmed in writing to ShengdaTech, Inc., Youth Pioneer
      Park, Tai’an Economic and Technological Development Zone, Tai’an City, Shangdong
      Province 271000, PRC, Attention: Xiangzhi Chen, and with a copy to Cadwalader,
      Wickersham & Taft LLP, 2301 China Central Place Tower 2, No. 79 Jianguo
      Road, Beijing 100025, PRC, Attention: Jiannan Zhang, Esq.

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    16. Successors.
      This
      Agreement shall inure to the benefit of, and shall be binding upon, the Initial
      Purchasers, the Company and their respective successors, legal representatives
      and assigns, and nothing expressed or mentioned in this Agreement is intended
      or
      shall be construed to give any other person any legal or equitable right, remedy
      or claim under or in respect of, or by virtue of, this Agreement or any
      provision herein contained; this Agreement and all conditions and provisions
      hereof being intended to be and being for the sole and exclusive benefit of
      such
      persons and for the benefit of no other person except that (i) the indemnities
      of the Company contained in Section 8 hereof shall also be for the benefit
      of
      the controlling persons and agents referred to in Sections 8 and 9 hereof and
      (ii) the indemnities of the Initial Purchasers contained in Section 8
      hereof shall also be for the benefit of the directors of the Company, and its
      officers, employees and agents and any controlling person or persons referred
      to
      in Sections 8 and 9 hereof. No purchaser of Notes from the Initial Purchasers
      will be deemed a successor, legal representative or assign because of such
      purchase.

     

    17. No
      Waiver; Modifications in Writing.
      No
      failure or delay on the part of the Company or the Initial Purchasers in
      exercising any right, power or remedy hereunder shall operate as a waiver
      thereof, nor shall any single or partial exercise of any such right, power
      or
      remedy preclude any other or further exercise thereof or the exercise of any
      other right, power or remedy. The remedies provided for herein are cumulative
      and are not exclusive of any remedies that may be available to the Company
      or
      the Initial Purchasers at law or in equity or otherwise. No waiver of or consent
      to any departure by the Company or the Initial Purchasers from any provision
      of
      this Agreement shall be effective unless signed in writing by the party entitled
      to the benefit thereof; provided
      that
      notice of any such waiver shall be given to each party hereto as set forth
      above. Except as otherwise provided herein, no amendment, modification or
      termination of any provision of this Agreement shall be effective unless signed
      in writing by or on behalf of the Company and the Initial Purchasers. Any
      amendment, supplement or modification of or to any provision of this Agreement,
      any waiver of any provision of this Agreement, and any consent to any departure
      by the Company or the Initial Purchasers from the terms of any provision of
      this
      Agreement shall be effective only in the specific instance and for the specific
      purpose for which made or given. Except where notice is specifically required
      by
      this Agreement, no notice to or demand on the Company in any case shall entitle
      the Company to any other or further notice or demand in similar or other
      circumstances.

     

    18. Entire
      Agreement.
      This
      Agreement constitutes the entire agreement among the parties hereto and
      supersedes all prior agreements, understandings and arrangements, oral or
      written, among the parties hereto with respect to the subject matter
      hereof.

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    19. Applicable
      Law; Waiver of Jury Trial.
      THE
      VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS
      SET
      FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
      OF
      THE STATE OF NEW YORK. TIME IS OF THE ESSENCE IN THIS AGREEMENT. The Company
      irrevocably (a) submits to the jurisdiction of any court of the State of New
      York or the United State District Court for the Southern District of the State
      of New York for the purpose of any suit, action, or other proceeding arising
      out
      of this Agreement, or any of the Transaction Documents and the Offering
      Memorandum (each, a “Proceeding”), (b) agrees that all claims in respect of any
      Proceeding may be heard and determined in any such court, (c) waives, to the
      fullest extent permitted by law, any immunity from jurisdiction of any such
      court or from any legal process therein, (d) agrees not to commence any
      Proceeding other than in such courts, and (e) waives, to the fullest extent
      permitted by law, any claim that such Proceeding is brought in an inconvenient
      forum. The Company hereby irrevocably designates CT Corporation System Inc,
      111
      Eighth Avenue, New York, NY 10011 as agent upon whom process against the Company
      may be served. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT
      PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS)
      HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM
      BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THE TRANSACTION DOCUMENTS
      AND
      THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION DOCUMENTS, THE DISCLOSURE
      PACKAGE AND THE OFFERING MEMORANDUM.

     

    20. Judgment
      Currency.
      If for
      the purposes of obtaining judgment in any court it is necessary to convert
      a sum
      due hereunder into any currency other than United States dollars, the parties
      hereto agree, to the fullest extent permitted by law, that the rate of exchange
      used shall be the rate at which in accordance with normal banking procedures
      the
      relevant party or parties could purchase United States dollars with such other
      currency in The City of New York on the business day preceding that on which
      final judgment is given. The obligation of each party hereto with respect to
      any
      sum due from it to any other party hereto or any person controlling any such
      other party shall, notwithstanding any judgment in a currency other than United
      States dollars, not be discharged until the first business day following receipt
      by such other party or controlling person of any sum in such other currency,
      and
      only to the extent that such other party or controlling person may in accordance
      with normal banking procedures purchase United States dollars with such other
      currency. If the United States dollars so purchased are less than the sum
      originally due to such other party or controlling person hereunder, the
      first-mentioned party agrees as a separate obligation and notwithstanding any
      such judgment, to indemnify such other party or controlling person against
      such
      loss. If the United States dollars so purchased are greater than the sum
      originally due to such other party or controlling person hereunder, such other
      party or controlling person agrees to pay to the first-mentioned party an amount
      equal to the excess of the United States dollars so purchased over the sum
      originally due to such other party or controlling person hereunder.

     

    21. Foreign
      Taxes.
      All
      payments made by the Company under this Agreement will be made without
      withholding or deduction for or on account of any present or future taxes,
      duties, assessments or governmental charges of whatever nature imposed or levied
      by or on behalf of the PRC or the British Virgin Islands or any political
      subdivision or any taxing authority thereof or therein unless the Company is
      or
      becomes required by law to withhold or deduct such taxes, duties, assessments
      or
      other governmental charges. In such event, the Company shall pay such additional
      amounts as will result, after such withholding or deduction, in the receipt
      by
      the Initial Purchasers and each person controlling the Initial Purchasers,
      as
      the case may be, of the amounts that would otherwise have been receivable in
      respect thereof, except to the extent such taxes, duties, assessments or other
      governmental charges are imposed or levied by reason of such Initial Purchasers’
or controlling person’s being connected with the PRC or the British Virgin
      Islands other than by reason of its being an Initial Purchasers or a person
      controlling an Initial Purchasers under this Agreement.

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    22. Contractual
      Relationship.
      The
      Company acknowledges and agrees that each of the Initial Purchasers has acted
      and is acting solely in the capacity of a principal in an arm’s length
      transaction between the Company, on the one hand, and the Initial Purchasers,
      on
      the other hand, with respect to the offering of Notes contemplated hereby
      (including in connection with determining the terms of the offering) and not
      as
      a financial advisor, agent or fiduciary to the Company or any other person.
      Additionally, the Company acknowledges and agrees that the Initial Purchasers
      have not and will not advise the Company or any other person as to any legal,
      tax, investment, accounting or regulatory matters in any jurisdiction. The
      Company has consulted with its own advisors concerning such matters and shall
      be
      responsible for making its own independent investigation and appraisal of the
      transactions contemplated hereby, and the Initial Purchasers shall have no
      responsibility or liability to the Company or any other person with respect
      thereto, whether arising prior to or after the date hereof. Any review by the
      Initial Purchasers of the Company, the transactions contemplated hereby or
      other
      matters relating to such transactions have been and will be performed solely
      for
      the benefit of the Initial Purchasers and shall not be on behalf of the Company.
      The Company agrees that it will not claim that the Initial Purchasers, or any
      of
      them, has rendered advisory services of any nature or respect, or owes a
      fiduciary duty to the Company or any other person in connection with any such
      transaction or the process leading thereto.

     

    23. Partial
      Unenforceability.
      The
      invalidity or unenforceability of any Section, paragraph or provision of this
      Agreement shall not affect the validity or enforceability of any other Section,
      paragraph or provision hereof.

     

    24. Headings.
      The
      headings herein are inserted for convenience of reference only and are not
      intended to be part of, or to affect the meaning or interpretation of, this
      Agreement.

     

    25. Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original, but all such counterparts shall together constitute
      one and the same instrument. Delivery of a signed counterpart of this Agreement
      by facsimile transmission shall constitute valid and sufficient delivery
      thereof.

     

    [Signature
      page follows]

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    If
      the
      foregoing correctly sets forth the understanding among the Initial Purchasers
      and the Company, please so indicate in the space provided below for that
      purpose, whereupon this letter shall constitute a binding agreement among
      us.

     

    
      	
              Very
                truly yours,

            
	 
	
              ShengdaTech,
                Inc.

            
	 
	 
	
              By:

            	
              /s/
                Xiangzhi Chen

            
	 	
              Name:
                Xiangzhi Chen

            
	 	
              Title: President, Chief Executive Officer and Director

            

    

    

    Accepted and agreed to as of

    the
      date
      first above written:

    

    Oppenheimer
      & Co. Inc.

    

      ACTING
        SEVERALLY ON BEHALF OF THEMSELVES 

      AND
        AS
        REPRESENTATIVES OF THE SEVERAL INITIAL 

      PURCHASERS
        NAMED IN SCHEDULE I HERETO.

    

    

    
      	
              By:

            	
              OPPENHEIMER
                & CO. INC.

            
	 	 
	 	
              /s/
                Andrew MacInnes

            
	 	
              Name:
                Andrew MacInnes

            
	 	
              Title:
                Managing Director

            
	 	
               
                Head of Equity Capital Markets

            

    

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    Schedule
      I

     

    Initial
      Purchasers

     

    
      	
              Name

            	 	
              Aggregate

              Amount of

              Firm Notes to

              be Purchased 

            	 
	 	 	 	 
	
              Oppenheimer
                & Co. Inc.

            	 	
              $

            	
              80,000,000

            	 
	
              ROTH
                Capital Partners, LLC

            	 	
              $

            	
              10,000,000

            	 
	
              Brean
                Murray, Carret & Co., LLC

            	 	
              $

            	
              10,000,000

            	 
	 	 	 	 	 
	 	 	 	 	 
	
              Total

            	 	
              $

            	
              100,000,000

            	 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
      II

     

    Subsidiaries

     

    Faith
      Boom Limited

     

    Shandong
      Haize Nanomaterials Co., Ltd.

     

    Shaanxi
      Haize Nanomaterials Co., Ltd.

     

    Shandong
      Bangsheng Chemicals Co., Ltd.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Schedule
      III

     

    

    

    5/22/08

    ShengdaTech,
      Inc.

     

    $100,000,0006.0%
      Convertible Senior Notes due 2018

     

    
      	
              Issuer:

            	 	
              ShengdaTech,
                Inc.

            
	
              Common
                stock symbol:

            	 	
              SDTH

            
	
              Title
                of securities:

            	 	
              6.00%
                Convertible Senior Notes due 2018

            
	
              Aggregate
                principal amount offered:

            	 	
              $100.0
                million

            
	
              Deal
                type

            	 	
              144A
                with Registration Rights and Section 4-1(1/2)

            
	
              Principal
                amount per bond:

            	 	
              $1,000

            
	
              Issue
                price:

            	 	
              100%
                of principal amount

            
	
              Over-Allotment
                option:

            	 	
              $15.0
                million

            
	
              Annual
                interest rate:

            	 	
              6.00%

            
	
              Conversion
                premium:

            	 	
              18.0%

            
	
              Reference
                price:

            	 	
              $8.42

            
	
              Conversion
                price:

            	 	
              $9.94

            
	
              Conversion
                rate:

            	 	
              100.6036

            
	
              Interest
                payment dates:

            	 	
              6/1
                & 12/1 of each year beginning 12/1/08

            
	
              Maturity:

            	 	
              6/1/18

            
	
              Call
                feature:

            	 	
              3
                year NC, 2 year provisional call protection @ 150%

            
	
              Put
                dates:

            	 	
              Year
                3, Year 5

            
	
              Voluntary
                Conversion Make Whole

            	 	
              See
                “Conversion Rights” below

            
	
              Use
                of proceeds:

            	 	
              $56M
                to expand its NPCC production capacity, acquisitions,
                GCP

            
	
              Additional
                Indebtedness Covenant:

            	 	
              See
                “Limitation on Incurrence of Indebtedness” below

            
	
              Trade
                date:

            	 	
              5/22/08

            
	
              Settlement
                date:

            	 	
              5/28/08

            
	
              144A
                CUSIP:

            	 	
              823213AA1

            
	
              Section
                4-1(1/2) CUSIP:

            	 	
              823213AC7

            
	
              Bookrunner:

            	 	
              Oppenheimer
                & Co.

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Adjustment
      to conversion rate upon a specified Fundamental Change

    

    
      	 	 	
              Stock
                Price

            	 
	
              Effective
                Date 

            	 	
              $

            	
              8.42

            	 	
              $

            	
              9.26

            	 	
              $

            	
              9.94

            	 	
              $

            	
              11.00

            	 	
              $

            	
              12.50

            	 	
              $

            	
              14.00

            	 	
              $

            	
              15.50

            	 	
              $

            	
              17.00

            	 	
              $

            	
              18.50

            	 	
              $

            	
              20.00

            	 
	
              5/28/2008
                

            	 	 	
              21.38
                

            	 	 	
              19.44
                

            	 	 	
              18.11
                

            	 	 	
              16.36
                

            	 	 	
              14.40
                

            	 	 	
              12.86
                

            	 	 	
              11.61
                

            	 	 	
              10.59
                

            	 	 	
              9.73
                

            	 	 	
              9.00
                

            	 
	
              6/1/2009
                

            	 	 	
              14.25
                

            	 	 	
              12.96
                

            	 	 	
              12.07
                

            	 	 	
              10.91
                

            	 	 	
              9.60
                

            	 	 	
              8.57
                

            	 	 	
              7.74
                

            	 	 	
              7.06
                

            	 	 	
              6.49
                

            	 	 	
              6.00
                

            	 
	
              6/1/2010
                

            	 	 	
              7.13
                

            	 	 	
              6.48
                

            	 	 	
              6.04
                

            	 	 	
              5.45
                

            	 	 	
              4.80
                

            	 	 	
              4.29
                

            	 	 	
              3.87
                

            	 	 	
              3.53
                

            	 	 	
              3.24
                

            	 	 	
              3.00
                

            	 
	
              6/1/2011
                

            	 	 	
              0.00
                

            	 	 	
              0.00
                

            	 	 	
              0.00
                

            	 	 	
              0.00
                

            	 	 	
              0.00
                

            	 	 	
              0.00
                

            	 	 	
              0.00
                

            	 	 	
              0.00
                

            	 	 	
              0.00
                

            	 	 	
              0.00
                

            	 

    

    

    CONFIDENTIAL

     

    This
      document is confidential and must not be redistributed or forwarded by you
      under
      any circumstance.

     

    The
      term sheet contains a summary of select terms of the offering only and should
      not be relied upon in making any investment decision.  This term sheet is
      qualified in its entirety by the Offering Memorandum, and you should read these
      documents for a complete description of the company and offering, including
      risk
      factors related thereto.

    

    TERMS

    

    The
      notes and the shares of common stock issuable upon conversion of the notes
      (together, the “Securities”) have
      not been and will not be registered under the Securities Act or any state
      securities laws and may not be offered in the United States, except that
      Securities may be offered and sold to Qualified Institutional Buyers exclusively
      in reliance upon the exemption from the registration requirements of the
      Securities Act provided by Rule 144A or another exemption from
      registration

    

    The
      Securities have not been approved or disapproved by the Securities and Exchange
      Commission or by any state securities commission or regulatory authority, nor
      have the foregoing authorities passed on the accuracy or adequacy of the
      attached documents.  Any representation to the contrary is a criminal
      offense.

    

    This
      announcement shall not constitute an offer to sell or the solicitation of an
      offer to buy any securities of ShengdaTech, Inc., nor shall there be any sale
      of
      securities in any state or jurisdiction in which such an offer, solicitation
      or
      sale would be unlawful prior to registration or qualification under the
      securities laws of any such state or jurisdiction.

    

    Copies
      of the Offering Memorandum can be obtained from your Oppenheimer sales
      representative.

    

    This
      message is intended solely for the benefit of the initial recipient. No
      retransmission, copying or distribution is
      permitted.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    SUPPLEMENTAL
      DISCLOSURE TO THE PRICING SUPPLEMENT

    

    Below
      is
      additional information regarding the beneficial ownership of ShengdaTech, Inc.
      (the “Company”),
      clarification regarding the payment of additional interest upon the conversion
      of notes by holders any time prior to June 1, 2011, information regarding
      limitations on the Company’s ability to incur indebtedness and the fact that the
      offering is being conducted in two tranches. Such information should be
      considered by the investors when making an investment in the convertible senior
      notes to be issued by the Company. Please note that the additional information
      below will also be reflected in the final offering memorandum.

    

    PRINCIPAL
      STOCKHOLDERS

    

    The
      following table sets forth information as of May 16, 2008, regarding the
      beneficial ownership of the Company’s common stock by each person known by the
      Company to own 5% or more of its outstanding shares of common stock, each the
      Company’s directors and executive officers who beneficially own common stock of
      the Company, and the Company’s directors and executive officers as a group. The
      percentage of beneficial ownership is calculated based on a total of 54,202,036
      shares of common stock outstanding as of May 16, 2008.

     

    
      	
              Name
                and Address

            	 	
              Number of Shares

            	 	
              Percentage Owned

            	 
	
              Xiangzhi
                Chen

            	 	 	
              22,902,912

            	 	 	
              42.3

            	
              %

            
	
              Carl
                Mudd 

            	 	 	
              5,000

            	 	 	
              —

            	 
	
              Xiqing
                Xu

            	 	 	
              1,159,584

            	 	 	
              2.1

            	
              %

            
	
              Directors
                and executive officers as a group (8 persons)

            	 	 	
              24,062,496

            	 	 	
              44.4

            	
              %

            

    

    

    The
      address for all of the above officers and executive directors is Youth Pioneer
      Park, Tai'an Economic and Technological Development Zone, Tai'an City, Shandong
      Province 271000, People's Republic of China.

    

    CONVERSION
      RIGHTS

    

    If
      holders convert their notes at any time prior to June 1, 2011, the Company
      will
      pay additional interest in cash or, at the option of the Company, in shares
      to
      holders of the notes being converted. The amount of this additional interest
      (the “additional interest”) shall be equal to the interest due and payable from
      the date of issuance until and including June 1, 2011, less any interest
      actually paid or provided for prior to the date of such conversion.

    

    In
      the
      event the Company elects to pay any portion of the additional interest in
      shares, it will notify the holders of notes being converted the amount of
      additional interest to be satisfied in shares, or it will notify that it will
      satisfy the entire additional interest in cash, within one VWAP trading day
      (as
      defined below) of the relevant conversion date; provided
      that if
      the Company does not give any notice within the time period described as to
      how
      it intends to settle the additional interest, the Company will satisfy its
      obligations with respect to the additional interest only in cash. The Company
      will treat all holders with the same conversion date in the same manner, but
      will not, however, have any obligation to treat holders with different
      conversion dates in the same manner.

     

    If
      the
      Company elects to settle the additional interest only in cash, such settlement
      will occur simultaneously with its settlement of the related conversion, which
      will occur as soon as practicable, but in any event within three business days
      of the relevant conversion date.

     

    If
      the
      Company elects to settle all or any portion of the additional interest in
      shares, such settlement will occur on the third business day following the
      final
      VWAP trading day of the related share settlement averaging period (as defined
      below).

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    The
      amount of cash and/or number of shares, as the case may be, due with respect
      to
      the additional interest will be determined as follows:

     

    (1) If
      the
      Company elects to satisfy the entire additional interest in cash, it will
      deliver to the holders of notes being converted the amount of cash equal to
      the
      additional interest described above.

     

    (2) If
      the
      Company elects to satisfy the entire additional interest in shares, it will
      deliver to the holders of notes being converted the number of shares equal
      to
      (A) the amount of additional interest due with respect to such notes,
divided
      by
      (B) 95%
      of the average daily VWAP during the share settlement averaging
      period.

     

    (3) If
      the
      Company elects to satisfy the additional interest in a combination of cash
      and
      shares, it will deliver to the holders of notes being converted:

     

    • cash
      (the
“cash amount”) in an amount equal to the portion of additional interest due with
      respect to such notes the Company elects to satisfy in cash; and

     

    • the
      number of shares equal to (A) the amount of additional interest due with respect
      to such notes minus
      the cash
      amount, divided
      by
      (B) 95%
      of the average daily VWAP during the share settlement averaging
      period.

     

    The
      “share settlement averaging period” means the 10 consecutive VWAP trading day
      period beginning on the second VWAP trading day following the relevant
      conversion date. 

     

    “VWAP”
      for the Company’s shares of common stock means, for each of the 10 consecutive
      VWAP trading days during any share settlement averaging period, the per share
      volume-weighted average price as displayed under the heading “Bloomberg VWAP” on
      Bloomberg page [SDTH <equity> VWAP] (or any equivalent successor page if
      such page is not available) in respect of the period from the scheduled open
      of
      trading on the principal trading market for the Company’s common stock to the
      scheduled close of trading on such market on such VWAP trading day, or if such
      volume-weighted average price is unavailable, the market value of one share
      of
      the Company’s common stock on such VWAP trading day as the Company’s board of
      directors determines in good faith using a volume-weighted method.

     

    

    A
“VWAP
      trading day” means a day during which (i) trading in the Company’s common stock
      generally occurs on the principal U.S. national securities exchange on which
      such common stock is listed and (ii) there is no VWAP market disruption event.
      If the Company’s common stock is not so listed, then “VWAP trading day” means a
      business day.

    

    A
“VWAP
      market disruption event” means (i) a failure by the principal U.S. national
      securities exchange or market on which the Company’s common stock is listed to
      open for trading during its regular trading session or (ii) the occurrence
      or
      existence prior to 1:00 p.m. on any scheduled trading day for the Company’s
      common stock for an aggregate one half-hour period of any suspension or
      limitation imposed on trading (by reason of movements in price exceeding limits
      permitted by the stock exchange or otherwise) in the Company’s common stock or
      in any options contracts or futures contracts relating to the Company’s common
      stock.

    

    LIMITATION
      ON INCURRENCE OF INDEBTEDNESS

    

    The
      Company will not incur any secured indebtedness and it will not permit any
      of
      its subsidiaries to directly or indirectly incur any indebtedness. The Company
      will be permitted to incur additional indebtedness (the “Permitted
      Indebtedness”)
      which
      ranks equal in right of payment to the notes in an amount not to exceed
      US$15,000,000; provided
      that
      such Permitted Indebtedness does not require any repayment prior to the next
      purchase date as set forth under “—Purchase of Notes at Your Option on Specified
      Dates” at the time of such incurrence. The Company will be permitted to issue
      equity securities, including common stock and preferred stock (in the case
      of
      preferred stock, which shall not be redeemable or otherwise repayable prior
      to
      the stated maturity date of the Notes so long as 25% or more of the initial
      aggregate principal amount of notes issued, including any notes issued pursuant
      to the over-allotment option, is outstanding), and any securities which rank
      junior in right of payment to the notes.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    The
      limitation as set forth above shall cease to be in effect at such point as
      either of the following conditions is met: (i) the aggregate principal amount
      of
      notes outstanding is less than 25% of the initial aggregate principal amount
      of
      notes issued including any notes issued pursuant to the over-allotment option
      or
      (ii) the common stock into which the notes are convertible trades at a level
      greater than 165% of the conversion price in effect at such time for a period
      of
      20 of 30 consecutive trading days, subject to the notes and common stock into
      which the notes are convertible being the subject of an effective registration
      statement or exempt from registration requirements under Rule 144.

    

    "indebtedness"
      means obligations for money borrowed.

    

    OFFERING
      BEING CONDUCTED IN TWO SEPARATE TRANCHES

    

    The
      offering will be conducted in the form two separate tranches, a Rule 144A
      tranche and a Section 4(1-1/2) tranche. Purchasers in the Rule 144A tranche
      will
      be subject to the following restriction on aggregate additional interest
      payments upon early conversion to preserve Rule 144A

    eligibility:

    

    If
      a
      holder converts notes prior to the earliest of (1) the sale of such notes
      pursuant to Rule 144 under the U.S. Securities Act of 1933, as amended, (2)
      the
      date falling one year after the last issuance of the notes pursuant to this
      offering and (3) the sale of such notes pursuant to an effective registration
      statement, then the aggregate additional interest such holder will receive
      upon
      conversion of each US$1,000 original principal amount of notes will not exceed
      US$68.21, which is the amount determined pursuant to the following
      formula:

    

    1000
      -
      1.1(CR * OP)

    

    where
      CR
      is 100.6036, the initial conversion rate for the notes and OP is US$8.42, the
      last reported sale price of our common stock on the date we priced this offering
      of notes; provided,
      however,
      that if
      such holder has elected in writing to purchase the notes in this offering in
      a
      Section 4(1-1/2) transaction under the U.S. Securities Act of 1933, as amended,
      instead of pursuant to Rule 144A, then such restriction on the maximum aggregate
      amount of additional interest payable during this period shall not apply. If
      the
      notes held by such a holder are subsequently resold pursuant to Rule 144A prior
      to the expiration of this period, then such restriction on additional interest
      shall once again apply to such notes.

    

    Purchasers
      in the Section 4(1-1/2) tranche will receive notes that are not subject to
      this
      restriction on aggregate additional interest payments. However, such purchasers
      will be required to enter into typical investor letters as a condition to
      closing and will receive their purchased securities in the form of physical
      legended note certificates."

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    Schedule
      IV

     

    Free
      Writing Offering Documents

     

    None

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    Schedule
      V

     

    Persons
      Party to Lock Up Agreement

     

    Xiangzhi
      Chen

     

    Carl
      Mudd

     

    Xiqin
      Xu

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    Exhibit
      A

     

    Form
      of
      Registration Rights Agreement

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    Exhibit
      B

     

    FORM
      LOCK
      UP
      AGREEMENT

     

    May
      22,
      2008

     

    Oppenheimer
      & Co. Inc.

    300
      Madison Avenue

    New
      York,
      New York 10017

     

    Ladies
      and Gentlemen:

    

    This
      Lock-Up Agreement is being delivered to you in connection with the proposed
      Purchase Agreement (the “Purchase
      Agreement”)
      to be
      entered into by ShengdaTech, Inc., a Nevada corporation (the “Company”),
      and
      you with respect to the offering (the “Offering”)
      without registration under the Securities Act of 1933, as amended (the
“Act”),
      and
      initial resale in reliance on Rule 144A under the Act, of $100,000,000 of
      6.00% Senior
      Convertible Notes due 2018 (the “Notes”)
      of the
      Company. Capitalized terms used herein without definition shall have the
      respective meanings ascribed to them in the Purchase Agreement.

     

    In
      order
      to induce you to enter into the Purchase Agreement, the undersigned agrees
      that,
      for a period (the “Lock-Up
      Period”)
      beginning on the date hereof and ending on, and including, the date that is
      90 days after the date of the final offering memorandum relating to the
      Offering, the undersigned will not, without your prior written consent,
      (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge,
      grant any option to purchase or otherwise dispose of or agree to dispose of,
      directly or indirectly, or file (or participate in the filing of) a registration
      statement with the Securities and Exchange Commission (the “Commission”)
      in
      respect of, or establish or increase a put equivalent position or liquidate
      or
      decrease a call equivalent position within the meaning of Section 16 of the
      Securities Exchange Act of 1934, as amended, and the rules and regulations
      of
      the Commission promulgated thereunder (the “Exchange
      Act”)
      with
      respect to, any Common Stock, $0.00001 par value per share, of the Company
      (the
“Common
      Stock”),
      the
      Notes or any other securities of the Company that are substantially similar
      to
      the Common Stock or the Notes, or any securities convertible into or
      exchangeable or exercisable for, or any warrants or other rights to purchase,
      the foregoing, (ii) enter into any swap or other arrangement that transfers
      to another, in whole or in part, any of the economic consequences of ownership
      of the Common Stock, the Notes or any other securities of the Company that
      are
      substantially similar to the the Common Stock or the Notes, or any securities
      convertible into or exchangeable or exercisable for, or any warrants or other
      rights to purchase, the foregoing, whether any such transaction is to be settled
      by delivery of Common Stock or such other securities, in cash or otherwise
      or
      (iii) publicly announce an intention to effect any transaction specified in
      clause (i) or (ii). The foregoing sentence shall not apply to (a) bona fide
      gifts or distributions without consideration, provided the recipient thereof
      agrees in writing with the Initial Purchasers to be bound by the terms of this
      Lock-Up Agreement, or (b) dispositions to any trust for the direct or
      indirect benefit of the undersigned and/or the immediate family of the
      undersigned, provided that such trust agrees in writing with the Initial
      Purchasers to be bound by the terms of this Lock-Up Agreement, or
      (c) transfers that occur by operation of law, such as the rules of
      intestate succession or statutes governing the effects of a merger, provided
      the
      transferee thereof agrees in writing with the Initial Purchasers to be bound
      by
      the terms of this Lock-Up Agreement. For purposes of this paragraph, “immediate
      family” shall mean the undersigned and the spouse, any lineal descendent,
      father, mother, brother or sister of the undersigned.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    In
      addition, the undersigned hereby waives any rights the undersigned may have
      to
      require registration of Common Stock in connection with the filing of any
      registration statement to be filed with the Commission pursuant to the
      Registration Rights Agreement. The undersigned further agrees that, for the
      Lock-Up Period, the undersigned will not, without your prior written consent,
      make any demand for, or exercise any right with respect to, the registration
      of
      Common Stock or any securities convertible into or exercisable or exchangeable
      for Common Stock, or warrants or other rights to purchase Common Stock or any
      such securities.

     

    * * *

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    If
      (i) the Company notifies you in writing that it does not intend to proceed
      with the Offering or (ii) for any reason the Purchase Agreement shall be
      terminated prior to the “Firm Notes Closing Date” (as defined in the Purchase
      Agreement), this Lock-Up Agreement shall be terminated and the undersigned
      shall
      be released from its obligations hereunder.

     

    
      	
              Yours
                very truly,

            
	 
	
                  

            
	
              Name:

            

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    Exhibit
      C-1

     

    Form
      of
      Opinion of Company Counsel

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    Exhibit
      C-2

     

    Form
      of
      Opinion of Company British Virgin Islands Counsel

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    Exhibit
      C-3

     

    Form
      of
      Opinion of Company PRC Counsel

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    Exhibit
      C-4

     

    Form
      of
      Opinion of Initial Purchasers’ PRC Counsel

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    Exhibit
      C-5

     

    Form
      of
      Opinion of Trustee’s Counsel

    
      
         

      

      
        v

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