Document:

Unassociated Document

     

    THIS
      AGREEMENT TO
      AMEND
      THAT CERTAIN TRUST
      DEED made on April 12, 2007 between CHINA
      ARCHITECTURAL ENGINEERING, INC.,
      and
THE
      BANK OF NEW YORK, LONDON BRANCH,
      is
      made, agreed and entered into on this
      29th
      day of August 2007, between the Issuer, the Trustee and ABN AMRO Bank, N.V.
      (“ABN”),
      currently the sole holder of the Bonds issued pursuant to the Trust
      Deed.

    

    RECITALS

    

    WHEREAS
      :-

    

    
      	
              (A)

            	
              A
                Trust Deed (the “Trust
                Deed”)
                was made on April 12, 2007 between CHINA
                ARCHITECTURAL ENGINEERING, INC.,
                a
                company incorporated under the laws of the State of Delaware whose
                registered office is at 2711 Centerville Road, Suite 400, Wilmington,
                Delaware 19808, c/o Corporation Service Company (the “Issuer”)
                and THE
                BANK OF NEW YORK, LONDON BRANCH,
                a
                company incorporated with limited liability in United Kingdom, whose
                principal office is situated at 40th Floor, One Canada Square, London,
                E14, 5AL, United Kingdom (the “Trustee”).

            

    

    

    
      	
              (B)

            	
              The
                Issuer has advised ABN that it will not take or permit any action
                that
                would cause the price of its common shares to drop below US$0.25
                per
                common share or which would cause, under the current terms of the
                Trust
                Deed, the Conversion Price of the Bonds to be less than US$0.25 per
                common
                share.

            

    

    

    
      	
              (C)

            	
              In
                order to address certain potential accounting issues of the Issuer,
                the
                Issuer wishes to amend the Trust Deed to provide that the Conversion
                Price
                of the Bonds cannot be adjusted lower than US$0.25 per common share
                (as
                adjusted for stock splits, stock dividends, rights offerings, capital
                distributions and similar events) except in certain instances.
                

            

    

    

    
      	
              (D)

            	
              Therefore,
                the parties have agreed to enter into this Agreement to amend certain
                provisions of the Trust Deed.

            

    

    

    NOW
      THEREFORE IT IS HEREBY AGREED as follows:

     

    
      	
              1.

            	
              DEFINITIONS
                AND INTERPRETATION

               

              In
                this Agreement,
                terms and expressions defined in the Trust Deed shall, unless the
                context
                otherwise requires, have the same meanings when used
                herein.

            

    

     

    
      	
              2.

            	
              AMENDMENT
                AND RESTATEMENT 

               

              The
                Trust Deed is amended and restated as of
                the date hereof in the form attached as Annex
                A.

            

    

     

    
      	
              3.

            	
              UNDERTAKING

               

              The
                Issuer shall deliver to the Trustee and ABN
                certified
                copies of the resolutions of the board of directors of the Issuer
                approving this Agreement and authorising the execution
                thereof.

            

    

     

    
      
        
        

      

      
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          1 -

        
          

        

      

      
        
        

      

    

     

    
      	
              4.

            	
              MISCELLANEOUS

            

    

    

    
      	
              4.1

            	
              Except
                as expressly amended in this Agreement, the Trust Deed shall continue
                in
                full force and effect in all respects and shall be read and construed
                to
                give full effect to the provisions of this
                Agreement.

            

    

     

    
      	
              4.2

            	
              All
                costs, expenses and fees, including legal and accounting fees,
                registration fees, taxes, stamp duty and all other charges and
                disbursements whatsoever incurred by ABN or the Trustee in connection
                with
                the preparation, negotiation, execution, administration and enforcement
                of
                this Agreement and any documents to be executed pursuant hereto shall
                be
                paid by the Issuer forthwith on demand on a full indemnity
                basis.

            

    

    

    
      	
              4.3

            	
              This
                Agreement shall be construed and governed by the laws of England
                and the
                parties hereby agree to submit to the exclusive jurisdiction of the
                English courts.

            

    

    

    This
      Agreement has been duly executed on the date first above written.

     

    
      
        
        

      

      
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          2 -

        
          

        

      

      
        
        

      

    

    

    THE
      ISSUER

    

    Executed
      as a deed by

    CHINA
      ARCHITECTURAL ENGINEERING, INC. 

     

    

    By:
      /s/ Luo Ken Yi 

    
      
        

      

    

    Name:
      Luo
      Ken Yi 

    Title:
      Chairman

    
 

    Name
      of
      Witness: Wei Wan

    Address:

    

    

    THE
      TRUSTEE

    

    Executed
      as a deed by

    THE
      BANK OF NEW YORK, LONDON BRANCH 

     

    

    By:
      /s/ Tania Sibree 

    
      

    

    Name:
      Tania Sibree 

    Title:
      Vice President

     

     

    
      Name
        of
        Witness: Daphne Yeung

      Address:

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    THE
      BONDHOLDER

    

    Executed
      as a deed by

    ABN
      AMRO BANK, N.V. 

    
      	 	 	 	 
	/s/ A.
              Gardner	 	 	/s/ G.
              Booth
	
              

            	 	 	
              

            
	Name:
              A. Gardner
Title: Regional Counsel	 	 	Name:
              G. Booth
Title: Head of Asian
              Equity
Linked

    

     

    Name
      of
      Witness: Fraser Ross

    Address:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

    

    ANNEX
      A

    

    FORM
      OF AMENDED AND RESTATED TRUST DEED

     

     

     

    
      
        
        

      

      
        Annex
          A-1

        
          

        

      

      
        
        

      

    

    
       

       

      
        
 

      

      

      AMENDED
        AND RESTATED TRUST DEED

      

      

      CHINA
        ARCHITECTURAL ENGINEERING, INC.

      

      US$10,000,000
        VARIABLE RATE COUPON CONVERTIBLE BONDS DUE 2012

      

      

      Originally
        Dated April 12, 2007, Amended and Restated on August 29, 2007

      

      

      

      
        

      

       

      
         

        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      CONTENTS

      

      
        	
                Clause

              	
                Page

              
	
              	 	 
	
                1.

              	
                Interpretation

              	
                1

              
	
                2.

              	
                Amount
                  of the Bonds and Covenant to Pay

              	
                5

              
	
                3.

              	
                Form
                  of the Bonds and Certificates; Issue of the Bonds

              	
                6

              
	
                4.

              	
                Stamp
                  Duties and Taxes

              	
                7

              
	
                5.

              	
                Covenants
                  relating to the Conversion Rights

              	
                8

              
	
                6.

              	
                Notices
                  Relating to the Conversion Rights

              	
                10

              
	
                7.

              	
                Adjustments
                  to the Conversion Price

              	
                13

              
	
                8.

              	
                Application
                  of Moneys Received by the Trustee

              	
                19

              
	
                9.

              	
                General
                  Covenants

              	
                20

              
	
                10.

              	
                Remuneration
                  and Indemnification of Trustee

              	
                23

              
	
                11.

              	
                Provisions
                  supplemental to the Trustee Acts

              	
                25

              
	
                12.

              	
                Liability
                  of the Trustee

              	
                30

              
	
                13.

              	
                Waiver
                  and Proof of Default

              	
                30

              
	
                14.

              	
                Trustee
                  not Precluded from Entering into Contracts

              	
                31

              
	
                15.

              	
                Modification
                  and substitution

              	
                31

              
	
                16.

              	
                Appointment,
                  Retirement and Removal of the Trustee

              	
                33

              
	
                17.

              	
                Communications

              	
                34

              
	
                18.

              	
                Further
                  Issues

              	
                35

              
	
                19.

              	
                Currency
                  Indemnity

              	
                35

              
	
                20.

              	
                Governing
                  Law, Third Party Rights and Jurisdiction

              	
                36

              
	
                21.

              	
                Third
                  Party Rights

              	
                36

              
	
                22.

              	
                Counterparts

              	
                37

              
	
                23.

              	
                Termination
                  of this Trust Deed

              	
                37

              
	
              	 	 
	
                Schedule

              	 
	
              	 	 
	
                1.

              	
                Form
                  of Certificate

              	
                38

              
	
                2.

              	
                Form
                  of Global Certificate

              	
                71

              
	
                3.

              	
                Provisions
                  for Meetings of Bondholders

              	
                78

              

      

       

      
        
          
          

        

        
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            i -

          
            

          

        

        
          
          

        

      

      THIS
        AMENDED AND RESTATED TRUST DEED (this
        “Trust
        Deed”)
        is
        originally dated April 12, 2007 and amended and restated on August 29, 2007
        between:

      

      
        	(1)	
                CHINA
                  ARCHITECTURAL ENGINEERING, INC.,
                  a
                  company incorporated under the laws of the State of Delaware whose
                  registered office is at 2711
                  Centerville Road, Suite 400, Wilmington, Delaware 19808, c/o Corporation
                  Service Company
                  (the “Issuer”);
                  and

              

      

      

      
        	(2)	
                THE
                  BANK OF NEW YORK, LONDON BRANCH,
                  a
                  company incorporated with limited liability in United Kingdom,
                  whose
                  principal office is situated at 40th Floor, One Canada Square,
                  London,
                  E14, 5AL, United Kingdom (the “Trustee”,
                  which expression, where the context so admits, includes all persons
                  for
                  the time being the trustee or trustees of this Trust
                  Deed).

              

      

      

      WHEREAS:

      

      
        	
                (A)

              	
                The
                  Issuer has (pursuant to resolutions of its board of directors dated
                  April
                  9, 2007 and August [•], 2007) authorised the issue of US$10,000,000
                  Variable Rate Convertible Bonds due 2012 convertible into shares
                  of common
                  stock of the Issuer with par value of US$0.001 each to be constituted
                  by
                  this Trust Deed.

              

      

      

      
        	
                (B)

              	
                The
                  Trustee has agreed to act as trustee of this Trust Deed on the
                  following
                  terms and conditions.

              

      

      

      THIS
        TRUST DEED WITNESSES AND IT IS HEREBY AGREED AND DECLARED AS
        FOLLOWS:

       

      
        	
                1.

              	
                Interpretation

              

      

      

      
        	
                1.1

              	
                Definitions
                  

              

      

      

      The
        following expressions have the following meanings:

      

      “Accounts”
means,
        in relation to the Issuer and a Fiscal Period, its balance sheet and income
        statements for that Fiscal Period, which shall be consolidated if the Issuer
        has
        Subsidiaries the accounts of which should be consolidated under the laws
        or
        regulations of the United States of America or under the generally accepted
        accounting principles in the United States of America;

      

      “Agency
        Agreement”
means
        the paying and conversion agency agreement dated April 12, 2007, as supplemented
        from time to time, between the Issuer, the Trustee, the Registrar and the
        Agents, whereby the Registrar and the Agents are appointed and includes any
        other agreements related to it, as supplemented from time to time, approved
        in
        writing by the Trustee appointing Successor Agents and/or a Successor
        Registrar;

      

      “Agents”
means
        the Principal Agent, the Registrar and the other paying, conversion and transfer
        agents appointed under the Agency Agreement, at their specified offices,
        and
        their Successors;

      

      “Alternative
        Stock Exchange”
has
        the
        meaning set out in Condition 6(C);

      

      “AMEX”
means
        the American Stock Exchange;

      

      “Auditors”
means
        in relation to the Issuer, the firm of auditors appointed by the Board of
        Directors, from time to time, of the Issuer;

       

      
        
          
          

        

        
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            1 -

          
            

          

        

        
          
          

        

      

       

      “Average
        Closing Price”
has
        the
        meaning set out in Condition 6(C);

      

      “Bondholder”
or,
        in
        respect of a Bond, “holder”
means
        a
        person in whose name a Bond is registered in the register of
        Bondholders;

      

      “Bonds”
means
        the bonds, in the denomination of US$1,000 each, in registered form comprising
        the US$10,000,000 Variable Rate Convertible Bonds due 2012 (the “Bonds”)
        constituted by this Trust Deed and for the time being outstanding or, as
        the
        context may require, a specific number or principal amount of them;

      

      “Capital
        Distribution”
has
        the
        meaning set out in Condition 6(C);

      

      “Certificate”
means
        a
        certificate, substantially in the form set out in Schedule
        1,
        issued
        in the name of the holder of one (1) or more Bonds; and, except in Clause
        3,
        includes the Global Certificate;

      

      “Clearstream”
means
        Clearstream Banking, société anonyme, incorporated under the laws of the Grand
        Duchy of Luxembourg or any successor securities clearing agency;

      

      “Closing
        Price”
has
        the
        meaning set out in Condition 6(C);

      

      “Conditions”
means
        the terms and conditions of the Bonds set out in Schedule 1 as from time
        to time
        modified in accordance with this Trust Deed, and as modified, in their
        application to the Bonds in respect of which the Global Certificate is issued,
        by the provisions of the Global Certificate, and any reference to a particularly
        numbered Condition shall be construed accordingly;

      

      “Conversion
        Date”
has
        the
        meaning set out in Condition 6(B)(i);

      

      “Conversion
        Notice”
means
        the written notice in a form previously approved by the Trustee required
        to
        accompany the Certificates deposited for the purposes of conversion of Bonds,
        the initial form of which is set out in Exhibit A to the Agency
        Agreement;

      

      “Conversion
        Period”
has
        the
        meaning set out in Condition 6(A)(i);

      

      “Conversion
        Price”
has
        the
        meaning set out in Condition 6(A)(iii);

      

      “Conversion
        Right”
has
        the
        meaning set out in Condition 6(A)(i);

      

      “Current
        Market Price”
has
        the
        meaning set out in Condition 6(C);

      

      “definitive
        Certificate”
has
        the
        meaning ascribed to it in the Global Certificate;

      

      “Dividend”
has
        the
        meaning set out in Condition 6(C);

      

      “Early
        Redemption Amount”
has
        the
        meaning set out in Condition 9(B);

      

      “Employee
        Share Scheme”
means
        any scheme approved by the shareholders of the Issuer (whether before or
        after
        the date hereof) and in compliance with the requirements of the listing rules
        of
        the AMEX (or if applicable, the Alternative Stock Exchange) pursuant to which
        Shares or other securities (including rights or options) are or may be issued,
        offered or granted to employees (including directors) or former employees
        of the
        Issuer, its Subsidiaries and/or associated companies, or persons related
        to such
        employees (including directors) or former employees or eligible participants
        of
        such scheme, provided that such issues are in compliance with the Listing
        Rules;

       

      
        
          
          

        

        
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            2 -

          
            

          

        

        
          
          

        

      

       

      “Equivalent
        Amount”
has
        the
        meaning set out in Condition 6(B)(iii);

      

      “Euroclear”
means
        Euroclear Bank S.A./N.V., or any successor securities clearing
        agency;

      

      “Event
        of Default”
means
        any of the events described in Condition 11; 

      

      “Extraordinary
        Resolution”
has
        the
        meaning set out in Schedule
        3;

      

      “Fair
        Market Value”
has
        the
        meaning set out in Condition 6(C); 

      

      “Fiscal
        Period” means,
        as
        the context may require, a period commencing on 1 January and ending on the
        succeeding 31 December, provided that if the Issuer shall change its financial
        year so as to end on a date other than 31 December, the foregoing shall be
        amended as necessary;

      

      “Global
        Certificate”
means
        the single global certificate substantially in the form set out in Schedule
        2
        issued in respect of all the Bonds;

      

      “Liability” means
        any
        loss, damage, cost, charge, claim, demand, expense, judgment, action, proceeding
        or other liability whatsoever (including, without limitation, in respect
        of
        taxes, duties, levies, imposts and other charges) and including any value
        added
        tax or similar tax charged or chargeable in respect thereof and legal fees
        and
        expenses on a full indemnity basis;

      

      “Listing
        Rules”
means
        the listing rules of the AMEX;

      

      “non-assessable”,
        in
        relation to securities, including the Shares, means that, when issued, those
        securities are not subject to any further calls by the Issuer for, or any
        other
        provisions which could require, further payments or contributions from their
        holders;

      

      “outstanding”
means,
        in relation to the Bonds, all the Bonds issued except (a) those which have
        been
        redeemed in accordance with the Conditions, (b) those in respect of which
        the
        date for redemption has occurred and the redemption moneys and all accrued
        default interest (if any) have been duly paid to or to the order of the Trustee
        as provided in Clause 2
        or have
        been duly paid to the Principal Agent if permitted by Clause 2,
        (c)
        those in respect of which claims have become prescribed under Condition 13,
        (d)
        those which have been purchased and cancelled by the Issuer or any of their
        respective Subsidiaries as provided in the Conditions, (e) those in respect
        of
        which the Conversion Right has been duly exercised and discharged (and, for
        the
        avoidance of doubt, a Bond in respect of which a Conversion Date has occurred
        shall be deemed to remain outstanding until the Conversion Right has been
        satisfied and discharged even if the holder is removed from the register
        of
        Bondholders during the conversion process); (f) those mutilated or defaced
        Bonds
        which have been surrendered and cancelled and in respect of which replacements
        have been issued pursuant to Condition 16, (g) the Global Certificate to
        the
        extent that it shall have been exchanged for another Global Certificate in
        respect of the Bonds or for the Bonds in definitive form pursuant to its
        provisions; and provided that for the purposes of (i) ascertaining the right
        to
        attend and vote at any meeting of the Bondholders, (ii) determining how many
        Bonds are outstanding for the purposes of Conditions 11, 12 and 15 and Schedule
        3, (iii) the exercise of any discretion, power or authority which the Trustee
        is
        required, expressly or impliedly, to exercise in or by reference to the
        interests of the Bondholders, and (iv) the certification (where relevant)
        by the
        Trustee as to whether any event, circumstance, matter or thing is in its
        opinion
        materially prejudicial to the interests of the Bondholders, those Bonds which
        are beneficially held by or on behalf of the Issuer or any of their respective
        Subsidiaries and not yet cancelled shall (unless no longer so held) be deemed
        not to remain outstanding;

       

      
        
          
          

        

        
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            3 -

          
            

          

        

        
          
          

        

      

       

      “Principal
        Agent”
means
        The Bank of New York, London Branch at its specified office at 40th Floor,
        One
        Canada Square, London, E14 5AL, United Kingdom or any Successor Principal
        Agent
        appointed under the Agency Agreement, at its specified office;

      

      “record
        date”
means
        a
        date fixed by or pursuant to the By-laws of the Issuer or otherwise specified
        for the purpose of determining entitlements to dividends or other distributions
        to, or rights of, holders of Shares;

      

      “Registrar”
means
        The Bank of New York at its specified office at 101 Barclay Street, 21st
        Floor,
        New York, NY 10286, United States of America or any Successor Registrar
        appointed under the Agency Agreement, at its specified office;

      

      “Relevant
        Cash Dividend”
has
        the
        meaning set out in Condition 6(C); 

      

      “Scrip
        Dividend”
has
        the
        meaning set out in Condition 6(C);

      

      “Shares”
means
        the shares of common stock of par value US$0.001 per share that will be listed
        on the AMEX;

      

      “Shareholder”
means
        the person in whose name a Share is registered;

      

      “specified
        office”
means,
        in relation to an Agent or the Registrar, the office identified with its
        name at
        the end of the Conditions or any other office approved by the Trustee and
        notified to the Bondholders pursuant to Clause 9.11;

      

      “Subsidiary”
has
        the
        meaning set out in Condition 5(B)(iii);

      

      “Successor”
means,
        in relation to the Agents or the Registrar, such other or further person
        as may
        from time to time be appointed by the Issuer as an Agent or the Registrar
        with
        the written approval of, and on terms approved in writing by, the Trustee
        and
        notice of whose appointment is given to Bondholders pursuant to Clause
        9.11;

      

      “Trading
        Day”
has
        the
        meaning set out in Condition 6(C);

      

      “this
        Trust Deed”
means
        this Trust Deed (as from time to time altered in accordance with this Trust
        Deed) and any other document executed in accordance with this Trust Deed
        (as
        from time to time so altered) and expressed to be supplemental to this Trust
        Deed; and

      

      “trust
        corporation”
means
        a
        corporation entitled pursuant to any legislation applicable to a trustee
        in any
        jurisdiction to act as trustee and carry on trust business under the laws
        of the
        country of its incorporation.

       

      
        
          
          

        

        
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                1.2

              	
                Construction
                  of Certain References 

              

      

      

      References
        to:

      

      
        	 	
                (a)

              	
                costs,
                  charges, remuneration or expenses include any withholding, value
                  added,
                  turnover or similar tax charged in respect
                  thereof;

              

      

      

      
        	 	
                (b)

              	
                “United
                  States dollars”,
                  “US$”
                  and “United
                  States cents” are
                  to the lawful currency for the time being of the United States
                  of
                  America;

              

      

      

      
        	 	
                (c)

              	
                a
                  Schedule or a Clause or a sub-clause, paragraph or sub-paragraph
                  is,
                  unless otherwise stated, to a schedule hereto or a clause or sub-clause,
                  paragraph or sub-paragraph hereof respectively;

              

      

      

      
        	 	
                (d)

              	
                an
                  action, remedy or method of judicial proceedings for the enforcement
                  of
                  rights of creditors include references to the action, remedy or
                  method of
                  judicial proceedings in jurisdictions other than England as shall
                  most
                  nearly approximate thereto; and

              

      

      

      
        	 	
                (e)

              	
                references
                  in this Trust Deed and the Conditions to the consent or approval
                  of the
                  Trustee not being unreasonably withheld or delayed shall be construed
                  giving due regard to the fact that the Trustee in giving any such
                  consent
                  or approval is acting as Trustee for the Bondholders and is obliged
                  to act
                  in their interests.

              

      

      

      
        	
                1.3

              	
                Headings

              

      

      

      Headings
        shall be ignored in construing this Trust Deed.

      

      
        	
                1.4

              	
                Schedules
                  

              

      

      

      The
        Schedules are part of this Trust Deed and have effect accordingly.

      

      
        	
                1.5

              	
                Definitions
                  in Conditions 

              

      

      

      Terms
        defined in the Conditions shall, unless otherwise defined herein, have the
        same
        meaning when used in the main body of this Trust Deed.

       

      
        	
                2.

              	
                
                  AMOUNT
                    OF THE BONDS AND COVENANT TO
                    PAY

                

              

      

      

      
        	
                2.1

              	
                Amount
                  of the Bonds

              

      

      

      The
        aggregate principal amount of the Bonds is limited to US$10,000,000 subject
        to
        the increase by the principal amount of any bonds issued pursuant to Condition
        17.

      

      
        	
                2.2

              	
                Covenant
                  to pay

              

      

      

      The
        Issuer will on one (1) business day (as defined in Condition 8(F)) prior
        to any
        date when the Bonds or any of them become due to be redeemed unconditionally
        pay
        to or to the order of the Trustee in London in United States dollars in
        immediately available funds the principal amount of the Bonds becoming due
        for
        redemption on that date (to be received by 10:00 a.m. New York time) together
        with any applicable premium and will (subject to the Conditions) until such
        payment (both before and after judgment) unconditionally so pay to or to
        the
        order of the Trustee interest in United States dollars on the principal amount
        of the Bonds outstanding as set out in the Conditions provided that:

       

      
        
          
          

        

        
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            5 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (a)

              	
                every
                  payment of any sum due in respect of the Bonds made to the Principal
                  Agent
                  as provided in the Agency Agreement shall, to that extent, satisfy
                  such
                  obligation except to the extent that there is failure in its subsequent
                  payment to the relevant Bondholders under the Conditions; and
                  

              

      

      

      
        	 	
                (b)

              	
                a
                  payment made after the due date or pursuant to Condition 11 will
                  be deemed
                  to have been made when the full amount due (including interest
                  or default
                  interest accrued (if any)) has been received by the Principal Agent
                  or the
                  Trustee and notice to that effect has been given to Bondholders
                  (if
                  required under Clause 9.10)
                  except (if payment is made to Principal Agent) to the extent that
                  there is
                  failure in the subsequent payment to the relevant Bondholders under
                  the
                  Conditions. 

              

      

      

      The
        Trustee will hold the benefit of this covenant on trust for the
        Bondholders.

      

      
        	
                2.3

              	
                Discharge

              

      

      

      Subject
        to Clause 2.4,
        any
        payment to be made in respect of the Bonds by the Issuer or the Trustee may
        be
        made as provided in the Conditions and any payment so made will (subject
        to
        Clause 2.4)
        to such
        extent be a good discharge to the Issuer or the Trustee, as the case may
        be.

       

      
        	
                2.4

              	
                Payment
                  after a Default

              

      

      

      At
        any
        time after an Event of Default has occurred the Trustee may:

       

      
        	 	
                (a)

              	
                by
                  notice in writing to the Issuer, the Agents and the Registrar,
                  require the
                  Agents and the Registrar, until notified by the Trustee to the
                  contrary,
                  so far as permitted by applicable
                  law:

              

      

       

      
        	 	
                (i)

              	
                to
                  act as agents of the Trustee under this Trust Deed and the Bonds
                  on the
                  terms of the Agency Agreement (with consequential amendments as
                  necessary
                  and except that the Trustee’s liability for the indemnification,
                  remuneration and all other expenses of the Agents and the Registrar
                  will
                  be limited to the amounts for the time being held by the Trustee
                  in
                  respect of the Bonds on the terms of this Trust Deed) and thereafter
                  to
                  hold all Certificates and all moneys, documents and records held
                  by them
                  in respect of Bonds to the order of the Trustee;
                  and/or

              

      

       

      
        	 	
                (ii)

              	
                to
                  deliver all Certificates and all moneys, documents and records
                  held by
                  them in respect of the Bonds to the Trustee or as the Trustee shall
                  direct
                  in such notice or subsequently, provided that this Clause 2.4(a)(ii)
                  shall not apply to any documents or records which the Principal
                  Agent, the
                  Registrar or the relevant Agent is not obliged to release by any
                  law or
                  regulation to which it is subject;
                  and

              

      

      

      
        	 	
                (b)

              	
                by
                  notice in writing to the Issuer require them to make all subsequent
                  payments in respect of the Bonds to or to the order of the Trustee
                  and not
                  to the Principal Agent.

              

      

       

      
        	
                3.

              	
                
                  
                    
                      FORM
                        OF THE BONDS AND CERTIFICATES; ISSUE OF THE
                        BONDS

                    

                  

                

              

      

       

      
        	
                3.1

              	
                The
                  Global Certificate

              

      

      

      On
        issue
        of the Bonds, the Global Certificate will be issued in respect of the aggregate
        principal amount of the Bonds and the Issuer shall procure the Registrar
        to make
        such entries of Bonds in the register of Bondholders as appropriate. The
        Global
        Certificate will be issued and registered in the name of a nominee of, and
        deposited with a common depositary for Euroclear and Clearstream or their
        nominee. The Global Certificate need not be security printed. The Bonds
        evidenced by the Global Certificate shall be subject to its terms in all
        respects and entitled to the same benefits under this Trust Deed as Bonds
        evidenced by individual definitive Certificates.

       

      
        
          
          

        

        
          -
            6 -

          
            

          

        

        
          
          

        

      

       

      
        	
                3.2

              	
                The
                  definitive Certificates

              

      

      

      The
        definitive Certificates, if issued, will be security printed in accordance
        with
        all applicable legal and stock exchange requirements and will be substantially
        in the form set out in Schedule 1 and endorsed with the Conditions.

      

      
        	
                3.3

              	
                Signature

              

      

      

      The
        Global Certificate (and the definitive Certificates, if issued) will be signed
        manually or in facsimile by one (1) or more directors or officers duly
        authorised for the purpose, or manually or in facsimile by any duly authorised
        attorney of the Issuer, and authenticated manually by or on behalf of the
        Registrar. The Issuer may use the signature of any person who as at the date
        of
        this Trust Deed is an authorised officer or attorney, as the case may be,
        of the
        Issuer even if at the time of issue of any definitive Certificate or the
        Global
        Certificate he no longer holds such office and the Bonds in respect of which
        the
        Global Certificate or a definitive Certificate is so executed and authenticated
        will be binding and valid obligations of the Issuer.

      

      
        	
                3.4

              	
                Issue

              

      

      

      Issue
        and
        delivery of the Bonds shall be completed on the issue and delivery of the
        Global
        Certificate to the common depositary referred to in Clause 3.1
        (or its
        representative) by, or by the order of, the Issuer and completion of the
        register of Bondholders by or on behalf of the Registrar.

      

      
        	
                3.5

              	
                Entitlement
                  to treat holder as owner

              

      

      

      The
        holder of any Bond will (save as otherwise required by law) be treated as
        its
        absolute owner for all purposes (whether or not it is overdue and regardless
        of
        any notice of ownership, trust or any interest in it or any writing on or
        the
        theft or loss of the Certificate issued in respect of it) and no person will
        be
        liable for so treating the holder.

      

      
        	
                3.6

              	
                Authentication

              

      

      

      No
        Bond
        shall be entitled to any benefit under this Trust Deed or be valid for any
        purpose, unless and until authenticated by the manual signature of the
        Registrar. The Registrar’s authentication to be borne on the Bonds shall be the
        certificate of authentication substantially as set out in the form of
Schedule
        2,
        and
        such certificate upon any Bond shall be conclusive evidence, and the only
        evidence, that such Bond has been duly authenticated and delivered
        thereunder.

       

      
        	
                4.

              	
                
                  STAMP
                    DUTIES AND TAXES

                

              

      

      

      
        	
                4.1

              	
                Stamp
                  Duties

              

      

      

      The
        Issuer will pay any stamp, issue, registration, documentary, transfer or
        other
        taxes and duties, including interest and penalties, payable in respect of
        the
        creation, issue and offering of the Bonds, the execution or delivery of this
        Trust Deed and the deposit of Certificates for the conversion of Bonds and
        the
        issue and delivery of Shares following such deposit, except for the taxes
        and
        duties required to be paid by Bondholders under Condition 6(B)(ii). The Issuer
        will also indemnify the Trustee and the Bondholders from and against all
        stamp,
        issue, registration, documentary or other taxes and duties paid by any of
        them
        in any jurisdiction in connection with any action taken by or on behalf of
        the
        Trustee or, as the case may be, (where entitled under Condition 14 to do
        so) the
        Bondholders to enforce the obligations of the Issuer under this Trust Deed
        or
        the Bonds.

       

      
        
          
          

        

        
          -
            7 -

          
            

          

        

        
          
          

        

      

      
 

      
        	
                4.2

              	
                Change
                  of Taxing Jurisdiction

              

      

      

      If
        the
        Issuer becomes subject generally to the taxing jurisdiction of any territory
        or
        any authority of or in that territory having power to tax other than or in
        addition to New York or the United Kingdom or any such authority of or in
        such
        territory which imposes taxes, duties, assessments or governmental charges
        of
        whatever nature with respect to this Trust Deed or the Bonds then the Issuer
        will notify the Trustee as soon as practicable and (subject to Condition
        6(B)(ii)) give to the Trustee an undertaking satisfactory to the Trustee
        in
        terms corresponding to the terms of Condition 9 with the substitution for,
        or
        (as the case may require) the addition to, the references in that Condition
        to
        New York and the United Kingdom of references to that other or additional
        territory or authority to whose taxing jurisdiction the Issuer has become
        so
        subject. In such event, this Trust Deed and the Bonds will be read in accordance
        with the above terms.

       

      
        	
                5.

              	
                
                  COVENANTS
                    RELATING TO THE CONVERSION
                    RIGHTS

                

              

      

      

      So
        long
        as any Bond remains outstanding, save with the approval of an Extraordinary
        Resolution of the Bondholders or with the approval of the Trustee where,
        in the
        opinion of the Trustee, it is not materially prejudicial to the interests
        of the
        Bondholders to give such approval, the Issuer will:

      

      
        	
                5.1

              	
                Availability
                  of Shares

              

      

      

      Keep
        available, free from pre-emptive or other rights, out of its authorised but
        unissued share capital such number of Shares as would be required to be issued
        on conversion of all the Bonds from time to time remaining outstanding and
        to
        satisfy in full all other rights of conversion into or exchange or subscription
        for Shares and shall ensure that all Shares delivered on conversion of Bonds
        will be duly and validly issued as fully-paid and non-assessable; Ensure
        that it
        will keep available a sufficient number of authorized and unissued Shares
        such
        that the Conversion Price shall not be affected by any limitation to an
        adjustment to the Conversion Price set forth in Clause 7.2(b), Clause 7.3(d),
        Condition 6(C) and Condition 6(D)(iv). 

       

      
        	
                5.2

              	
                Restricted
                  Actions

              

      

      

      Not
        make
        any issue, grant or distribution or take any other action the effect of which
        would be to reduce the Conversion Price below
        the
        par value of the Shares; Not take any action or permit any action which would
        result in any limitation to an adjustment to the Conversion Price pursuant
        to
        Clause 7.2(b),
        Clause 7.3(d) or Condition 6(D)(iv); Take such actions as are required to
        avoid
        any limitation to an adjustment to the Conversion Price pursuant to Clause
        7.2(b),
        Clause 7.3(d) or Condition 6(D)(iv).

      

      
        	
                5.3

              	
                Notice

              

      

      

      Simultaneously
        with the announcement of the terms of any event which give rise to the
        adjustment of Conversion Price pursuant to this Trust Deed and the Conditions,
        give notice to the Bondholders and the Trustee in accordance with Condition
        17
        (such notice to be signed by an authorised officer of the Issuer) advising
        them
        of the date on which the relevant adjustment of the Conversion Price is likely
        to become effective and of the effect of exercising their rights of conversion
        before then;

       

      
        
          
          

        

        
          -
            8 -

          
            

          

        

        
          
          

        

      

       

      
        	
                5.4

              	
                Directors’
                  Certificate

              

      

      

      If
        an
        event happens as a result of which the Conversion Price may be adjusted pursuant
        to this Trust Deed and the Conditions, as soon as practicable send the Trustee
        a
        certificate signed by two (2) directors of the Issuer on behalf of the Issuer
        setting out particulars of the event, whether an adjustment to the Conversion
        Price falls to be made and, if so, the adjusted Conversion Price and the
        date on
        which such adjustment takes effect and in any case setting out such other
        information as the Trustee may reasonably require;

      

      
        	
                5.5

              	
                Extend
                  Offer

              

      

      

      If
        an
        offer is made to all (or as nearly as may be practicable all) Shareholders,
        or
        all (or as nearly as may be practicable all) such Shareholders other than
        the
        offeror and/or any associate or associates of the offeror to acquire all
        or a
        majority of the issued equity share capital of the Issuer, or if any person
        proposes a scheme with regard to such acquisition, give notice of such offer
        or
        scheme to the Bondholders at the same time as any notice thereof is sent
        to its
        Shareholders (or as soon as practicable thereafter) stating that details
        concerning such offer or scheme may be obtained from the specified offices
        of
        the Agents and the Registrar and, where such an offer or scheme has been
        recommended by the Board of Directors of the Issuer or where such an offer
        has
        become or been declared unconditional in all respects, use its best endeavours
        to procure that a like offer or scheme is extended to the Bondholders and
        the
        holders of any Shares issued during the period of the offer or scheme arising
        out of Conversion Rights;

      

      
        	
                5.6

              	
                No
                  Reduction of Issued Share
                  Capital

              

      

      

      Not
        make
        any reduction of its ordinary share capital or any uncalled liability in
        respect
        thereof or of any share premium account or capital redemption reserve fund
        (except, in each case, as permitted by law or by means of a purchase or
        reduction of the share capital of the Issuer permitted by Clause 5.3 or where
        the reduction has resulted in an adjustment to the Conversion Price under
        Clause
        7);

      

      
        	
                5.7

              	
                Closing
                  of Register of Members

              

      

      

      Unless
        so
        required by applicable law or regulation or in order to determine the
        entitlement of rights to a dividend or other rights attaching to the Shares
        or
        entitlements of the Shareholders, not close its register of Shareholders
        or take
        any other action which prevents the transfer of its Shares generally and
        ensure
        that the Bonds may be converted legally and the Shares issued on conversion
        may
        (subject to any limitation imposed by law) be transferred (as between transferor
        and transferee) at all times while the register is closed or such other action
        is effective, nor take any action which prevents the conversion of the Bonds
        or
        the issue of Shares in respect of them;

      

      
        	
                5.8

              	
                Listing
                  of Shares

              

      

      

      
        	 	
                (a)

              	
                promptly
                  list the Shares into which the Bonds are or may be convertible
                  pursuant to
                  the terms of this Trust Deed and the Conditions on the AMEX or
                  any
                  Alternative Stock Exchange and in any event no later than three
                  hundred
                  and sixty-five (365) days after the date
                  hereof,

              

      

       

      
        
          
          

        

        
          -
            9 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (b)

              	
                maintain
                  such listing on the AMEX or any Alternative Stock Exchange,
                  and

              

      

      

      
        	 	
                (c)

              	
                will
                  forthwith give notice to the Bondholders in accordance with Condition
                  18
                  of any such listing or delisting of such Shares (as a class) by
                  the AMEX
                  or any Alternative Stock Exchange; 

              

      

      

      
        	
                5.9

              	
                Expenses

              

      

      

      Pay
        the
        expenses of the issue of, and all expenses of obtaining and maintaining a
        listing for, Shares arising on conversion of the Bonds.

      

      For
        the
        above purposes, “equity
        share capital”
means
        the share capital of a company excluding any part of that capital which,
        neither
        as respects dividends nor as respects capital, carries any right to participate
        beyond a specified amount in a distribution.

       

      
        	
                6.

              	
                
                  NOTICES
                    RELATING TO THE CONVERSION
                    RIGHTS

                

              

      

       

      
        	
                6.1

              	
                Requirement
                  to give notice

              

      

      

      If
        after
        the date of this Trust Deed:

       

      
        	 	
                (a)

              	
                the
                  Issuer declares, or pays or makes a Capital Distribution, or authorises
                  the grant, issue or offer to all or substantially all holders of
                  Shares of
                  rights or warrants to subscribe for or purchase any shares or securities
                  other than Shares or any securities convertible into or exchangeable
                  for
                  or which confer rights to purchase Shares;
                  or

              

      

      

      
        	 	
                (b)

              	
                there
                  is a re-classification of the Shares (including a sub-division
                  or
                  consolidation of the Issuer’s outstanding Shares) or a consolidation,
                  merger or amalgamation to which the Issuer is not the surviving
                  party or
                  any sale or transfer of all or substantially all of the assets
                  or business
                  of the Issuer; or

              

      

       

      
        	 	
                (c)

              	
                the
                  Issuer authorises the issue of any securities convertible into
                  or
                  exchangeable for Shares or rights or warrants to subscribe for
                  or purchase
                  Shares (other than the warrants issued to ABN AMRO Bank N.V.) or
                  securities (other than those referred to in paragraph 6.1(a) above)
                  which
                  will, or authorises the issue of any Shares which will, (or, if
                  in any
                  such case a relevant consideration or offering price fixed by the
                  Board of
                  Directors of the Issuer to be recommended at a relevant general
                  meeting of
                  shareholders is adopted, will) upon issue give rise to an adjustment
                  to
                  the Conversion Price pursuant to Clause 7;
                  or

              

      

      

      
        	 	
                (d)

              	
                there
                  is a voluntary or involuntary dissolution, liquidation
                  or winding-up of the Issuer, 

              

      

      

      the
        Issuer shall forthwith give written notice thereof to the Trustee and the
        Principal Agent and, in addition, it will at least five (5) days before the
        applicable (in the case of paragraph (i)
        below)
        record date or (in the case of paragraph (ii)
        below)
        record date or date of submission, whichever is earlier, or (in the case
        of
        paragraph (iii)
        below)
        date of submission, or (in the case of paragraph (iv)
        below)
        date of issue or (in the case of paragraph (v)
        below)
        record date or effective date, whichever is earlier, give notice to the
        Bondholders stating, as the case may require:

       

      
        
          
          

        

        
          -
            10 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (i)

              	
                the
                  record date in the United States for such issuance or event described
                  in
                  paragraphs 6.1(a), (b) or (c), above;
                  or

              

      

       

      
        	 	
                (ii)

              	
                the
                  date in the United States (1) on which such re-classification,
                  consolidation, merger, amalgamation, sale, transfer, dissolution,
                  liquidation or winding-up is to be submitted to a general meeting
                  of
                  Shareholders of the Issuer for approval, and (2) which is the record
                  date
                  for the same (if applicable), and (3) on which such re-classification,
                  consolidation, merger, amalgamation, sale, transfer, dissolution,
                  liquidation or winding-up is expected to become effective, and
                  (4) as of
                  which it is expected that holders of Shares will be entitled, if
                  at all,
                  to exchange their Shares for securities or other property deliverable
                  upon
                  such re-classification, consolidation, merger, amalgamation, sale,
                  transfer, dissolution, liquidation or winding-up;
                  or

              

      

       

      
        	 	
                (iii)

              	
                (in
                  the event of the declaration of a Capital Distribution referred
                  to in
                  paragraph 6.1(a)
                  above, the payment of which must be submitted for approval to a
                  general
                  meeting of Shareholders or to a meeting of the Board of Directors
                  of the
                  Issuer before such Capital Distribution may be paid or made) the
                  date of
                  such submission; or

              

      

       

      
        	 	
                (iv)

              	
                (in
                  the event of an issue referred to in paragraph 6.1(c)
                  above) the date of such issue; or

              

      

       

      
        	 	
                (v)

              	
                (in
                  the event of such re-classification, consolidation, merger, amalgamation,
                  sale, transfer, dissolution, liquidation or winding-up described
                  in
                  paragraph 6.1(b) or (c) above not being submitted to a general
                  meeting of
                  shareholders of the Issuer for approval) (1) the record date for
                  the same
                  (if applicable), and (2) the date when the same becomes
                  effective;

              

      

      

      provided
        that if the exact date of any such submission referred to in paragraph
(ii)
        or
(iii)
        above is
        not known at the time of such notice to the Trustee and the Principal Agent,
        such notice shall indicate the approximate date thereof and the Issuer shall
        give a second notice to the Trustee and the Principal Agent as soon as
        practicable, specifying the exact date of submission, and provided further
        that
        if the period referred to in paragraph (i)
        above or
        the effective date or exchange date referred to in paragraph (ii)
        above or
        the date of issue or effective date referred to in paragraph (iv)
        or
(v)
        above is
        not known at the time of such first notice to the Trustee and the Principal
        Agent, the Issuer shall give a second notice (which shall be in writing)
        to the
        Trustee and the Principal Agent, at least fourteen (14) days before the
        commencement of such period or (as the case may be) before such date specifying
        such period (and the date of its commencement) and/or such date and shall
        also
        (in a case within paragraph (i),
        (ii)
        or
(v)
        above)
        cause such second notice to be given to Bondholders at least fourteen (14)
        days
        before the commencement of the applicable period or (as the case may be)
        before
        the effective date or exchange date except where such period or date has
        already
        been specified in the first notice to the Bondholders. However, in the case
        of
        any issue referred to in paragraph 6.1(c)
        above,
        the Issuer need not give any notice mentioned above before the date on which
        the
        relevant consideration per Share for such issue is fixed by the Issuer but
        in
        such case the Issuer shall promptly upon the fixing of such consideration
        give
        notice in accordance with this Clause; and provided further that the Issuer
        need
        not give any notice mentioned above before the date on which it otherwise
        discloses or gives notice of such event to any other party.

       

      
        
          
          

        

        
          -
            11 -

          
            

          

        

        
          
          

        

      

       

      
        	
                6.2

              	
                Where
                  Adjustment to Conversion Price
                  Required

              

      

      

      If
        the
        event referred to in the notice required pursuant to Clause 6.1
        would
        result in an adjustment to the Conversion Price, such notice shall also state
        the Conversion Price in effect at the time such notice is required to be
        given
        and the Conversion Price which will result after giving effect to such event
        or,
        if such adjusted Conversion Price is not then determinable, the fact that
        an
        adjustment in the Conversion Price may result. Without prejudice to Clause
        5.2,
        if,
        after giving effect to the event covered by any such notice and to any
        adjustment in the Conversion Price, the Shares could not or might not, under
        applicable law then in effect, be legally issued on conversion of Bonds as
        fully-paid and non-assessable, such notice shall also state such fact and
        the
        extent to which, by reason of such provisions, effect will not be given to
        such
        adjustment.

      

      
        	
                6.3

              	
                Notice
                  of Adjustment or Reset

              

      

      

      If,
        while
        any Conversion Right is or is capable of being or becoming exercisable, there
        shall be any adjustment to the Conversion Price (which for the purpose of
        this
        sub-Clause shall include any reset of the Conversion Price pursuant to Condition
        6(D)), the Issuer shall (a) as soon as practicable notify the Trustee and
        the
        Agents of particulars of the event giving rise to the adjustment, the Conversion
        Price prior to such adjustment, the adjusted Conversion Price, the date on
        which
        the adjustment takes effect and such other information as the Trustee may
        require, and (b) promptly after the adjustment takes effect, give notice
        to the
        Bondholders stating that the Conversion Price has been adjusted and setting
        out
        the event giving rise to the adjustment, the Conversion Price in effect before
        the adjustment, the adjusted Conversion Price and the effective date of the
        adjustment. However, a notice pursuant to another sub-Clause of this Clause
        6
        correctly stating any information required to be given pursuant to this
        sub-Clause shall, as to such information, satisfy the requirements of this
        sub-Clause.

      

      
        	
                6.4

              	
                Notification
                  of Closed Periods

              

      

      

      The
        Issuer shall give not less than fifteen (15) days’ nor more than sixty (60)
        days’ notice to the Trustee and the Agents of (a) any days during the Conversion
        Period on which the Issuer’s register of shareholders is to be closed by reason
        of New York law or applicable rules and regulation or for the purpose of
        determining the entitlements of rights to any dividend or other rights attaching
        to the Shares, and (b) any other day during the Conversion Period on which
        it is
        aware that its register of shareholders is to be closed. The notice shall
        state
        the reason for such closure and whether the Issuer intends to give notice
        to
        Bondholders of the closure.

      

      
        	
                6.5

              	
                Notification
                  of end of Conversion
                  Period

              

      

      

      The
        Issuer shall give not less than twenty-eight (28) days’ nor more than forty-two
        (42) days’ notice to the Bondholders in writing prior to the end of the
        Conversion Period, which notice shall specify the Conversion Rights of the
        Bondholders and the Conversion Price then in effect (as adjusted pursuant
        to
        Clause 7
        of this
        Trust Deed, if applicable).

       

      
        
          
          

        

        
          -
            12 -

          
            

          

        

        
          
          

        

      

       

      
        	
                7.

              	
                
                  ADJUSTMENTS
                    TO THE CONVERSION PRICE

                

              

      

      

      
        	
                7.1

              	
                The
                  Conversion Price will be subject to adjustment in the following
                  events as
                  follows:

              

      

      

        
          	 	
                  (a)

                	
                  Consolidation,
                    Subdivision or Reclassification:
                    If and whenever there shall be an alteration to the nominal value
                    of the
                    Shares as a result of consolidation, subdivision or reclassification,
                    the
                    Conversion Price shall be adjusted by multiplying the Conversion
                    Price in
                    force immediately before such alteration by the following
                    fraction:

                

        

        

          
            	
                    A

                  
	
                    B

                  

          

        

        

          
            	
                    Where:

                  	 
	 	 
	
                    A

                  	
                    is
                      the nominal amount of one (1) Share immediately after such
                      alteration;
                      and

                  
	 	 
	
                    B

                  	
                    is
                      the nominal amount of one (1) Share immediately before such
                      alteration.

                  

          

        

         

        Such
          adjustment shall become effective on the date the alteration takes
          effect.

        

        
          	 	
                  (b)

                	
                  Capitalisation
                    of Profits or Reserves:
                    If and whenever the Issuer shall issue any Shares credited as
                    fully paid
                    to the holders of Shares (the “Shareholders”)
                    by way of capitalisation of profits or reserves (including any
                    share
                    premium account) including, Shares paid up out of distributable
                    profits or
                    reserves and/or share premium account issued (except any Scrip
                    Dividend)
                    and which would not have constituted a Capital Distribution,
                    the
                    Conversion Price shall be adjusted by multiplying the Conversion
                    Price in
                    force immediately before such issue by the following
                    fraction:

                

        

      

      
        

          
            	
                    A

                  
	
                    B

                  

          

        

        

          
            	
                    Where:

                  	 
	 	 
	
                    A

                  	
                    is
                      the aggregate nominal amount of the issued Shares immediately
                      before such
                      issue; and

                  
	 	 
	
                    B

                  	
                    is
                      the aggregate nominal amount of the issued Shares immediately
                      after such
                      issue.

                  

          

           

        

      

      Such
        adjustment shall become effective on the date of issue of such Shares or
        if a
        record date is fixed therefor, immediately after such record date.

      

      
        	 	
                (c)

              	
                Capital
                  Distributions:
                  If and whenever the Issuer shall pay or make any Capital Distribution
                  to
                  the Shareholders (except to the extent that the Conversion Price
                  falls to
                  be adjusted under paragraph (b) above), the Conversion Price shall
                  be
                  adjusted by multiplying the Conversion Price in force immediately
                  before
                  such Capital Distribution by the following
                  fraction:

              

      

      
        

          
            	
                    A
                      –
                      B

                  
	
                    A

                  

          

        

        

          
            	
                    Where:

                  	 
	 	 
	
                    A

                  	
                    is
                      the Current Market Price of one (1) Share on the last Trading
                      Day
                      preceding the date on which the Capital Distribution is publicly
                      announced; and

                  
	 	 
	
                    B

                  	
                    is
                      the Fair Market Value on the date of such announcement of the
                      portion of
                      the Capital Distribution attributable to one (1)
                      Share.

                  

          

           

          
            
              
              

            

            
              -
                13 -

              
                

              

            

            
              
              

            

          
 

      

      Such
        adjustment shall become effective on the date that such Capital Distribution
        is
        actually made or if a record date is fixed therefor, immediately after such
        record date.

      

      When
        the
        Capital Distribution is by means of distribution of a cash dividend such
        cash
        dividend shall be regarded as a Capital Distribution and shall be fully taken
        into account in the determination of the Fair Market Value of the portion
        of the
        Capital Distribution attributable to one (1) Share. 

      

      
        	 	
                (d)

              	
                Rights
                  Issues of Shares or Options over Shares:
                  If and whenever the Issuer shall issue Shares to all or substantially
                  all
                  Shareholders as a class by way of rights, or issue or grant to
                  all or
                  substantially all Shareholders as a class by way of rights, of
                  options,
                  warrants or other rights to subscribe for or purchase or otherwise
                  acquire
                  any Shares, in each case at less than the Current Market Price
                  per Share
                  on the last Trading Day preceding the date of the announcement
                  of the
                  terms of the issue or grant, the Conversion Price shall be adjusted
                  by
                  multiplying the Conversion Price in force immediately before such
                  issue or
                  grant by the following fraction:

              

      

      
        

          
            	
                    A +
                      B

                  
	
                    A
                      +
                      C

                  

          

        

        
           

          
            
              	
                      Where:

                    	 
	 	 
	
                      A

                    	
                      is
                        the number of Shares in issue immediately before such
                        announcement;

                    
	 	 
	
                      B

                    	
                      is
                        the number of Shares which the aggregate amount (if any)
                        payable for the
                        Shares issued by way of rights or for the options or warrants
                        or other
                        rights issued by way of rights and for the total number of
                        Shares
                        comprised therein would subscribe for, purchase or otherwise
                        acquire at
                        such Current Market Price per Share; and

                    
	 	 
	
                      C

                    	
                      is
                        the aggregate number of Shares issued or, as the case may
                        be, comprised in
                        the grant.

                    

            

          

        

      

       

      Such
        adjustment shall become effective on the date of issue of such Shares or
        issue
        or grant of such options, warrants or other rights (as the case may
        be).

      

      
        	 	
                (e)

              	
                Rights
                  Issues of Other Securities:
                  If and whenever the Issuer shall issue any securities (other than
                  Shares
                  or options, warrants or other rights to subscribe for, purchase
                  or
                  otherwise acquire Shares) to all or substantially all Shareholders
                  as a
                  class by way of rights or grant to all or substantially all Shareholders
                  as a class by way of rights, of options, warrants or other rights
                  to
                  subscribe for, purchase or otherwise acquire any securities (other
                  than
                  Shares or options, warrants or other rights to subscribe for, purchase
                  or
                  otherwise acquire Shares), the Conversion Price shall be adjusted
                  by
                  multiplying the Conversion Price in force immediately before such
                  issue or
                  grant by the following fraction:

              

      

       

      
        
          
          

        

        
          -
            14 -

          
            

          

        

        
          
          

        

      

      
        

          
            	
                    A
                      –
                      B

                  
	
                    A

                  

          

        

      

      

        
          	
                  Where:

                	 
	 	 
	
                  A

                	
                  is
                    the Current Market Price of one (1) Share on the last Trading
                    Day
                    preceding the date on which such issue or grant is publicly announced;
                    and

                
	 	 
	
                  B

                	
                  is
                    the Fair Market Value on the date of such announcement of the
                    portion of
                    the rights attributable to one (1)
                    Share.

                

        

      

       

      Such
        adjustment shall become effective on the date of issue of the securities
        or
        grant of such rights, options or warrants (as the case may be).

      

      
        	 	
                (f)

              	
                Issues
                  at less than Conversion Price:
                  If and whenever the Issuer shall issue (otherwise than as mentioned
                  in
                  paragraph (d) above) any Shares (other than Shares issued on the
                  exercise
                  of Conversion Rights or on the exercise of any other rights of
                  conversion
                  into, or exchange or subscription for, Shares) or shall issue or
                  grant
                  (otherwise than as mentioned in paragraph (d) above) options, warrants
                  or
                  other rights to subscribe for, purchase or otherwise acquire Shares
                  in
                  each case at a price per Share which is less than the Conversion
                  Price in
                  effect at the time of such issue, then, in such event, the Conversion
                  Price shall be reduced, concurrently with such issue or grant,
                  to a price
                  equal to the consideration per share for which such Shares are
                  or will be
                  issued. If such Shares are issued for no consideration, then the
                  consideration per share shall be deemed to be the then current
                  par value
                  of each Share.

              

      

      

      Determination
        of Consideration: For
        purpose of this Clause 7.1(f), the consideration received by the Issuer for
        the
        issue of any such Shares shall be computed as follows:

      

      
        	 	
                (A)

              	
                in
                  so far as such consideration consists of cash, it shall be computed
                  at the
                  aggregate amount of cash received by the
                  Issuer;

              

      

      

      
        	 	
                (B)

              	
                in
                  so far as such consideration consists of property other than cash,
                  it
                  shall be computed at the fair value thereof at the time of such
                  issue, as
                  determined in good faith by the directors of the Issuer (the “Directors”);
                  provided, however, that no value shall be attributed to any services
                  performed by any employee, officer or director of the Issuer;
                  and

              

      

      

      
        	 	
                (C)

              	
                in
                  the event the Shares are issued together with other shares or securities
                  or other assets of the Issuer for consideration which covers both
                  the
                  proportion of such consideration so received with respect to such
                  Shares,
                  shall be computed as provided in paragraphs (A) and (B) above,
                  as
                  determined in good faith by the
                  Directors.

              

      

      

      References
        to additional Shares in the above formula shall, in the case of an issue
        by the
        Issuer of options, warrants or other rights to subscribe or purchase Shares,
        mean such Shares to be issued assuming that such options, warrants or other
        rights are exercised in full at the initial exercise price on the date of
        issue
        of such options, warrants or other rights.

      

      Such
        adjustment shall become effective on the date of issue of such additional
        Shares
        or, as the case may be, the issue of such options, warrants or other rights.
        

       

      
        
          
          

        

        
          -
            15 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (g)

              	
                Other
                  Issues at less than Conversion Price:
                  Save in the case of an issue of securities arising from a conversion
                  or
                  exchange of other securities in accordance with the terms applicable
                  to
                  such securities themselves falling within this Clause 7.1(g), if
                  and
                  whenever the Issuer or any of its Subsidiaries (otherwise than
                  as
                  mentioned in paragraphs (d), (e) or (f), or (at the direction or
                  request
                  of or pursuant to any arrangements with the Issuer or any of its
                  Subsidiaries) any other company, person or entity shall issue any
                  securities (other than the Bonds) which by their terms of issue
                  carry
                  rights of conversion into, or exchange or subscription for, Shares
                  to be
                  issued by the Issuer upon conversion, exchange or subscription
                  at a
                  consideration per Share which is less than the Conversion Price
                  in effect
                  at the time of issue of such securities, then, in such event, the
                  Conversion Price shall be reduced, concurrently with such issue,
                  to a
                  price equal to the consideration per share receivable by the Issuer
                  for
                  the Shares to be issued on conversion or exchange or on exercise
                  of the
                  right of subscription determined by reference to the maximum number
                  of
                  Shares to be issued on conversion, exchange or subscription at
                  the minimum
                  conversion, exchange or subscription price. If such Shares are
                  issued for
                  no consideration, then the consideration per share shall be deemed
                  to be
                  the then current par value of each
                  Share.

              

      

      

      Determination
        of Consideration: For
        purpose of this Clause 7.1(g), the consideration receivable by the Issuer
        for
        the issue of any such Shares shall be computed as follows:

      

      
        	 	
                (A)

              	
                in
                  so far as such consideration consists of cash, it shall be computed
                  at the
                  aggregate amount of cash received by the
                  Issuer;

              

      

      

      
        	 	
                (B)

              	
                in
                  so far as such consideration consists of property other than cash,
                  it
                  shall be computed at the fair value thereof at the time of such
                  issue, as
                  determined in good faith by the Directors; provided, however, that
                  no
                  value shall be attributed to any services performed by any employee,
                  officer or director of the Issuer;
                  and

              

      

      

      
        	 	
                (C)

              	
                in
                  the event the Shares are issued together with
                  other shares or securities or other assets of the Issuer for consideration
                  which
                  covers both the proportion of such consideration so received with
                  respect
                  to such Shares, shall be computed as provided in paragraphs (A)
                  and (B)
                  above, as determined in good faith by the
                  Directors.

              

      

      

      Such
        adjustment shall become effective on the date of issue of such
        securities

      

      
        	 	
                (h)

              	
                Modification
                  of Rights of Conversion etc.:
                  If and whenever there shall be any modification of the rights of
                  conversion, exchange or subscription attaching to any such securities
                  as
                  are mentioned in Clause 7.1(g) (other than in accordance with the
                  terms of
                  such securities) so that the consideration per Share (for the number
                  of
                  Shares available on conversion, exchange or subscription following
                  the
                  modification) is reduced and is less than the Conversion Price
                  in effect
                  at the time of such modification, the Conversion Price shall be
                  reduced,
                  concurrently with such modification, to a price equal to the modified
                  consideration per share receivable by the Issuer for the Shares
                  to be
                  issued on conversion or exchange or on exercise of the right of
                  subscription determined by reference to the maximum number of Shares
                  to be
                  issued on conversion, exchange or subscription at the minimum conversion,
                  exchange or subscription price. If such Shares are issued for no
                  consideration, then the consideration per share shall be deemed
                  to be the
                  then current par value of each
                  Share.

              

      

       

      
        
          
          

        

        
          -
            16 -

          
            

          

        

        
          
          

        

      

       

      Determination
        of Consideration: For
        purpose of this Clause 7.1(h), the consideration receivable by the Issuer
        for
        the issue of any such Shares shall be computed as follows:

       

      
        	 	
                (A)

              	
                in
                  so far as such consideration consists of cash, it shall be computed
                  at the
                  aggregate amount of cash received by the
                  Issuer;

              

      

      

      
        	 	
                (B)

              	
                in
                  so far as such consideration consists of property other than cash,
                  it
                  shall be computed at the fair value thereof at the time of such
                  issue, as
                  determined in good faith by the Directors; provided, however, that
                  no
                  value shall be attributed to any services performed by any employee,
                  officer or director of the Issuer;
                  and

              

      

      

      
        	 	
                (C)

              	
                in
                  the event the Shares are issued together with other shares or securities
                  or other assets of the Issuer for consideration which covers both
                  the
                  proportion of such consideration so received with respect to such
                  Shares,
                  shall be computed as provided in paragraphs (A) and (B) above,
                  as
                  determined in good faith by the
                  Directors.

              

      

      

      Such
        adjustment shall become effective on the date of modification of the rights
        of
        conversion, exchange or subscription attaching to such securities.

      

      
        	 	
                (i)

              	
                Other
                  Offers to Shareholders:
                  If and whenever the Issuer or any of its Subsidiaries or (at the
                  direction
                  or request of or pursuant to any arrangements with the Issuer or
                  any of
                  its Subsidiaries) any other company, person or entity issues, sells
                  or
                  distributes any securities in connection with which an offer to
                  which the
                  Shareholders generally are entitled to participate in arrangements
                  whereby
                  such securities may be acquired by them (except where the Conversion
                  Price
                  falls to be adjusted under Clause 7.1(d), Clause 7.1(e), Clause
                  7.1(f) or
                  Clause (g), the Conversion Price shall be adjusted by multiplying
                  the
                  Conversion Price in force immediately before such issue by the
                  following
                  fraction:

              

      

      
        

          
            	
                    A
                      –
                      B

                  
	
                    A

                  

          

        

      

      

        
          	
                  Where:

                	 
	 	 
	
                  A

                	
                  is
                    the Current Market Price of one (1) Share on the last Trading
                    Day
                    preceding the date on which such issue is publicly announced;
                    and

                
	 	 
	
                  B

                	
                  is
                    the Fair Market Value on the date of such announcement of the
                    portion of
                    the rights attributable to one (1)
                    Share.

                

        

      

       

      Such
        adjustment shall become effective on the date of issue of the
        securities.

      

      
        	 	
                (j)

              	
                Other
                  Events:
                  If the Issuer determines that a downward adjustment should be made
                  to the
                  Conversion Price as a result of one (1) or more events or circumstances
                  not referred to in this Clause 7.1, the Issuer shall, at its own
                  expense,
                  consult an independent investment bank of international repute
                  (acting as
                  expert), selected by the Issuer and approved in writing by the
                  Trustee
                  (such approval not to be unreasonably withheld or delayed), to
                  determine
                  as soon as practicable what adjustment (if any) to the Conversion
                  Price is
                  fair and reasonable to take account thereof, if the adjustment
                  would
                  result in a reduction in the Conversion Price, and the date on
                  which such
                  adjustment should take effect and upon such determination by the
                  independent investment bank such adjustment (if any) shall be made
                  and
                  shall take effect in accordance with such determination, provided
                  that
                  where the events or circumstances giving rise to any adjustment
                  pursuant
                  to this Clause 7.1 have already resulted or will result in an adjustment
                  to the Conversion Price or where the events or circumstances giving
                  rise
                  to any adjustment arise by virtue of events or circumstances which
                  have
                  already given rise or will give rise to an adjustment to the Conversion
                  Price, such modification (if any) shall be made to the operation
                  of the
                  provisions of this Clause 7.1 as may be advised by the independent
                  investment bank to be in their opinion appropriate to give the
                  intended
                  result. Neither the Agents nor the Trustee should have the responsible
                  for
                  determining the Conversion Price or the adjustment to the Conversion
                  Price.

              

      

       

      
        
          
          

        

        
          -
            17 -

          
            

          

        

        
          
          

        

      

       

      
        	
                7.2

              	
                (a)

              	
                No
                  adjustment will be made to the Conversion Price (i) when Shares
                  or other
                  securities (including rights or options) are issued, offered or
                  granted to
                  employees (including directors) of the Issuer or any of its Subsidiaries
                  pursuant to any Employee Share Scheme (and which Employee Share
                  Scheme (a)
                  is in compliance with the listing rules of the AMEX or, if applicable,
                  the
                  listing rules of an Alternative Stock Exchange; and (b) does not
                  amount
                  to, relate to, or entitle such persons to receive, Shares in excess
                  of ten
                  percent (10%) of the average number of issued and outstanding Shares
                  during any twelve (12) months); or (ii) as a result of the issuance
                  on the
                  date hereof of the Warrants issued to ABN AMRO Bank, N.V. or any
                  exercise
                  of such Warrants; or (iii) as a result of the exercise of the outstanding
                  warrants issued on 17 October, 2006, to purchase 232,088 Shares
                  at US$1.60
                  per share.

              

      

      

      
        	 	
                (b)

              	
                Notwithstanding
                  anything herein, the Conversion Price shall only be adjusted pursuant
                  to
                  Clauses 7.1(f), 7.1(g), 7.1(h), 7.1(i) and 7.1(j) to an amount
                  not less
                  than US$0.25 per Share (as adjusted for stock splits, stock dividends,
                  spin-offs, rights offerings, recapitalizations and similar
                  events).

              

      

      

      
        	 	
                (c)

              	
                Where
                  more than one (1) event which gives or may give rise to an adjustment
                  to
                  the Conversion Price occurs within such a short period of time
                  that in the
                  opinion of an independent investment bank of international repute
                  (acting
                  as expert), selected by the Issuer and approved in writing by the
                  Trustee
                  (such approval shall not be unreasonably withheld or delayed),
                  the
                  foregoing provisions would need to be operated subject to some
                  modification in order to give the intended result, such modification
                  shall
                  be made to the operation of the foregoing provisions as may be
                  advised by
                  such independent investment bank to be in their opinion appropriate
                  in
                  order to give such intended result. No adjustment involving an
                  increase in
                  the Conversion Price will be made, except in the case of a consolidation
                  of the Shares as referred to in Clause 7.1(a) above.
                  

              

      

      

      
        	 	
                (d)

              	
                The
                  Trustee shall not be under any duty to monitor whether any event
                  or
                  circumstance has happened or exists which may require an adjustment
                  to be
                  made to the Conversion Price and will not be responsible to Bondholders
                  for any loss arising from any failure by it to do
                  so.

              

      

      

      
        	 	
                (e)

              	
                If
                  any doubt arises as to an adjustment of the Conversion Price pursuant
                  to
                  Clause 7.1, the Trustee may, at the cost and expense of the Issuer,
                  consult with any reputable investment bank in the United States
                  and may
                  act on the opinion or advice of or any certificate or information
                  obtained
                  from any such investment bank, and such determination, opinion,
                  advice,
                  certification or action (or absence thereof) shall be conclusive
                  and
                  binding upon the Issuer and the
                  Bondholders.

              

      

      

      
        	
                7.3

              	
                Conversion
                  Price Reset

              

      

      

      If
        the
        Average Closing Price for the period of twenty (20) consecutive Trading Days
        immediately prior to any of April 12, 2009 and February 18, 2012 (each a
        “Reset
        Date”)
        is
        lower than the Conversion Price on the relevant Reset Date, the Conversion
        Price
        will be adjusted so that such Average Closing Price shall be the Conversion
        Price in effect from, and including, the relevant Reset Date. The Issuer
        shall
        notify the Bondholders, Trustee and the Paying Agent of such adjustment within
        ten (10) business days after the relevant Reset Date, in accordance with
        Condition 18. Such adjusted Conversion Price shall be rounded upwards, if
        necessary, to the nearest one-tenth (1/10) of a United States cent.

       

      
        
          
          

        

        
          -
            18 -

          
            

          

        

        
          
          

        

      

       

      Provided
        that:

      

      
        	 	
                (a)

              	
                any
                  such adjustment to the Conversion Price pursuant to this Clause
                  7.3 shall
                  be limited so that the Conversion Price adjusted in accordance
                  with this
                  Clause 7.3 shall not be less than seventy percent (70%) of the
                  initial
                  Conversion Price (taking account of any adjustments required under
                  Clause
                  7.1 above which may have occurred prior to the relevant Reset
                  Date;

              

      

      

      
        	 	
                (b)

              	
                subject
                  to (a) above the provisions of Clause 7.1 shall apply, mutatis
                  mutandis,
                  to this Clause 7.3 to ensure that appropriate adjustments shall
                  be made to
                  any Closing Price to reflect any adjustments made to the Conversion
                  Price
                  in accordance with Clause 7.1;

              

      

      

      
        	 	
                (c)

              	
                for
                  the avoidance of doubt, any adjustments to the Conversion Price
                  made
                  pursuant to this Clause 7.3 shall only be downward adjustments;
                  and
                  

              

      

      

      
        	 	
                (d)

              	
                notwithstanding
                  anything herein, the Conversion Price shall only be adjusted pursuant
                  to
                  Clause 7.3 to an amount not less than US$0.25 per Share (as adjusted
                  for
                  stock splits, stock dividends, spin-offs, rights offerings,
                  recapitalizations and similar
                  events).

              

      

       

      
        	
                8.

              	
                
                  APPLICATION
                    OF MONEYS RECEIVED BY THE
                    TRUSTEE

                

              

      

       

      
        	
                8.1

              	
                Declaration
                  of Trust

              

      

      

      All
        moneys received by the Trustee in respect of the Bonds or amounts payable
        under
        this Trust Deed will, despite any appropriation of all or part of them by
        the
        Issuer, be held by the Trustee upon trust to apply them (subject to Clause
        8.2):

      

      
        	 	
                (a)

              	
                firstly,
                  in payment of all costs, charges, expenses and liabilities properly
                  incurred by the Trustee (including remuneration payable to the
                  Trustee) in
                  carrying out its functions under this Trust Deed;
                  

              

      

      

      
        	 	
                (b)

              	
                secondly,
                  in payment of all costs, charges, expenses and liabilities properly
                  incurred by the Agents, except the Registrar, (including remuneration
                  payable to the Agents) in carrying out its functions under the
                  Agency
                  Agreement;

              

      

      

      
        	 	
                (c)

              	
                thirdly,
                  in payment of all costs, charges, expenses and liabilities properly
                  incurred by the Registrar, (including remuneration payable to the
                  Registrar) in carrying out its functions under the Agency
                  Agreement;

              

      

      

      
        	 	
                (d)

              	
                fourthly,
                  in payment of any amounts of principal, interest, and premium (if
                  any)
                  owing in respect of the Bonds pari
                  passu
                  and rateably; 

              

      

      

      
        	 	
                (e)

              	
                fifthly,
                  in payment of any other amounts owing in respect of the Bonds;
                  and

              

      

      

      
        	 	
                (f)

              	
                sixthly,
                  in payment of any balance (if any) to the Issuer for
                  itself.

              

      

       

      
        
          
          

        

        
          -
            19 -

          
            

          

        

        
          
          

        

      

       

      If
        the
        Trustee holds any moneys which represent principal, interest, default interest
        and premium (if any) in respect of Bonds in respect of which claims have
        become
        prescribed under Condition 13, the Trustee will hold them on trust and apply
        them as set out in this Clause 8.1.

       

      
        	
                8.2

              	
                Accumulation

              

      

      

      If
        the
        amount of the moneys at any time available for payment in respect of the
        Bonds
        under Clause 8.1
        is less
        than ten percent (10%) of the principal amount of the Bonds then outstanding,
        the Trustee may, at its sole discretion, invest such moneys. The Trustee
        may
        retain such investments and accumulate the resulting income until the
        investments and the accumulations, together with any other funds for the
        time
        being under its control and available for such payment, amount to at least
        ten
        percent (10%) of the principal amount of the Bonds then outstanding and then
        such investments, accumulations and funds (after deduction of, or provision
        for,
        any applicable taxes) will be applied as specified in Clause 8.1.

      

      
        	
                8.3

              	
                Investment

              

      

      

      Moneys
        held by the Trustee may be invested in its name or under its control in any
        investments or other assets anywhere whether or not they produce income or
        deposited in its name or under its control at such bank or other financial
        institution in such currency as the Trustee may, in its absolute discretion,
        think fit, acting in accordance with the Trustees Act. If they are deposited
        at
        a bank or institution that is the Trustee or a subsidiary, holding or associated
        company of the Trustee, it needs only account for an amount of interest
        calculated at the rate per annum equal to the best rate payable by it on
        a
        deposit of like amount to an independent customer. The Trustee may at any
        time
        vary or transpose any such investments or assets or convert any moneys so
        deposited into any other currency, and will not be responsible for any resulting
        loss, whether by depreciation in value, change in exchange rates or
        otherwise.

       

      
        	
                9.

              	
                
                  GENERAL
                    COVENANTS

                

              

      

      

      So
        long
        as any Bond is outstanding, the Issuer will:

      

      
        	
                9.1

              	
                Books
                  of Account

              

      

      

      Keep,
        and
        procure that its Subsidiaries keep, proper books of account and, at any time,
        so
        far as permitted by applicable law and to the extent it does not result in
        any
        additional disclosure obligations under the listing rules of the AMEX or
        if
        applicable, the Alternative Stock Exchange, allow, and procure that each
        of its
        Subsidiaries will allow, the Trustee and anyone appointed by it, by prior
        appointment access to the books of account of the Issuer and/or the relevant
        Subsidiary respectively at all reasonable times during normal business
        hours;

      

      
        	
                9.2

              	
                Notice
                  of Events of Default

              

      

      

      Notify
        the Trustee in writing immediately on becoming aware of the occurrence of
        any
        Event of Default;

      

      
        	
                9.3

              	
                Information

              

      

      

      So
        far as
        permitted by applicable law, give the Trustee such certificates, information
        and
        evidence as it requires for the purpose of the discharge of the duties, powers,
        trusts, authorities and discretions vested in it by this Trust Deed or by
        operation of law;

       

      
        
          
          

        

        
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            20 -

          
            

          

        

        
          
          

        

      

       

      
        	
                9.4

              	
                Financial
                  Statements etc.

              

      

      

      Send
        to
        the Trustee, as promptly as practicable (and, in the case of each annual
        Fiscal
        Period, in any event within six (6) months after the close of each Fiscal
        Period), three (3) copies or translations, in each case in English, of the
        following:

      

      
        	 	
                (a)

              	
                in
                  the case of the first semi-annual Fiscal Period falling within
                  each of the
                  annual Fiscal Periods, the semi-annual interim report containing
                  unaudited
                  consolidated Accounts of the Issuer in respect of such Fiscal Period
                  which
                  Accounts are prepared on a basis substantially consistent with
                  the most
                  recent audited Accounts, or which indicate the way in which their
                  basis of
                  preparation is different; and

              

      

      

      
        	 	
                (b)

              	
                in
                  the case of each annual Fiscal Period, the annual report containing
                  audited Accounts of the Issuer as at the end of, and for, such
                  Fiscal
                  Period, reported on by the Auditors and prepared in accordance
                  with
                  generally accepted accounting principles in the United States of
                  America;

              

      

      

      provided
        that if and to the extent that the Accounts are not prepared or adjusted
        on a
        basis consistent with that used for the preceding corresponding Fiscal Period,
        that fact shall be stated;

      

      
        	
                9.5

              	
                Information
                  Material to Bondholders

              

      

      

      Send
        to
        the Trustee three (3) copies or translations, in each case in English, of
        all
        notices, statements and documents which are issued to the holders of its
        shares
        or its creditors generally as soon as practicable (but not later than thirty
        (30) days) after their date of issue and make available to the Agents (without
        cost to the Agents) as many further copies or translations as they may request
        in order to satisfy requests from Bondholders for them;

      

      
        	
                9.6

              	
                Other
                  Information

              

      

      

      Send
        to
        the Trustee together with the Accounts referred to in Clause 9.4
        a list
        in English of all documents issued, during or in respect of the relevant
        annual
        Fiscal Period, by Issuer to its Shareholders, which list shall indicate the
        principal subject of each of such documents, and (if the Trustee so requires
        at
        any time) provide a certified copy or translation, in each case in English,
        of
        any document described in such list within thirty (30) days after being
        requested so to do;

       

      
        	
                9.7

              	
                Certificate
                  of Directors

              

      

      

      Send
        to
        the Trustee, at the same time that its annual audited Accounts are being
        provided pursuant to Clause 9.4 above, and also within fourteen (14) days
        after
        any written request by the Trustee, a certificate of the Issuer signed by
        two
        (2) directors of the Issuer to the effect that, having made all reasonable
        enquiries, to the best of the knowledge, information and belief of the Issuer
        as
        at a date (the “Certification
        Date”)
        being
        not more than five (5) days before the date of the certificate 

      

      
        	 	
                (a)

              	
                no
                  Event of Default had occurred since the date of this Trust Deed
                  or the
                  Certification Date of the last such certificate (if any) or, if
                  such an
                  event had occurred, giving details of it;
                  and

              

      

       

      
        
          
          

        

        
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            21 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (b)

              	
                the
                  Issuer has complied with all its obligations under this Trust
                  Deed.

              

      

      

      The
        Trustee shall be entitled to rely upon certificates of the Issuer;

      

      
        	
                9.8

              	
                Notices
                  to Bondholders

              

      

      

      Send
        to
        the Trustee at least seven (7) days (or such shorter period as may be agreed
        by
        the Trustee) prior to the date of publication, a copy of the form of each
        notice
        to be given to Bondholders and once given, two (2) copies of each such notice,
        such notice to be in a form approved by the Trustee (such approval shall
        not be
        unreasonably withheld or delayed) and (if applicable) complying with the
        requirements of the AMEX or an Alternative Stock Exchange except for any
        announcement, notice or circular to be made by the Issuer pursuant to the
        requirements of the listing rules or at the request of the AMEX or an
        Alternative Stock Exchange, of which three (3) copies of each such announcement,
        notice or circular, shall be sent by the Issuer to the Trustee as promptly
        as
        practicable after its date of issue;

      

      
        	
                9.9

              	
                Further
                  Acts

              

      

      

      So
        far as
        permitted by applicable law, do such further things as may be necessary in
        the
        opinion of the Trustee to give effect to this Trust Deed;

       

      
        	
                9.10

              	
                Notice
                  of late payment

              

      

      

      Forthwith
        upon request by the Trustee give notice to the Bondholders of any unconditional
        payment to the Principal Agent or the Trustee of any sum due in respect of
        the
        Bonds made after the due date for such payment;

      

      
        	
                9.11

              	
                Change
                  in Agents

              

      

      

      Give
        at
        least fourteen (14) days’ prior notice to the Bondholders of any future
        appointment, resignation or removal of any Agent or of the Registrar or of
        any
        change by any Agent or by the Registrar of its specified office and not make
        any
        such appointment or removal without the Trustee’s prior written
        approval;

       

      
        	
                9.12

              	
                Early
                  Redemption

              

      

      

      Give
        prior notice to the Trustee of any proposed early redemption pursuant to
        Condition 9(B), 9(C), 9(D) or 9(E);

      

      
        	
                9.13

              	
                Change
                  of Control or Delisting

              

      

      

      Give
        notice (which shall be in writing) to the Trustee and the Bondholders in
        accordance with Condition 18 by not later than the fourteenth day following
        the
        first day on which it becomes aware of the occurrence of a Relevant Event
        (as
        defined in Condition 9(D));

      

      
        	
                9.14

              	
                Compliance

              

      

      

      Comply
        with, perform and observe all the provisions of the Agency Agreement, the
        Trust
        Deed and the Conditions; and

       

      
        
          
          

        

        
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            22 -

          
            

          

        

        
          
          

        

      

       

      
        	
                9.15

              	
                Bonds
                  held by the Issuer etc.

              

      

      

      Send
        to
        the Trustee as soon as practicable after being so requested by the Trustee
        a
        certificate of the Issuer signed by its director stating the number of Bonds
        held as at the date of such certificate by or on behalf of the Issuer or
        its
        Subsidiaries.

       

      
        	
                10.

              	
                
                  REMUNERATION
                    AND INDEMNIFICATION OF
                    TRUSTEE

                

              

      

      

      
        	
                10.1

              	
                Payment
                  of Remuneration

              

      

      

      The
        Issuer shall pay to the Trustee remuneration for its services as trustee
        as from
        the date of this Trust Deed, such remuneration to be at such rate to be agreed
        between the Issuer and the Trustee and on such date and on such terms as
        shall
        be separately agreed between the Issuer and the Trustee. 

       

      
        	
                10.2

              	
                Additional
                  Remuneration

              

      

      

      In
        the
        event of the occurrence of an Event of Default the Trustee considering it
        expedient or necessary or being requested by the Issuer to undertake duties
        which the Trustee and the Issuer agree to be of an exceptional nature or
        otherwise outside the scope of the normal duties of the Trustee under this
        Trust
        Deed. or should the Trustee perform any additional or any ancillary functions
        outside of those previously agreed with the Issuer, the Issuer shall pay
        to the
        Trustee such additional remuneration as shall be agreed between them. It
        is
        acknowledged and agreed that the Trustee shall not be obliged to undertake
        any
        additional duties unless the Trustee is satisfied (at its absolute discretion)
        that all its additional remuneration will be paid.

      

      
        	
                10.3

              	
                Tax

              

      

      

      The
        Issuer shall in addition pay to the Trustee an amount equal to the amount
        of any
        value added tax or similar tax chargeable in any jurisdiction in respect
        of its
        remuneration under this Trust Deed. 

       

      
        	
                10.4

              	
                Disputes

              

      

      

      In
        the
        event of the Trustee and the Issuer failing to agree (in a case to which
        Clause
10.2
        above
        applies) upon whether such duties shall be of an exceptional nature or otherwise
        outside the scope of the normal duties of the Trustee under this Trust Deed,
        or
        upon such additional remuneration, such matters shall be determined by a
        merchant bank (acting as an expert and not as an arbitrator) selected by
        the
        Trustee and approved by the Issuer or, failing such approval, nominated (on
        the
        application of the Trustee) by the President for the time being of The Law
        Society of England and Wales (the expenses involved in such nomination and
        the
        fees of such merchant bank being payable by the Issuer) and the determination
        of
        any such merchant bank shall be final and binding upon the Trustee, the
        Bondholders and the Issuer. 

       

      
        	
                10.5

              	
                Payment
                  of Liabilities

              

      

      

      The
        Issuer shall also pay or discharge all Liabilities properly incurred by the
        Trustee in relation to the preparation and execution of, the exercise of
        its
        powers, authorities and discretions and the performance of its duties under,
        and
        in any other manner in relation to, this Trust Deed, including but not limited
        to all expenses and any stamp, issue, registration, documentary and other
        taxes
        or duties paid or payable by the Trustee in connection with any action taken
        or
        contemplated by or on behalf of the Trustee for enforcing, or resolving any
        doubt concerning, or for any other purpose in relation to, this Trust Deed.
        

       

      
        
          
          

        

        
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            23 -

          
            

          

        

        
          
          

        

      

       

      
        	
                10.6

              	
                Interest

              

      

      

      All
        amounts payable pursuant to Clause 10.5
        above
        and/ or Clause 10.9
        shall be
        payable (subject to and in accordance by the Issuer on the date specified
        in a
        demand by the Trustee and in the case of payments actually made by the Trustee
        prior to such demand shall (if not paid within ten (10) days after such demand
        and the Trustee so requires) carry interest at a rate of two percent (2%)
        per
        annum above the cost of funds from the date that payment is made by the Trustee
        until the date the Issuer reimburses the Trustee and in all other cases shall
        (if not paid on the date specified in such demand and the Trustees so requires)
        carry interest at such rate from the date specified in such demand until
        payment
        by the Issuer to the Trustee. All remuneration payable to the Trustee shall
        carry interest at such rate from the due date therefor.

      

      
        	
                10.7

              	
                No
                  Set-off or Withholding

              

      

      

      The
        Issuer hereby further undertakes to the Trustee that all monies payable by
        the
        Issuer to the Trustee under this Clause 10 shall be made without set-off,
        counterclaim, deduction or withholding unless compelled by law in which event
        the Issuer will pay such additional amounts as will result in the receipt
        by the
        Trustee of the amounts which would otherwise have been payable by the Issuer
        to
        the Trustee under this Clause in the absence of any such set-off, counterclaim,
        deduction or withholding.

      

      
        	
                10.8

              	
                Survival
                  of Clauses

              

      

      

      Unless
        otherwise specifically stated in any discharge of this Trust Deed, the
        provisions of this Clause 10
        shall
        continue in full force and effect notwithstanding such discharge.

       

      
        	
                10.9

              	
                Indemnity

              

      

      

      Without
        prejudice to the right of indemnity by law given to trustees, the Issuer
        shall
        indemnify the Trustee and its directors, officers and employees and every
        Appointee (as defined in Clause 11(y))
        and
        keep it or him indemnified against all Liabilities to which it or he may
        be or
        become subject or which may be paid or incurred by it or him or which may
        be
        claimed against it or him as a result of or in connection with the Trustee
        acting as trustee under this Trust Deed (including, without limitation, in
        the
        execution or purported execution of any of its trusts, powers, authorities
        and
        discretions under this Trust Deed and Agency Agreement) or its or his functions
        under any such appointment or in respect of any other matter or thing done
        or
        omitted in any way relating to this Trust Deed or any such appointment
        (including all liabilities incurred in disputing or defending any of the
        foregoing), except those resulting from its or his gross negligence, wilful
        default or fraud.

      

      
        	
                10.10

              	
                Force
                  Majeure

              

      

      

      Notwithstanding
        anything to the contrary in this Trust Deed or in any other transaction
        document, the Trustee shall not in any event be liable for any failure or
        delay
        in the performance of its obligations hereunder if it is prevented from so
        performing its obligations by any existing or future law or regulation, any
        existing or future act of governmental authority, Act of God, flood, war
        whether
        declared or undeclared, terrorism, riot, rebellion, civil commotion, strike,
        lockout, other industrial action, general failure of electricity or other
        supply, aircraft collision, technical failure, accidental or mechanical or
        electrical breakdown, computer failure or failure of any money transmission
        system or any reason which is beyond the control of the Trustee.

       

      
        
          
          

        

        
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            24 -

          
            

          

        

        
          
          

        

      

       

      
        	
                11.

              	
                
                  PROVISIONS
                    SUPPLEMENTAL TO THE TRUSTEE
                    ACTS

                

              

      

      

      Section
        1
        of the Trustee Act 2000 shall not apply to the duties of the Trustee in relation
        to the trusts constituted by these presents. Where there are any inconsistencies
        between the Trustee Acts and the provisions of these presents, the provisions
        of
        these presents shall, to the extent allowed by law, prevail and, in the case
        of
        any such inconsistency with the Trustee Act 2000, the provisions of these
        presents shall constitute a restriction or exclusion for the purposes of
        that
        Act. The Trustee shall have all the powers conferred upon trustees by the
        Trustee Acts and by way of supplement thereto it is expressly declared as
        follows:

      

      
        	 	
                (a)

              	
                Advice:
                  The Trustee, whenever it considers it reasonably necessary and
                  expedient
                  in the interest of the Bondholders, shall engage and consult, at
                  the
                  expense of the Issuer, with any legal or professional adviser and
                  notice
                  of appointment of any legal or professional adviser shall be given
                  to the
                  Issuer as soon as practicable. The Trustee may act on the opinion
                  or
                  advice of, or information obtained from, any lawyer, valuer, accountant
                  (including the Auditors), banker or other expert whether obtained
                  by or
                  addressed to the Issuer, the Trustee, the Principal Agent or otherwise,
                  and notwithstanding any monetary or other limit on liability contained
                  therein, will not be responsible to anyone for any Liability occasioned
                  by
                  so acting. Any such opinion, advice or information may be sent
                  or obtained
                  by letter, telex, fax or electronic mail and the Trustee will not
                  be
                  liable to anyone for acting in good faith on any opinion, advice
                  or
                  information purporting to be conveyed by such means, notwithstanding
                  any
                  limitation on liability (monetary or otherwise) in relation to
                  such
                  person’s opinion or advice and even if it contains some error or is not
                  authentic.

              

      

      

      
        	 	
                (b)

              	
                Trustee
                  to Assume Performance: The Trustee need not notify anyone of the
                  execution
                  of this Trust Deed or do anything to find out if an Event of Default
                  has
                  occurred. Until it has actual knowledge or express notice to the
                  contrary,
                  the Trustee may assume that no such event has occurred and that
                  each of
                  the Issuer and the Principal Agent is performing all its obligations
                  under
                  this Trust Deed and the Bonds.

              

      

      

      
        	 	
                (c)

              	
                Resolutions
                  of Bondholders: The Trustee will not be responsible for having
                  acted in
                  good faith on a resolution in writing or any resolution purporting
                  to have
                  been passed at a meeting of Bondholders in respect of which minutes
                  have
                  been made and signed even if it is later found that there was a
                  defect in
                  the constitution of the meeting or the passing of the resolution
                  or that
                  the resolution was not valid or binding on the
                  Bondholders.

              

      

      

      
        	 	
                (d)

              	
                Illegality/Expenditure
                  of Trustee Funds: No provision of these presents shall require
                  the Trustee
                  to do anything which may: (i) be illegal or contrary to applicable
                  law or
                  regulation; (ii) cause it to expend or risk its own funds or otherwise
                  incur any financial liability in the performance of any of its
                  duties or
                  in the exercise of any of its own rights, powers, authorities or
                  discretions, if it shall have grounds for believing that repayment
                  of such
                  funds or satisfactory indemnity against, or security for, such
                  risk or the
                  liability is not assured to it.

              

      

      

      
        	 	
                (e)

              	
                Certificate
                  signed by Directors: If the Trustee, in the exercise of its functions,
                  requires to be satisfied or to have information as to any fact
                  or the
                  expediency of any act, it may call for and accept as sufficient
                  evidence
                  of that fact or the expediency of that act a certificate signed
                  by a
                  director of the Issuer as to that fact or to the effect that, in
                  their
                  opinion, that act is expedient and the Trustee need not call for
                  further
                  evidence and will not be responsible for any loss occasioned by
                  acting on
                  such a certificate.

              

      

       

      
        
          
          

        

        
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            25 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (f)

              	
                Deposit
                  of Documents: The Trustee may appoint as custodian, on any terms,
                  any bank
                  or entity whose business includes the safe custody of documents
                  or any
                  lawyer or firm of lawyers believed by it to be of good repute and
                  may
                  deposit this Trust Deed and any other documents with such custodian
                  and
                  pay all sums due in respect thereof. The Trustee shall not be responsible
                  for or required to insure against any Liability incurred in connection
                  with such deposit and may pay all sums required to be paid on account
                  of,
                  or in respect of, any such deposit.

              

      

      

      
        	 	
                (g)

              	
                Discretion:
                  The Trustee will have absolute and uncontrolled discretion as to
                  the
                  exercise of its functions (the exercise of which, as between the
                  Bondholders and the Trustee shall be conclusive and binding on
                  the
                  Bondholders) and will not be responsible for any Liability which
                  may
                  result from their exercise or non-exercise. Whenever in this Trust
                  Deed,
                  the Agency Agreement or by law, the Trustee shall have discretion
                  or
                  permissive power it may decline to exercise the same in the absence
                  of
                  approval by the Bondholders and need not exercise the same unless
                  it has
                  been indemnified and/or provided with security to its
                  satisfaction.

              

      

      

      
        	 	
                (h)

              	
                Agents:
                  Whenever it considers it reasonably necessary and expedient in
                  the
                  interests of the Bondholders, the Trustee may, in the conduct of
                  its trust
                  business, instead of acting personally, employ and pay an agent
                  selected
                  by it, whether or not a lawyer or other professional person, to
                  transact
                  or conduct, or concur in transacting or conducting, any business
                  and to do
                  or concur in doing all acts required to be done by the Trustee
                  (including
                  the receipt and payment of money). Provided that the Trustee shall
                  have
                  exercised reasonable care in the selection of such agent, the Trustee
                  shall not be responsible to the Bondholders for any misconduct
                  on the part
                  of any such person appointed by it hereunder or be bound to supervise
                  the
                  proceedings or acts of any such person.

              

      

      

      
        	 	
                (i)

              	
                Delegation:
                  Whenever it considers it reasonably necessary and expedient in
                  the
                  interests of the Bondholders, the Trustee may delegate by power
                  of
                  attorney or otherwise to any person or persons or fluctuating body
                  of
                  persons on any terms (including power to sub-delegate) all or any
                  of its
                  trusts, powers, authorities, discretions or functions under this
                  Trust
                  Deed. Provided that the Trustee shall have exercised reasonable
                  care in
                  the selection of such delegate, the Trustee shall not be under
                  any
                  obligation to the Bondholders to supervise the proceedings or be
                  in any
                  way responsible for any loss incurred by reason of any misconduct
                  or
                  default on the part of any such delegate or
                  sub-delegate.

              

      

      

      
        	 	
                (j)

              	
                Nominees:
                  In relation to any asset held by it under this Trust Deed, the
                  Trustee may
                  appoint any person to act as its nominee on any
                  terms.

              

      

      

      
        	 	
                (k)

              	
                Confidentiality:
                  Unless required by law or ordered to do so by a court of competent
                  jurisdiction, the Trustee shall not be required to disclose to
                  any
                  Bondholder any confidential financial or other information made
                  available
                  to the Trustee by the Issuer and no Bondholder shall be entitled
                  to take
                  any action to obtain from the Trustee any such
                  information.

              

      

       

      
        
          
          

        

        
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            26 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (l)

              	
                Determinations
                  Conclusive: As between itself and the Bondholders, the Trustee
                  may
                  determine all questions and doubts arising in relation to any of
                  the
                  provisions of this Trust Deed or any of the Bonds. Such determinations,
                  whether made upon such a question actually raised or implied in
                  the acts
                  or proceedings of the Trustee, will be conclusive and shall bind
                  the
                  Trustee and the Bondholders.

              

      

      

      
        	 	
                (m)

              	
                Currency
                  Conversion: Where it is necessary or desirable to translate or
                  convert any
                  sum from one (1) currency to another, it will (unless otherwise
                  provided
                  hereby or required by law) be converted or translated at such rate
                  or
                  rates, in accordance with such method and as at such date as may
                  be
                  specified by the Trustee but having regard to current rates of
                  exchange,
                  if available. Any rate, method and date so specified will be binding
                  on
                  the Issuer and the Bondholders.

              

      

      

      
        	 	
                (n)

              	
                Payment
                  for and Delivery of Bonds: The Trustee will not be responsible
                  for the
                  receipt or application by the Issuer of the proceeds of the issue
                  of the
                  Bonds, any exchange of Bonds or the delivery of Bonds to the persons
                  entitled to them.

              

      

      

      
        	 	
                (o)

              	
                Conversion
                  Price: The Trustee shall have no duty or responsibility to determine
                  whether facts exist which may require an adjustment of the Conversion
                  Price or to determine the nature or extent of any such adjustment
                  when
                  made or the method used or to be used in making
                  it.

              

      

      

      
        	 	
                (p)

              	
                The
                  Shares: The Trustee shall have no duty or responsibility at any
                  time in
                  respect of the validity or value (or the kind or amount) of the
                  Shares or
                  any
                  other property which may at any time be issued or delivered on
                  the
                  conversion of any Bonds or the sale or other disposal of any Shares.
                  The
                  Trustee shall not be responsible for any failure of the Issuer
                  to make
                  available or deliver any Shares, share certificates or any other
                  securities or property or make any payment on the exercise of any
                  Conversion Right.

              

      

      

      
        	 	
                (q)

              	
                Responsibility:
                  The Trustee assumes no responsibility for the correctness of Recital
                  (A)
                  to this Trust Deed (which shall be taken as a statement by the
                  Issuer) or
                  other statements, warranties or representations of the Issuer,
                  nor shall
                  the Trustee by the execution of this Trust Deed be deemed to make
                  any
                  representation as to the validity, sufficiency, enforceability
                  or
                  admissibility in evidence of the Bonds, this Trust Deed or the
                  Agency
                  Agreement.

              

      

      

      
        	 	
                (r)

              	
                Enforcement:
                  The Trustee shall not be under any obligation to take proceedings
                  against
                  the Issuer to enforce payment of the Bonds after the Bonds have
                  become due
                  and payable nor to declare the Bonds due and payable unless it
                  shall have
                  been so requested in writing by holders of not less than twenty-five
                  percent (25%) in principal amount of the Bonds then outstanding
                  (which
                  request has not been revoked) or shall have been so directed by
                  an
                  Extraordinary Resolution and it shall have been indemnified and/or
                  secured
                  to its satisfaction.

              

      

      

      
        	 	
                (s)

              	
                Satisfaction
                  of Trustee in Condition 9(C): For the purposes of Condition 8(C),
                  the
                  Trustee shall be satisfied by the Issuer that the Issuer will be
                  obliged
                  to pay additional amounts as provided in that Condition by the
                  delivery to
                  it of (a) a certificate signed by two (2) directors of the Issuer
                  and (b)
                  an opinion of independent legal or tax advisors of recognised standing
                  to
                  the effect that the amendment or change giving rise to the payment
                  of
                  additional amounts have occurred.

              

      

       

      
        
          
          

        

        
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            27 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (t)

              	
                Consolidation,
                  amalgamation etc: The Trustee shall not be responsible for any
                  consolidation, amalgamation, merger, reconstruction or scheme of
                  the
                  Issuer or any sale or transfer of all or substantially all of the
                  assets
                  of the Issuer or the form or substance of any plan relating thereto
                  or the
                  consequences thereof to any
                  Bondholder.

              

      

      

      
        	 	
                (u)

              	
                Forged
                  Bonds and Documents: The Trustee shall not be liable to the Issuer
                  or any
                  Bondholder if without gross negligence, wilful default or fraud
                  on its
                  part it has accepted as valid or has not rejected any Bonds purporting
                  to
                  be such and subsequently found to be forged or not authentic nor
                  shall it
                  be liable for any action taken or omitted to be taken in reliance
                  on any
                  document, certificate or communication believed by it to be genuine
                  and to
                  have been presented or signed by the proper
                  parties.

              

      

      

      
        	 	
                (v)

              	
                Consent:
                  Any consent or approval to be given by the Trustee for the purposes
                  of
                  this Trust Deed may be given on such terms and subject to such
                  conditions
                  (if any) as the Trustee thinks fit and notwithstanding any contrary
                  provision in this Trust Deed may be given retrospectively. The
                  Issuer
                  shall observe and perform any such terms and conditions and the
                  Trustee
                  may at any time waive or agree to a variation of such terms and
                  conditions.

              

      

      

      
        	 	
                (w)

              	
                Acceleration:
                  The Trustee shall not be obliged to declare the Bonds immediately
                  due and
                  payable under Condition 11 unless it has been indemnified and/or
                  secured
                  to its satisfaction in respect of all costs, claims and liabilities
                  which
                  it has incurred to that date and to which it may thereby and as
                  a
                  consequence thereof in its opinion render itself, or have rendered
                  itself,
                  liable.

              

      

      

      
        	 	
                (x)

              	
                Bonds
                  held by the Issuer etc.: In the absence of actual knowledge or
                  express notice to the contrary, the Trustee may assume without
                  enquiry
                  (other than requesting a certificate under Clause 9.15)
                  that no Bonds are for the time being held by or on behalf of the
                  Issuer or
                  its Subsidiaries.

              

      

      
        	 	
                (y)

              	
                Responsibility
                  for agents etc.: If the Trustee exercises reasonable care in selecting
                  any
                  custodian, agent, delegate or nominee appointed under this clause
                  (an
                  “Appointee”) (in each case, after written notice have been given to the
                  Issuer to the extent reasonably practicable), it will not have
                  any
                  obligation to supervise the Appointee or be responsible for any
                  loss,
                  liability, cost, claim, action, demand or expense incurred by reason
                  of
                  the Appointee’s misconduct or default or the misconduct or default of any
                  substitute appointed by the Appointee. 

              

      

      

      
        	 	
                (z)

              	
                Reliance
                  on Certificates: The Trustee may rely without liability to Bondholders
                  on
                  any certificate prepared by the directors of the Issuer and accompanied
                  by
                  a certificate or report prepared by an internationally recognised
                  firm of
                  accountants (including the Auditors) pursuant to the Conditions
                  and/or
                  this Trust Deed, whether or not addressed to the Trustee and whether
                  or
                  not the internationally recognised firm of accountants’ liability in
                  respect thereof is limited by a monetary cap or otherwise limited
                  or
                  excluded and shall be obliged to do so where the certificate or
                  report is
                  delivered pursuant to the obligation of the Issuer to procure such
                  delivery under the Conditions; any such certificate or report shall
                  be
                  conclusive and binding on the Issuer, the Trustee and the
                  Bondholders.

              

      

       

      
        
          
          

        

        
          -
            28 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (aa)

              	
                Compliance:
                  The Conditions shall be binding on the Issuer and the Bondholders.
                  The
                  Trustee shall be entitled to enforce the obligations of the Issuer
                  under
                  the Bonds and the Conditions as if the same were set out and contained
                  in
                  this Trust Deed which shall be read and construed as one (1) document
                  with
                  the Bonds. The provisions contained in Schedule 3 shall have effect
                  in the
                  same manner as if herein set forth.

              

      

      

      
        	 	
                (bb)

              	
                Error
                  of Judgment: The Trustee shall not be liable for any error of judgment
                  made in good faith by any officer or employee of the Trustee assigned
                  by
                  the Trustee to administer its corporate trust
                  matters.

              

      

      

      
        	 	
                (cc)

              	
                Professional
                  Charges: Any Trustee being a banker, lawyer, broker or other person
                  engaged in any profession or business shall be entitled to charge
                  and be
                  paid all usual professional and other charges for business transacted
                  and
                  acts done by him or his partner or firm on matters arising in connection
                  with the trusts of this Trust Deed and also his properly incurred
                  charges
                  in addition to disbursements for all other work and business done
                  and all
                  time spent by him or his partner or firm on matters arising in
                  connection
                  with this Trust Deed, including matters which might or should have
                  been
                  attended to in person by a trustee not being a banker, lawyer,
                  broker or
                  other professional person.

              

      

      

      
        	 	
                (dd)

              	
                Consequential
                  loss: Notwithstanding any contrary provision of this Trust Deed,
                  the
                  Trustee shall not in any event be liable for special, indirect,
                  punitive
                  or consequential loss or damage of any kind whatsoever (including
                  but not
                  limited to lost profits), whether or not foreseeable, even if the
                  Trustee
                  has been advised of the likelihood of such loss or damage and regardless
                  of whether the claim for such is made in negligence, breach of
                  contract,
                  fraud, breach of fiduciary obligation or
                  otherwise.

              

      

      

      
        	 	
                (ee)

              	
                Other
                  Obligations: The Trustee shall not be responsible for the validity
                  or
                  enforceability of any obligations owed to it as Trustee hereof
                  other than
                  by the Issuer the benefit of which obligations have been taken
                  by the
                  Trustee in the interests of the
                  Bondholders.

              

      

      

      
        	 	
                (ff)

              	
                Reliance:
                  Any certificate or report of the Auditors or any other expert or
                  other
                  person called for by or provided to the Trustee (whether or not
                  addressed
                  to the Trustee) in accordance with or for the purposes of these
                  Conditions
                  or this Trust Deed may be relied upon by the Trustee as sufficient
                  evidence of the facts therein and shall, in absence of manifest
                  error, be
                  conclusive and binding on all parties and the Trustee shall not
                  be
                  responsible for any loss occasioned by acting on any such certificate
                  or
                  report. The Trustee shall be entitled to rely on any report of
                  accountants, financial advisers or investment bank where the Issuer
                  procures the delivery of the same pursuant to its obligations to
                  do so
                  under the Conditions and such report shall be binding on the Issuer
                  and
                  the holders of the Bonds in the absence of manifest or proven
                  error.

              

      

      

      
        	 	
                (gg)

              	
                Certificates
                  from clearing systems: The Trustee may call for any certificate
                  or other
                  document to be issued by Clearstream, Luxembourg or Euroclear (or
                  any
                  alternative clearing system on behalf of whom the Global Certificate
                  may
                  be held) as to the principal amount of Bonds evidenced by the Global
                  Certificate standing to the account of any person. Any such certificate
                  or
                  other document shall, in the absence of manifest error, be conclusive
                  and
                  binding for all purposes. The Trustee shall not be liable to any
                  person by
                  reason of having accepted as valid or not having rejected any certificate
                  or other document to such effect purporting to be issued by Clearstream
                  or
                  Euroclear (or any such alternative clearing system) and subsequently
                  found
                  to be forged or not authentic or not to be
                  correct.

              

      

       

      
        
          
          

        

        
          -
            29 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (hh)

              	
                Exercise
                  of power: In connection with the exercise by it of any of its trusts,
                  powers, authorities, duties and discretions under this Trust Deed
                  (including, without limitation, any modification, waiver, authorisation
                  or
                  determination), the Trustee shall have regard to the interests
                  of all of
                  the Bondholders and shall not have regard to any interests arising
                  from
                  circumstances particular to individual Bondholders (whatever their
                  number)
                  (except where expressly provided otherwise), and, in particular
                  but
                  without limitation, shall not have regard to the consequences of
                  such
                  exercise for individual Bondholders resulting from their being
                  for any
                  purpose domiciled or resident in, or otherwise connected with,
                  or subject
                  to the jurisdiction of, any particular territory or any political
                  sub-division thereof and the Trustee shall not be entitled to require,
                  nor
                  shall any Bondholder be entitled to claim, from the Issuer (except
                  to the
                  extent provided for in Condition 10), the Trustee or any other
                  person any
                  indemnification or payment in respect of any tax consequence of
                  any such
                  exercise upon individual
                  Bondholders.

              

      

      

      
        	 	
                (ii)

              	
                Transaction
                  Documents: The Trustee shall not be responsible for the execution,
                  delivery, legality, effectiveness, adequacy, genuineness, validity,
                  performance, enforceability or admissibility in evidence of this
                  Trust
                  Deed or any other document relating thereto and shall not be liable
                  for
                  any failure to obtain any licence, consent or other authority for
                  the
                  execution, delivery, legality, effectiveness, adequacy, genuineness,
                  validity, performance, enforceability or admissibility in evidence
                  of this
                  Trust Deed or any other document relating
                  thereto.

              

      

      

      
        	 	
                (jj)

              	
                Legal
                  Opinion: The Trustee shall not be responsible to any person for
                  failing to
                  request, require or receive any legal opinion relating to the Bonds
                  or for
                  checking or commenting upon the content of any such legal opinion
                  and
                  shall not be responsible for any Liability incurred
                  thereby.

              

      

      

      
        	 	
                (kk)

              	
                Taking
                  Action by Trustee: The Trustee shall not be bound to take any action
                  in
                  connection with this Trust Deed or any obligations arising pursuant
                  thereto, including, without prejudice to the generality of the
                  foregoing,
                  forming any opinion or employing any financial adviser, where it
                  is not
                  reasonably satisfied that the Issuer will be able to indemnify
                  it against
                  all Liabilities which may be incurred in connection with such action
                  and
                  may demand prior to taking any such action that there be paid to
                  it in
                  advance such sums as it reasonably considers (without prejudice
                  to any
                  further demand) shall be sufficient so to indemnify it and on such
                  demand
                  being made the Issuer shall be obliged to make payment of all such
                  sums in
                  full.

              

      

       

      
        	
                12.

              	
                
                  LIABILITY
                    OF THE TRUSTEE

                

              

      

      

      If
        the
        Trustee fails to show the degree of care and diligence required of it as
        trustee
        having regard to the provisions hereof, nothing in this Trust Deed shall
        relieve
        or indemnify it from or against any liability which would otherwise attach
        to it
        in respect of any gross negligence, wilful default or fraud of which it may
        be
        guilty.

      

        
          	13.	
                  WAIVER
                    AND PROOF OF DEFAULT

                

        

         

      

      
        
          
          

        

        
          -
            30 -

          
            

          

        

        
          
          

        

      

       

      
        	
                13.1

              	
                Waiver

              

      

      

      The
        Trustee may, without the consent of the Bondholders and without prejudice
        to its
        rights in respect of any subsequent breach, from time to time and at any
        time,
        if in its opinion the interests of the Bondholders will not be materially
        prejudiced thereby, waive or authorise, on such terms as seem expedient to
        it,
        any breach or proposed breach by the Issuer of this Trust Deed or the Conditions
        or determine that an Event of Default will not be treated as such provided
        that
        the Trustee will not do so in contravention of an express direction given
        by an
        Extraordinary Resolution or a request made pursuant to Condition 11. No such
        direction or request will affect a previous waiver, authorisation or
        determination. Any such waiver, authorisation or determination will be binding
        on the Bondholders and, if the Trustee so requires, will be notified to the
        Bondholders as soon as practicable.

      

      
        	
                13.2

              	
                Proof
                  of Default

              

      

      

      Proof
        that the Issuer has failed to pay a sum due to the holder of any one (1)
        Bond
        will (unless the contrary be proved) be sufficient evidence that it has made
        the
        same default as regards all other Bonds which are then payable.

       

      
        	
                14.

              	
                
                  
                    TRUSTEE
                      NOT PRECLUDED FROM ENTERING INTO
                      CONTRACTS

                  

                

              

      

      

      The
        Trustee and any other person, whether or not acting for itself, may acquire,
        hold or dispose of any Bond or other security (or any interest therein) of
        the
        Issuer or any other person, may enter into or be interested in any contract
        or
        transaction with any such person and may act on, or as depositary or agent
        for,
        any committee or body of holders of any securities of any such person in
        each
        case with the same rights as it would have had if the Trustee were not acting
        as
        Trustee and need not account for any profit.

       

      
        	
                15.

              	
                
                  
                    MODIFICATION
                      AND SUBSTITUTION

                  

                

              

      

      

      
        	
                15.1

              	
                Modification

              

      

      

      
        	 	
                (a)

              	
                The
                  Trustee may (but is not obliged to) agree without the consent of
                  the
                  Bondholders to any modification to this Trust Deed (which for the
                  avoidance of doubt includes the Bonds) and the Agency Agreement,
                  which in
                  the Trustee’s opinion, is of a formal, minor or technical nature or to
                  correct a manifest or (to the satisfaction of the Trustee) proven
                  error.
                  The Trustee may (but is not obliged to) agree to any modification
                  to this
                  Trust Deed which is in its opinion proper to make if, in its opinion,
                  such
                  modification will not be materially prejudicial to the interests
                  of the
                  Bondholders. Unless the Trustee agrees otherwise, any such modification
                  shall be notified to the Bondholders as soon as practicable
                  thereafter.

              

      

      

      
        	 	
                (b)

              	
                Any
                  amendment or supplement to this Trust Deed shall be made by an
                  instrument
                  in writing signed by all the parties to this Trust Deed. A waiver
                  or
                  consent by the Trustee with respect to action required or forbidden
                  by
                  this Trust Deed shall be effective only if sent in writing by the
                  Trustee
                  and only for that occasion.

              

      

       

      
        	
                15.2

              	
                Substitution

              

      

      

      The
        Trustee may (but is not obliged to), without the consent of the Bondholders,
        agree to the substitution of any other company (the “Substituted
        Obligor”)
        in
        place of the Issuer (or of any previous substitute under this sub-Clause)
        as the
        principal debtor under this Trust Deed and the Bonds provided that:

       

      
        
          
          

        

        
          -
            31 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (a)

              	
                no
                  payment in respect of the Bonds is at the relevant time
                  overdue;

              

      

      

      
        	 	
                (b)

              	
                a
                  deed is executed or undertaking given by the Substituted Obligor
                  to the
                  Trustee, agreeing to be bound by this Trust Deed and the Bonds
                  (with
                  consequential amendments as the Trustee may deem appropriate) as
                  if the
                  Substituted Obligor had been named in this Trust Deed and the Bonds
                  as the
                  principal debtor in place of the
                  Issuer;

              

      

      

      
        	 	
                (c)

              	
                if
                  the Substituted Obligor is subject generally to the taxing jurisdiction
                  of
                  a territory or any authority of or in that territory with power
                  to tax
                  (the “Substituted
                  Territory”)
                  other than the territory to the taxing jurisdiction of which (or
                  to any
                  such authority of or in which) the Issuer is subject generally
                  (the
                  “Issuer’s
                  Territory”),
                  the Substituted Obligor has given (unless the Trustee otherwise
                  agrees) to
                  the Trustee an undertaking satisfactory to the Trustee in terms
                  corresponding to Condition 10 with the substitution for the references
                  in
                  that Condition to the Issuer’s Territory of references to the Substituted
                  Territory whereupon this Trust Deed and the Bonds will be read
                  accordingly;

              

      

      

      
        	 	
                (d)

              	
                any
                  two (2) directors of the Substituted Obligor certifies that it
                  will be
                  solvent immediately after such
                  substitution;

              

      

      

      
        	 	
                (e)

              	
                (unless
                  the Issuer’s successor in business is the Substituted Obligor as the
                  principal debtor under this Trust Deed and the Bonds) the obligations
                  of
                  the Substituted Obligor as the principal debtor under this Trust
                  Deed and
                  the Bonds are unconditionally and irrevocably guaranteed by the
                  Issuer;

              

      

      

      
        	 	
                (f)

              	
                a
                  certificate signed by two (2) duly authorised signatories of the
                  Issuer
                  stating that the circumstances referred to in this Clause prevail
                  and
                  legal opinions addressed to the Trustee from independent legal
                  advisors of
                  recognised standing in each jurisdiction referred to in (c) above,
                  in form
                  and substance satisfactory to the Trustee, as to the fulfilment
                  of the
                  conditions set out in full in this Clause have been delivered to
                  the
                  Trustee and the Trustee shall not be liable to anyone for relying
                  on such
                  certificates and legal opinions;
                  and

              

      

      

      
        	 	
                (g)

              	
                the
                  Issuer shall have given, unless the Trustee agrees otherwise, at
                  least
                  fourteen (14) days’ prior notice of such substitution to the Bondholders,
                  stating that copies, or pending execution the agreed text, of all
                  documents in relation to the substitution which are referred to
                  above, or
                  which might otherwise reasonably be regarded as material to Bondholders,
                  will be available for inspection at the specified office of the
                  Principal
                  Agent.

              

      

      

      References
        in Condition 11 to obligations under the Bonds shall be deemed to include
        obligations under the supplemental trust deed, and the events listed in
        Condition 11 shall be deemed to include any guarantee referred to in (e)
        above
        not being (or being claimed by the Issuer not to be) in full force and effect
        and the provisions in Condition 11(A)(iv), (v), (vi), (vii), (viii) and (ix)
        shall be deemed to apply to the Issuer as guarantor.

      

      
        	
                15.3

              	
                Release
                  of substituted Issuer

              

      

      

      An
        agreement by the Trustee pursuant to Clause 15.2
        will, if
        so expressed, release the Issuer (or a previous substitute) from any or all
        of
        its obligations (save for any guarantee obligations) under this Trust Deed
        and
        the Bonds. Notice of the substitution will be given by the Issuer to the
        Trustee
        (who will give such notice to the Bondholders) within fourteen (14) days
        of the
        execution of such documents and compliance with such requirements.

       

      
        
          
          

        

        
          -
            32 -

          
            

          

        

        
          
          

        

      

       

      
        	
                15.4

              	
                Completion
                  of Substitution

              

      

      

      On
        completion of the formalities set out in Clause 15.2,
        the
        Substituted Obligor will be deemed to be named in this Trust Deed and the
        Bonds
        as the principal debtor in place of the Issuer (or of any previous substitute)
        and this Trust Deed and the Bonds will be deemed to be amended as necessary
        to
        give effect to the substitution.

       

      
        	
                16.

              	
                
                  APPOINTMENT,
                    RETIREMENT AND REMOVAL OF THE
                    TRUSTEE

                

              

      

       

      
        	
                16.1

              	
                Appointment

              

      

      

      The
        Issuer has the power of appointing new trustees but no one may be so appointed
        unless previously approved by an Extraordinary Resolution. A trustee will
        at all
        times be a trust corporation and it may be the sole Trustee. Any appointment
        of
        a new Trustee will be notified by the Issuer to the Bondholders as soon as
        practicable.

      

      
        	
                16.2

              	
                Retirement
                  and Removal

              

      

      

      Any
        Trustee may retire at any time on giving at least sixty (60) days’ written
        notice to the Issuer without giving any reason and without being responsible
        for
        any costs occasioned by such retirement and the Bondholders may by an
        Extraordinary Resolution remove any Trustee provided that the retirement
        or
        removal of a sole trust corporation will not become effective until a trust
        corporation is appointed as successor Trustee. If a sole trust corporation
        gives
        notice of retirement or an Extraordinary Resolution is passed for its removal,
        the Issuer, will use all reasonable endeavours to procure that another trust
        corporation be appointed as Trustee as soon as practicable and if, after
        thirty
        (30) days’ of such notice having been given the Issuer, has failed to do so, the
        Trustee shall be entitled (at the expense of the Issuer) but not obliged
        to
        appoint another trust corporation selected by the Trustee as its successor.
        The
        protections, indemnities and immunities in this Trust Deed in favour of the
        Trustee shall continue to benefit the Trustee notwithstanding such Trustee’s
        removal or retirement.

      

      
        	
                16.3

              	
                Co-Trustees

              

      

      

      The
        Trustee may, despite Clause 16.1,
        by
        written notice to the Issuer appoint anyone to act as an additional Trustee
        jointly with the Trustee:

      

      
        	 	
                (a)

              	
                if
                  the Trustee considers such appointment to be in the interests of
                  the
                  Bondholders;

              

      

      

      
        	 	
                (b)

              	
                to
                  conform with any legal requirement, restriction or condition in
                  a
                  jurisdiction in which a particular act is to be performed;
                  or

              

      

      

      
        	 	
                (c)

              	
                to
                  obtain a judgment or to enforce a judgment or any provision of
                  this Trust
                  Deed in any jurisdiction.

              

      

      

      Subject
        to the provisions of this Trust Deed the Trustee may confer on any person
        so
        appointed such functions as it thinks fit. The Trustee shall not be responsible
        for supervision and management of the additional Trustee. The Trustee may
        by
        written notice to the Issuer and that person remove that person. At the
        Trustee’s request, the Issuer will forthwith do all things as may be required to
        perfect such appointment or removal and it irrevocably appoints the Trustee
        to
        be its attorney in its name and on its behalf to do so.

       

      
        
          
          

        

        
          -
            33 -

          
            

          

        

        
          
          

        

      

       

      
        	
                16.4

              	
                Competence
                  of a Majority of Trustees

              

      

      

      If
        there
        are more than two (2) Trustees the majority of them will be competent to
        perform
        the Trustee’s functions provided the majority includes a trust
        corporation.

      

      
        	
                16.5

              	
                Successor

              

      

      

      Any
        corporation into which the Trustee may be merged or converted or with which
        it
        may be consolidated, or any corporation resulting from any merger, conversion
        or
        consolidation to which the Trustee shall be a party, or any corporation
        succeeding to all or substantially all the corporate trust business of the
        Trustee, shall be the successor to the Trustee hereunder (provided it is
        a trust
        corporation) without the execution or filing of any papers or any further
        act on
        the part of any of the parties hereto.

       

      
        	
                17.

              	
                
                  COMMUNICATIONS

                

              

      

       

      
        Any
          notice or other communication hereunder shall be in writing. It shall be
          served
          by letter sent by registered post or courier or by fax:

        

        In
          the
          case of the Issuer, to it at:

        

        China
          Architectural Engineering, Inc.

        105
          Baishi Rd., Jiuzhou West Avenue

        Zhuhai,
          519070

        China

        

          
            	
                    Telephone
                      no.

                  	
                    :

                  	
                    +86-756-853-8908

                  
	
                    Fax
                      no.

                  	
                    :

                  	
                    +86-756-853-8922

                  
	
                    Attention

                  	
                    :

                  	
                    Luo
                      Ken Yi

                  

          

        

         

        In
          the
          case of the Trustee, to it at:

        

        The
          Bank
          of New York, London Branch

        40th
          Floor, One Canada Square

        London,
          E14 5AL, United Kingdom

        

          
            	
                    Fax
                      no.: 

                  	
                    +44
                      20 7964 6369

                  
	
                    Attention:
                      

                  	
                    Global
                      Corporate Trust

                  

          

        

        

        With
          a
          copy to:

        

        The
          Bank
          of New York

        Level
          12,
          3 Pacific Place

        1
          Queen’s
          Road East

        Hong
          Kong

        
          

            
              	
                      Fax
                        no.: 

                    	
                      852
                        2295 3283

                    
	
                      Attention:
                        

                    	
                      Corporate
                        Trust

                    

            

          

        

      

       

      
        
          
          

        

        
          -
            34 -

          
            

          

        

        
          
          

        

      

      
         

        Communications
          will take effect, in the case of a letter sent by registered post, on the
          seventh business day in New York receipt after posting; in the case of
          a letter
          sent by courier, at the time of delivery; in the case of fax, at the time
          of
          despatch if the correct error-free transmission report is received; provided
          that if such communication would take effect outside business hours then
          it
          shall be deemed to be received on the next business day in the place of
          receipt.

      

      

      For
        the
        purposes of this Clause 17,
        “business
        day”
means
        a
        day (other than Saturday, Sunday or public holidays) on which commercial
        banks
        and foreign exchange markets are open for business in the relevant
        location(s).

       

      
        	
                18.

              	
                
                  FURTHER
                    ISSUES

                

              

      

      

      
        	
                18.1

              	
                Supplemental
                  Trust Deed

              

      

      

      If
        the
        Issuer issues further securities as provided in Condition 16, it shall, before
        their issue, execute and deliver to the Trustee a deed supplemental to this
        Trust Deed containing such provisions (corresponding to any of the provisions
        of
        this Trust Deed) as the Trustee may require.

      

      
        	
                18.2

              	
                Meetings
                  of Bondholders

              

      

      

      If
        the
        Trustee so directs, Schedule 3 shall apply equally to Bondholders and to
        holders
        of any securities issued pursuant to the Conditions as if references in it
        to
“Bonds”
        and
“Bondholders”
        were
        also to such securities and their holders respectively.

       

      
        	
                19.

              	
                
                  CURRENCY
                    INDEMNITY

                

              

      

      

      
        	
                19.1

              	
                Currency
                  of Account and Payment

              

      

      

      United
        States dollars (the “Contractual
        Currency”)
        is the
        sole currency of account and payment for all sums payable by the Issuer under
        or
        in connection with this Trust Deed and the Bonds, including
        damages.

      

      
        	
                19.2

              	
                Extent
                  of discharge

              

      

      

      An
        amount
        received or recovered in a currency other than the Contractual Currency (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 Issuer or otherwise),
        by
        the Trustee or any Bondholder in respect of any sum expressed to be due to
        it
        from the Issuer will only discharge the Issuer to the extent of the Contractual
        Currency 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).

      

      
        	
                19.3

              	
                Indemnity

              

      

      

      If
        that
        Contractual Currency amount is less than the Contractual Currency amount
        expressed to be due to the recipient under this Trust Deed or the Bonds,
        the
        Issuer will indemnify it against any loss sustained by it as a result. In
        any
        event, the Issuer will indemnify the recipient against the cost of making
        any
        such purchase.

       

      
        
          
          

        

        
          -
            35 -

          
            

          

        

        
          
          

        

      

       

      
        	
                19.4

              	
                Indemnity
                  separate

              

      

      

      The
        indemnities in this Clause 19
        and in
        Clause 10.9 constitute separate and independent obligations from the other
        obligations in this Trust Deed, will give rise to a separate and independent
        cause of action, will apply irrespective of any indulgence granted by the
        Trustee and/or any Bondholder and will continue in full force and effect
        despite
        any judgment, order, claim or proof for a liquidated amount in respect of
        any
        sum due under this Trust Deed and/or the Bonds or any other judgment or
        order.

       

      
        	
                20.

              	
                
                  GOVERNING
                    LAW, THIRD PARTY RIGHTS AND
                    JURISDICTION

                

              

      

      

      
        	
                20.1

              	
                Governing
                  Law

              

      

      

      This
        Trust Deed shall be governed by and construed in accordance with English
        law.

      

      
        	
                20.2

              	
                The
                  Issuer irrevocably agrees for the benefit of the Trustee and the
                  Bondholders that the courts of England are to have exclusive jurisdiction
                  to settle any dispute which may arise out of or in connection with
                  these
                  presents and accordingly submit to the exclusive jurisdiction of
                  the
                  English courts. The Issuer waives any objection to the courts of
                  England
                  on the grounds that they are an inconvenient or inappropriate forum.
                  The
                  Trustee and the Bondholders may take any suit, action or proceedings
                  arising out of or in connection with these presents (together referred
                  to
                  as “Proceedings”)
                  against the Issuer in any other court of competent jurisdiction
                  and
                  concurrent Proceedings in any number of
                  jurisdictions.

              

      

      

      
        	
                20.3

              	
                The
                  Issuer irrevocably and unconditionally appoints The London Law
                  Agency at
                  its registered office for the time being and in the event of its
                  ceasing
                  so to act will appoint such other person as the Trustee may approve
                  and as
                  the Issuer may nominate in writing to the Trustee for the purpose
                  to
                  accept service of process on its behalf in England in respect of
                  any
                  Proceedings. The Issuer:

              

      

      

      
        	 	
                (a)

              	
                agrees
                  to procure that, so long as any of the Bonds remain liable to
                  prescription, there shall be in force an appointment of such a
                  person
                  approved by the Trustee with an office in London with authority
                  to accept
                  service as aforesaid;

              

      

      

      
        	 	
                (b)

              	
                agrees
                  that failure by any such person to give notice of such service
                  of process
                  to the Issuer shall not impair the validity of such service or
                  of any
                  judgment based thereon;

              

      

      

      
        	 	
                (c)

              	
                consents
                  to the service of process in respect of any Proceedings by the
                  airmailing
                  of copies, postage prepaid, to the Issuer in accordance with clause
                  17;
                  and

              

      

      

      
        	 	
                (d)

              	
                agrees
                  that nothing in these presents shall affect the right to serve
                  process in
                  any other manner permitted by law.

              

      

       

      
        	
                21.

              	
                
                  THIRD
                    PARTY RIGHTS

                

              

      

      

      A
        person
        who is not a party to these presents has no rights under the Contracts (Rights
        of Third Parties) Act 1999 to enforce any term of these presents, but this
        does
        not affect any right or remedy of a third party which exists or is available
        apart from that Act.

       

      
        
          
          

        

        
          -
            36 -

          
            

          

        

        
          
          

        

      

       

      
        	
                22.

              	
                
                  
                    COUNTERPARTS

                  

                

              

      

      

      This
        Trust Deed (and any supplemental trust deed thereto) may be executed in
        counterparts, each of which shall be deemed to be an original and all of
        which
        when so executed shall constitute one (1) and the same instrument.

       

      
        	
                23.

              	
                
                  TERMINATION
                    OF THIS TRUST DEED

                

              

      

      

      This
        Trust Deed shall terminate forthwith when none of the Bonds remains
        outstanding.

       

      
        
          
          

        

        
          -
            37 -

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        1

      

        FORM
          OF
          CERTIFICATE

      

       

       

      On
        the
        front:

      

      

      
        	
                Amount

              	
                ISIN

              	
                Common
                  Code

              	
                Certificate
                  Number

              

      

       

       

      CHINA
        ARCHITECTURAL ENGINEERING, INC.

      (incorporated
        under the laws of the State of Delaware)

      US$10,000,000

      Variable
        Rate Convertible Bonds due 2012

      

      The
        Bond
        or Bonds in respect of which this Certificate is issued, the identifying
        numbers
        of which are noted above, are in registered form and form part of a series
        designated as specified in the title (the Bonds)
        of
        China Architectural Engineering, Inc. (the Issuer)
        and
        constituted by the Trust Deed referred to on the reverse hereof. The Bonds
        are
        subject to, and have the benefit of, that Trust Deed and the terms and
        conditions (the Conditions)
        set out
        on the reverse hereof.

      

      The
        Issuer hereby certifies that [  ]
        of
        [            
 ] is, as at the date hereof, entered in the register of Bondholders as the
        holder of Bonds in the principal amount of US$10,000,000 (Ten Million United
        States dollars). For value received, the Issuer promises to pay the person
        who
        appears at the relevant time on the register of Bondholders as holder of
        the
        Bonds in respect of which this Certificate is issued such amount or amounts
        as
        shall become due in respect of such Bonds and otherwise to comply with the
        Conditions.

      

      The
        Bonds
        in respect of which this Certificate is issued are convertible into fully-paid
        shares of common stock with a par value of US$0.001 each of the Issuer subject
        to and in accordance with the Conditions and the Trust Deed.

      

      This
        Certificate is evidence of entitlement only. Title to the Bonds passes only
        on
        due registration on the register of Bondholders and only the duly registered
        holder is entitled to payments on Bonds in respect of which this Certificate
        is
        issued.

      

      This
        Certificate shall not be valid for any purpose until authenticated by or
        on
        behalf of the Principal Agent.

      

      The
        Certificate is governed by, and shall be construed in accordance with, English
        law.

      

      IN
        WITNESS whereof the Issuer has caused this Certificate to be signed on its
        behalf.

      

      Dated
        [  ]
        

      

      CHINA
        ARCHITECTURAL ENGINEERING, INC.

      

      By:

      Director/Authorised
        Signatory

       

      
        
          
          

        

        
          -
            38 -

          
            

          

        

        
          
          

        

      

       

      Certificate
        of Authentication

      

      Certified
        that the above-named holder is as at the date hereof entered in the register
        of
        Bondholders as holder of the above-mentioned principal amount of Bonds with
        identifying numbers:

      

      
        
          

        

      

       

      
        

      

       

      
        

      

       

      
        

      

       

      The
        Bank of New York as Registrar

      (without
        warranty, recourse or liability)

      

      

      

      

      By:

      

      

      

      Authorised
        Signatory

      

      Dated:

      

      

      
        
          
          

        

        
          -
            39 -

          
            

          

        

        
          
          

        

      

      

      TERMS
        AND CONDITIONS OF THE BONDS

      

      The
        following is the text of the Conditions of the Bonds which (subject to
        modification and except for the paragraphs in italics) will be endorsed on
        the
        Certificates issued in respect of the Bonds.

       

      The
        issue
        of the US$10,000,000 aggregate principal amount of Variable Rate Convertible
        Bonds due 2012 (the Bonds,
        which
        term shall include, unless the context requires otherwise, any further Bonds
        issued in accordance with Condition 17 and consolidated and forming a single
        series therewith) of China Architectural Engineering, Inc. (the Issuer)
        and the
        right of conversion into Shares (as defined in Condition 6(A)(v)) were
        authorised by resolutions of the board of directors of the Issuer passed
        on
        April 9, 2007. The Bonds are constituted by a trust deed dated April 12,
        2007
        (the Original
        Trust Deed)
        made
        between the Issuer and the The Bank of New York, London Branch as trustee
        for
        the holders of the Bonds (the Trustee,
        which
        term shall, where the context so permits, include all other persons or companies
        for the time being acting as trustee or trustees under the Trust Deed), as
        amended and restated by an amended and restated trust deed dated August [•],
        2007 (the Amended
        and Restated Trust Deed,
        the
        Original Trust Deed and the Amended and Restated Trust Deed are collectively
        referred to as the Trust
        Deed)
        made
        between the Issuer and the Trustee and are subject to the paying and conversion
        agency agreement dated April 12, 2007 (the Agency
        Agreement)
        with
        the Trustee, The Bank of New York, London Branch as principal paying, conversion
        and transfer agent (the Principal
        Agent),
        The
        Bank of New York as registrar (the Registrar)
        and the
        other paying, conversion and transfer agents appointed under it (each a
Paying
        Agent,
        Conversion
        Agent,
        Transfer
        Agent,
        and
        together with the Registrar and the Principal Agent, the Agents)
        relating to the Bonds. References to the Principal
        Agent,
        Registrar
        and
Agents
        below
        are references to the principal agent, registrar and agents for the time
        being
        for the Bonds. The statements in these terms and conditions of the Bonds
        (these
Conditions)
        include
        summaries of, and are subject to, the detailed provisions of the Trust Deed.
        Unless otherwise defined, terms used in these Conditions have the meaning
        specified in the Trust Deed. Copies of the Trust Deed and of the Agency
        Agreement are available for inspection during normal business hours at the
        registered office of the Trustee being as at the date hereof at 40th Floor,
        One
        Canada Square, London, E14 5AL, United Kingdom and at the specified offices
        of
        each of the Agents. The Bondholders are bound by, and are deemed to have
        notice
        of, all the provisions of the Trust Deed and the Agency Agreement applicable
        to
        them.

       

      
        	
                1.

              	
                Status
                  

              

      

       

      The
        Bonds
        constitute direct, unsubordinated, unconditional and (subject to the provisions
        of Condition 5)
        unsecured obligations of the Issuer and shall at all times rank pari
        passu
        and
        without any preference or priority among themselves. The payment obligations
        of
        the Issuer under the Bonds shall, save for such exceptions as may be provided
        by
        applicable legislation and subject to Condition 5, at all times rank at least
        equally with all of its other present and future unsecured and unsubordinated
        obligations (other than any obligations preferred by mandatory provisions
        of
        applicable law). 

       

      
        	
                2.

              	
                Form
                  and Denomination

              

      

       

      The
        Bonds
        are issued in registered form in the denomination of US$1,000
        each. A Bond certificate (each a Certificate)
        will be
        issued to each Bondholder in respect of its registered holding of Bonds.
        Each
        Bond and each Certificate will be numbered serially with an identifying number
        which will be recorded on the relevant Certificate and in the Register (as
        defined in Condition 4(A)) which the Issuer will procure to be kept by the
        Registrar.

       

      
        
          
          

        

        
          -
            40 -

          
            

          

        

        
          
          

        

      

       

      
        	
                3.

              	
                Title

              

      

       

      Title
        to
        the Bonds passes only by transfer and registration in the register of
        Bondholders as described in Condition 4. The holder of any Bond will (except
        as
        otherwise required by law) be treated as its absolute owner for all purposes
        (whether or not it is overdue and regardless of any notice of ownership,
        trust
        or any interest in it or any writing on, or the theft or loss of, the
        Certificate issued in respect of it) and no person will be liable for so
        treating the holder.
        In these
        Conditions, Bondholder
        and (in
        relation to a Bond) holder
        mean the
        person in whose name a Bond is registered.

       

      
        	
                4.

              	
                Transfers
                  of Bonds; Issue of
                  Certificates

              

      

       

      
        	
                A.

              	
                Register

              

      

       

      The
        Issuer will cause to be kept at the specified office outside
        the United Kingdom of the Registrar and in accordance with the terms of the
        Agency Agreement a register on which shall be entered the names and addresses
        of
        the holders of the Bonds and the particulars of the Bonds held by them and
        of
        all transfers of the Bonds (the Register).
        Each
        Bondholder shall be entitled to receive only one (1) Certificate in respect
        of
        its entire holding of Bonds.

       

      
        	
                B.

              	
                Transfer

              

      

       

      Subject
        to the terms of the Agency Agreement, a Bond may be transferred by delivery
        of
        the Certificate issued in respect of that Bond, with the form of transfer
        on the
        back duly completed and signed by the holder or his attorney duly authorised
        in
        writing, to the specified office of the Registrar or any of the
        Agents.
        No
        transfer of a Bond will be valid unless and until entered on the
        Register.

       

      
        	
                C.

              	
                Delivery
                  of New Certificates

              

      

       

      Each
        new
        Certificate to be issued upon a transfer of Bonds will, within three
        (3)
        business days of receipt by the Registrar or, as the case may be, any other
        relevant Agent of the form of transfer, be made available for collection
        at the
        specified office of the Registrar or such other relevant Agent or, if so
        requested in the form of transfer, be mailed by uninsured mail at the risk
        of
        the holder entitled to the Bonds (but free of charge to the holder) to the
        address specified in the form of transfer.

       

      Where
        only part of a principal amount of the Bonds (being that of one (1) or more
        Bonds) in respect of which a Certificate is issued is to be transferred or
        converted, a new Certificate in respect of the Bonds not so transferred or
        converted will, within three (3) business days of delivery of the original
        Certificate to the Registrar or other relevant Agent, be made available for
        collection at the specified office of the Registrar or such other relevant
        Agent
        or, if so requested in the form of transfer, be mailed by uninsured mail
        at the
        risk of the holder of the Bonds not so transferred or converted (but free
        of
        charge to the holder) to the address of such holder appearing on the
        Register.

       

      For
        the
        purposes of Condition 4, business
        day
        shall
        mean a day other than a Saturday or Sunday on which banks are open for business
        in the city in which the specified office of the Registrar (if a Certificate
        is
        deposited with it in connection with a transfer or conversion) or the Agent
        with
        whom a Certificate is deposited in connection with a transfer or conversion,
        is
        located.

       

      
        
          
          

        

        
          -
            41 -

          
            

          

        

        
          
          

        

      

       

      
        	
                D.

              	
                Formalities
                  Free of Charge

              

      

       

      Registration
        of transfer of Bonds will be effected without charge by or on behalf of the
        Issuer or any of the Agents, but upon payment (or the giving of such indemnity
        as the Issuer or any of the Agents may require) in respect of any tax or
        other
        governmental charges which may be imposed in relation to such
        transfer.

       

      
        	
                E.

              	
                Closed
                  Periods

              

      

       

      No
        Bondholder may require the transfer of a Bond to be registered (i) during
        the
        period of seven (7)
        days
        ending on (and including) the dates for payment of any principal and/or premium
        (if any) pursuant to the Conditions; (ii) after a Conversion Notice (as defined
        in Condition 6(B)) has been delivered with respect to a Bond; or (iii) after
        a
        Tax Redemption Notice (as defined in Condition 9(C)) or a Relevant Event
        Redemption Notice (as defined in Condition 9(D)) has been deposited in respect
        of such Bond.

       

      
        	
                F.

              	
                Regulations

              

      

       

      All
        transfers of Bonds and entries on the register of Bondholders will be made
        subject to the detailed regulations concerning transfer of Bonds scheduled
        to
        the Agency Agreement.
        The
        regulations may be changed by the Issuer, with the prior written approval
        of the
        Trustee and the Registrar. A copy of the current regulations will be mailed
        (free of charge) by the Registrar to any Bondholder upon request.

       

      
        	
                5.

              	
                Negative
                  Pledge

              

      

       

      
        	
                A.

              	
                Negative
                  Pledge

              

      

       

      The
        Issuer undertakes that, so long as any of the Bonds remains outstanding (as
        defined in the Trust Deed) or any amount is due under or in respect of any
        Bond
        or otherwise under the Trust Deed, it will not, and will procure that none
        of
        its Subsidiaries will, create or permit to subsist or arise any Encumbrance
        upon
        the whole or any part of their respective present or future assets or revenues
        to secure any Relevant Indebtedness of the Issuer or any Subsidiary of the
        Issuer or to secure any guarantee of or indemnity in respect of any such
        Relevant Indebtedness unless, at the same time or prior thereto, the
        Issuer’s
        obligations under the Bonds are secured by the same Encumbrance or have the
        benefit from a guarantee or indemnity in substantially identical terms thereto
        or, at the option of the Issuer, by such other security, guarantee, indemnity
        or
        other arrangement as the Bondholders may approve by Extraordinary Resolution
        (as
        defined in the Trust Deed). 

       

      
        	
                B.

              	
                Interpretation

              

      

       

      In
        these
        Conditions:

       

      
        	 	
                (i)

              	
                any
                  reference to an Encumbrance
                  is
                  to a mortgage, charge, pledge, lien or other encumbrance or security
                  interest securing any obligation of any
                  person;

              

      

       

      
        	 	
                (ii)

              	
                any
                  reference to Relevant
                  Indebtedness
                  is
                  to any future or present indebtedness in the form of or represented
                  by
                  debentures, loan stock, bonds, notes, bearer participation certificates,
                  depository receipts, certificates of deposit or other similar securities
                  or instruments or by bills of exchange drawn or accepted for the
                  purpose
                  of raising money which are, or are issued with the intention on
                  the part
                  of the Issuer or any Subsidiary of the Issuer that they should
                  be, quoted,
                  listed, ordinarily dealt in or traded on any stock exchange or
                  over the
                  counter or on any other securities market (whether or not initially
                  distributed by way of private placement); and

              

      

       

      
        
          
          

        

        
          -
            42 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (iii)

              	
                any
                  reference to a Subsidiary
                  of
                  any person is to any company or other business entity of which
                  that person
                  owns or controls (either directly or through one (1) or more other
                  Subsidiaries) more than fifty percent (50%) of the issued share
                  capital or
                  other ownership interest having ordinary voting power to elect
                  directors,
                  managers or trustees of such company or other business entity or
                  any
                  company or other business entity which at any time has its accounts
                  consolidated with those of that person or which, under United States
                  or
                  other relevant law, regulations or generally accepted accounting
                  principles from time to time, should have its accounts consolidated
                  with
                  those of that person.

              

      

       

      
        	
                6.

              	
                Conversion

              

      

       

      
        	
                A.

              	
                Conversion
                  Right

              

      

       

      
        	
                (i)

              	
                Conversion
                  Period:
                  Subject as hereinafter provided, Bondholders have the right to
                  convert
                  their Bonds into Shares at any time during the Conversion Period
                  referred
                  to below.

              

      

       

      The
        right
        of a Bondholder to convert any Bond
        into
        Shares is called the Conversion
        Right.
        Subject
        to and upon compliance with, the provisions of this Condition, the Conversion
        Right attaching to any Bond may be exercised, at the option of the holder
        thereof, at any time on and after 365 days after the date the Issuer’s Shares
        commences trading on AMEX upon consummation of the IPO up to the close of
        business (at the place where the Certificate evidencing such Bond is deposited
        for conversion) on March 28, 2012 (but, except as provided in Condition
        6(A)(iv), in no event thereafter) or if such Bond shall have been called
        for
        redemption before the Maturity Date (as defined in Condition 9(A)), then
        up to
        the close of business (at the place aforesaid) on a date no later than seven
        (7)
        business days (in the place aforesaid) prior to the date fixed for redemption
        thereof (the Conversion
        Period).

       

      The
        number of Shares to be issued on conversion of a Bond will be determined
        by
        dividing the principal amount of the Bond to be converted by the Conversion
        Price in effect at the Conversion Date (both as hereinafter defined). A
        Conversion Right may only be exercised in respect of one (1) or more Bonds.
        If
        more than one (1) Bond held by the same holder is converted at any one (1)
        time
        by the same holder, the number of Shares to be issued upon such conversion
        will
        be calculated on the basis of the aggregate principal amount of the Bonds
        to be
        converted. 

       

      
        	
                (ii)

              	
                Fractions
                  of Shares:
                  Fractions of Shares will not be issued on conversion and no cash
                  adjustments will be made in respect thereof. Notwithstanding the
                  foregoing, in the event of a consolidation or re-classification
                  of Shares
                  by operation of law or otherwise occurring after April 12, 2007
                  which
                  reduces the number of Shares outstanding, the Issuer will upon
                  conversion
                  of Bonds pay in cash (in US dollars by means of a US dollar cheque
                  drawn
                  on a bank in New York) a sum equal to such portion of the principal
                  amount
                  of the Bond or Bonds evidenced by the Certificate deposited in
                  connection
                  with the exercise of Conversion Rights, aggregated as provided
                  in
                  Condition 6(A)(i), as corresponds to any fraction of a Share not
                  issued as
                  a result of such consolidation or re-classification aforesaid if
                  such sum
                  exceeds US$10.00.

              

      

       

      
        	
                (iii)

              	
                Conversion
                  Price:
                  The price at which Shares will be issued upon conversion (the Conversion
                  Price)
                  will initially be the price per Share at which Shares are sold
                  in the IPO
                  (the IPO
                  Price)
                  but will be subject to adjustment in the manner provided in Conditions
                  6(C) and 6(D). IPO means a public offering of the Shares of the
                  Issuer on
                  the American Stock Exchange (AMEX)
                  with minimum gross proceeds of US$2,000,000. If no IPO has occurred
                  prior
                  to conversion, the Conversion Price will be deemed to be US$2.00
                  as of
                  April 12, 2007 (the “Closing
                  Date”),
                  subject to adjustment in the manner provided in Conditions 6(C)
                  and
                  6(D).

              

      

       

      
        
          
          

        

        
          -
            43 -

          
            

          

        

        
          
          

        

      

       

      
        	
                (iv)

              	
                Revival
                  and/or survival after Default:
                  Notwithstanding the provisions of Condition 6(A)(i), if (a) the
                  Issuer
                  shall default in making payment in full in respect of any Bond
                  which shall
                  have been called for redemption on the date fixed for redemption
                  thereof,
                  (b) any Bond has become due and payable prior to the Maturity Date
                  by
                  reason of the occurrence of any of the events under Condition 11
                  or (c)
                  any Bond is not redeemed on the Maturity Date in accordance with
                  Condition
                  9(A), the Conversion Right attaching to such Bond will revive and/or
                  will
                  continue to be exercisable up to, and including, the close of business
                  (at
                  the place where the Certificate evidencing such Bond is deposited
                  for
                  conversion) on the date upon which the full amount of the moneys
                  payable
                  in respect of such Bond has been duly received by the Principal
                  Agent or
                  the Trustee and notice of such receipt has been duly given to the
                  Bondholders and, notwithstanding the provisions of Condition 6(A)(i),
                  any
                  Bond in respect of which the Certificate and Conversion Notice
                  (as defined
                  below) are deposited for conversion prior to such date shall be
                  converted
                  on the relevant Conversion Date (as defined below) notwithstanding
                  that
                  the full amount of the moneys payable in respect of such Bond shall
                  have
                  been received by the Principal Agent or the Trustee before such
                  Conversion
                  Date or that the Conversion Period may have expired before such
                  Conversion
                  Date.

              

      

       

      
        	
                (v)

              	
                Meaning
                  of Shares:
                  As
                  used in these Conditions, the expression Shares
                  means shares of common stock of the Issuer or shares of any class
                  or
                  classes resulting from any subdivision, consolidation or re-classification
                  of those shares, which as between themselves have no preference
                  in respect
                  of dividends or of amounts payable in the event of any voluntary
                  or
                  involuntary liquidation or dissolution of the Issuer, in each case,
                  listed
                  on the American Stock Exchange (the AMEX)
                  .

              

      

       

      
        	
                B.

              	
                Conversion
                  Procedure

              

      

       

      
        	
                (i)

              	
                Conversion
                  Notice:
                  To exercise the Conversion Right attaching to any Bond, the holder
                  thereof
                  must complete, execute and deliver at his own expense during normal
                  business hours at the specified office of any Conversion Agent
                  a notice of
                  conversion (a Conversion
                  Notice)
                  in duplicate in the form (for the time being current) obtainable
                  from the
                  specified office of each Agent, together with the relevant Certificate
                  and
                  any amounts required to be paid by the Bondholder under Condition
                  6(B)(ii).

              

      

       

      The
        conversion date
        in
        respect of a Bond (the Conversion
        Date)
        must
        fall at a time when the Conversion Right attaching to that Bond is expressed
        in
        these Conditions to be exercisable (subject to the provisions of Condition
        6(A)(iv) above) and will be deemed to be the Stock Exchange Business Day
        (as
        defined below) immediately following the date of the surrender of the
        Certificate in respect of such Bond and delivery of such Conversion Notice
        and,
        if applicable, any payment or indemnity required to be made or given under
        these
        Conditions in connection with the exercise of such Conversion Right. A
        Conversion Notice once delivered shall be irrevocable and may not be withdrawn
        unless the Issuer consents in writing to such withdrawal. Stock
        Exchange Business Day
        means
        any day (other than a Saturday or Sunday) on which the AMEX or the Alternative
        Stock Exchange (as defined in Condition 6(C) below), as the case may be,
        is open
        for business of dealing in securities.

       

      
        
          
          

        

        
          -
            44 -

          
            

          

        

        
          
          

        

      

       

      
        	
                (ii)

              	
                Stamp
                  Duty etc.:
                  As conditions precedent to conversion, a Bondholder delivering
                  a
                  Certificate in respect of a Bond for conversion must pay any taxes
                  and
                  capital, stamp, issue and registration duties arising on conversion
                  (other
                  than any taxes or capital or stamp duties payable in the United
                  States,
                  the People’s Republic of China or England and, if relevant, in the place
                  of the Alternative Stock Exchange, by the Issuer in respect of
                  the
                  allotment and issue of Shares and listing of the Shares on the
                  AMEX or the
                  Alternative Stock Exchange on conversion) (the Taxes)
                  and such Bondholder must also pay all, if any, taxes arising by
                  reference
                  to any disposal or deemed disposal of a Bond in connection with
                  such
                  conversion. The Issuer will pay all other expenses arising on the
                  issue of
                  Shares on conversion of Bonds. The Bondholder (and, if applicable,
                  the
                  person other than the Bondholder to whom the Shares are to be issued)
                  must
                  provide the Conversion Agent with details of the relevant tax authorities
                  to which the Conversion Agent must pay monies received in settlement
                  of
                  Taxes payable pursuant to this Condition 6(B)(ii). The Conversion
                  Agent is
                  under no obligation to determine whether a Bondholder is liable
                  to pay any
                  Taxes including capital, stamp, issue, registration or similar
                  taxes and
                  duties or the amounts payable (if any) in connection with this
                  Condition
                  6(B)(ii).

              

      

       

      
        	
                (iii)

              	
                Registration:
                  As soon as practicable, and in any event not later than seven (7)
                  Trading
                  Days (as defined below) after the Conversion Date, the Issuer will,
                  procure that the relevant number of Shares are allotted to and
                  registered
                  in the name of the nominee of a depositary common to Euroclear
                  and
                  Clearstream for credit to the securities account designated for
                  the
                  purpose in the Conversion Notice for so long as the Shares are
                  listed on
                  the AMEX.

              

      

       

      If
        the
        Conversion Date in relation to any Bond shall be on or after a date with
        effect
        from which an adjustment to the Conversion Price takes retroactive effect
        pursuant to any of the provisions referred to in Condition 6(C) and the Trust
        Deed,
        and the
        relevant Registration Date (as defined below) falls on a date when the relevant
        adjustment has not yet been reflected in the then current Conversion Price,
        the
        provisions of this sub-paragraph (iii) shall be applied, mutatis
        mutandis,
        to such
        number of Shares as is equal to the excess of the number of Shares which
        would
        have been required to be issued on conversion of such Bond if the relevant
        retroactive adjustment had been given effect as at the said Registration
        Date
        over the number of Shares previously issued (or which the Issuer was previously
        bound to issue) pursuant to such conversion.

       

      The
        person or persons specified for that purpose will become the holder on record
        of
        the number of Shares issuable upon conversion with effect from the date he
        is or
        they are registered as such in the Issuer’s register of members (the
Registration
        Date).
        The
        Shares issued upon conversion of the Bonds will in all respects rank
pari
        passu
        with the
        Shares in issue on the relevant Registration Date. Save as set out in these
        Conditions, a holder of Shares issued on conversion of Bonds shall not be
        entitled to any rights the record date for which precedes the relevant
        Registration Date. Upon delivery of the Shares in satisfaction of the Conversion
        Right of any Converting Bondholder and the completion of such registration
        in
        accordance with this Condition 6(B), the right of such Converting Bondholder
        to
        repayment of the principal amount of the Bonds so converted shall
        extinguish.

       

      If
        the
        record date for the payment of any dividend or other distribution in respect
        of
        the Shares is on or after the Conversion Date in respect of any Bond, but
        before
        the Registration Date (disregarding any retroactive adjustment of the Conversion
        Price referred to in this sub-paragraph (iii) prior to the time such retroactive
        adjustment shall have become effective), the Issuer will pay to the converting
        Bondholder or his designee an amount (the Equivalent
        Amount)
        equal
        to any such dividend or other distribution to which he would have been entitled
        had he on that record date been such a shareholder of record and will make
        the
        payment at the same time as it makes payment of the dividend or other
        distribution, or as soon as practicable thereafter, but, in any event, not
        later
        than seven (7) days thereafter. The Equivalent Amount shall be paid by means
        of
        a U.S. dollar cheque drawn on a bank in New York and sent to the address
        specified in the relevant Conversion Notice.

       

      
        
          
          

        

        
          -
            45 -

          
            

          

        

        
          
          

        

      

       

      
        	
                C.

              	
                Adjustments
                  to Conversion Price

              

      

       

      The
        Conversion Price will be subject to adjustment in the following events as
        set
        out in the Trust Deed:

       

      
        	
                (1)

              	
                Consolidation,
                  Subdivision or Reclassification:
                  If
                  and whenever there shall be an alteration to the nominal value
                  of the
                  Shares as a result of consolidation, subdivision or reclassification,
                  the
                  Conversion Price shall be adjusted by multiplying the Conversion
                  Price in
                  force immediately before such alteration by the following
                  fraction:

              

      

       

      
        
          	
                  A

                
	
                  B

                

        

      

       

      
        	
                Where:

              	
                  

              
	 	 
	
                A

              	
                is
                  the nominal amount of one (1) Share immediately after such alteration;
                  and

              
	 	 
	
                B

              	
                 is
                  the nominal amount of one (1) Share immediately before such
                  alteration.

              

      

       

      Such
        adjustment shall become effective on the date the alteration takes
        effect.

       

      
        	
                (2)

              	
                Capitalisation
                  of Profits or Reserves: If
                  and whenever the Issuer shall issue any Shares credited as fully
                  paid to
                  the holders of Shares (the Shareholders)
                  by way of capitalisation of profits or reserves (including any
                  share
                  premium account) including, Shares paid up out of distributable
                  profits or
                  reserves and/or share premium account issued (except any Scrip
                  Dividend
                  (as defined below)) and which would not have constituted a Capital
                  Distribution (as defined below), the Conversion Price shall be
                  adjusted by
                  multiplying the Conversion Price in force immediately before such
                  issue by
                  the following fraction:

              

      

      
         

        
          
            	
                    A

                  
	
                    B

                  

          

           

        

      

      
        	
                Where:

              	
                 

              
	 	 
	
                A

              	
                is
                  the aggregate nominal amount of the issued Shares immediately before
                  such
                  issue; and

              
	 	 
	
                B

              	
                is
                  the aggregate nominal amount of the issued Shares immediately after
                  such
                  issue.

              

      

       

      Such
        adjustment shall become effective on the date of issue of such Shares
        or
        if a record date is fixed therefor, immediately after such record
        date.

       

      
        
          
          

        

        
          -
            46 -

          
            

          

        

        
          
          

        

      

       

      
        	
                (3)

              	
                Capital
                  Distributions: If
                  and whenever the Issuer shall pay or make any Capital Distribution
                  to the
                  Shareholders (except to the extent that the Conversion Price falls
                  to be
                  adjusted under Condition 6(C)(2) above), the Conversion Price shall
                  be
                  adjusted by multiplying the Conversion Price in force immediately
                  before
                  such Capital Distribution by the following
                  fraction:

              

      

      
        
           

          
            
              	
                      A
                        –
                        B

                    
	
                      A

                    

            

          

        

      

       

      
        	
                Where:

              	
                 

              
	 	 
	
                A

              	
                is
                  the Current Market Price of one (1) Share on the last Trading Day
                  preceding the date on which the Capital Distribution is publicly
                  announced; and

              
	 	 
	
                B

              	
                is
                  the Fair Market Value (as defined below) on the date of such announcement
                  of the portion of the Capital Distribution attributable to one
                  (1)
                  Share.

              

      

       

      Such
        adjustment shall become effective on the date that such Capital Distribution
        is
        actually made or if a record date is fixed therefor, immediately after such
        record date.

       

      When
        the
        Capital Distribution is by means of distribution of a cash dividend
        such
        cash dividend shall be regarded as a Capital Distribution and shall be fully
        taken into account in the determination of the Fair Market Value of the portion
        of the Capital Distribution attributable to one (1) Share. 

       

       

      
        	
                (4)

              	
                Rights
                  Issues of
                  Shares or Options over Shares: If
                  and whenever the Issuer shall issue Shares to all or substantially
                  all
                  Shareholders as a class by way of rights, or issue or grant to
                  all or
                  substantially all Shareholders as a class by way of rights, of
                  options,
                  warrants or other rights to subscribe for or purchase or otherwise
                  acquire
                  any Shares, in each case at less than the Current Market Price
                  per Share
                  on the last Trading Day preceding the date of the announcement
                  of the
                  terms of the issue or grant, the Conversion Price shall be adjusted
                  by
                  multiplying the Conversion Price in force immediately before such
                  issue or
                  grant by the following fraction:

              

      

      
        
          
             

            
              
                	
                        A
                          +
                          B

                      
	
                        A +
                          C

                      

              

            

          

        

      

       

      
        	
                Where:

              	
                 

              
	 	 
	
                A

              	
                is
                  the number of Shares in issue immediately before such
                  announcement;

              
	 	 
	
                B

              	
                is
                  the number of Shares which the aggregate amount (if any) payable
                  for the
                  Shares issued by way of rights or for the options or warrants or
                  other
                  rights issued by way of rights and for the total number of Shares
                  comprised therein would subscribe for, purchase or otherwise acquire
                  at
                  such Current Market Price per Share; and

              
	 	 
	
                C

              	
                is
                  the aggregate number of Shares issued or, as the case may be, comprised
                  in
                  the grant.

              

      

       

      
        
          
          

        

        
          -
            47 -

          
            

          

        

        
          
          

        

      

       

      Such
        adjustment shall become effective on the date of issue of such Shares
        or
        issue or grant of such options, warrants or other rights (as the case may
        be).

       

      
        	
                (5)

              	
                Rights
                  Issues of Other Securities: If
                  and whenever the Issuer shall issue any securities (other than
                  Shares or
                  options, warrants or other rights to subscribe for, purchase or
                  otherwise
                  acquire Shares) to all or substantially all Shareholders as a class
                  by way
                  of rights or grant to all or substantially all Shareholders as
                  a class by
                  way of rights, of options, warrants or other rights to subscribe
                  for,
                  purchase or otherwise acquire any securities (other than Shares
                  or
                  options, warrants or other rights to subscribe for, purchase or
                  otherwise
                  acquire Shares), the Conversion Price shall be adjusted by multiplying
                  the
                  Conversion Price in force immediately before such issue or grant
                  by the
                  following fraction:

              

      

      
        
          
            
               

              
                
                  	
                          A
                            –
                            B

                        
	
                          A

                        

                

              

            

          

        

      

       

      
        	
                Where:

              	
                 

              
	 	 
	
                A

              	
                is
                  the Current Market Price of one (1) Share on the last Trading Day
                  preceding the date on which such issue or grant is publicly announced;
                  and

              
	 	 
	
                B

              	
                is
                  the Fair Market Value on the date of such announcement of the portion
                  of
                  the rights attributable to one (1)
                  Share.

              

      

       

      Such
        adjustment shall become effective on the date of issue of the securities
        or
        grant of such rights, options or warrants (as the case may be).

       

      
        	
                (6)

              	
                Issues
                  at less than Conversion Price: If
                  and whenever the Issuer shall issue (otherwise than as mentioned
                  in
                  Condition 6(C)(4) above) any Shares (other than Shares issued on
                  the
                  exercise of Conversion Rights or on the exercise of any other rights
                  of
                  conversion into, or exchange or subscription for, Shares) or shall
                  issue
                  or grant (otherwise than as mentioned in Condition 6(C)(4) above)
                  options,
                  warrants or other rights to subscribe for, purchase or otherwise
                  acquire
                  Shares in each case at a price per Share which is less than the
                  Conversion
                  Price in effect at the time of such issue, then, in such event,
                  the
                  Conversion Price shall be reduced, concurrently with such issue
                  or grant,
                  to a price equal to the consideration per share for which such
                  Shares are
                  or will be issued. If such Shares are issued for no consideration,
                  then
                  the consideration per share shall be deemed to be the then current
                  par
                  value of each Share.

              

      

       

      Determination
        of Consideration: For
        purpose of this Condition 6(C)(6), the consideration received by the Issuer
        for
        the issue of any such Shares shall be computed as follows:

       

      
        	 	
                (A)

              	
                in
                  so far as such consideration consists of cash, it shall be computed
                  at the
                  aggregate amount of cash received by the
                  Issuer;

              

      

       

      
        	 	
                (B)

              	
                in
                  so far as such consideration consists of property other than cash,
                  it
                  shall be computed at the fair value thereof at the time of such
                  issue, as
                  determined in good faith by the directors of the Issuer (the Directors);
                  provided, however, that no value shall be attributed to any services
                  performed by any employee, officer or director of the Company;
                  and

              

      

       

      
        
          
          

        

        
          -
            48 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (C)

              	
                in
                  the event the Shares are issued together with other shares or securities
                  or other assets of the Issuer for consideration which covers both
                  the
                  proportion of such consideration so received with respect to such
                  Shares,
                  shall be computed as provided in Clauses (A) and (B) above, as
                  determined
                  in good faith by the Directors.

                 

              

      

       

      References
        to additional
        Shares in the above formula shall, in the case of an issue by the Issuer
        of
        options, warrants or other rights to subscribe or purchase Shares, mean such
        Shares to be issued assuming that such options, warrants or other rights
        are
        exercised in full at the initial exercise price on the date of issue of such
        options, warrants or other rights.

       

      Such
        adjustment shall become effective on the date of issue of such additional
        Shares
        or, as the case may be, the issue of such options, warrants or other rights.
        

       

      
        	
                (7)

              	
                Other
                  Issues at less than Conversion Price:
                  Save in the case of an issue of securities arising from a conversion
                  or
                  exchange of other securities in accordance with the terms applicable
                  to
                  such securities themselves falling within this Condition 6(C)(7),
                  if and
                  whenever the Issuer or any of its Subsidiaries (otherwise than
                  as
                  mentioned in Conditions 6(C)(4), 6(C)(5) or 6(C)(6)), or (at the
                  direction
                  or request of or pursuant to any arrangements with the Issuer or
                  any of
                  its Subsidiaries) any other company, person or entity shall issue
                  any
                  securities (other than the Bonds) which by their terms of issue
                  carry
                  rights of conversion into, or exchange or subscription for, Shares
                  to be
                  issued by the Issuer upon conversion, exchange or subscription
                  at a
                  consideration per Share which is less than the Conversion Price
                  in effect
                  at the time of issue of such securities, then, in such event, the
                  Conversion Price shall be reduced, concurrently with such issue,
                  to a
                  price equal to the consideration per share receivable by the Issuer
                  for
                  the Shares to be issued on conversion or exchange or on exercise
                  of the
                  right of subscription determined by reference to the maximum number
                  of
                  Shares to be issued on conversion, exchange or subscription at
                  the minimum
                  conversion, exchange or subscription price. If such Shares are
                  issued for
                  no consideration, then the consideration per share shall be deemed
                  to be
                  the then current par value of each
                  Share.

              

      

       

      Determination
        of Consideration: For
        purpose of this Condition 6(C)(7), the consideration receivable by the Issuer
        for the issue of any such Shares shall be computed as follows:

       

      
        	 	
                (A)

              	
                in
                  so far as such consideration consists of cash, it shall be computed
                  at the
                  aggregate amount of cash received by the
                  Issuer;

              

      

       

      
        	 	
                (B)

              	
                in
                  so far as such consideration consists of property other than cash,
                  it
                  shall be computed at the fair value thereof at the time of such
                  issue, as
                  determined in good faith by the Directors; provided, however, that
                  no
                  value shall be attributed to any services performed by any employee,
                  officer or director of the Company;
                  and

              

      

       

      
        	 	
                (C)

              	
                in
                  the event the Shares are issued together with other shares or securities
                  or other assets of the Issuer for consideration which
                  covers both the proportion of such consideration so received with
                  respect
                  to such Shares, shall be computed as provided in Clauses (A) and
                  (B)
                  above, as determined in good faith by the
                  Directors.

              

      

       

      
        
          
          

        

        
          -
            49 -

          
            

          

        

        
          
          

        

      

       

      Such
        adjustment shall become effective on the date of issue of such
        securities

       

      
        	
                (8)

              	
                Modification
                  of Rights of Conversion etc.:
                  If
                  and whenever there shall be any modification of the rights of conversion,
                  exchange or subscription attaching to any such securities as are
                  mentioned
                  in Condition 6(C)(7) (other than in accordance with the terms of
                  such
                  securities) so that the consideration per Share (for the number
                  of Shares
                  available on conversion, exchange or subscription following the
                  modification) is reduced and is less than the Conversion Price
                  in effect
                  at the time of such modification, the Conversion Price shall be
                  reduced,
                  concurrently with such modification, to a price equal to the modified
                  consideration per share receivable by the Issuer for the Shares
                  to be
                  issued on conversion or exchange or on exercise of the right of
                  subscription determined by reference to the maximum number of Shares
                  to be
                  issued on conversion, exchange or subscription at the minimum conversion,
                  exchange or subscription price. If such Shares are issued for no
                  consideration, then the consideration per share shall be deemed
                  to be the
                  then current par value of each
                  Share.

              

      

       

      Determination
        of Consideration: For
        purpose of this Condition 6(C)(8), the consideration receivable by the Issuer
        for the issue of any such Shares shall be computed as follows:

       

      
        	 	
                (A)

              	
                in
                  so far as such consideration consists of cash, it shall be computed
                  at the
                  aggregate amount of cash received by the
                  Issuer;

              

      

       

      
        	 	
                (B)

              	
                in
                  so far as such consideration consists of property other than cash,
                  it
                  shall be computed at the fair value thereof at the time of such
                  issue, as
                  determined in good faith by the Directors; provided, however, that
                  no
                  value shall be attributed to any services performed by any employee,
                  officer or director of the Company;
                  and

              

      

       

      
        	 	
                (C)

              	
                in
                  the event the Shares are issued together with other shares or securities
                  or other assets of the Issuer for consideration which covers both
                  the
                  proportion of such consideration so received with respect to such
                  Shares,
                  shall be computed as provided in Clauses (A) and (B) above, as
                  determined
                  in good faith by the Directors.

              

      

       

      Such
        adjustment shall become effective on the date of modification of the rights
        of
        conversion, exchange or subscription attaching to such securities.

       

      
        	
                (9)

              	
                Other
                  Offers to Shareholders:
                  If
                  and whenever the Issuer or any of its Subsidiaries or (at the direction
                  or
                  request of or pursuant to any arrangements with the Issuer or any
                  of its
                  Subsidiaries) any other company, person or entity issues, sells
                  or
                  distributes any securities in connection with which an offer to
                  which the
                  Shareholders generally are entitled to participate in arrangements
                  whereby
                  such securities may be acquired by them (except where the Conversion
                  Price
                  falls to be adjusted under Condition 6(C)(4), Condition 6(C)(5),
                  Condition
                  6(C)(6) or Condition 6(C)(7)), the Conversion Price shall be adjusted
                  by
                  multiplying the Conversion Price in force immediately before such
                  issue by
                  the following fraction:

              

      

      
         

      

      
        
          
          

        

        
          -
            50 -

          
            

          

        

        
          
          

        

      

      
        
          
             

            
              
                	
                        A
                          –
                          B

                      
	
                        A

                      

              

            

          

        

      

       

      
        	
                Where:

              	
                 

              
	 	 
	
                A

              	
                is
                  the Current Market Price of one (1) Share on the last Trading Day
                  preceding the date on which such issue is publicly announced;
                  and

              
	 	 
	
                B

              	
                is
                  the Fair Market Value on the date of such announcement of the portion
                  of
                  the rights attributable to one (1)
                  Share.

              

      

       

      Such
        adjustment shall become effective on the date of issue of the
        securities.

       

      
        	
                (10)

              	
                Other
                  Events: If the Issuer determines that a downward adjustment should
                  be made
                  to the Conversion Price as a result of one (1) or more events or
                  circumstances not referred to in this Condition 6, the Issuer shall,
                  at
                  its own expense, consult an independent investment bank of international
                  repute (acting as expert), selected by the Issuer and
                  approved in writing by the Trustee (such approval not to be unreasonably
                  withheld or delayed), to determine as soon as practicable what
                  adjustment
                  (if any) to the Conversion Price is fair and reasonable to take
                  account
                  thereof, if the adjustment would result in a reduction in the Conversion
                  Price, and the date on which such adjustment should take effect
                  and upon
                  such determination by the independent investment bank such adjustment
                  (if
                  any) shall be made and shall take effect in accordance with such
                  determination, provided that where the events or circumstances
                  giving rise
                  to any adjustment pursuant to this Condition 6 have already resulted
                  or
                  will result in an adjustment to the Conversion Price or where the
                  events
                  or circumstances giving rise to any adjustment arise by virtue
                  of events
                  or circumstances which have already given rise or will give rise
                  to an
                  adjustment to the Conversion Price, such modification (if any)
                  shall be
                  made to the operation of the provisions of this Condition 6 as
                  may be
                  advised by the independent investment bank to be in their opinion
                  appropriate to give the intended
                  result.

              

      

       

      For
        the
        purposes of these Conditions:

       

      Alternative
        Stock Exchange
        means at
        any time, in the case of the Shares, if they are not at that time listed
        and
        traded on the AMEX, the principal stock exchange or securities market on
        which
        the Shares are then listed or quoted or dealt in.

       

      Average
        Closing Price
        is the
        arithmetic average of the Closing Price per Share for each Trading Day during
        the Relevant Period. 

       

      Capital
        Distribution
        means
        any dividend or distribution of cash or assets in specie or other property,
        and
        whenever paid or made and however described (and for these purposes a
        distribution of assets in specie includes without limitation an issue of
        shares
        or other securities credited as fully or partly paid (other than Shares credited
        as fully paid to the extent any adjustment to the Conversion Price is made
        in
        respect thereof under Condition 6(C)(2)) by way of capitalisation of
        reserves).

       

      Closing
        Price
        for the
        Shares for any Trading Day shall be the price quoted by the AMEX or, as the
        case
        may be, the equivalent quotation sheet of an Alternative Stock Exchange for
        such
        day. 

       

      Current
        Market Price
        means,
        in respect of a Share on a particular date, the average of the Closing Prices
        for one (1) Share (being a Share carrying full entitlement to dividend) for
        the
        five (5) consecutive Trading Days ending on the Trading Day immediately
        preceding such date, provided that if at any time during the said five (5)
        Trading Day period the Shares shall have been quoted ex-dividend and during
        some
        other part of that period the Shares shall have been quoted cum-dividend
        then:

       

      
        
          
          

        

        
          -
            51 -

          
            

          

        

        
          
          

        

      

       

      
        	
                (i)

              	
                if
                  the Shares
                  to be issued in such circumstances do not rank for the dividend
                  in
                  question, the quotations on the dates on which the Shares shall
                  have been
                  quoted cum-dividend shall for the purpose of this definition be
                  deemed to
                  be the amount thereof reduced by an amount equal to the amount
                  of that
                  dividend per Share; or

              

      

       

      
        	
                (ii)

              	
                if
                  the Shares to be issued in such circumstances rank for the dividend
                  in
                  question, the quotations on the dates on which the Shares shall
                  have been
                  quoted ex-dividend shall for the purpose of this definition be
                  deemed to
                  be the amount thereof increased by such similar
                  amount;

              

      

       

      and
        provided further that if the Shares on each of the said five (5) Trading
        Days
        have been quoted cum-dividend in respect of a dividend which has been declared
        or announced but the Shares to be issued do not rank for that dividend, the
        quotations on each of such dates shall for the purpose of this definition
        be
        deemed to be the amount thereof reduced by an amount equal to the amount
        of that
        dividend per Share. 

       

      Dividend
        means
        any dividend or distribution, whether of cash, assets or other property,
        and
        whenever paid or made and however described (and for these purposes a
        distribution of assets includes, without limitation, an issue of Shares or
        other
        securities credited as fully or partly paid up) provided that:

       

      
        	
                (i)

              	
                where
                  a cash Dividend is announced which is to be, or may at the election
                  of a
                  holder or holders of Shares be, satisfied by the issue or delivery
                  of
                  Shares or other property or assets, then, the Dividend in question
                  shall
                  be treated as a Dividend of (a) the cash Dividend so announced,
                  or (b) the
                  Current Market Price on the date of announcement of such Dividend,
                  of such
                  Shares or the Fair Market Value of other property or assets to
                  be issued
                  or delivered in satisfaction of such Dividend (or which would be
                  issued if
                  all holders of Shares elected therefor, regardless of whether any
                  such
                  election is made) if the Current Market Price of such Shares or
                  the Fair
                  Market Value of other property or assets is greater than the cash
                  Dividend
                  so announced; and

              

      

       

      
        	(ii)	
                any
                  issue of Shares falling within Condition 6(C)(2) shall be
                  disregarded.

              

      

       

      Fair
        Market Value
        means,
        with respect to any assets, security, option, warrants or other right on
        any
        date, the fair market value of that asset, security, option, warrant or other
        right as determined by an independent investment bank of international repute
        (acting as expert) selected by the Issuer and
        approved in writing by the Trustee, provided that (i) the fair market value
        of a
        cash dividend paid or to be paid per Share shall be the amount of such cash
        dividend per Share determined as at the date of announcement of such dividend;
        (ii) where options, warrants or other rights are publicly traded in a market
        of
        adequate liquidity (as determined by such investment banks) the fair market
        value of such options, warrants or other rights shall equal the arithmetic
        mean
        of the daily closing prices of such options, warrants or other rights during
        the
        period of five (5) Trading Days on the relevant market commencing on the
        first
        such Trading Day such options, warrants or other rights are publicly traded.
        

       

      Relevant
        Cash Dividend
        means
        any cash dividend specifically declared by the Issuer.

       

      Total
        Current Dividend
        means
        any and all cash dividends or other distributions charged or provided for
        in the
        accounts of the Issuer, prior to the deduction of any withholding tax and
        any
        corporate tax attributable to that dividend, in the period starting from
        the
        beginning of the fiscal year in which the record date set for the dividend
        that
        may result in an adjustment falls and ending on and including that record
        date
        (including the dividend that may result in an adjustment), other than any
        dividend or portion thereof which previously resulted in an adjustment under
        this Condition 6(C).

       

      
        
          
          

        

        
          -
            52 -

          
            

          

        

        
          
          

        

      

       

      Trading
        Day
        means a
        day when the AMEX or, as the case may be an Alternative Stock Exchange, is
        open
        for business of dealing in securities, provided that if no Closing Price
        is
        reported for one (1) or more consecutive dealing days such day or days will
        be
        disregarded in any relevant calculation and shall be deemed not have existed
        when ascertaining any period of dealing days.

       

      No
        adjustment will be made to the Conversion Price (i) when Shares or other
        securities (including rights or options) are issued, offered or granted to
        employees (including directors) of the Issuer or any of its Subsidiaries
        pursuant to any Employee Share Scheme (as defined in the Trust Deed) (and
        which
        Employee Share Scheme (a) is in compliance with the listing rules of the
        AMEX
        or, if applicable, the listing rules of an Alternative Stock Exchange; and
        (b)
        does not amount to, relate to, or entitle such persons to receive, Shares
        in
        excess of ten percent (10%) of the average number of issued and outstanding
        Shares during any twelve (12) months); or (ii) as a result of the issuance
        on
        the date hereof of the Warrants issued to ABN AMRO Bank, N.V. or any exercise
        of
        such Warrants; or (iii) as a result of the exercise of the outstanding warrants
        issued on 17 October, 2006, to purchase 232,088 Shares at US$1.60 per
        share.

       

      On
        any
        adjustment, the relevant Conversion Price, if not an integral multiple of
        one
        (1) United States cent, shall be rounded down to the nearest United State
        cent.
        No adjustment shall be made to the Conversion Price where such adjustment
        (rounded down if applicable) would be less than one percent (1%) of the
        Conversion Price then in effect. Any adjustment not required to be made,
        and any
        amount by which the Conversion Price has not been rounded down, shall be
        carried
        forward and taken into account in any subsequent adjustment. Notice of any
        adjustment shall be given to Bondholders in accordance with Condition 18
        as soon
        as practicable after the determination thereof.

       

      Notwithstanding
        anything herein, the Conversion Price shall only be adjusted pursuant to
        Conditions 6(C)(6), 6(C)(7), 6(C)(8), 6(C)(9) and 6(C)(10) to an amount not
        less
        than US$0.25 per Share (as adjusted for stock splits, stock dividends,
        spin-offs, rights offerings, recapitalizations and similar events).

      

      Where
        more than one (1) event which gives or may give rise to an adjustment to
        the
        Conversion Price occurs within such a short period of time that in the opinion
        of an independent investment bank of international repute (acting as expert),
        selected by the Issuer and
        approved in writing by the Trustee (such approval not to be unreasonably
        withheld or delayed), the foregoing provisions would need to be operated
        subject
        to some modification in order to give the intended result, such modification
        shall be made to the operation of the foregoing provisions as may be advised
        by
        such independent investment bank to be in their opinion appropriate in order
        to
        give such intended result. No adjustment involving an increase in the Conversion
        Price will be made, except in the case of a consolidation of the Shares as
        referred to in Condition 6(C)(1) above or a Conversion Price reset as referred
        to in Condition 6(D) below. 

       

      The
        Trustee shall not be under any duty to monitor whether any event or circumstance
        has happened or exists which may require an adjustment to be made to the
        Conversion Price and will not be responsible to Bondholders for any loss
        arising
        from any failure by it to do so.

      If
        any
        doubt arises as to an adjustment of the Conversion Price pursuant to Condition
        6(C), the Trustee may, at the cost and expense of the Issuer, consult with
        any
        reputable investment bank in the United States and may act on the opinion
        or
        advice of or any certificate or information obtained from any such investment
        bank, and such determination, opinion, advice, certification or action (or
        absence thereof) shall be conclusive and binding upon the Issuer and the
        Bondholders.

       

      
        
          
          

        

        
          -
            53 -

          
            

          

        

        
          
          

        

      

       

      
        	
                D.

              	
                Conversion
                  Price Reset

              

      

       

      If
        the
        average
        of
        the Closing Prices (the Average
        Closing Price)
        for the
        period of twenty (20) consecutive Trading Days immediately prior to any of
        April
        12, 2009 and February 18, 2012 (each a Reset
        Date)
        is
        lower than the Conversion Price on the relevant Reset Date, the Conversion
        Price
        will be adjusted so that such Average Closing Price shall be the Conversion
        Price in effect from, and including, the relevant Reset Date. The Issuer
        shall
        notify the Bondholders, Trustee and the Paying Agent of such adjustment within
        ten (10) business days after the relevant Reset Date, in accordance with
        Condition 18. Such adjusted Conversion Price shall be rounded upwards, if
        necessary, to the nearest one-tenth (1/10) of a United States cent.

       

      Provided
        that:

       

      
        	(i)	
                any
                  such adjustment to the Conversion Price pursuant to this Condition
                  6(D)
                  shall be limited so that the Conversion Price adjusted in accordance
                  with
                  this Condition 6(D) shall not be less than seventy percent (70%)
                  of the
                  initial Conversion Price (taking account of any adjustments required
                  under
                  Condition 6(C) above which may have occurred prior to the relevant
                  Reset
                  Date);

              

      

       

      
        	(ii)	
                subject
                  to (i) above the provisions of Condition 6(C) shall apply,
                  mutatis mutandis,
                  to this Condition 6(D) to ensure that appropriate adjustments shall
                  be
                  made to any Closing Price to reflect any adjustments made to the
                  Conversion Price in accordance with Condition 6(C);
                  

              

      

       

      
        	(iii)	
                for
                  the avoidance of doubt, any adjustments to the Conversion Price
                  made
                  pursuant to this Condition 6(D) shall only be downward adjustments;
                  and
                  

              

      

       

      
        	(iv)	
                notwithstanding
                  anything herein, the Conversion Price shall only be adjusted pursuant
                  to this Condition 6(D) to an amount not less than US$0.25 per Share
                  (as
                  adjusted for stock splits, stock dividends, spin-offs, rights offerings,
                  recapitalizations and similar
                  events).

              

      

       

      
        	
                E.

              	
                Undertakings

              

      

       

      The
        Issuer has
        undertaken in the Trust Deed, inter
        alia,
        that so
        long as any Bond remains outstanding, save with the approval of an Extraordinary
        Resolution (as defined in the Trust Deed):

       

      
        	
                (i)

              	
                it
                  will obtain
                  on or before the first anniversary of the Closing Date, and thereafter
                  maintain, a listing on AMEX or the New York Stock Exchange or NASDAQ
                  for
                  all the issued Shares and for all the Shares issued on the exercise
                  of the
                  Conversion Rights attaching to the Bonds;
                  and

              

      

       

      
        	
                (ii)

              	
                it
                  will pay the expenses of the issue of, and all expenses of obtaining
                  and
                  maintaining such listing for, the Shares arising on conversion
                  of the
                  Bonds.

              

      

       

      The
        Issuer has also given certain other undertakings in the Trust Deed for the
        protection of the Conversion Rights.

       

      
        	
                F.

              	
                Notice
                  of Change in Conversion
                  Price

              

      

       

      The
        Issuer shall give notice to the Bondholders in accordance with Condition
        18
        of any
        change in the Conversion Price. Any such notice relating to a change in the
        Conversion Price shall set forth the event giving rise to the adjustment,
        the
        Conversion Price prior to such adjustment, the adjusted Conversion Price
        and the
        effective date of such adjustment.

       

      
        	
                7.

              	
                Interest

              

      

       

      The
        Bonds
        bear interest from April 12, 2007 at the rate of (i) six percent (6%) per
        annum
        for the first year after the Closing Date and (ii) three percent (3%) per
        annum
        thereafter, of the principal amount of the Bonds. Interest is payable
        semi-annually in arrears on April 4 and October 4 of each year (each an
Interest
        Payment Date)
        commencing October 4, 2007. Each Bond will cease to bear interest (a) (subject
        to Condition 6(A)(v)) from and including the Interest Payment Date last
        preceding its Conversion Date (as defined below) (or if such Conversion Date
        falls on or before the first Interest Payment Date, the Issue Date) subject
        to
        conversion of the relevant Bond in accordance with the provisions of Condition
        6(B), or (b) from the due date for redemption thereof unless, upon surrender
        in
        accordance with Condition 9, payment of the full amount due is improperly
        withheld or refused or default is otherwise made in respect of any such payment.
        In such event, interest will continue to accrue at the rate aforesaid (after
        as
        well as before any judgment) up to but excluding the date on which all sums
        due
        in respect of any Bond are received by or on behalf of the relevant holder.
        If
        interest is required to be calculated for a period of less than one (1) year,
        it
        will be calculated on the basis of a 360-day year of twelve 30-day months.
        Interest payable under this Condition 7 will be paid in accordance with the
        Condition 8(A).

       

      
        
          
          

        

        
          -
            54 -

          
            

          

        

        
          
          

        

      

       

      
        	
                8.

              	
                Payments

              

      

       

      
        	
                A.

              	
                Principal,
                  premium and interest

              

      

       

      Payment
        of principal
        and
        premium will be made by transfer to the registered account of the Bondholder
        or
        by United States dollar cheque drawn on a bank in New York mailed to the
        registered address of the Bondholder in accordance with Condition 18 if it
        does
        not have a registered account. Payment of principal will only be made after
        surrender of the relevant Certificate at the specified office of any of the
        Agents.

       

      Interest
        on Bonds due on an Interest Payment Date will be paid on the due date for
        the
        payment of interest to the holder shown on the Register at the close of business
        on the fifteenth day before the due date for the payment of interest (the
        Interest
        Record Date).
        Payments of interest on each Bond will be made by transfer to the registered
        account of the Bondholder or by United States dollar cheque drawn on a bank
        in
        New York mailed to the registered address of the Bondholder if it does not
        have
        a registered account.

       

      References
        in these Conditions, the Trust Deed and the Agency Agreement to principal
        in
        respect of any Bond shall, where the context so permits, be deemed to include
        a
        reference to any premium payable thereon.

       

      
        	
                B.

              	
                Registered
                  Accounts

              

      

       

      For
        the
        purposes of this Condition, a Bondholder’s
        registered account means the U.S. dollar account maintained by or on behalf
        of
        it with a bank in New York, details of which appear on the Register at the
        close
        of business on the second business day (as defined below) before the due
        date
        for payment, and a Bondholder’s registered address means its address appearing
        on the Register at that time. 

       

      
        	
                C.

              	
                Fiscal
                  Laws

              

      

       

      All
        payments are subject in all cases to any applicable laws and regulations
        in the
        place of payment, but without prejudice to the provisions of Condition
10.
        No
        commissions or expenses shall be charged to the Bondholders in respect of
        such
        payments.

       

      
        	
                D.

              	
                Payment
                  Initiation

              

      

       

      Where
        payment is to be made by transfer to a registered account, payment instructions
        (for value on the due date or, if that it not a business day (as defined
        below),
        for value on the first following day which is a business day) will be initiated
        and, where payment is to be made by cheque, the cheque will be mailed (at
        the
        risk and, if mailed at the request of the holder otherwise than by ordinary
        mail, expense of the holder) on the due date for payment (or, if it is not
        a
        business day, the immediately following business day) or, in the case of
        a
        payment of principal
        or
        premium (if any), if later, on the business day on which the relevant
        Certificate is surrendered at the specified office of an Agent.

       

      
        
          
          

        

        
          -
            55 -

          
            

          

        

        
          
          

        

      

       

      
        	
                E.

              	
                Default
                  Interest and Delay In
                  Payment

              

      

       

      If
        the
        Issuer fails to pay any sum in respect of the Bonds when the same becomes
        due
        and payable under these Conditions, interest shall accrue on the Bonds
        and
        any overdue sum at the rate of fifteen percent (15%) per annum from the due
        date. Such default interest shall accrue on the basis of the actual number
        of
        days elapsed and a 360-day year.

       

      Bondholders
        will not be entitled to any interest or other payment for any delay after
        the
        due date in receiving the amount due if the due date is not a business day,
        if
        the Bondholder is late in surrendering its Certificate (if required to do
        so) or
        if a cheque mailed in accordance with this Condition arrives after the due
        date
        for payment.

       

      
        	
                F.

              	
                Business
                  Day

              

      

       

      In
        this
        Condition, business
        day
        means a
        day other than a Saturday or Sunday on which commercial banks are open for
        business in New York, London and, in the case of the surrender of a Certificate,
        in the place where the Certificate is surrendered. 

       

      
        	
                G.

              	
                Annotation
                  of Register

              

      

       

      If
        an
        amount which is due on the Bonds is not paid in full, the Registrar will
        annotate the Register with a record of the amount (if any) in fact
        paid.

       

      
        	
                H.

              	
                Rounding

              

      

       

      When
        making payments to Bondholders, fractions of one
        (1)
        United States cent will be rounded down to nearest United States
        cent.

       

      
        	
                9.

              	
                Redemption,
                  Purchase and Cancellation

              

      

       

      
        	
                A.

              	
                Maturity

              

      

       

      Unless
        previously redeemed, converted or purchased and cancelled as provided herein,
        the Issuer will redeem each Bond at one
        hundred and fifty point eighty-seven percent (150.87%) of its principal amount
        on April 4, 2012 (the Maturity
        Date).
        The
        Issuer may not redeem the Bonds at its option prior to that date except as
        provided in Condition 9(B) or Condition 9(C) below (but without prejudice
        to
        Condition 10).

       

      
        	
                B.

              	
                Redemption
                  at the Option of the
                  Issuer

              

      

       

      At
        any
        time prior to the Maturity Date, the Issuer may, having given not less than
        thirty
        (30) nor more than sixty (60) days’ notice to the Bondholders, the Trustee and
        the Principal Agent (which notice will be irrevocable), redeem all and not
        some
        only of the Bonds at a redemption price equal to the Early Redemption Amount
        on
        the redemption date if more than ninety percent (90%) in principal amount
        of the
        Bonds has already been converted, redeemed or purchased and cancelled.

       

      The
        Early
        Redemption Amount
        of a
        Bond, for each US$1,000 principal amount of the Bonds, is determined so that
        it
        represents for the Bondholder a gross yield of twelve percent (12%) per annum,
        calculated on a semi-annual basis. The applicable Early Redemption Amount
        for
        each US$1,000 principal amount of Bonds is calculated in accordance with
        the
        following formula, rounded (if necessary) to two (2) decimal places with
        0.005
        being rounded upwards (provided that if the date fixed for redemption is
        the
        Semi-Annual Date (as set out below), such Early Redemption Amount shall be
        as
        set out in the table below in respect of such Semi-Annual Date): 

       

      
        
          
          

        

        
          -
            56 -

          
            

          

        

        
          
          

        

      

       

      Early
        Redemption Amount = Previous Redemption Amount x (1 + r/2)d/p 

       

      Previous
        Redemption Amount = the Early Redemption Amount for each US$1,000 principal
        amount of the Bonds on the Semi-Annual Date immediately preceding the date
        fixed
        for redemption as set out below:

      

        
          	
                  Semi-Annual
                    Date

                	
                  Early
                    Redemption 

                  Amount
                    (US$) 

                
	
                  October
                    4,
                    2007

                	
                  1,030.00

                
	
                  April
                    4,
                    2008

                	
                  1,060.90

                
	
                  October
                    4,
                    2008

                	
                  1,108.64

                
	
                  April
                    4,
                    2009

                	
                  1,158.53

                
	
                  October
                    4,
                    2009

                	
                  1,210.66

                
	
                  April
                    4,
                    2010

                	
                  1,265.14

                
	
                  October
                    4,
                    2010

                	
                  1,322.07

                
	
                  April
                    4,
                    2011

                	
                  1,381.57

                
	
                  October
                    4,
                    2011

                	
                  1,443.74

                
	
                  April
                    4,
                    2012

                	
                  1,508.71

                

        

      

      

      
        	r
                =	
                12%
                  expressed as a fraction.

              

      

       

      
        	d
                =	
                number
                  of days from and including the immediately preceding Semi-Annual
                  Date (or
                  if the Bonds are to be redeemed on or before October 4, 2007 from
                  and
                  including April 12, 2007) to, but excluding, the date fixed for
                  redemption, calculated on the basis of a 360-day year consisting
                  of twelve
                  (12) months of thirty (30) days each and, in the case of an incomplete
                  month, the number of days elapsed. 

              

      

       

      
        	p
                =	
                180

              

      

       

      
        	
                C.

              	
                Redemption
                  for Taxation Reasons

              

      

       

      
        	
                (i)

              	
                At
                  any time the Issuer may, having given not less than thirty
                  (30) nor more than sixty (60) days’ notice (a Tax
                  Redemption Notice)
                  to the Bondholders in accordance with Condition 18 (which notice
                  shall be
                  irrevocable) redeem all, but not some only, of the Bonds at a redemption
                  price equal to the Early Redemption Amount on the redemption date
                  (the
                  Tax
                  Redemption Date)
                  if (i) the Issuer satisfies the Trustee immediately prior to the
                  giving of
                  such Tax Redemption Notice that the Issuer has or will become obliged
                  to
                  pay additional amounts as referred to in Condition 10 as a result
                  of any
                  change in, or amendment to, the laws or regulations of the United
                  States
                  or, as the case may be, the People’s Republic of China (the PRC),England
                  or any political subdivision or any authority thereof or therein
                  having
                  power to tax, or any change in the general application or official
                  interpretation of such laws or regulations, which change or amendment
                  becomes effective on or after April 12, 2007 and (ii) such obligation
                  cannot be avoided by the Issuer taking reasonable measures available
                  to
                  it, provided that no Tax Redemption Notice shall be given earlier
                  than
                  ninety (90) days prior to the earliest date on which the Issuer
                  would be
                  obliged to pay such additional amounts were a payment in respect
                  of the
                  Bonds then due. Prior to the publication of any Tax Redemption
                  Notice
                  pursuant to this paragraph, the Issuer shall deliver to the Trustee
                  (a) a
                  certificate signed by two (2) directors of the Issuer stating that
                  the
                  obligation referred to in (i) above cannot be avoided by the Issuer
                  taking
                  reasonable measures available to it and (b) an opinion of independent
                  legal or tax advisors of recognised standing to the effect that
                  such
                  change or amendment has occurred (irrespective of whether such
                  amendment
                  or change is then effective) and the Trustee shall be entitled
                  to accept
                  such certificate and opinion as sufficient evidence thereof in
                  which event
                  it shall be conclusive and binding on the
                  Bondholders.

              

      

       

      
        
          
          

        

        
          -
            57 -

          
            

          

        

        
          
          

        

      

       

      
        	
                (ii)

              	
                If
                  the Issuer gives a Tax Redemption Notice pursuant to Condition
                  9(C)(i),
                  each Bondholder will have the right to elect that his Bond(s) shall
                  not be
                  redeemed and that the provisions of Condition 10 shall not apply
                  in
                  respect of any payment of principal, premium (if any) or interest
                  to be
                  made in respect of such Bond(s) which falls due after the relevant
                  Tax
                  Redemption Date whereupon no additional amounts shall be payable
                  in
                  respect thereof pursuant to Condition 10 and payment of all amounts
                  shall
                  be made subject to the deduction or withholding of any tax required
                  to be
                  deducted or withheld (provided that such election shall only be
                  in respect
                  of the deduction or withholding then required to be made and the
                  Issuer
                  shall comply with the provisions of Condition 10 in respect of
                  any further
                  deductions or withholding). To exercise a right pursuant to this
                  Condition
                  9(C), the holder of the relevant Bond must complete, sign and deposit
                  at
                  the specified office of any Paying Agent a duly completed and signed
                  notice of exercise, in the form for the time being current, obtainable
                  from the specified office of any Paying Agent together with the
                  Certificate evidencing the Bonds on or before the day falling ten
                  (10)
                  days prior to the Tax Redemption
                  Date.

              

      

       

      
        	
                D.

              	
                Redemption
                  for Delisting or Change of
                  Control

              

      

       

      Following
        the occurrence of a Relevant Event (as defined below), the holder of each
        Bond
        will have the right at such holder’s
        option, to require the Issuer to redeem all or some only of that holder’s Bonds
        on the Relevant Event Redemption Date (as defined below) at their Early
        Redemption Amount. To exercise such right, the holder of the relevant Bond
        must
        complete, sign and deposit, at his own expense, at the specified office of
        any
        Paying Agent a duly completed and signed notice of redemption, in the form
        for
        the time being current, obtainable from the specified office of any Paying
        Agent
        (the Relevant
        Event Redemption Notice)
        together with the Certificate evidencing the Bonds to be redeemed by not
        later
        than sixty (60) days following a Relevant Event, or, if later, sixty (60)
        days
        following the date upon which notice thereof is given to Bondholders by the
        Issuer in accordance with Condition 18. The Relevant
        Event Redemption Date
        shall be
        the fourteenth day after the expiry of such period of sixty (60) days as
        referred to above.

       

      A
        Relevant Event Redemption Notice, once delivered, shall be irrevocable (and
        may
        not be withdrawn unless the Issuer consents to such withdrawal) and the Issuer
        shall redeem the Bonds the subject of Relevant Event Redemption Notices
        delivered as aforesaid on the Relevant Event Redemption Date.

       

      The
        Trustee shall not be required to take any steps to ascertain whether a Relevant
        Event or any event which could lead to the occurrence of a Relevant Event
        has
        occurred.

       

      
        
          
          

        

        
          -
            58 -

          
            

          

        

        
          
          

        

      

       

      The
        Issuer shall give notice to Bondholders in accordance with Condition 18 by
        not
        later than fourteen (14) days following the first day on which it becomes
        aware
        of the occurrence of a Relevant Event, which notice shall specify the procedure
        for exercise by holders of their rights to require redemption of the Bonds
        pursuant to this Condition 9(E) and shall give brief details of the Relevant
        Event.

      A
        Relevant
        Event
        occurs:

       

      
        	
                (i)

              	
                when
                  the Shares
                  cease to be listed or admitted to trading, or for twenty (20) or
                  more
                  Trading Days occurring consecutively, trading in respect of the
                  Shares is
                  suspended, temporarily or otherwise, on the AMEX (and if applicable,
                  the
                  Alternative Stock Exchange); or

              

      

       

      
        	
                (ii)

              	
                when
                  there is a Change of Control. 

              

      

       

      For
        the
        purposes of this Condition 9(E):

       

      Control
        means
        the acquisition or control of more than fifty percent (50%) of the voting
        rights
        of the issued share capital of the Issuer or the right to appoint and/or
        remove
        all or the majority of the members of the Issuer’s board of directors or other
        governing body, whether obtained directly or indirectly, and whether obtained
        by
        ownership of share capital, the possession of voting rights, contract or
        otherwise.

      A
        Change
        of Control
        occurs
        when: 

       

      
        	
                (i)
                  

              	
                any
                  Person or Persons acting together acquires Control of the Issuer
                  if such
                  Person or Persons does not or do not have, and would not be deemed
                  to
                  have, Control of the Issuer on the Closing Date;
                  

              

      

       

      
        	
                (ii)
                  

              	
                the
                  Issuer consolidates with or merges into or sells or transfers all
                  or
                  substantially all of the Issuer’s assets to any other Person, unless the
                  consolidation, merger, sale or transfer will not result in the
                  other
                  Person or Persons acquiring Control over the Issuer or the successor
                  entity; or

              

      

       

      
        	
                (iii)
                  

              	
                one
                  (1) or more Persons (other than any Person referred to in sub-paragraph
                  (i) above) acquires the legal or beneficial ownership of all or
                  substantially all of the Issuer’s issued share
                  capital.

              

      

       

      Person
        includes
        any individual, company, corporation, firm, partnership, joint venture,
        undertaking, association, organisation, trust, state or agency of a state
        (in
        each case whether or not being a separate legal entity) but does not include
        the
        Issuer’s board of directors or any other governing board and does not include
        the Issuer’s wholly-owned direct or indirect Subsidiaries.

       

      
        
          
          

        

        
          -
            59 -

          
            

          

        

        
          
          

        

      

       

      
        	
                E.

              	
                Redemption
                  at the Option of the Bondholder

              

      

       

      In
        the
        event that either (i) the Issuer’s Shares (including the Shares issuable upon
        conversion of the Bonds and exercise of 800,000 warrants to purchase 800,000
        Shares (the Warrants))
        are
        not listed on the AMEX or (ii) the Shares issuable upon conversion of the
        Bonds
        and exercise of the Warrants are not registered on an effective United States
        Securities Act of 1933 resale registration statement with the United States
        Securities and Exchange Commission, in each case, within one (1) year after
        the
        Closing Date, the holder of each Bond shall have the right, at such holder’s
        option, to require the Issuer to redeem all or some of the Bonds held by
        that
        holder, at any time on or after the first anniversary of the Closing Date,
        at
        106.09% of its principal amount of the Bonds.

       

      At
        any
        time on or after the third anniversary of the Closing Date, the holder of
        each
        Bond shall have the right, at such holder’s option, to require the Issuer to
        redeem all or some of the Bonds held by that holder at 126.51% of its principal
        amount of the Bonds.

       

      To
        exercise either such optional redemption right, the holder of the relevant
        Bond
        must complete, sign and deliver at the specified office or any Paying Agent
        a
        duly completed and signed notice of redemption, in the then current form
        obtainable from the specified office of any Paying Agent together with the
        Certificate evidencing the Bonds to be redeemed not earlier than sixty (60)
        days
        and not later than thirty (30) days prior to the date chosen by the Bondholder
        for redemption (which shall be a business day).

       

      
        	
                F.

              	
                Purchases

              

      

       

      The
        Issuer or any of its Subsidiaries may at any time and from time to time purchase
        Bonds at any price in the open market or otherwise.

       

      
        	
                G.

              	
                Cancellation

              

      

       

      All
        Bonds
        which are redeemed, converted or purchased by the Issuer or any of its
        Subsidiaries, will forthwith be cancelled.
        Certificates in respect of all Bonds cancelled will be forwarded to or to
        the
        order of the Registrar and such Bonds may not be reissued or
        resold.

       

      
        	
                H.

              	
                Redemption
                  Notices

              

      

       

      All
        notices to Bondholders given by or on behalf of the Issuer pursuant to this
        Condition 9
        will be
        given in accordance with Condition 18 and will specify the Conversion Price
        as
        at the date of the relevant notice, the Conversion Period, the Closing Price
        of
        the Shares as at the latest practicable date prior to the publication of
        the
        notice, the price of redemption or Early Redemption Amount of the Bonds,
        the
        date for redemption, the manner in which redemption will be effected and
        the
        aggregate principal amount of the Bonds outstanding as at the latest practicable
        date prior to the publication of the notice.

       

      
        	
                10.

              	
                Taxation

              

      

       

      All
        payments made by the Issuer under or in respect of the Trust Deed or the
        Bonds
        will be made free from any restriction or condition and be made without
        deduction or withholding 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
        United States, the PRC or England or
        any
        political subdivisions thereof or any authority thereof or therein having
        power
        to tax, unless deduction or withholding of such taxes, duties, assessments
        or
        governmental charges is compelled by law. In such event, the Issuer will
        pay
        such additional amounts as will result in the receipt by the Bondholders
        of the
        net amounts after such deduction or withholding equal to the amounts which
        would
        otherwise have been receivable by them had no such deduction or withholding
        been
        required except that no such additional amount shall be payable in respect
        of
        any Bond:

       

      
        
          
          

        

        
          -
            60 -

          
            

          

        

        
          
          

        

      

       

      
        	
                (i)

              	
                to
                  a holder (or to a third party on behalf of a holder) who is subject
                  to
                  such taxes, duties, assessments or governmental charges in respect
                  of such
                  Bond by reason of his having some connection with the
                  United States or the PRC or any political subdivisions thereof
                  otherwise
                  than merely by holding such Bond or by the receipt of principal,
                  interest
                  or premium (if any) in respect of the
                  Bond;

              

      

       

      
        	
                (ii)

              	
                (in
                  the case of a payment of principal) if the Certificate in respect
                  of such
                  Bond is surrendered more than thirty (30) days after the relevant
                  date
                  except to the extent that the holder would have been entitled to
                  such
                  additional amount on surrendering the relevant Certificate for
                  payment on
                  the last day of such period of thirty (30) days;
                  

              

      

       

      
        	
                (iii)

              	
                where
                  such withholding or deduction is imposed on a payment to an individual
                  and
                  is required to be made pursuant to European Council Directive 2003/48/EC
                  or any law implementing or complying with, or introduced in order
                  to
                  conform to, such Directive; or 

              

      

       

      
        	
                (iv)

              	
                presented
                  for payment by or on behalf of a Bondholder who would have been
                  able to
                  avoid such withholding or deduction by presenting the relevant
                  Bond to
                  another Paying Agent in a Member State of the European Union.
                  

              

      

       

      For
        the
        purposes hereof, relevant
        date
        means
        whichever is the later of (a) the date on which such payment first becomes
        due
        and (b) if the full amount payable has not been received by the Trustee or
        the
        Principal Agent on or prior to such due date, the date on which, the full
        amount
        having been so received, notice to that effect shall have been given to the
        Bondholders and cheques despatched or payment made. 

       

      References
        in these Conditions to principal, interest and premium (if any) shall be
        deemed
        also to refer to any additional amounts which may be payable under this
        Condition or any undertaking or covenant given in addition thereto or in
        substitution therefor pursuant to the Trust Deed.

       

      If
        the Issuer becomes obliged to pay additional amounts in accordance with this
        Condition 10, the Issuer shall have the right to redeem the Bonds in accordance
        with the provisions of Condition 9(C)(i), subject to the right of each
        Bondholder under the provisions of Condition 9(C)(ii) to elect that his Bond(s)
        shall not be so redeemed and that the provisions of Condition 10 shall not
        apply
        in respect of any payment to be made in respect of such Bond(s) which falls
        due
        after the relevant Tax Redemption Date.

       

      
        	
                11.

              	
                Events
                  of Default

              

      

       

      
        	
                A.

              	
                Events
                  of Default

              

      

       

      The
        Trustee at its sole discretion may, and if so requested in writing by the
        holders of not less than twenty-five
        percent (25%) in principal amount of the Bonds then outstanding or if so
        directed by an Extraordinary Resolution shall (subject to being indemnified
        and/or secured by the holders to its satisfaction), give notice to the Issuer,
        that the Bonds are, and they shall accordingly thereby become, immediately
        due
        and repayable at the Early Redemption Amount (subject as provided below and
        without prejudice to the right of Bondholders to exercise the Conversion
        Right
        in respect of their Bonds in accordance with Condition 6) if:

       

      
        	 	
                (i)

              	
                a
                  default is made in the payment of any principal or Early Redemption
                  Amount
                  due in respect of the Bonds; 

              

      

       

      
        
          
          

        

        
          -
            61 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (ii)

              	
                any
                  failure by the Issuer to deliver the Shares
                  as and when the Shares are required to be delivered following conversion
                  of Bonds and such failure continues for seven (7) days;
                  

              

      

       

      
        	 	
                (iii)

              	
                the
                  Issuer does not perform or comply with one (1) or more of its other
                  obligations in the Bonds or the Trust Deed which default is incapable
                  of
                  remedy or, if in the opinion of the Trustee capable of remedy,
                  is not in
                  the opinion of the Trustee remedied within twenty-one (21) days
                  after
                  written notice by the Trustee of such default shall have been delivered
                  to
                  the Issuer; 

              

      

       

      
        	 	
                (iv)

              	
                the
                  Issuer or any of its Subsidiaries (as defined below) is (or is,
                  or could
                  be, deemed by law or a court to be) insolvent or bankrupt or unable
                  to pay
                  its debts, stops, suspends or threatens to stop or suspend payment
                  of all
                  or a material part of (or of a particular type of) its debts, proposes
                  or
                  makes any agreement for the deferral, rescheduling or other readjustment
                  of all of (or all of a particular type of) its debts (or of any
                  part which
                  it will or might otherwise be unable to pay when due), proposes
                  or makes a
                  general assignment or an arrangement or composition with or for
                  the
                  benefit of the relevant creditors in respect of any of such debts
                  or a
                  moratorium is agreed or declared in respect of or affecting all
                  or any
                  part of (or of a particular type of) the debts of the Issuer or
                  any of its
                  Subsidiaries; an administrator or liquidator of the Issuer or any
                  of its
                  Subsidiaries or the whole or any material part of the assets and
                  turnover
                  of the Issuer or any of its Subsidiaries is appointed (or application
                  for
                  any such appointment is made); 

              

      

       

      
        	 	
                (v)

              	
                (a)
                  any other present or future indebtedness (whether actual or contingent)
                  of
                  the Issuer or any of its Subsidiaries for or in respect of moneys
                  borrowed
                  or raised becomes, or becomes capable of being declared, due and
                  payable
                  prior to its stated maturity by reason of any actual or potential
                  default,
                  event of default or the like (howsoever described), or (b) any
                  such
                  indebtedness is not paid when due or, as the case may be, within
                  any
                  applicable grace period, or (c) the Issuer or any of its Subsidiaries
                  fails to pay when due any amount payable by it under any present
                  or future
                  guarantee for, or indemnity in respect of, any moneys borrowed
                  or raised,
                  provided that the aggregate amount of the relevant indebtedness,
                  guarantees and indemnities in respect of which one (1) or more
                  of the
                  events mentioned above in this paragraph (v) have occurred equals
                  or
                  exceeds US$5,000,000 or its equivalent in any other currency on
                  the day on
                  which such indebtedness becomes due and payable or is not paid
                  or any such
                  amount becomes due and payable or is not paid under any such guarantees
                  or
                  indemnity; 

              

      

       

      
        	 	
                (vi)

              	
                a
                  distress, attachment, execution, seizure before judgment or other
                  legal
                  process is levied, enforced or sued out on or against any of the
                  property,
                  assets or turnover of the Issuer or any of its
                  Subsidiaries;

              

      

       

      
        	 	
                (vii)

              	
                an
                  order is made or an effective resolution passed for the winding-up
                  or
                  dissolution, judicial management or administration of the Issuer
                  or any of
                  its Subsidiaries (except for a members’ voluntary solvent winding-up), or
                  the Issuer or any Subsidiaries ceases or threatens to cease to
                  carry on
                  all or substantially all of its business or operations and except
                  for the
                  purpose of and followed by a reconstruction, amalgamation, reorganisation,
                  merger or consolidation (a) on terms approved by an Extraordinary
                  Resolution, or (b) in the case of any Subsidiary, whereby the undertaking
                  and assets of such Subsidiary are transferred to or otherwise vested
                  in
                  the Issuer or any of its Subsidiaries;

              

      

       

      
        
          
          

        

        
          -
            62 -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (viii)

              	
                an
                  encumbrancer takes possession or an administrative or other receiver,
                  manager, administrator or other similar officer is appointed of
                  the whole
                  or any material part of the property, assets or turnover of the
                  Issuer or
                  any of its Subsidiaries (as the case may be) and is not discharged
                  within
                  thirty (30) days;

              

      

       

      
        	 	
                (ix)

              	
                (a)
                  any step is taken by any person with a view to the seizure, compulsory
                  acquisition, expropriation or nationalisation of all or a material
                  part of
                  the assets of the Issuer or any of its Subsidiaries; or (b) the
                  Issuer or
                  any of its Subsidiaries is prevented from exercising normal control
                  over
                  all or any substantial part of its property, assets and
                  turnover;

              

      

       

      
        	 	
                (x)

              	
                any
                  action, condition or thing (including the obtaining or effecting
                  of any
                  necessary consent, approval, authorisation, exemption, filing,
                  licence,
                  order, recording or registration) at any time required to be taken,
                  fulfilled or done in order (a) to enable the Issuer lawfully to
                  enter
                  into, exercise its rights and perform and comply with its obligations
                  under the Bonds and the Trust Deed, (b) to ensure that those obligations
                  are legally binding and enforceable and (c) to make the Bonds and
                  the
                  Trust Deed admissible in evidence in the courts of the United States
                  or
                  the PRC is not taken, fulfilled or
                  done;

              

      

       

      
        	 	
                (xi)

              	
                it
                  is or will become unlawful for the Issuer to perform or comply
                  with any
                  one (1) or more of its obligations under any of the Bonds or the
                  Trust
                  Deed; 

              

      

       

      
        	 	
                (xii)

              	
                the
                  Conversion Price is affected by any limitation to an adjustment
                  to the
                  Conversion Price set forth in Condition 6(C) or Condition 6(D)(iv)
                  of
                  these Conditions or Clause 7.2(b) or Clause 7.3(d) of the Trust
                  Deed; or
                  

              

      

       

      
        	 	
                (xiii)

              	
                any
                  event occurs which under the laws of any relevant jurisdiction
                  has an
                  analogous effect to any of the events referred to in any of the
                  foregoing
                  paragraphs;

              

      

       

      provided
        that, in the case of any such event other than those described in paragraph
        (i),
        (ii), (iii), (x) or (xi), the Trustee shall have certified in writing to
        the
        Issuer that such event is in its opinion materially prejudicial to the interests
        of Bondholders. 

       

      
        	
                B.

              	
                Default
                  Cure Amount

              

      

       

      Notwithstanding
        receipt of any payment after the acceleration of the Bonds, a
        Bondholder
        may
        exercise its Conversion Right by depositing a Conversion Notice with a
        Conversion Agent or Paying Agent during the period from and including the
        date
        of a default notice with respect to an event specified in Condition 11(A)(ii)
        (at which time the Issuer will notify the Bondholders of the number of Shares
        per Bond to be delivered upon conversion, assuming all the then outstanding
        Bonds are converted) to and including the 30th business day after such
        payment.

       

      If
        any
        converting Bondholder deposits a Conversion Notice pursuant to this Condition
        11(B)
        on
        the business day prior to, or during, a Closed Period, the Bondholder’s
        Conversion Right shall continue until the business day following the last
        day of
        the Closed Period, which shall be deemed the Conversion Date, for the purposes
        of such Bondholder’s exercise of its Conversion Right pursuant to this Condition
        11(B).

       

      
        
          
          

        

        
          -
            63 -

          
            

          

        

        
          
          

        

      

       

      If
        the
        Conversion Right attached to any Bond is exercised pursuant to this Condition
        11(B), the Issuer will deliver Shares (which number will be disclosed to
        such
        Bondholder as soon as practicable after the Conversion Notice is given) in
        accordance with the Conditions, except that the Issuer shall have twelve
        (12)
        business days before it is required to register the converting Bondholder
        (or
        its designee) in its register of members as the owner of the number of Shares
        to
        be delivered pursuant to this Condition and an additional five (5) business
        days
        from such registration date to make payment in accordance with the following
        paragraph.

       

      If
        the
        Conversion Right attached to any Bond is exercised pursuant to this Condition
        11(B), or if the Bonds have become due and payable pursuant to Condition
        11(A)(ii), the Issuer shall, at the request of the converting Bondholder,
        pay to
        such Bondholder an amount in United States dollars (the Default
        Cure Amount),
        equal
        to the product of (x) (i) the number of Shares that are required to be delivered
        by the Issuer to satisfy the Conversion Right in relation to such converting
        Bondholder minus (ii) the number of Shares that are actually delivered by
        the
        Issuer pursuant to such Bondholders’ Conversion Notice and (y) the Share Price
        (as defined below) on the Conversion Date; provided that if such Bondholder
        has
        received any payment under the Bonds pursuant to this Condition 11(B), the
        amount of such payment shall be deducted from the Default Cure
        Amount.

       

      The
        Share
        Price
        means
        the closing price of the Shares as quoted by the AMEX or, as the case may
        be,
        the Alternative Stock Exchange on the Conversion Date or, if no reported
        sales
        take place on such date, the average of the reported closing bid and offered
        prices, in either case as reported by the AMEX or other applicable securities
        exchange on which the Shares are listed for such day as furnished by a reputable
        and independent broker-dealer selected from time to time by the Trustee at
        the
        expense of the Issuer for such purpose.

       

      
        	
                12.

              	
                Consolidation,
                  Amalgamation or Merger

              

      

       

      The
        Issuer will not consolidate with, amalgamate with, merge with or into, or
        sell,
        convey, transfer, lease or otherwise dispose of all or substantially all
        of its
        property and assets (as an entirety or substantially an entirety in one
        transaction or a series of related transactions) to any entity
        unless:

       

      
        	
                (i)

              	
                the
                  entity formed by such amalgamation or consolidation or into which
                  the
                  Issuer is merged or which acquired or leased such property and
                  assets of
                  the Issuer shall be a corporation organised and validly existing
                  under the
                  laws of its place of incorporation, and shall, by a trust deed
                  supplemental to the Trust Deed and an agency agreement supplemental
                  to the
                  Agency Agreement and such other undertakings or documents as the
                  Trustee
                  may require, executed and delivered in form and content acceptable
                  to the
                  Trustee, expressly assume all of the obligations of the Issuer
                  in respect
                  of all of the Bonds and under the Trust Deed and the Agency Agreement
                  and
                  indemnify each Bondholder against any tax, assessment or governmental
                  charge payable by withholding or deduction thereafter imposed on
                  such
                  holder solely as a consequence of such consolidation, amalgamation,
                  merger, sale, conveyance, transfer lease or other disposal with
                  respect to
                  the payment of principal, premium and interest on the
                  Bonds;

              

      

       

      
        	
                (ii)

              	
                the
                  supplemental Trust Deed referred to in paragraph (i) above will
                  ensure
                  that (a) the holder of each Bond then outstanding will have the
                  right
                  (during the period in which such Bond shall be convertible) to
                  convert
                  such Bond into the class and amount of shares and other securities
                  and
                  property receivable upon such consolidation, amalgamation, merger,
                  sale,
                  conveyance, transfer lease or other disposal by a holder of the
                  number of
                  Shares
                  which would have become liable to be issued upon conversion of
                  such Bond
                  immediately prior to such consolidation, amalgamation, merger,
                  sale,
                  conveyance, transfer, lease or other disposal (such supplemental
                  Trust
                  Deed will provide for adjustments which will be as nearly equivalent
                  as
                  may be practicable to the adjustments provided for in the provisions
                  of
                  Condition 6(C), (b) the rights of Bondholders shall not be adversely
                  affected as a result of such transaction and (c) that there shall
                  be no
                  right to exercise a redemption of the Bonds under Condition 9(C)
                  as a
                  result of (A) any change in the domicile or place of incorporation
                  of the
                  Issuer or (B) the successor entity not being incorporated in the
                  State of
                  Delaware and the provisions of Condition 10 shall also be supplemented
                  or
                  modified as the Trustee deems appropriate;
                  and

              

      

       

      
        
          
          

        

        
          -
            64 -

          
            

          

        

        
          
          

        

      

       

      
        	
                (iii)

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

              

      

       

      The
        above
        provisions of this Condition 12
        will
        apply, mutatis
        mutandis,
        to any
        subsequent consolidations, amalgamations, mergers, sales or
        transfers.

       

      
        	
                13.

              	
                Prescription

              

      

       

      Claims
        in
        respect of amounts due in respect of the Bonds will become prescribed unless
        made within ten
        (10)
        years (in the case of principal) and five (5) years (in the case of default
        interest or premium (if any)) from the relevant date (as defined in Condition
        9)
        in respect thereof.

       

      
        	
                14.

              	
                Enforcement

              

      

       

      At
        any
        time after the Bonds have become due and repayable, the Trustee may, at its
        sole
        discretion and without further notice, take such proceedings against the
        Issuer
        as it may think fit to enforce repayment of the Bonds and to enforce the
        provisions of the Trust Deed, but it will not be bound to take any such
        proceedings unless (a) it shall have been so requested in writing by the
        holders
        of not less than twenty-five
        percent (25%) in principal amount of the Bonds then outstanding or shall
        have
        been so directed by an Extraordinary Resolution and (b) it shall have been
        indemnified and/or secured to its satisfaction. No Bondholder will be entitled
        to proceed directly against the Issuer unless the Trustee, having become
        bound
        to do so, fails to do so within a reasonable period and such failure shall
        be
        continuing.

       

      
        	
                15.

              	
                Meetings
                  of Bondholders, Modification and
                  Waiver

              

      

       

      
        	
                A.

              	
                Meetings

              

      

       

      The
        Trust
        Deed contains provisions for convening meetings of Bondholders to consider
        any
        matter affecting their interests, including the sanctioning by Extraordinary
        Resolution of a modification of the Bonds or the provisions of the Trust
        Deed.
        The
        quorum at any such meeting for passing an Extraordinary Resolution will be
        two
        (2) or more persons holding or representing over fifty percent (50%) in
        principal amount of the Bonds for the time being outstanding or, at any
        adjourned such meeting, two (2) or more persons being or representing
        Bondholders whatever the principal amount of the Bonds so held or represented
        unless the business of such meeting includes consideration of proposals,
        inter
        alia,
        (i) to
        modify the due date for any payment in respect of the Bonds, (ii) to reduce
        or
        cancel the amount of principal, interest, premium, or default interest
        (including any Early Redemption Amount) or Equivalent Amount payable in respect
        of the Bonds or changing the method of calculation of the Early Redemption
        Amount, (iii) to change the currency of payment of the Bonds, (iv) to modify
        (except by a unilateral and unconditional reduction in the Conversion Price)
        or
        cancel the Conversion Rights, or (v) to modify the provisions concerning
        the
        quorum required at any meeting of the Bondholders or the majority required
        to
        pass an Extraordinary Resolution, in which case the necessary quorum for
        passing
        an Extraordinary Resolution will be two (2) or more persons holding or
        representing not less than two-thirds (2/3), or at any adjourned such meeting
        not less than one-third (1/3), in principal amount of the Bonds for the time
        being outstanding. An Extraordinary Resolution passed at any meeting of
        Bondholders will be binding on all Bondholders, whether or not they are present
        at the meeting. The Trust Deed provides that a written resolution signed
        by or
        on behalf of the holders of not less than ninety percent (90%) of the aggregate
        principal amount of Bonds outstanding shall be as valid and effective as
        a duly
        passed Extraordinary Resolution.

       

      
        
          
          

        

        
          -
            65 -

          
            

          

        

        
          
          

        

      

       

      
        	
                B.

              	
                Modification
                  and Waiver

              

      

       

      The
        Trustee may agree, without the consent of the Bondholders, to (i) any
        modification (except as mentioned in Condition 15(A) above) to, or the waiver
        or
        authorisation of any breach or proposed breach of, the Bonds, the Agency
        Agreement or the Trust Deed which is in its opinion proper to make if, in
        the
        opinion of the Trustee, it is not materially prejudicial to the interests
        of the
        Bondholders or (ii) any modification to the Bonds or the Trust Deed which,
        in
        the Trustee’s opinion, is of a formal, minor or technical nature or to correct a
        manifest error or (to the satisfaction of the Trustee) proven error to comply
        with mandatory provisions of law. Any such modification, waiver or authorisation
        will be binding on the Bondholders and, unless the Trustee agrees otherwise,
        any
        such modifications will be notified by the Issuer to the Bondholders as soon
        as
        practicable thereafter. 

       

      
        	
                C.

              	
                Substitution

              

      

       

      The
        Trustee may (but is not obliged to), without the consent of the Bondholders,
        agree to the substitution of any other company in place of the Issuer (or
        of any
        previous substitute under this Condition 15(C)) as the principal debtor under
        the Bonds and the Trust Deed, subject to the Bonds being unconditionally
        and
        irrevocably guaranteed by the Issuer to the Trustee’s satisfaction and certain
        other conditions set out in the Trust Deed being complied with.

       

      
        	
                D.

              	
                Interests
                  of Bondholders

              

      

       

      In
        connection with the exercise of its functions (including but not limited
        to
        those in relation to any proposed modification, authorisation,
        waiver, determination or substitution) the Trustee shall have regard to the
        general interests of the Bondholders as a class but shall not have regard
        to any
        interests arising from circumstances particular to individual Bondholders
        (whatever their number) and, in particular but without limitation, shall
        not
        have regard to the consequences of such exercise for individual Bondholders
        (whatever their number) resulting from their being for any purpose domiciled
        or
        resident in, or otherwise connected with, or subject to the jurisdiction
        of, any
        particular territory or any political sub-division thereof and the Trustee
        shall
        not be entitled to require, nor shall any Bondholder be entitled to claim,
        from
        the Issuer or the Trustee or any other person, any indemnification or payment
        in
        respect of any tax consequences of any such exercise upon individual Bondholders
        except to the extent provided for in Condition 10 and/or any undertakings
        given
        in addition thereto or in substitution therefor pursuant to the Trust
        Deed.

       

      In
        the event of the passing of an Extraordinary Resolution in accordance with
        Condition 15(A), a modification, waiver or authorisation in accordance with
        Condition 15(B) or a substitution in accordance with Condition 15(C), the
        Issuer
        will procure that the Bondholders be notified in accordance with Condition
        18.

       

      
        
          
          

        

        
          -
            66 -

          
            

          

        

        
          
          

        

      

       

      
        	
                16.

              	
                Replacement
                  of Certificates

              

      

       

      If
        any
        Certificate is mutilated, defaced, destroyed, stolen or lost, it may be replaced
        at the specified office of the Registrar or any Agent upon payment by the
        claimant of such costs as may be incurred in connection therewith and on
        such
        terms as to evidence and indemnity as the Issuer and such Agent may require.
        Mutilated or defaced Certificates must be surrendered before replacements
        will
        be issued.

       

      
        	
                17.

              	
                Further
                  Issues

              

      

       

      The
        Issuer may from time to time, without the consent of the Bondholders, create
        and
        issue further bonds
        having the same terms and conditions as the Bonds in all respects and so
        that
        such further issue shall be consolidated and form a single series with the
        Bonds. Such further bonds may, with the consent of the Trustee, be constituted
        by a deed supplemental to the Trust Deed.

       

      
        	
                18.

              	
                Notices

              

      

       

      All
        notices to Bondholders shall be validly given if mailed to them at their
        respective addresses in the Register of Bondholders maintained by the
        Registrar
        or
        published in a leading newspaper having general circulation in the United
        States
        or, if such publication shall not be practicable, in an English language
        newspaper of general circulation in Asia. Any such notice shall be deemed
        to
        have been given on the later of the date of such publication and the seventh
        day
        after being so mailed, as the case may be. 

       

      Notices
        to be given by (i) any Bondholder shall be in writing and given by lodging
        the
        same, together with the relative Certificate, with the Registrar, or (ii)
        if the
        Certificates are held in a clearing system, may be given through the clearing
        system in accordance with its standard rules and procedures.

       

      
        	
                19.

              	
                Agents

              

      

       

      The
        names
        of the initial Agents and the Registrar and their specified offices are set
        out
        below.
        The
        Issuer reserves the right, subject to the prior written approval of the Trustee,
        at any time to vary or terminate the appointment of any Agent or the Registrar
        and to appoint additional or other Agents or a replacement Registrar. The
        Issuer
        will at all times maintain (a) a Principal Agent, (b) a Paying Agent with
        a
        specified office in a European Union member state that will not be obliged
        to
        withhold or deduct tax pursuant to European Council Directive 2003/48/EC
        or any
        law implementing or complying with, or introduced in order to conform, to
        such
        Directive, and (c) a Registrar which will maintain the register of Bondholders
        outside the United Kingdom. Notice of any such termination or appointment,
        of
        any changes in the specified offices of any Agent or the Registrar and of
        any
        change in the identity of the Registrar or the Principal Agent will be given
        promptly by the Issuer to the Bondholders and in any event not less than
        forty-five (45) days’ notice will be given.

       

      
        	
                20.

              	
                Indemnification

              

      

       

      The
        Trust
        Deed contains provisions for the indemnification of the Trustee and for its
        relief from responsibility, including provisions relieving it from taking
        any
        action unless indemnified and/or secured to its satisfaction. The Trustee
        is
        entitled to enter into business transactions with the Issuer and any entity
        related to the Issuer without accounting for any profit.

       

      
        	20.	
                Rights
                  of Third Parties

              

      

      

      No
        person
        shall have any right to enforce any term or condition of the Bonds under
        the
        Contracts (Rights of Third Parties) Act 1999, but this does not affect any
        right
        or remedy of any person which exists or is available apart from that
        Act.

       

      
        
          
          

        

        
          -
            67 -

          
            

          

        

        
          
          

        

      

       

      
        	21.	
                Governing
                  Law and Submission to Jurisdiction

              

      

       

      The
        Trust
        Deed and the Bonds and all matters arising from or connected with the Trust
        Deed
        and the Bonds are governed by, and shall be construed in accordance with,
        English law.

       

      The
        Issuer has irrevocably agreed that the courts of England have exclusive
        jurisdiction to settle any dispute which may arise out of or in connection
        with
        the Bonds and accordingly has submitted to the exclusive jurisdiction of
        the
        English courts. 

       

      The
        Issuer has waived any objection to the courts of England on the grounds that
        they are an inconvenient or inappropriate forum. The Bondholder may take
        any
        suit, action or proceedings arising out of or in connection with the Bonds
        (Proceedings)
        against
        the Issuer in any other court of competent jurisdiction and concurrent
        Proceedings in any number of jurisdictions.

       

      The
        Issuer as irrevocably and unconditionally appointed The
        London Law Agency
        at the
        latter's registered office for the time being as its agent for service of
        process in England in respect of any Proceedings and have undertaken that
        in the
        event of such agent ceasing so to act it will appoint such other person as
        the
        Trustee may approve as its agent for that purpose.

       

      
        
          
          

        

        
          -
            68 -

          
            

          

        

        
          
          

        

      

      

      PRINCIPAL
        PAYING, CONVERSION AND TRANSFER AGENT

      

      

      40th
        Floor, One Canada Square

      London,
        E14, 5AL, United Kingdom

      Fax
        no.:
        +44 20 7964 6369

      Attention:
        Global Corporate Trust

      

      

      with
        a
        copy to:

      

      The
        Bank
        of New York

      Level
        12,
        3 Pacific Place

      1
        Queen’s
        Road East

      Hong
        Kong

      Fax
        no.:
        852 2295 3283

      Attention:
        Corporate Trust

      

      

      REGISTRAR

      

      The
        Bank
        of New York

      101
        Barclay Street, 21st Floor, New York

      NY
        10286,
        United States of America

      Fax
        no:
        +1 212 815 5802/5803

      Attention:
        Global Corporate Trust

      

      with
        a
        copy to:

      

      The
        Bank
        of New York

      Level
        12,
        3 Pacific Place

      1
        Queen’s
        Road East

      Hong
        Kong

      Fax
        no.:
        852 2295 3283

      Attention:
        Corporate Trust

      

      
        
          
          

        

        
          -
            69 -

          
            

          

        

        
          
          

        

      

       

      Form
        of Transfer

      

      FOR
        VALUE
        RECEIVED the undersigned hereby transfers to

       

      
        
          

        

        
 

       

      (Please
        Print or Typewrite Name and Address of Transferee)

      

      US$______principal
        amount of the Bonds in respect of which this Certificate is issued, and all
        rights in respect thereof.

      

      All
        payments in respect of the Bonds hereby transferred are to be made (unless
        otherwise instructed by the transferee) to the following account:

      

        
          	
                  Name
                    of bank:

                	 

	 	 
	
                  US$
                    account number: 

                	 

	 	 
	
                  For
                    the account of:

                	 

        

      

       

      

        
          	
                  Dated:

                	 

	 	 
	 	  

	 	 
	 	
                  Certifying
                    Signature

                
	 	 
	
                  Name:

                	 

        

      

      

      

      Notes:

      

      
        	
                (i)

              	
                A
                  representative of the Bondholder should state the capacity in which
                  he
                  signs, e.g. executor.

              

      

      

      
        	
                (ii)

              	
                The
                  signature of the person effecting a transfer shall conform to any
                  list of
                  duly authorised specimen signatures supplied by the registered
                  holder or
                  be certified by a recognised bank, notary public or in such other
                  manner
                  as the Agent or the Registrar may
                  require.

              

      

      

      
        
          
          

        

        
          -
            70 -

          
            

          

        

        
          
          

        

      

      

      SCHEDULE
        2

      
         

        FORM
          OF GLOBAL CERTIFICATE

      

       

       

      ISIN:
        [·]

      Common
        Code: [·]

      

      CHINA
        ARCHITECTURAL ENGINEERING, INC.

      (incorporated
        under the laws of the State of Delaware)

      US$10,000,000

      Variable
        Rate Convertible Bonds due 2012

      

      GLOBAL
        CERTIFICATE

      

      The
        Bonds
        in respect of which this Global Certificate is issued are in registered form
        and
        form part of the series designated as specified in the title (the “Bonds”)
        of
        China Architectural Engineering, Inc. (the “Issuer”).

      

      The
        Issuer hereby certifies that [·]
        is, as
        at the date hereof, entered in the register of Bondholders as the holder
        of
        Bonds in the principal amount of US$10,000,000 (Ten million United States
        dollars) or such other amount as is shown on the register of Bondholders
        as
        being represented by this Global Certificate and is duly endorsed (for
        information purposes only) in the third column of Schedule A to this Global
        Certificate. For value received, the Issuer promises to pay the person who
        appears at the relevant time on the register of Bondholders as holder of
        the
        Bonds in respect of which this Global Certificate is issued such amount or
        amounts as shall become due in respect of such Bonds and otherwise to comply
        with the Conditions, as referred to below.

      

      The
        Bonds
        are constituted by a trust deed (the “Trust
        Deed”)
        dated
        [•]
        2007
        and made between the Issuer and The Bank of New York, London Branch as trustee
        (the “Trustee”)
        and
        are subject to, and have the benefit of, the Trust Deed and the terms and
        conditions (the “Conditions”
or
        the
“Terms
        and Conditions”)
        set
        out in Schedule 1 to the Trust Deed, as modified by the provisions of this
        Global Certificate. Terms defined in the Trust Deed have the same meanings
        when
        used herein.

      

      The
        Bonds
        in respect of which this Global Certificate is issued are convertible into
        fully-paid shares of common stock of par value US$0.001 each of the Issuer
        subject to and in accordance with the Conditions and the Trust
        Deed.

      

      Owners
        of
        interests in the Bonds in respect of which this Global Certificate is issued
        will be entitled to have title to the Bonds registered in their names and
        to
        receive individual definitive Certificates if either Euroclear or Clearstream
        (or any other clearing system (an “Alternative
        Clearing System”)
        as
        shall have been designated by the Issuer and approved by the Trustee on behalf
        of which the Bonds evidenced by this Global Certificate may be held) is closed
        for business for a continuous period of fourteen (14) days (other than by
        reason
        of holidays, statutory or otherwise) or announces an intention permanently
        to
        cease business or does in fact do so.

      

      In
        such
        circumstances, the Issuer will at its own expense cause sufficient individual
        definitive Certificates to be executed and delivered to the Registrar for
        completion, authentication and dispatch to all Bondholders. A person with
        an
        interest in the Bonds in respect of which this Global Certificate is issued
        must
        provide the Registrar with a written order containing instructions and such
        other information as the Issuer and the Registrar may require to complete,
        execute and deliver such individual definitive Certificates.

       

      
        
          
          

        

        
          -
            71 -

          
            

          

        

        
          
          

        

      

       

      This
        Global Certificate is evidence of entitlement only. Title to the Bonds passes
        only on due registration in the register of Bondholders and only the duly
        registered holder is entitled to payments on Bonds in respect of which this
        Global Certificate is issued.

      

      The
        Conditions are modified as follows in so far as they apply to the Bonds in
        respect of which this Global Certificate is issued.

      

      The
        Registrar will not register the exchange of interests in this Global Certificate
        for individual definitive Certificates for a period of fifteen (15) calendar
        days preceding the due date for any payment of principal, interest and premium
        (if any) in respect of the Bonds.

      

      Meetings

      

      The
        registered holder of this Global Certificate will be treated as being two
        (2)
        persons for the purposes of any quorum requirements of a meeting of Bondholders
        and, at any such meeting, as having one (1) vote in respect of each US$1,000
        in
        principal amount of Bonds for which this Global Certificate is issued. The
        Trustee may allow a person with an interest in Bonds in respect of which
        this
        Global Certificate has been issued to attend and speak at a meeting of
        Bondholders on appropriate proof of his identity and interest.

      

      Cancellation

      

      Cancellation
        of any Bond by the Issuer following its redemption, conversion or purchase
        by
        the Issuer will be effected by a reduction in the principal amount of the
        Bonds
        in the register of Bondholders.

      

      Trustee’s
        Powers

      

      In
        considering the interests of Bondholders while this Global Certificate is
        registered in the name of a nominee for a clearing system, the Trustee may,
        to
        the extent it considers it appropriate to do so in the circumstances but
        without
        being obliged to do so, (a) have regard to any information as may have been
        made
        available to it by or on behalf of the relevant clearing system or its operator
        as to the identity of its accountholders (either individually or by way of
        category) with entitlements in respect of the Bonds and (b) may consider
        such
        interests on the basis that such accountholders were the holders of the Bonds
        in
        respect of which this Global Certificate is issued.

      

      Conversion

      

      Subject
        to the requirements of Euroclear and Clearstream (or any Alternative Clearing
        System), the Conversion Right attaching to a Bond in respect of which this
        Global Certificate is issued, may be exercised by the presentation (which
        may be
        by facsimile transmission) thereof to or to the order of the Principal Agent
        of
        one (1) of more Conversion Notices duly completed by or on behalf of a holder
        of
        a book-entry interest in such Bond. Deposit of this Global Certificate with
        the
        Principal Agent together with the relevant Conversion Notice(s) shall not
        be
        required. The exercise of the Conversion Right shall be notified by the
        Principal Agent to the Registrar and the holder of this Global
        Certificate.

       

      
        
          
          

        

        
          -
            72 -

          
            

          

        

        
          
          

        

      

       

      Payment

      

      Payments
        of principal, interest and premium (if any) in respect of Bonds represented
        by
        this Global Certificate will be made without presentation or if no further
        payment falls to be made in respect of the Bonds, against presentation and
        surrender of this Global Certificate to or to the order of the Principal
        Agent
        or such other Paying Agent as shall have been notified to the Bondholders
        for
        such purpose.

      

      Notices

      

      So
        long
        as the Bonds are represented by this Global Certificate and this Global
        Certificate is held on behalf of Euroclear or Clearstream or the Alternative
        Clearing System, notices to Bondholders may be given by delivery of the relevant
        notice to Euroclear or Clearstream or the Alternative Clearing System, for
        communication by it to entitled accountholders in substitution for notification
        as required by the Conditions.

      

      Bondholders’
        Redemption

      

      The
        Bondholders’ redemption options in Conditions 9(D) and 9(E) may be exercised by
        the holder of this Global Certificate giving notice (which may be made by
        facsimile transmission) to the Principal Agent of the principal amount of
        Bonds
        in respect of which the option is exercised and presenting this Global
        Certificate for endorsement or exercise within the time limits specified
        in
        those Conditions.

      

      Registration
        of Title

      

      Certificates
        in definitive form for individual holdings of Bonds will not be issued in
        exchange for interests in Bonds in respect of which the Global Certificate
        is
        issued, except if either Euroclear or Clearstream (or any alternative clearing
        system on behalf of which the Bonds evidenced by the Global Certificate may
        be
        held) is closed for business for a continuous period of fourteen (14) days
        (other than by reason of holidays, statutory or otherwise) or announces an
        intention permanently to cease business or does in fact do so.

      

      Transfers

      

      Transfers
        of interests in the Bonds will be effected through the records of Euroclear
        and
        Clearstream and their respective participants in accordance with the rules
        and
        procedures of Euroclear and Clearstream and their respective direct and indirect
        participants.

      

      Enforcement

      

      For
        the
        purposes of enforcement of the provisions of the Trust Deed against the Trustee,
        the persons named in a certificate of the holder of the Bonds in respect
        of
        which this Global Certificate is issued shall be recognised as the beneficiaries
        of the trust set out in the Trust Deed, to the extent of the principal amounts
        of their interest in the Bonds set out in the certificate of the holder,
        as if
        they were themselves the holders of Bonds in such principal
        amounts.

      

      For
        all
        purposes the Bonds in respect of which this Global Certificate is issued,
        each
        person who is for the time being shown in the records of Euroclear or of
        Clearstream as the holder of a particular principal amount of such Bonds
        (in
        which regard any certificate or other document issued by Euroclear or
        Clearstream as to the principal amount of Bonds represented by a Global
        Certificate standing to the account of any person shall be conclusive and
        binding for all purposes) shall be recognised as the holder of such principal
        amount of Bonds.

       

      
        
          
          

        

        
          -
            73 -

          
            

          

        

        
          
          

        

      

       

      Third
        Party Rights

      

      No
        rights
        are conferred on any person under the Contracts (Rights of Third Parties)
        Act
        1999 to enforce any term of this Global Certificate but this does not affect
        any
        right or remedy of any person which exists or is available apart from that
        Act.

      

      This
        Global Certificate shall not be valid for any purpose until authenticated
        by or
        on behalf of the Principal Agent.

      

      This
        Global Certificate is governed by, and shall be construed in accordance with,
        English law.

      

      In
        witness
        whereof
        the Issuer has caused this Global Certificate to be signed on its
        behalf.

      

      Dated
        [·]
        2007

      

      CHINA
        ARCHITECTURAL ENGINEERING, INC.

      

      

      

        
          	
                  By:

                	
                   

                

      

      Director/Authorised
        Signatory

      

      

      Certificate
        of Authentication

      

      Certified
        that the above-named holder is as at the date hereof entered in the register
        of
        Bondholders as holder of the above-mentioned principal amount of
        Bonds.

      

      The
        Bank of New York as Registrar

      (without
        warranty, recourse or liability)

       

      
        

          
            	
                    By:

                  	
                     

                  

          

           

          Authorised
            Signatory

        

      

      

      Dated:

      

      
        
          
          

        

        
          -
            74 -

          
            

          

        

        
          
          

        

      

      

      Schedule
        A

      

      Schedule
        of Reductions in Principal Amount of Bonds in respect of which
        this

      Global
        Certificate is Issued

       

      The
        following reductions in the principal amount of Bonds in respect of which
        this
        Global Certificate is issued have been made as a result of: (i) exercise
        of the
        Conversion Rights attaching to Bonds or (ii) redemption of Bonds or (iii)
        issue
        of definitive Certificates in respect of the Bonds or (iv) purchase and
        cancellation of the Bonds:

      

      

      
        	
                Date
                  of Conversion / Redemption
                  / Issue of definitive Certificates / Purchase and cancellation
                  of the
                  Bonds

              	 	
                Amount
                  of decrease in principal amount of this Global
                  Certificate

              	 	
                Principal
                  Amount of this Global Certificate following such
                  decrease

              	 	
                Notation
                  made by or on behalf of the Registrar

              
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

      

       

      
        
          
          

        

        
          -
            75 -

          
            

          

        

        
          
          

        

      

       

      PRINCIPAL
        PAYING, CONVERSION AND TRANSFER AGENT

      

      

      The
        Bank
        of New York, London Branch

      40th
        Floor, One Canada Square

      London,
        E14, 5AL, United Kingdom

      Fax
        no.:
        +44 20 7964 6369

      Attention:
        Global Corporate Trust

      

      

      with
        a
        copy to:

      

      The
        Bank
        of New York

      Level
        12,
        3 Pacific Place

      1
        Queen’s
        Road East

      Hong
        Kong

      Fax
        no.:
        852 2295 3283

      Attention:
        Corporate Trust

      

      

      REGISTRAR

      

      

      The
        Bank
        of New York

      101
        Barclay Street, 21st Floor, New York

      NY
        10286,
        United States of America

      Fax
        no:
        +1 212 815 5802/5803

      Attention:
        Global Corporate Trust

      

      with
        a
        copy to:

      

      The
        Bank
        of New York

      Level
        12,
        3 Pacific Place

      1
        Queen’s
        Road East

      Hong
        Kong

      Fax
        no.:
        852 2295 3283

      Attention:
        Corporate Trust

      

      
        
          
          

        

        
          -
            76 -

          
            

          

        

        
          
          

        

      

       

      Form
        of Transfer

      

      FOR
        VALUE
        RECEIVED the undersigned hereby transfers the following principal amounts
        of
        Bonds in respect of which the Global Certificate is issued, and all rights
        in
        respect thereof, to the transferee(s) listed below:

      

        
          	
                  Principal
                    Amount transferred

                	 	
                  Name,
                    address and account for 

                
	
                   

                	 	
                  payments
                    of transferee

                
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                  Dated
                    :

                	
                   

                	 	
                  Certifying
                    Signature : 

                	
                   

                
	 	 	 	 	 
	
                  Name
                    : 

                	
                   

                	 	
                	
                
	 	 	 	 	 
	
                  Notes:

                	
                	 	
                	 

        

      

       

      
        	
                (i)

              	
                A
                  representative of the Bondholder should state the capacity in which
                  he
                  signs e.g. executor.

              

      

      

      
        	
                (ii)

              	
                The
                  signature of the person effecting a transfer shall conform to any
                  list of
                  duly authorised specimen signatures supplied by the registered
                  holder or
                  be certified by a recognised bank, notary public or in such other
                  manner
                  as the Principal Agent or the Registrar may
                  require.

              

      

       

      
        
          
          

        

        
          -
            77 -

          
            

          

        

        
          
          

        

      

      

      SCHEDULE
        3

       

      Provisions
        for Meetings of Bondholders

      

      
        	
                21.

              	
                A
                  holder of a Bond may by an instrument in writing (a “form
                  of proxy”)
                  in the form available from the specified office of any Agent in
                  English
                  signed by the holder or, in the case of a corporation, executed
                  under its
                  common seal or signed on its behalf by an attorney or a duly authorised
                  officer of the corporation and delivered to the Agent not later
                  than
                  twenty-four (24) hours before the time fixed for any meeting, appoint
                  any
                  person (a “proxy”)
                  to act on his or its behalf in connection with any meeting or proposed
                  meeting of Bondholders.

              

      

      

      
        	22.	
                A
                  holder of a Bond which is a corporation may by delivering to any
                  Agent not
                  later than twenty-four (24) hours before the time fixed for any
                  meeting a
                  resolution of its directors or other governing body in English
                  authorise
                  any person to act as its representative (a “representative”)
                  in connection with any meeting or proposed meeting of
                  Bondholders.

              

      

      

      
        	
                23.

              	
                A
                  proxy or representative so appointed shall so long as such appointment
                  remains in force be deemed, for all purposes in connection with
                  any
                  meeting or proposed meeting of Bondholders specified in such appointment,
                  to be the holder of the Bonds to which such appointment relates
                  and the
                  holder of the Bond shall be deemed for such purposes not to be
                  the
                  holder.

              

      

      

      
        	
                24.

              	
                Each
                  of the Issuer and the Trustee may at any time convene a meeting
                  of
                  Bondholders. If the Trustee receives a written request by Bondholders
                  holding at least ten percent (10%) in principal amount of the Bonds
                  for
                  the time being outstanding and is indemnified to its satisfaction
                  against
                  all costs and expenses, the Trustee shall convene a meeting of
                  Bondholders. Every meeting shall be held at a time and place approved
                  by
                  the Trustee.

              

      

      

      
        	
                25.

              	
                At
                  least twenty-one (21) days’ notice (exclusive of the day on which the
                  notice is given and of the day of the meeting) shall be given to
                  the
                  Bondholders to convene a meeting of Bondholders. A copy of the
                  notice
                  shall be given by the party convening the meeting to the other
                  parties.
                  The notice shall specify the day, time and place of meeting, be
                  given in
                  the manner provided in the Conditions and shall specify, unless
                  the
                  Trustee otherwise agrees, the nature of the resolutions to be proposed
                  and
                  shall include a statement to the effect that the holders of Bonds
                  may
                  appoint proxies by executing and delivering a form of proxy in
                  English to
                  the specified office of an Agent not later than twenty-four (24)
                  hours
                  before the time fixed for the meeting or, in the case of corporations,
                  may
                  appoint representatives by resolution in English of their directors
                  or
                  other governing body and by delivering an executed copy of such
                  resolution
                  to the Agent not later than twenty-four (24) hours before the time
                  fixed
                  for the meeting.

              

      

      

      
        	
                26.

              	
                A
                  person (who may, but need not, be a Bondholder) nominated in writing
                  by
                  the Trustee may act as chairman of a meeting but if no such nomination
                  is
                  made or if the person nominated is not present within fifteen (15)
                  minutes
                  after the time fixed for the meeting the Bondholders present shall
                  choose
                  one (1) of their number to be chairman, failing which, the Issuer
                  may
                  appoint the chairman. The chairman of an adjourned meeting need
                  not be the
                  same person as was chairman of the original
                  meeting.

              

      

      

      
        	
                27.

              	
                At
                  a meeting two (2) or more persons present in person holding Bonds
                  or being
                  proxies or representatives and holding or representing in the aggregate
                  not less than ten percent (10%) in principal amount of the Bonds
                  for the
                  time being outstanding shall (except for the purpose of passing
                  an
                  Extraordinary Resolution) form a quorum for the transaction of
                  business
                  and no business (other than the choosing of a chairman) shall be
                  transacted unless the requisite quorum be present at the commencement
                  of
                  business. The quorum at a meeting for passing an Extraordinary
                  Resolution
                  shall (subject as provided below) be two (2) or more persons present
                  in
                  person holding Bonds or being proxies or representatives and holding
                  or
                  representing in the aggregate over fifty percent (50%) in principal
                  amount
                  of the Bonds for the time being outstanding provided that the quorum
                  at
                  any meeting the business of which includes any of the matters specified
                  in
                  the proviso to paragraph 16
                  shall be two (2) or more persons so present holding Bonds or being
                  proxies
                  or representatives and holding or representing in the aggregate
                  not less
                  than two-thirds (2/3) in principal amount of the Bonds for the
                  time being
                  outstanding.

              

      

       

      
        
          
          

        

        
          -
            78 -

          
            

          

        

        
          
          

        

      

       

      
        	
                28.

              	
                If
                  within fifteen (15) minutes from the time fixed for a meeting a
                  quorum is
                  not present the meeting shall, if convened upon the requisition
                  of
                  Bondholders or if the Issuer and the Trustee agree, be dissolved.
                  In any
                  other case it shall stand adjourned to such date, not less than
                  fourteen
                  (14) nor more than forty-two (42) days later, and to such place
                  as the
                  chairman may decide. At such adjourned meeting two (2) or more
                  persons
                  present in person holding Bonds or being proxies or representatives
                  (whatever the principal amount of the Bonds so held or represented)
                  shall
                  form a quorum and may pass any resolution and decide upon all matters
                  which could properly have been dealt with at the meeting from which
                  the
                  adjournment took place had a quorum been present at such meeting
                  provided
                  that at any adjourned meeting at which is to be proposed an Extraordinary
                  Resolution for the purpose of effecting any of the modifications
                  specified
                  in the proviso to paragraph 16
                  the quorum shall be two (2) or more persons so present holding
                  Bonds or
                  being proxies or representatives and holding or representing in
                  the
                  aggregate not less than one-third (1/3) in principal amount of
                  the Bonds
                  for the time being outstanding.

              

      

      

      
        	
                29.

              	
                The
                  chairman may with the consent of (and shall if directed by) a meeting
                  adjourn the meeting from time to time and from place to place but
                  no
                  business shall be transacted at an adjourned meeting which might
                  not
                  lawfully have been transacted at the meeting from which the adjournment
                  took place.

              

      

      

      
        	
                30.

              	
                At
                  least ten (10) days’ notice of any meeting adjourned through want of a
                  quorum shall be given in the same manner as for an original meeting
                  and
                  such notice shall state the quorum required at the adjourned meeting.
                  No
                  notice need, however, otherwise be given of an adjourned
                  meeting.

              

      

      

      
        	
                31.

              	
                Each
                  question submitted to a meeting shall be decided in the first instance
                  by
                  a show of hands and in case of equality of votes the chairman shall
                  both
                  on a show of hands and on a poll have a casting vote in addition
                  to the
                  vote or votes (if any) which he may have as a Bondholder or as
                  a holder of
                  a voting certificate or as a proxy or
                  representative.

              

      

      

      
        	
                32.

              	
                Unless
                  a poll is (before or on the declaration of the result of the show
                  of
                  hands) demanded at a meeting by the chairman, the Issuer, the Trustee
                  or
                  by one (1) or more persons holding one (1) or more Bonds or being
                  proxies
                  or representatives and holding or representing in the aggregate
                  not less
                  than two percent (2%) in principal amount of the Bonds for the
                  time being
                  outstanding, a declaration by the chairman that a resolution has
                  been
                  carried or carried by a particular majority or lost or not carried
                  by a
                  particular majority shall be conclusive evidence of the fact without
                  proof
                  of the number or proportion of the votes recorded in favour of
                  or against
                  such resolution.

              

      

      

      
        	
                33.

              	
                If
                  a poll is demanded, it shall be taken in such manner and (subject
                  as
                  provided below) either at once or after such an adjournment as
                  the
                  chairman directs and the result of such poll shall be deemed to
                  be the
                  resolution of the meeting at which the poll was demanded as at
                  the date of
                  the taking of the poll. The demand for a poll shall not prevent
                  the
                  continuation of the meeting for the transaction of any business
                  other than
                  the question on which the poll has been
                  demanded.

              

      

       

      
        
          
          

        

        
          -
            79 -

          
            

          

        

        
          
          

        

      

       

      
        	
                34.

              	
                A
                  poll demanded on the election of a chairman or on any question
                  of
                  adjournment shall be taken at the meeting without
                  adjournment.

              

      

      

      
        	
                35.

              	
                The
                  Issuer and the Trustee (through their respective representatives)
                  and
                  their respective financial and legal advisers may attend and speak
                  at any
                  meeting of Bondholders. No one else may attend or speak at a meeting
                  of
                  Bondholders unless he is the holder of a Bond or is a proxy or
                  a
                  representative.

              

      

      

      
        	
                36.

              	
                On
                  a show of hands every holder who is present in person or any person
                  who is
                  present and is a proxy or a representative shall have one (1) vote
                  and on
                  a poll every person who is so present shall have one (1) vote in
                  respect
                  of each Bond produced or in respect of which he is a proxy or a
                  representative. Without prejudice to the obligations of proxies,
                  a person
                  entitled to more than one (1) vote need not use them all or cast
                  them all
                  in the same way.

              

      

      

      
        	
                37.

              	
                A
                  proxy need not be a Bondholder.

              

      

      

      
        	
                38.

              	
                A
                  meeting of Bondholders shall, subject to the Conditions, in addition
                  to
                  the powers given above, but without prejudice to any powers conferred
                  on
                  other persons by this Trust Deed, have power exercisable by Extraordinary
                  Resolution:

              

      

      

      
        	 	
                38.1

              	
                to
                  sanction any proposal by the Issuer for any modification, abrogation,
                  variation or compromise of, or arrangement in respect of, the rights
                  of
                  the Bondholders against the Issuer whether or not such rights arise
                  under
                  this Trust Deed;

              

      

      

      
        	 	
                38.2

              	
                to
                  sanction the exchange or substitution for the Bonds of, or the
                  conversion
                  of the Bonds into, shares, bonds, or other obligations or securities
                  of
                  the Issuer or any other entity;

              

      

      

      
        	 	
                38.3

              	
                to
                  assent to any modification of this Trust Deed or the Bonds which
                  shall be
                  proposed by the Issuer or the
                  Trustee;

              

      

      

      
        	 	
                38.4

              	
                to
                  authorise anyone to concur in and do anything necessary to carry
                  out and
                  give effect to an Extraordinary
                  Resolution;

              

      

      

      
        	 	
                38.5

              	
                to
                  give any authority, direction or sanction required to be given
                  by
                  Extraordinary Resolution;

              

      

      

      
        	 	
                38.6

              	
                to
                  appoint any persons (whether Bondholders or not) as a committee
                  or
                  committees to represent the interests of the Bondholders and to
                  confer on
                  them any powers or discretions which the Bondholders could themselves
                  exercise by Extraordinary
                  Resolution;

              

      

      

      
        	 	
                38.7

              	
                to
                  approve the substitution of any entity for the Issuer (or any previous
                  substitute) as principal debtor under this Trust Deed;
                  

              

      

      

      
        	 	
                38.8

              	
                to
                  approve a proposed new Trustee and to remove a Trustee;
                  and

              

      

      

      
        	 	
                38.9

              	
                to
                  discharge or exonerate the Trustee from any liability in respect
                  of any
                  act or omission for which it may become responsible under this
                  Trust Deed
                  or the Bonds,

              

      

       

      
        
          
          

        

        
          -
            80 -

          
            

          

        

        
          
          

        

      

       

      provided
        that the special quorum provisions contained in the proviso to paragraph
        5
        and, in
        the case of an adjourned meeting, in the proviso to paragraph 6
        shall
        apply for the purpose of making any modification to the provisions contained
        in
        this Trust Deed or the Bonds which would have the effect of:

      

      
        	 	
                18.9.1

              	
                modifying
                  the due date for any payment in respect of the Bonds;
                  or

              

      

      

      
        	 	
                18.9.2

              	
                reducing
                  or cancelling the amount of principal, interest, premium, or default
                  interest (including any Early Redemption Amount) or Equivalent
                  Amount
                  payable in respect of the Bonds or changing the method of calculation
                  of
                  the Early Redemption Amount; or

              

      

      

      
        	 	
                18.9.3

              	
                changing
                  the currency of payment of the Bonds;
                  or

              

      

      

      
        	 	
                18.9.4

              	
                modifying
                  (except by a unilateral and unconditional reduction in the Conversion
                  Price) or cancelling the Conversion Rights or the options specified
                  in
                  Conditions 9(D) or 9(E); or

              

      

      

      
        	 	
                18.9.5

              	
                modifying
                  the provisions contained in this Schedule concerning the quorum
                  required
                  at a meeting of Bondholders or the majority required to pass an
                  Extraordinary Resolution or sign a resolution in writing;
                  or

              

      

      

      
        	 	
                18.9.6

              	
                amending
                  this proviso.

              

      

      

      
        	
                39.

              	
                An
                  Extraordinary Resolution passed at a meeting of Bondholders duly
                  convened
                  and held in accordance with this Trust Deed shall be binding on
                  all the
                  Bondholders, whether or not present at the meeting, and each of
                  them shall
                  be bound to give effect to it accordingly. The passing of such
                  a
                  resolution shall be conclusive evidence that the circumstances
                  of such
                  resolution justify the passing of
                  it.

              

      

      

      
        	
                40.

              	
                The
                  expression “Extraordinary
                  Resolution”
                  means a resolution passed at a meeting of Bondholders duly convened
                  and
                  held in accordance with these provisions by a majority consisting
                  of not
                  less than three-quarters (3/4) of the votes cast at such
                  meeting.

              

      

      

      
        	
                41.

              	
                A
                  resolution in writing signed by or on behalf of the holders of
                  not less
                  than ninety percent (90%) in principal amount of the Bonds who
                  for the
                  time being are entitled to receive notice of a meeting in accordance
                  with
                  these provisions shall for all purposes be as valid as an Extraordinary
                  Resolution passed at a meeting of Bondholders convened and held
                  in
                  accordance with these provisions. Such resolution in writing may
                  be in one
                  (1) document or several documents in like form each signed by or
                  on behalf
                  of one (1) or more of the
                  Bondholders.

              

      

      

      
        	
                42.

              	
                Minutes
                  shall be made of all resolutions and proceedings at every meeting
                  and, if
                  purporting to be signed by the chairman of that meeting or of the
                  next
                  succeeding meeting of Bondholders, shall be conclusive evidence
                  of the
                  matters in them. Until the contrary is proved every meeting for
                  which
                  minutes have been so made and signed shall be deemed to have been
                  duly
                  convened and held and all resolutions passed or proceedings transacted
                  at
                  it to have been duly passed and
                  transacted.

              

      

      

      
        	
                43.

              	
                Subject
                  to all other provisions contained in this Trust Deed, the Trustee
                  may
                  without the consent of the Bondholders prescribe such further regulations
                  regarding the holding of meetings and attendance and voting at
                  them or
                  regarding the making of resolutions in writing as the Trustee may
                  in its
                  sole discretion determine including (without limitation) such regulations
                  and requirements as the Trustee thinks reasonable to satisfy itself
                  that
                  persons who purport to make any requisition in accordance with
                  this Trust
                  Deed are entitled to do so and that those who purport to attend
                  or vote at
                  a meeting or to sign a written resolution are entitled to do
                  so.

              

      

      

      
        
          
          

        

        
          -
            81 -

          
            

          

        

        
          
          

        

      

      

      This
        deed
        is delivered on the day and year first before written.

      

      The
        Issuer

      

      Executed
        as a deed by

      CHINA
        ARCHITECTURAL ENGINEERING, INC. 

       

      

      By:
        /s/ Luo Ken Yi 

      
        
          

        

      

      Name:
        Luo
        Ken Yi 

      Title:
        Chairman

      
 

      Name
        of
        Witness: Wei Wan

      Address:

      

      

      The
        Trustee

      

      Executed
        as a deed by

      THE
        BANK OF NEW YORK, LONDON BRANCH 

       

      

      By:
        /s/ Tania Sibree 

      
        

      

      Name:
        Tania Sibree 

      Title:
        Vice President

       

       

      
        Name
          of
          Witness: Daphne Yeung

        Address:EXHIBIT
      10.1

     

    WAIVER
      OF PENALTIES RELATED TO REGISTRATION RIGHTS

     

    This
      WAIVER OF PENALTIES RELATED TO REGISTRATION
      RIGHTS (“WAIVER”)
      is
      entered into as of this 29th
      day of
      August, 2007 by and between a CHINA ARCHITECTURAL ENGINEERING, INC., a Delaware
      corporation (the “Company”),
      and
      the persons listed on the signature pages hereof (the “Investors”).
      Undefined terms herein shall have the meaning set forth in the Subscription
      Agreement, as defined below.

     

    RECITALS:

     

    WHEREAS,
      the Company and each of the Investors entered into that certain Subscription
      Agreement dated October 17, 2007 (“Subscription
      Agreement”)
      pursuant to which the Investors purchased securities of the Company;

     

    WHEREAS,
      the Company, pursuant to Section 4 of the Subscription Agreement, agreed to
      use
      its reasonable best efforts to cause the Registration Statement to become
      effective within one hundred eighty (180) days after the Closing Date if the
      Registration Statement is subject to a full review by the SEC;

     

    WHEREAS,
      the Subscription Agreement states that Company shall be required to pay, as
      liquidated damages, to each of the Subscriber a cash payment (the “Penalty
      Payment”)
      equal
      to a total of 0.0333% of the Purchase Price of the Shares sold to the Subscriber
      for each business day after the 180-day period has expired until the
      Registration Statement is declared effective by the SEC;

     

    WHEREAS,
      Section 5.2 of the Subscription Agreement states that the terms of Section
      4 of
      the Subscription Agreement may be modified without the consent or approval
      of
      all of the Subscribers so long as (i) such modification applies in the same
      fashion to the Subscription Agreement of all of the Subscribers in the Offering
      and (ii) at least holders of a majority of the Shares sold in the Offering
      have
      given their approval of such modification, which approval shall be binding
      on
      all holders of Shares; and

     

    WHEREAS,
      the undersigned Investors hold an aggregate number of Shares that is more than
      a
      majority of the Shares sold in the Offering and each of the undersigned
      Investors and the Company desire to modify Section 4 of the Subscription
      Agreement to waive any and all Penalty Payment, and any rights to any Penalty
      Payment, under the Subscription Agreement.

     

    AGREEMENT:

     

    NOW,
      THEREFORE, in consideration of the foregoing recitals and the mutual promises
      hereinafter set forth, the parties hereto agree as follows:

     

    1. Waiver
      of Penalty Payment.
      The
      Company and the undersigned Investors hereby agree to remove all references
      to
      the Penalty Payment from the Subscription Agreement, and each of the Investors
      hereby fully and irrevocably waive the Penalty Payment, any claim to payment
      of
      the Penalty Amount, whether or not owed, and any and all rights related
      thereto.

     

    2. Conflicts.
      To the
      extent there is any conflict between the terms of the Subscription Agreement
      and
      the terms hereof, the terms of this Waiver take precedence.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    3. Confirmation
      of Subscription Agreement.
      The
      parties hereto hereby confirm that the Subscription Agreement, as amended by
      this Waiver, remains in full force and effect.

     

    4. Miscellaneous.
      This
      Waiver may be executed in any number of facsimile counterparts, each of which
      shall be an original, but which together constitute one and the same instrument.
      The parties expressly agree that all the terms and provisions hereof shall
      be
      construed in accordance with and governed by the laws of the State of
      Delaware.

    

    [Signature
      Pages Follow]

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

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

     

    
      
        	
                CHINA
                  ARCHITECTURAL ENGINEERING, INC. 

              
	 
	 
	
                By: /s/ Ken Luo Yi

              
	
                

              
	
                Name:
                  Ken Luo Yi

                Title:
                  Chief Executive Officer  
                  

              

      

    

     

    Company
      Signature Page

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

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

    

      
        	 	 	 
	 	
                INVESTOR

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                Name
                  of Investor:

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                Name
                  of Signatory:

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                Title
                  of Signatory: 

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                Address:
                  

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                Telephone:

              	
                 

              
	
                 

              	
                Facsimile:

              	 

      

    

     

    
      
         

      

      
        4

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