Document:

CNCN form 8-K 4-19-2007 EX 10.1

    

    

    

    

    

    

    

    

    

    CONVERTIBLE
      BONDS SUBSCRIPTION AGREEMENT

    

    

    by
      and
      between

    

    

    

    

    Cintel
      Corp.

    Subscriber

    

    and

    

    

    STS
      Semiconductor & Telecommunications Co., Ltd.

    Issuer

    

    

    

    

    

    

    

    

    

    

    April
      19,
      2007

    

    

    

    

    

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    

    CONVERTIBLE
      BONDS SUBSCRIPTION AGREEMENT

    

     

    This
      CONVERTIBLE
      BONDS SUBSCRIPTION AGREEMENT (the "Agreement")
      is
      made and entered into as of April 19, 2007 by and between the parties stated
      hereunder:

     

    
      	(1)  	
              STS
                Semiconductor & Telecommunications Co., Ltd.,
                a
                company incorporated under the laws of the Republic of Korea
                (“Korea”)
                having its principal office at 555-9, Baekseok-Dong, Cheonan,
                Chungcheongnam-Do, Korea (the “Company”);
                and. 

            

    

     

    
      	(2)  	
              Cintel
                Corp., a
                corporation incorporated under the laws of the State of Nevada having
                its
                principal office at 9900 Corporate Campus Drive Suite 3000 Louisville,
                KY
                40223, U.S.A. (the “Subscriber”)

            

    

     

    Recitals

     

    WHEREAS,
      the
      Company has authorized the sale of convertible bonds in an aggregate principal
      amount of Korean Won (“KRW”
or
      “Won”)
      10,000,000,000 (Ten Billion Won) (the “Bonds”
or
      “Convertible
      Bonds”),
      convertible into shares of the Company’s common stock, having the par value of
      KRW 500 (Five Hundred Won) (the “Common
      Stock”);
      and

     

    WHEREAS,
      the
      Subscriber desires to subscribe for the Bonds on the terms and conditions set
      forth herein. 

     

    NOW
      THEREFORE,
      in
      consideration of the foregoing recitals and the mutual promises,
      representations, warranties and covenants hereinafter set forth and for other
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto agree as follows:

     

    

      
        	 	
                1.

                 

              	
                Issuance
                  of the Convertible Bonds. 

                 

              
	 	 	
                Pursuant
                  to the terms and conditions set forth in this Agreement on the
                  Closing
                  Date (as defined below), the Company shall issue to the Subscriber,
                  and
                  the Subscriber shall subscribe for KRW 10,000,000,000 (Ten Billion
                  Won)
                  Convertible Bonds due on April 20, 2012 in accordance with the
                  terms and
                  conditions set forth in Exhibit A. The Bonds will be issued at
                  an issue
                  price (the “Subscription
                  Price”)
                  equal to 100 per cent. of the principal amount of the Convertible
                  Bonds.

                 

              
	 	 	 
	 	
                2.

                 

              	
                Payment
                  of Subscription Price for the Convertible Bonds. 

                 

              
	 	 	
                The
                  Subscription Price for the Convertible Bonds shall be paid or caused
                  to be
                  paid by the Subscriber to the Company at 10 a.m., Seoul, Korea
                  time, on
                  the Closing Date in same day funds.

                 

              
	 	 	 
	 	
                3.

                 

              	
                Closing
                  

                 

              
	 	
                3.1

                 

              	
                Closing
                  Date and Place.
                  The closing of the issuance and subscription of the Convertible
                  Bonds (the
                  “Closing”)
                  will be held at the office of the Company or such other place as
                  agreed
                  between the parties hereto, at 10 a.m., Seoul, Korea time, on April
                  20,
                  2007, or such other date as agreed between the parties hereto (the
                  “Closing
                  Date”).
                  

                 

              

      

    

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

    

      
        	 	
                3.2

              	
                Conditions
                  to Closing.
                  The Closing is conditional upon fulfillment or waiver by the Company
                  of
                  the followings:

              

      

       

    

    
      	(i)  	
              The
                issue and subscription of the Convertible Bonds on the terms and
                conditions herein provided shall not violate any requirements of law
                applicable to the Company or the Subscriber;

            

    

     

    
      	(ii)  	
              The
                Subscriber and the Company shall have completed or obtained all requisite
                governmental or internal approvals, consents and filing of reports;
                and

            

    

    

    
      	(iii)  	
              The
                Subscriber shall have reported its subscription of the Convertible
                Bonds
                to the Bank of Korea.

            

    

     

    
      
        	 	
                3.3

                 

              	
                Closing
                  Deliveries of the Company

                 

              
	        
On
                the
                Closing Date, the Company shall deliver or cause to be delivered
                to the
                Subscriber all the following documents at the same time, in form
                and
                substance reasonably satisfactory to the
                Subscriber:

      

    

     

    
      	(i)  	
              a
                receipt signed by a duly authorized officer of the Company, acknowledging
                receipt of the Subscription Price;

            

    

     

    
      	(ii)  	
              bond
                certificates representing the Convertible Bonds;
                

            

    

     

    
      	(iii)  	
              a
                certificate of a duly authorized officer of the Company attaching
                copies,
                certified by such officer as true and complete, of the resolutions
                of its
                board of directors in connection with the authorization and approval
                of
                the execution, delivery and performance of this Agreement and the
                consummation of the transaction contemplated hereunder and of all
                other
                documents evidencing all necessary corporate action taken in connection
                therewith; 

            

    

     

    
      	(iv)  	
              a
                certified copy of the Commercial Registry extract of the Company
                dated as
                of a date no later than the date
                hereof;

            

    

     

    
      	(v)  	
              the
                Articles of Incorporation of the Company;
                and

            

    

     

    
      	(vi)  	
              such
                other documents as the Subscriber may reasonably
                request.

            

    

     

     

    
      
        	 	
                4.

              	
                Termination
                  

              
	 
	 	
                4.1

                 

              	
                Termination
                  of Agreement. This Agreement may be terminated by notice in writing
                  at any
                  time prior to the Closing by:

                 

              

      

    

    
      	(i)  	
              the
                Company or the Subscriber, if any governmental authority of competent
                jurisdiction shall have issued any judgment, injunction, order, ruling
                or
                decree or taken any other action restraining, enjoining or otherwise
                prohibiting the consummation of the transactions contemplated by
                this
                Agreement and such judgment, injunction, order, ruling, decree or
                other
                action becomes final and non-appealable; provided, that the party
                seeking
                to terminate this Agreement pursuant to this clause (i) shall have
                used its best and reasonable efforts to have such judgment, injunction,
                order, ruling or decree lifted, vacated or
                denied;

            

    

     

    
      	(ii)  	
              the
                Company and the Subscriber, if the Company and the Subscriber so
                mutually
                agree in writing; 

            

    

     

    
      	(iii)  	
              the
                Company or the Subscriber, if there has been a material breach on
                the part
                of the other party of its representations, warranties and undertakings,
                and the failure to perform its obligations, set forth in this Agreement
                and the other party fails to cure such breach in fourteen (14) calendar
                days after the other party receives a notice of such breach;
                

            

    

     

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

    
      	(iv)  	
              the
                Company or the Subscriber, if any of the conditions specified Section
                3.2
                hereof has not been satisfied or waived;
                and.

            

    

     

    
      	(v)  	
              the
                Subscriber (i) if trading in any securities of the Company has been
                suspended or limited on the Korea Securities Dealers Automated Quotation
                Division of the Korea Exchange (the “KOSDAQ”)
                or (ii) if trading generally on the KOSDAQ or the Korea Exchange
                has been
                suspended or limited, or minimum or maximum prices for trading have
                been
                fixed, or (iii) maximum ranges for prices have been required, by
                the
                KOSDAQ or the Korea Exchange or any other governmental authority,
                or a
                material disruption has occurred in commercial banking or bond settlement
                or clearance services in Korea.

            

    

     

    
      
        	 	
                4.2

                 

              	
                Effect
                  of Termination. If this Agreement is terminated in accordance with
                  Section 4.1 hereof and the transactions contemplated hereby are not
                  consummated, this Agreement shall become null and void and shall
                  be of no
                  further force and effect. No party shall be under any liability
                  to the
                  other party in respect of this Agreement, only if this Agreement
                  is
                  terminated pursuant to Article 4.1(i), (ii) and (v) hereof. 

                 

              
	 	
                4.3

                 

              	
                Indemnification.
                  In case of termination hereof under Article 4.1(iii) or (iv) above,
                  the
                  party with the fault causing such termination shall indemnify and
                  hold the
                  other party, its directors, officers, employees, sub-contractors
                  or agents
                  harmless from any and all reasonable losses and damages incurred
                  by the
                  non-breaching party.

                 

              
	 	 	 
	 	
                5.

                 

              	
                Representations,
                  Warranties and undertakings of the Company. 

                 

              
	 	
                5.1

                 

              	
                Representations
                  and Warranties: The Company represents to the Subscriber as of
                  the date of
                  this Agreement and the Closing Date:

                 

              

      

       

    

    
      
        
          	
                  a.

                	
                  that
                    the Company is duly organized and validly existing under the
                    law of the
                    jurisdiction in which it is incorporated, and has the requisite
                    corporate
                    power to own its properties and to carry on its business as now
                    being
                    conducted; 

                
	 	 
	
                  b.

                	
                  that
                    the Company is duly qualified as a corporation to do business
                    and is in
                    good standing in every jurisdiction in which the nature of the
                    business
                    conducted by it makes such qualification necessary and where
                    the failure
                    so to qualify would have a Material Adverse Effect; 

                
	 	 
	 	
                  “Material
                    Adverse Effect”
                    means any material adverse effect on the business, properties,
                    operations,
                    assets, financial condition or results of operations of the Subscriber
                    or
                    the Company, as the case may be, taken as a whole, or on the
                    transactions
                    contemplated hereby or by the agreements or instruments to be
                    entered into
                    in connection herewith.

                
	 	 
	
                  c.

                	
                  that
                    (i) the Company has the requisite corporate power and authority
                    to execute
                    and deliver this Agreement and to perform its obligations under
                    this
                    Agreement, and to issue the Convertible Bonds and the shares
                    of Common
                    Stock issuable upon conversion of the Convertible Bonds (the
“Bond
                    Shares”),
                    in accordance with the terms hereof, (ii) the execution and delivery
                    of
                    this Agreement by the Company and the consummation by it of the
                    transactions contemplated hereby have
                    been duly authorized by its board of directors and no further
                    consent or
                    authorization of the Company, or its board of directors or stock
                    holder is
                    required, (iii) this Agreement has been duly executed and delivered,
                    and
                    (iv) this Agreement constitutes a valid and binding obligation
                    of the
                    Company enforceable against the Company in accordance with its
                    terms;

                

        

      

    

    
       

      
        
          
          

        

        
          -
            4
            -

          
            

          

        

        
          
          

        

      

      

        
          	
                  d.

                	
                  that
                    the Company has an authorized
                    share capital of 200,000,000 shares with the par value
                    of
                    Won 500 and an issued and outstanding share capital of 15,066,357
                    common
                    shares as of the date hereof;

                
	 	 
	
                  e.

                	
                  that
                    all of the outstanding shares have been duly listed and admitted
                    for
                    trading on the KOSDAQ;

                
	 	 
	
                  f.

                	
                  that
                    the Convertible Bonds are duly authorized and are validly issued,
                    fully
                    paid and non-assessable, free of any encumbrances, and are not
                    subject to
                    preemptive rights of the Company’s Articles of Incorporation, By-laws and
                    other constitutional documents;

                
	 	 
	
                  g.

                	
                  that
                    the Company has available, and will maintain available, free
                    from
                    pre-emptive or other rights, out of its authorized but unissued
                    shares
                    such number of the Bond Shares as would or may be required to
                    be issued
                    upon conversion of the Convertible Bonds.

                
	 	 
	
                  h.

                	
                  that
                    the execution, delivery and performance of this Agreement and
                    the
                    Convertible Bonds issued by the Company and the consummation
                    by the
                    Company of the transactions contemplated hereby will not (i)
                    result in a
                    violation of the Certificate of Incorporation, By-laws or other
                    constitutional documents of the Company or (ii) conflict with,
                    or
                    constitute a default (or an event which with notice or lapse
                    of time or
                    both could become a default) in material respects under, or give
                    to others
                    any rights of termination, amendment or cancellation of, any
                    agreement,
                    indenture or instrument to which the Company is a party, or (iii)
                    result
                    in a violation of any law, rule, regulation, order, judgment
                    or decree
                    (including federal and state securities laws and regulations)
                    in material
                    respects applicable to the Company or by which any material property
                    or
                    asset of the Company is bound or affected;

                
	 	 
	
                  i.

                	
                  that
                    except as specifically contemplated by this Agreement and as
                    required
                    under the Korea Securities and Exchange Act and the regulations
                    thereunder, the Company is not required to obtain any consent,
                    authorization or order of, or make any filing or registration
                    with, any
                    court or governmental agency or any regulatory or self regulatory
                    agency
                    in order for it to execute, deliver or perform any of its obligations
                    under this Agreement in accordance with the terms
                    hereof;

                
	 	 
	
                  j.

                	
                  that
                    there is no action, suit, proceeding, inquiry or investigation
                    before or
                    by any court, public board, government agency, self-regulatory
                    organization or body pending or, to the knowledge of the Company,
                    threatened against or affecting the Company that is reasonably
                    likely to
                    have a Material Adverse Effect;

                
	 	 
	
                  k.

                	
                  that
                    the Company (i) owns or has the right to use, free and clear
                    of all liens,
                    claims, encumbrances, pledges, security interests, and other
                    adverse
                    interests of any kind whatsoever, all patents, inventions, know-how,
                    trade
                    secrets, trademarks, service marks, trade names, copyrights,
                    technology,
                    and all licenses and rights with respect to the foregoing, used
                    in the
                    conduct of its business as now conducted or proposed to be conducted
                    without, to the best knowledge of the Company, infringing upon
                    or
                    otherwise acting adversely to the right or claimed right of any
                    person,
                    the Company or other entity, (ii) is not obligated or under any
                    liability
                    whatsoever to make any payments by way of royalties, fees or
                    otherwise to
                    any owner or licensee of, or other claimant to, any patent, trademark,
                    service mark, trade name, copyright, know-how, technology or
                    other
                    intangible asset, with respect to the use thereof or in connection
                    with
                    the conduct of its business or otherwise and (iii) has not received
                    any
                    notice of infringement of or conflict with asserted rights of
                    others with
                    respect to any of the foregoing which, singly or in the aggregate,
                    if the
                    subject of an unfavorable decision, ruling or finding, might
                    have a
                    Material Adverse Effect;

                

        

         

      

      
        
          
          

        

        
          -
            5
            -

          
            

          

        

        
          
          

        

         

        
          
            	
                    l.

                  	
                    that
                      (i) the Company has filed or caused to be filed all income
                      tax returns
                      which is required to be filed and has paid or caused to be
                      paid all taxes
                      and all assessments received by them to the extent that such
                      taxes and
                      assessments have become due, except taxes and assessments the
                      validity or
                      amount of which is being contested in good faith by appropriate
                      proceedings and with respect to which adequate reserves have
                      been set
                      aside, and except for such returns for which the failure to
                      file would not
                      have a Material Adverse Effect upon the Company and (ii) the
                      Company has
                      paid or caused to be paid, or has established reserves that
                      the Company
                      reasonably believes to be adequate in all material respects,
                      for all
                      federal income tax liabilities and state income tax liabilities
                      applicable
                      to the Company for all fiscal years which have not been examined
                      and
                      reported on by the taxing authorities (or closed by applicable
                      statutes);

                  
	 	 
	
                    m.

                  	
                    that
                      there has been no material adverse change in the business and
                      financial
                      conditions of the Company since the date of its last audited
                      financial
                      statements;

                  
	 	 
	
                    n.

                  	
                    that
                      the
                      Company is not in violation of and is not under investigation
                      with respect
                      to and, to the best knowledge of the Company, has not been
                      threatened to
                      be charged with or given notice of any violation of, any law
                      or government
                      order, which would have a Material Adverse Effect;

                  
	 	 
	
                    o.

                  	
                    that
                      neither the Company nor any person acting on its or their behalf
                      has,
                      directly or indirectly, made offers or sales of the Convertible
                      Bonds, or
                      solicited offers to buy the Convertible Bonds, under circumstances
                      that
                      would require the registration of the Convertible Bonds
                      (or the Bond Shares issuable on conversion of the Convertible
                      Bonds) under
                      the United States Securities Act of 1933 (the “U.S.
                      Securities Act”);
                      

                  
	 	 
	
                    p.

                  	
                    that
                      neither the Company nor any person acting on its or their behalf
                      has
                      engaged in any directed selling efforts (as defined in Regulation
                      S under
                      the U.S. Securities Act) with respect to the Convertible Bonds
                      (or the
                      Bond Shares issuable on conversion thereof). The Company reasonably
                      believes that there is no substantial U.S. market interest
                      (as defined in
                      Regulation S) in its Convertible Bonds (or the Bond Shares
                      issuable on
                      conversion thereof);

                  
	 	 
	
                    q.

                  	
                    that
                      the Company is a "foreign company" (as such term is defined
                      in Regulation
                      S) and reasonably believes that there is no substantial U.S.
                      market
                      interest (as defined in Regulation S) in the debt securities,
                      the shares
                      of the Company or any securities of the same class as the shares
                      of the
                      Company and that the Company and any person acting on its or
                      their behalf
                      have complied with and will comply with the offering restrictions
                      requirement of Regulation S;

                  
	 	 
	
                    r.

                  	
                    that
                      the Company (i) is not a person described or designated in
                      the Specially
                      Designated Nationals and Blocked Persons List of the Office
                      of Foreign
                      Assets Control of the U.S. Department of the Treasury (“OFAC”)
                      or in Section 1 of the Anti-Terrorism Order and (ii) does not
                      engage in
                      any dealings or transactions with whom the Company reasonably
                      believes to
                      be any such person; and

                  
	 	 
	
                    s.

                  	
                    that
                      none of the Company, to the knowledge of the Company, any director,
                      officer, agent or employee of the Company are currently subject
                      to any
                      U.S. sanctions administered by OFAC.

                  
	 	 
	 	 

          

        

         

        
          
            
            

          

          
            -
              6
              -

            
              

            

          

          
            
            

          

        

        

          
            	
                     

                  	
                    5.2    Undertaking.
                      

                  
	
                     

                  	
                     

                  
	
                    a.

                  	
                    Listing.
                      The Company shall:

                  
	
                     

                  	
                     

                    (i)    (including,
                      without limitation, furnishing to the KOSDAQ from time to time
                      any and all
                      documents, instruments, information and undertakings that may
                      be

                           
                      necessary) maintain a listing for all the issued shares of
                      the Company on
                      the KOSDAQ; 

                  
	
                     

                  	
                     

                    (ii)    apply
                      for listing of the Bond Shares on the KOSDAQ promptly after
                      the issue of
                      the Bond Shares, and obtain such listing as soon as practicable
                      thereafter
                      and

                            
                      maintain such listing; and

                  
	
                     

                  	
                     

                    (iii)    minimise
                      any trading halt or temporary suspension of trading of the
                      shares of the
                      Company on the KOSDAQ, and, if trading of the shares on the
                      KOSDAQ is
                      so

                            
                       halted or temporarily suspended, limit such halt or temporary
                      suspension of trading to as short as period as
                      possible.

                  
	
                     

                  	
                     

                  
	
                    b.

                  	
                    Registration
                      of Convertible Bonds and Bonds Shares The Company shall register
                      the
                      issuance of the Convertible Bonds in the bond registry maintained
                      and kept
                      by it immediately upon the issuance of the Convertible Bonds.
                      The Company
                      shall register the issuance of the Convertible Bonds with the
                      Registry
                      Office of the competent Korean court having jurisdiction over
                      the Company
                      in accordance with the Commercial Code of Korea. In addition,
                      the Company
                      shall register the issuance of the Bond Shares to be issued
                      upon
                      conversion of the Convertible Bonds with the Registry Office
                      of the
                      competent Korean court having jurisdiction over the Company
                      in a timely
                      manner in accordance with the Commercial Code of Korea.

                  
	
                     

                  	
                     

                  
	
                    c.

                  	
                    Inspection
                      and Information Provision. The Company shall prepare and deliver,
                      to the
                      extent permissible under the applicable law, to the Subscriber:
                      (i) audited annual financial statements and management report within
                      90 days after the end of each fiscal year; (ii) unaudited quarterly
                      financial and management information within 45 days after the
                      end of each
                      quarter; (iii) material information concerning the management
                      and
                      operation of the Company at least on a quarterly basis; (iv)
                      copies of all
                      documents or other information sent to any shareholder or bondholder
                      that
                      are material to the rights and/or obligations of the Subscriber;;
                      and (v)
                      copies of any material reports filed by the Company with any
                      relevant
                      securities exchange, regulatory authority or government agency.
                      The
                      Company shall make available to the Subscriber, the directors
                      or other
                      responsible officers of the Subscriber as to the matters relating
                      to this
                      Agreement and copies of all notices, statements and documents
                      in
                      connection therewith that the Subscriber may reasonably request.
                      More
                      specifically, while the Subscriber is a shareholder or bondholder
                      of the
                      Company, the Company shall, to the extent permissible under
                      the applicable
                      law, (i) give the Subscriber and its representatives reasonable
                      access to
                      the offices and properties during normal business hours of
                      the Company and
                      to books and records of the Company; (ii) furnish to the Subscriber
                      and
                      its advisors such financial and operating data and other information
                      relating to the Company as such persons shall reasonably request;
                      and
                      (iii) instruct employees and advisors of the Company to cooperate
                      with the
                      Subscriber in respect of the foregoing.

                  
	
                     

                  	
                     

                  
	
                    d.

                  	
                    Notice
                      Obligation: In case there is any material change at the Company,
                      the
                      Company shall promptly inform the Subscriber in
                      writing.

                  

          

        

      

       

    

    
      
        
        

      

      
        -
          7
          -

        
          

        

      

      
        
        

      

    

     

    
      
        
          	 	
                  5.3    Negative
                    Covenant.  Unless specifically
                    permitted in writing by the Subscriber, so long as any of the
                    Bonds remain
                    outstanding, the Company undertakes with the Subscriber
                    that:

                
	 	 
	
                  a.

                	
                  it
                    will not take any steps for capital reduction;

                
	 	 
	
                  b.

                	
                  it
                    will not
                    go
                    through the delisting process nor take any steps that may cause
                    the
                    delisting of shares of the Company; 

                
	 	 
	
                  c.

                	
                  it
                    will not enter into dissolution, liquidation, bankruptcy or other
                    similar
                    proceeding;

                
	 	 
	
                  d.

                	
                  It
                    will not spin-off or transfer all or substantial parts of its
                    business to
                    other entities or persons; and

                
	 	 
	
                  e.

                	
                  it
                    will not cause any change in control where Bokwang Group of Korea
                    will
                    decrease its interest or shares in and eventually lose the management
                    control over the Company.

                
	 	 
	 	 
	 	
                  5.4    Merger
                    and Consolidation.    The Company agrees to follow all of
                    the procedures and measures provided for the protection of the
                    Subscriber
                    under the Commercial Code of Korea in the event the Company undertakes
                    merger or consolidation.

                

        

        
          	 	
                  6.     
                    Miscellaneous.

                   

                
	 	
                  6.1    Entire
                    Agreement. This Agreement, the exhibits and schedules hereto,
                    and the
                    other documents delivered pursuant hereto constitute the full
                    and entire
                    understanding and agreement between the parties with regard to
                    the
                    subjects hereof and no party shall be liable or bound to any
                    other in any
                    manner by any representations, warranties, covenants and agreements
                    except
                    as specifically set forth herein and therein. 

                   

                
	 	
                  6.2    Notices.
                    All notices required or permitted hereunder shall be in writing
                    and shall
                    be deemed effectively given: (a) upon personal delivery to the party
                    to be notified, (b) when sent by confirmed telex or facsimile if sent
                    during normal business hours of the recipient, if not, then on
                    the next
                    business day, (c) five days after having been sent by registered or
                    certified mail, return receipt requested, postage prepaid, or
                    (d) one
                    day after deposit with a nationally recognized overnight courier,
                    specifying next day delivery, with written verification of receipt.
                    All
                    communications shall be as follows at such other address as the
                    Company or
                    the Subscriber may designate by ten days advance written notice
                    to the
                    other parties hereto:

                   

                

        

      

      to
        the
        Subscriber:

    

    

    Cintel
      Corp.

    9900
      Corporate Campus Drive Suite 3000

    Louisville,
      KY 40223

    U.S.A.

    

    Attention: Sang
      Don
      Kim

    Telephone
      No.: 822-512-2111

    Facsimile
      No.: 822-512-5111

    

    with
      a
      copy to 

    

    Pheonix
      Asset Management Inc.

    26th
      Fl.,
      Hanwha Securities Bldg.

    23-5,
      Yoido-dong, Youngdeungpo-gu

    Seoul
      150-717, Korea

    

    
      
        
        

      

      
        -
          8
          -

        
          

        

      

      
        
        

      

    

    Attention: Stanley
      S.Y. Oh

    Telephone
      No.: 822-799-2202

    Facsimile
      No.: 822-799-2286

    

    to
      the
      Company:

     

     STS
      Semiconductor & Telecommunications Co., Ltd.

    555-9,
      Baekseok-Dong, Cheonan, Chungcheongnam-Do, Korea 

    

    Attention: Jong-Muk
      Wi 

    Telephone
      No.: 8241-529-0810

    Facsimile
      No.: 8241-621-5384

    

    
      	 	 
	 	
              6.3    Titles
                and Subtitles. The titles of the sections and subsections of this
                Agreement are for convenience of reference only and are not to be
                considered in construing this Agreement.

               

            
	 	
              6.4    Facsimile
                Signatures; Counterparts. This Agreement may be executed by facsimile
                signatures and in any number of counterparts, each of which shall
                be an
                original, but all of which together shall constitute one
                instrument.

               

            
	 	
              6.5    Broker's
                Fees.
                Each party hereto represents and warrants that no agent, broker,
                investment banker, person or firm acting on behalf of or under the
                authority of such party hereto is or will be entitled to any broker's
                or
                finder's fee or any other commission directly or indirectly in connection
                with the transactions contemplated herein, except as specified herein
                with
                respect to the Company. 

               

            
	 	
              6.6    Waiver
                of Immunity. Each of the parties hereto irrevocably waives any immunity
                to
                which it or its property may at any time be or become entitled, whether
                characterized as sovereign immunity or otherwise, from any set-off
                or
                legal action in Korea or elsewhere, including immunity from service
                of
                process, immunity from jurisdiction of any court or tribunal, and
                immunity
                of any of its property from attachment prior to judgment or from
                execution
                of a judgment.

            
	 	 
	 	
              6.7    Governing
                Law;
                Jurisdiction. This Agreement shall be governed by and construed in
                accordance with the laws of Korea. The Seoul Central District Court
                of
                Korea shall have jurisdiction to settle any disputes which may arise
                out
                of or in connection with this Agreement and accordingly any legal
                action
                or proceedings arising out of or in connection with this Agreement
                shall
                be brought in such court.

            
	 	 
	 	
              6.8    Successors
                in
                Interest. This Agreement may not be assigned or transferred by the
                Company
                without the prior written consent of the Subscriber. Except as otherwise
                provided herein, all provisions of this Agreement shall be binding
                upon,
                inure to the benefit of, and be enforceable by and against the respective
                heirs, executors, administrators, personal representatives and successors
                and permitted assigns of any of the parties to this Agreement.
                

            
	 	 
	 	
              6.9    Severability.
                If any term or other provision of this Agreement is invalid, illegal
                or
                incapable of being enforced by any rule of law or public policy,
                all other
                conditions and provisions of this Agreement shall nevertheless remain
                in
                full force and effect. Upon such determination that any term or other
                provision is invalid, illegal or incapable of being enforced, the
                parties
                hereto shall negotiate in good faith to modify this Agreement so
                as to
                effectuate the original intent of the parties as closely as possible.
                

            
	 	 
	 	
              6.10    Construction.
                Each party acknowledges that its legal counsel participated in the
                preparation of this Agreement and, therefore, stipulates that the
                rule of
                construction that ambiguities are to be resolved against the drafting
                party shall not be applied in the interpretation of this Agreement
                to
                favor any party against the other.

               

            

    

     

    
      
        
        

      

      
        -
          9
          -

        
          

        

      

      
        
        

      

    

     

    

      
        	 	
                6.11    Costs,
                  Expenses and Taxes. Each of the Company and the Subscriber shall
                  be
                  responsible for any and all costs, expenses and taxes (including,
                  without
                  limitation, attorney fees) respectively incurred by it in connection
                  with
                  the execution and delivery of this Agreement and the performance
                  of its
                  obligations under this Agreement.

              
	 	 
	 	
                6.12    Confidentiality.
                  Each
                  of the Company and the Subscriber agrees
                  not to disclose to any person any information relating to the
                  business, finances or other matters of the other party that it
                  may have
                  obtained as a result of the execution of this Agreement or of which
                  it may
                  otherwise become possessed as a result of being party to this Agreement
                  or
                  the performance of its obligations hereunder. Each
                  of the Company and the Subscriber
                  shall use all reasonable endeavors to prevent any such disclosure;
                  provided, however, that the provisions of this Section 7.12 shall
                  not
                  apply:

              
	 	 
	     	
                    (a)    to
                  the
                  disclosure
                  of
                  any information: (i) to any person who is required to know the
                  same to
                  perform its obligations under this Agreement; (ii) already known
                  to the
                  recipient otherwise than as a result of entering into this Agreement;
                  (iii) subsequently received by the recipient which it would otherwise
                  be
                  free to disclose; (iv) which is or becomes public knowledge otherwise
                  than
                  as a result of the breach of this Section 7.12 of the recipient;
                  (v) to
                  professional advisers or auditors who receive the same under a
                  duty of
                  confidentiality on a need to know basis; and (vi) with the consent
                  of all
                  the parties to whom such confidential information relates;
                  and

              
	 	 
	 	
                    (b)    to
                  any
                  extent that the recipient is required to disclose any information
                  pursuant
                  to any law or order
                  of
                  any court or pursuant to any direction, request or requirement
                  (whether or
                  not having the force of law) of any governmental or other regulatory
                  or
                  taxation authority or stock exchange on which the Convertible Bonds
                  or the
                  Bonds Shares are listed from time to time (including, without limitation,
                  any official bank examiners or
                  regulators).

              

      

    

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

    

    
      
        
        

      

      
        -
          10
          -

        
          

        

      

      
        
        

      

    

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

     

    
      	
              For
                and on behalf of

              Cintel
                Corp.

               

               

              /s/
                Sang Don Kim

            	 	
              For
                and on behalf of

              STS
                Semiconductor & Telecommunications Co., Ltd.

               

               

              /s/
                Ha Hae Don

            
	 Name:
              Sang Don Kim
              Title:
                Chief Executive Officer 

            	 	 Name:
              Ha Hae Don  
              Title:
                Chief Executive Officer

            
	 

               

            	 	 
	 	 	 

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        -
          11
          -

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    THIS
      BOND
      HAS NOT BEEN REGISTERED AND WILL NOT BE REGISTERED UNDER THE SECURITIES AND
      EXCHANGE ACT OF KOREA (THE “SECURITIES ACT”). THIS BOND MAY NOT BE CONVERTED
      INTO THE SHARES OF COMMON STOCK FOR A PERIOD OF ONE YEAR AFTER THE ISSUE OF
      THE
      BOND, EXCEPT AS OTHERWISE PERMITTED BY APPLICABLE KOREAN LAWS AND REGULATIONS.
      

    

    Convertible
      Bond - STS
      Semiconductor & Telecommunications Co., Ltd.

    /
      Bond
      Certificate No.: [ ]

    

    Korean
      Won 10,000,000,000 (Ten Billion Korean Won)    April 20, 2007 (the
“Issue
      Date”)
      

     

    (representing
      one (1) Bond with the face value of Korean Won 10,000,000,000 (Ten Billion
      Korean Won)

    

    This
      bond
      certificate may not be subdivided for a period of one year from the Issue
      Date;;
      provided
      further that additional certificate(s) of different denomination(s) may be
      created by STS Semiconductor & Telecommunications Co., Ltd. (the
“Company”)
      in
      case of partial redemption or conversion of the Bonds by the Subscriber and/or
      the Holder. 

     

    This
      certificate is issued in respect of one (1) bond which is duly authorized issue
      of Korean Won 10,000,000,000 Convertible Bond due on April 20, 2012 (the
“Bond”)
      of the
      Company. References herein to the Conditions shall be to the terms and
      conditions of the Bond attached hereto (the “Conditions”).

    

    For
      value
      received, the Company, subject to and in accordance with the Conditions,
      promises to pay to Cintel Corp. (the “Subscriber”)
      or its
      registered assigns (collectively the “Holder”)
      upon
      presentation and surrender of this Certificate the principal sum of Korean
      Won
      10,000,000,000 (Ten Billion Korean Won) (or such other amount as is shown on
      the
      register of the bondholder with respect to the Bond as being represented by
      this
      Certificate) on April 20, 2012 (the “Maturity
      Date”)
      or on
      such earlier date as such sum becomes due and repayable under the Conditions,
      together with any other sums payable under the Conditions, all subject to and
      in
      accordance with the Conditions. 

    

    The
      coupon rate of the Bond shall be at the compounded interest rate of 0.0% per
      annum until the date of conversion thereof; however, if conversion right is
      not
      exercised during the conversion period (i.e., the period from one year after
      the
      Issue Date until one month prior to the Maturity Date), then regardless of
      the
      coupon rate, the Company shall guarantee a compounded interest rate of 8.0%
      per
      annum in total on the Bond. At any time between one year after the Issue Date
      and one month prior to the Maturity Date, the Bond may, at the option of the
      Holder, be converted into common shares in the Company by the number of shares
      which will be calculated by dividing the principal amount of the Bond by Korean
      Won 8,010, and a remaining fractional amount, if any, which is less than the
      Conversion Price (as defined in the Terms and Conditions of the Bonds), shall
      be
      returned to the Subscriber without any interest on the Maturity Date.

    

    This
      Certificate is governed by, and shall be construed in accordance with, the
      laws
      of the Republic of Korea. The Company has submitted to the exclusive
      jurisdiction of the Seoul Central District Court of Korea for all purposes
      in
      connection with this Certificate.

    

    

    IN
      WITNESS WHEREOF the Company has caused this Certificate to be duly executed
      on
      its behalf and under its corporate seal.

    

    STS
      SEMICONDUCTOR & TELECOMMUNICATIONS CO., LTD.

    

    By:
      _________________________

    Name:

    Title:

    
      
        
        

      

      
        -
          12
          -

        
          

        

      

      
        
        

      

    

    TERMS
      AND CONDITIONS OF THE BONDS

    

    

    The
      statements in these terms and conditions (the “Conditions”)
      constitute Korean Won 10,000,000,000 Convertible Bonds of STS Semiconductor
      & Telecommunications Co., Ltd. (the “Company”)
      due on
      April 20, 2012 (the “Bonds”)
      and
      the holder of the Bonds (the “Holder”)
      is
      entitled to the benefit of and is bound by all the provisions of the Conditions.
      The term “Agreement” as used herein shall refer to the Convertible Bonds
      Subscription Agreement executed by and between the Company and the Subscriber
      dated as of April 19, 2007.

    

    

    
      	
              1.
                

               

            	
              Status,
                Type, Denomination, Repayment of Principal and Interest

               

            
	
              The
                Bonds constitute direct, unsecured and unsubordinated obligations
                of the
                Company and rank at least with all other present and future unsecured
                and
                unsubordinated debt and obligations of the Company. The Bonds are
                in
                registered form (Ki-Myoung-Shik).
                The Bonds are due and payable as follows:

            
	 	 
	
              (A)

               

            	
              The
                principal amount of the Bonds, together with all accrued and unpaid
                interest then outstanding, shall be due and payable on April 20,
                2012 (the
                “Maturity
                Date”).
                

               

            
	
              (B)
                

            	
              Certificate(s)
                of different denomination(s) may be created by the Company only after
                one
                (1) year from the Issue Date in case of partial redemption or conversion
                of the Bonds by the Subscriber and/or the Holder.
                

            
	 	 
	
              (C)

               

            	
              The
                coupon rate of the Bonds shall be at the compounded interest rate
                of 0.0%
                per annum until the date of conversion thereof; however, if conversion
                right is not exercised during the conversion period (i.e., the period
                from
                one year after the Issue Date until one month prior to the Maturity
                Date),
                then regardless of the coupon rate, the Company shall guarantee a
                compounded interest rate of 8.0% per annum in total on the Bonds.
                

               

            
	
              2.

               

            	
              Conversion

               

            
	
              (A)
                

               

            	
              Conversion
                Period and Conversion Price

               

            
	At
              any time between one year after the issuance date of the Bonds and
              one
              month prior to the Maturity Date, the Holder has a right to convert
              any
              Bond, whether wholly or in part, into shares of common stock of the
              Company (the “Common
              Shares”)
              at the option of the Holder (the “Conversion
              Right)”.
              The number of the Common Shares to be issued will be determined by
              dividing the principal amount of the Bonds deposited for conversion
              by the
              Conversion Price, as adjusted herein, at the Conversion Date (both
              as
              hereinafter defined), and a remaining fractional amount, if any, which
              is
              less than the Conversion Price shall be returned to the Holder without
              any
              interest on the Maturity Date. 
	The
              price at which the Common Shares of the Company will be issued upon
              conversion will be Korean Won 8,010 per Common Share (the “Initial
              Conversion Price”)
              but will be subject to adjustment in the manner provided in Conditions
              2(C) and 2(D) (the “Conversion
              Price”).
	
              (B)
                

               

            	
              Procedure
                for Conversion

               

            
	To
              exercise the Conversion Right attaching to any Bond, the Holder must
              complete, execute and deposit at his own expense during normal business
              hours at the specified office of the Company a notice of conversion
              (a
              “Conversion
              Notice”)
              in duplicate in the form obtainable from the Company together with
              the
              relevant Bond.

    

      

    
      
        
        

      

      
        -
          13
          -

        
          

        

      

      
        
        

      

    

     

    
      
        	
                As
                  a condition precedent to conversion, on or prior to delivering
                  a
                  Conversion Notice, a Holder, who is a foreigner or foreign corporation,
                  exercising its Conversion Right must obtain an investment registration
                  card issued by the Korean Financial Supervisory Service by registering
                  its
                  identity with the Korean Financial Supervisory Service in accordance
                  with
                  applicable Korean laws and regulations, including the regulations
                  of the
                  Korean Financial Supervisory Commission unless it has previously
                  obtained
                  an investment registration card. However, the registration requirement
                  does not apply to foreign investors who acquire Common Shares with
                  the
                  intention of selling such Common Shares within three months from
                  the date
                  of acquisition of the Common Shares. 

              
	
                 

              
	
                The
                  date on which any Bond and the Conversion Notice (in duplicate)
                  relating
                  thereto are deposited with the Company or, if later, the date on
                  which all
                  conditions precedent to the conversion thereof are fulfilled is
                  hereinafter referred to as the “Deposit
                  Date”
                  applicable to such Bond and must fall at a time when the Conversion
                  Right
                  attaching to such Bond is expressed in these Terms and Conditions
                  to be
                  exercisable. The request for conversion shall be deemed to have
                  been made
                  at 23:59 hours (Seoul time) on the Deposit Date applicable to the
                  relevant
                  Bond (herein referred to as the “Conversion
                  Date”
                  applicable to such Bond). A Conversion Notice once deposited may
                  not be
                  withdrawn without the consent in writing of the
                  Company.

              
	
                 

                With
                  effect from the Conversion Date, the Company will deem the converting
                  Holder to have become the holder of record of the number of Common
                  Shares
                  to be issued to such Holder upon such conversion (disregarding
                  any
                  retroactive adjustment of the Conversion Price referred to below
                  prior to
                  the time such retroactive adjustment shall have become effective).
                  Thereafter the Company will, subject to any applicable limitations
                  then
                  imposed by Korean laws and regulations, according to the request
                  made in
                  the relevant Conversion Notices, or cause its share transfer agent
                  as soon
                  as practicable, and in any event within 10 Business Days (as defined
                  below) after the Conversion Date, (i) to deliver or cause to be
                  delivered
                  to the order of the person named for that purpose in the relevant
                  Conversion Notice for the time being of the share transfer agent
                  a
                  certificate or certificates for the relevant Common Shares registered
                  in
                  the name of the converting Holder or, in cases permitted under
                  Korean law,
                  any other person named for that purpose in the relevant Conversion
                  Notices, or (ii) to credit the relevant Shares to the electronic
                  book-entry account of the converting Holder, together with any
                  other
                  securities, property or cash (including, without limitation, cash
                  payable
                  pursuant to Condition 2) required to be delivered upon conversion
                  and such
                  assignments and other documents (if any) as may be required by
                  law to
                  effect the delivery thereof. 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 paragraphs (C) and (D) of this Condition
                  2 and
                  the relevant Conversion Date falls on a date when the relevant
                  adjustment
                  has not yet been reflected in the then current Conversion Price,
                  the
                  Company will procure that the provisions of this paragraph shall
                  be
                  applied, mutatis
                  mutandis,
                  to
                  such number of Common Shares as is equal to the excess of the number
                  of
                  Common 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 Conversion Date over the number of Common Shares previously
                  issued pursuant to such conversion, and in such event and in respect
                  of
                  such number of Common Shares references in this paragraph to the
                  Conversion Date shall be deemed to refer to the date upon which
                  such
                  retroactive adjustment becomes effective (disregarding the fact
                  that it
                  becomes effective retroactively).

              
	
                 

              
	
                Any
                  dividend on the Common Shares issued upon conversion of a Bond
                  or Bonds
                  with respect to the Fiscal Period (as defined below) during which
                  the
                  relevant Conversion Date falls will be paid with respect to the
                  full
                  Fiscal Period on the basis that the conversion took effect immediately
                  before the beginning of such Fiscal Period. The Common Shares issued
                  upon
                  conversion of the Bonds will in all other respect rank pari
                  passu
                  with the Common Shares in issue on the relevant Conversion Date
                  (except
                  for any right the record date for which precedes such Conversion
                  Date and
                  any other right excluded by mandatory provisions of applicable
                  law).
                  “Fiscal
                  Period”
                  means an annual period commencing on January 1 and ending on December
                  31
                  in any year unless changed in accordance with the provisions of
                  the
                  Article of Incorporation of the
                  Company.

              

      

    

    
       

    

    
      
        
        

      

      
        -
          14
          -

        
          

        

      

      
        
        

      

    

    

    “Business
      Day”
means
      any day on which banks are open for business in Seoul.

     

    

      
        	(C)	
                Adjustment
                  of Conversion Price

              

      

    

    

    The
      Conversion Price shall be subject to adjustment as follows:

    
      	
              (i)(x)

            	
              If
                the Company shall (a) make a free distribution of Common Shares,
                (b)
                sub-divide its outstanding Common Shares, (c) consolidate its outstanding
                Common Shares into a smaller number of Common Shares, or (d) re-classify
                any of its Common Shares into other securities of the Company, then
                the
                Conversion Price shall be appropriately adjusted so that the Holder,
                the
                Conversion Date in respect of which occurs after the coming into
                effect of
                the adjustment described in this paragraph (i)(x), shall be entitled
                to
                receive the number of Common Shares or other securities of the Company
                which he would have held or have been entitled to receive after the
                happening of any of the events described above had such Bond been
                converted immediately prior to the happening of such event (or, if
                the
                Company has fixed a prior record date for the determination of
                shareholders entitled to receive any such free distribution of Common
                Shares or other securities issued upon any such sub-division,
                consolidation or re-classification, immediately prior to such record
                date), but without prejudice to the effect of any other adjustment
                to the
                Conversion Price made with effect from the date of the happening
                of such
                event (or such record date) or at any time thereafter. An adjustment
                made
                pursuant to this paragraph (i)(x) shall become effective immediately
                on
                the relevant event referred to above becoming effective or, if a
                record
                date is fixed therefor, immediately after such record date; provided,
                that in the case of a free distribution of Common Shares which must,
                under
                the applicable law, be submitted for approval to a general meeting
                of
                shareholders or be approved by a meeting of the Board of Directors
                of the
                Company before being legally paid or made, and which is so approved
                after
                the record date fixed for the determination of shareholders entitled
                to
                receive such distribution, such adjustment shall, immediately upon
                such
                approval being given by such meeting, become effective retroactively
                to
                immediately after such record date.

            

    

    

    If
      the
      Company shall authorize a free distribution of Common Shares which distribution
      is to be paid or made to shareholders as of a record date which is
      also:

    

      
        	 	
                (a)

              	
                the
                  record date for the issue of any rights or warrants which requires
                  an
                  adjustment of the Conversion Price pursuant to paragraph (ii) or
                  (iii)
                  below;

              
	 	 	 
	 	
                (b)

              	
                the
                  day immediately before the date of issue of any securities convertible
                  into or exchangeable for Common Shares which requires an adjustment
                  of the
                  Conversion Price pursuant to paragraph (v) below;

              
	 	 	 
	 	
                (c)

              	
                the
                  day immediately before the date of issue of any Common Shares which
                  requires an adjustment of the Conversion Price pursuant to paragraph
                  (vi)
                  below; or 

              
	 	 	 
	 	
                (d)

              	
                the
                  day immediately before the date of issue of any rights or warrants
                  which
                  requires an adjustment of the Conversion Price pursuant to paragraph
                  (vii)
                  below,

              
	 	 	 
	 	 	
                then
                  (except where such free distribution gives rise to a retroactive
                  adjustment of the Conversion Price under this paragraph (i)(x))
                  no
                  adjustment of the Conversion Price in respect of such free distribution
                  shall be made under this paragraph (i)(x), but in lieu thereof
                  an
                  adjustment shall be made under paragraph (ii), (iii), (v), (vi)
                  or (vii)
                  below (as the case may be) by including in the denominator of the
                  fraction
                  described therein the aggregate number of Common Shares to be issued
                  pursuant to such free
                  distribution.

              

      

    

    

      
        
        

      

      
        -
          15
          -

        
          

        

      

      
        
        

      

       

    

    
      	
              (i)(y)

            	
              If
                the Company shall declare a dividend in Common Shares then the Conversion
                Price in effect on the date when such dividend is declared (or, if
                the
                Company has fixed a prior record date for the determination of
                shareholders entitled to receive such dividend, on such record date)
                shall
                be adjusted in accordance with the following formula:

            

    

     

    NCP
      = OCP
 ́
      [(N + y)
 ̧
      (N +
      n)]

    

    where:

    

      
        	 	
                NCP

              	
                =
                  

              	
                the
                  Conversion Price after such adjustment

              
	 	 	 	 
	 	
                OCP

              	
                =
                  

              	
                the
                  Conversion Price before such adjustment

              
	 	 	 	 
	 	
                N

              	
                =

              	
                the
                  number of Common Shares outstanding (having regard to paragraph
                  (x) below)
                  at the time of declaration of such dividend (or at the close of
                  business
                  in Korea on such record date as the case may be) 

              
	 	 	 	 
	 	
                n

              	
                =

              	
                the
                  number of Common Shares to be distributed to the shareholders as
                  a
                  dividend

              
	 	 	 	 
	 	
                y

              	
                =

              	
                the
                  number of Common Shares which the aggregate par value of such Common
                  Shares to be distributed to the shareholders as a dividend would
                  purchase
                  at the current market price per Common Share on the date of the
                  declaration of such dividend (or, if a prior record date has been
                  fixed as
                  aforesaid, such record date). An adjustment made pursuant to this
                  paragraph (i)(y) shall become effective as provided with respect
                  to
                  paragraph (i)(x); provided
                  that in the case of a dividend in Common Shares which must, under
                  the
                  applicable law, be submitted for approval to a general meeting
                  of
                  shareholders of the Company before being legally paid, and which
                  is so
                  approved after the record date fixed for the determination of shareholders
                  entitled to receive such dividend, such adjustment shall, immediately
                  upon
                  such approval being given by such meeting, become effective retroactively
                  to immediately after such record
                  date.

              

      

    

    
    

    If
      the
      Company shall declare a dividend in Common Shares which dividend is to be paid
      or made to shareholders as of a record date which is also:

    

      
        	 	
                (a)

              	
                the
                  record date for the issue of any rights or warrants which requires
                  an
                  adjustment of the Conversion Price pursuant to paragraph (ii) or
                  (iii)
                  below;

              
	 	 	 
	 	
                (b)

              	
                the
                  day immediately before the date of issue of any securities convertible
                  into or exchangeable for Common Shares which requires an adjustment
                  of the
                  Conversion Price pursuant to paragraph (v) below;

              
	 	 	 
	 	
                (c)

              	
                the
                  day immediately before the date of issue of any Common Shares which
                  requires an adjustment of the Conversion Price pursuant to paragraph
                  (vi)
                  below; or

              
	 	 	 
	 	
                (d)

              	
                the
                  day immediately before the date of issue of any rights or warrants
                  which
                  requires an adjustment of the Conversion Price pursuant to paragraph
                  (vii)
                  below,

              
	 	 	 
	 	 	
                then
                  (except where such dividend gives rise to a retroactive adjustment
                  of the
                  Conversion Price under the first paragraph of paragraph (i)(x)
                  above) no
                  adjustment of the Conversion Price in respect of such dividend
                  shall be
                  made under this paragraph (i)(y), but in lieu thereof an adjustment
                  shall
                  be made under paragraph (ii), (iii), (v), (vi) or (vii) below (as
                  the case
                  may require) by including in the denominator of the fraction described
                  therein the aggregate number of Common Shares to be issued pursuant
                  to
                  such dividend and including in the numerator of the fraction described
                  therein the number of Common Shares which the aggregate par value
                  of
                  Common Shares to be so distributed would purchase at the current
                  market
                  price per Common Share.

              

      

    

    
 

    
      
        
        

      

      
        -
          16
          -

        
          

        

      

      
        
        

      

       

    

    
      	(ii)  	
              if
                the Company shall grant, issue or offer to the holders of Common
                Shares
                rights or warrants entitling them to subscribe for or purchase Common
                Shares:

            

    

    

      
        	 	
                (a)

              	
                at
                  a consideration per Common Share receivable by the Company (determined
                  as
                  provided in paragraph (ix) below) which is fixed on or prior to
                  the record
                  date mentioned below and is less than the current market price
                  per Common
                  Share at such record date; or 

              
	 	 	 
	 	
                (b)

              	
                at
                  a consideration per Common Share receivable by the Company (determined
                  as
                  aforesaid) which is fixed after the record date mentioned below
                  and is
                  less than the current market price per Common Share on the date
                  the
                  Company fixes the said consideration, then the Conversion Price
                  in effect
                  (in a case within (a) above) on the record date for the determination
                  of
                  shareholders entitled to receive such rights or warrants or (in
                  a case
                  within (b) above) on the date the Company fixes the said consideration
                  shall be adjusted in accordance with the following formula:

              

      

    

     

    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    

    where:

    

      
        	 	
                NCP

              	
                =

              	
                the
                  Conversion Price after such adjustment

              
	 	 	 	 
	 	
                OCP

              	
                =

              	
                the
                  Conversion Price before such adjustment

              
	 	 	 	 
	 	
                N

              	
                =

              	
                the
                  number of Common Shares outstanding (having regard to paragraph
                  (x) below)
                  at the close of business in Korea (in a case within (a) above)
                  on such
                  record date or (in a case within (b) above) on the date the Company
                  fixes
                  the said consideration

              
	 	 	 	 
	 	
                n

              	
                =

              	
                the
                  number of Common Shares initially to be issued upon exercise of
                  such
                  rights or warrants at the said consideration

              
	 	 	 	 
	 	
                v

              	
                =

              	
                the
                  number of Common Shares which the aggregate consideration receivable
                  by
                  the Company (determined as provided in paragraph (ix) below) would
                  purchase at such current market price per Common Share specified
                  in (a)
                  or, as the case may be, (b)
                  above.

              

      

    

     

    Such
      adjustment shall become effective (in a case within (a) above) immediately
      after
      the record date for the determination of shareholders entitled to receive such
      rights or warrants or (in a case within (b) above) immediately after the Company
      fixes the said consideration but retroactively to immediately after the record
      date for the said determination.

    

    If,
      in
      connection with a grant, issue or offer to the holders of Common Shares of
      rights or warrants entitling them to subscribe for or purchase Common Shares,
      any Common Shares which are not subscribed for or purchased by the persons
      entitled thereto are offered to or subscribed by others (whether as places
      or
      members of the public or pursuant to underwriting arrangements or otherwise),
      no
      further adjustment shall be required or made to the Conversion Price by reason
      of such offer or subscription.

     

    

      
        	 	
                (iii)

              	
                If
                  the Company shall grant, issue or offer to the holders of Common
                  Shares
                  rights or warrants entitling them to subscribe for or purchase
                  any
                  securities convertible into or exchangeable for Common Shares (other
                  than
                  those rights and warrants granted, issued or offered to and accepted
                  by
                  existing employees of the Company in accordance with mandatory
                  provisions
                  of the applicable law):

              

      

       

    

    
      
        
        

      

      
        -
          17
          -

        
          

        

      

      
        
        

      

      

        
          	 	
                  (a)

                	
                  at
                    a consideration per Common Share receivable by the Company (determined
                    as
                    provided in paragraph (ix) below) which is fixed on or prior
                    to the record
                    date mentioned below and is less than the current market price
                    per Common
                    Share at such record date; or

                
	 	 	 
	 	
                  (b)

                	
                  at
                    a consideration per Common Share receivable by the Company (determined
                    as
                    aforesaid) which is fixed after the record date mentioned below
                    and is
                    less than the current market price per Common Share on the date
                    the
                    Company fixes the said consideration,

                
	 	 	 
	 	 	
                  then
                    the Conversion Price in effect (in a case within (a) above) on
                    the record
                    date for the determination of shareholders entitled to receive
                    such rights
                    or warrants or (in a case within (b) above) on the date the Company
                    fixes
                    the said consideration shall be adjusted in accordance with the
                    following
                    formula:

                
	 	 	 

        

      

    

    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    

      
      where:

     

    
      
        	 	
                NCP
                  and OCP have the meanings ascribed thereto in paragraph (ii)
                  above.

              
	 	 	 	 
	 	
                N

              	
                =

              	
                the
                  number of Common Shares outstanding (having regard to paragraph
                  (x) below)
                  at the close of business in Korea (in a case within (a) above)
                  on such
                  record date or (in a case within (b) above) on the date the Company
                  fixes
                  the said consideration 

              
	 	 	 	 
	 	
                n

              	
                =

              	
                the
                  number of Common Shares initially to be issued upon exercise of
                  such
                  rights or warrants and conversion or exchange of such convertible
                  or
                  exchangeable securities at the said consideration

              
	 	 	 	 
	 	
                v

              	
                =

              	
                the
                  number of Common Shares which the aggregate consideration receivable
                  by
                  the Company (determined as provided in paragraph (ix) below) would
                  purchase at such current market price per Common Share specified
                  in (a)
                  or, as the case may be, (b)
                  above.

              

      

    Such
      adjustment shall become effective (in a case within (a) above) immediately
      after
      the record date for the determination of shareholders entitled to receive such
      rights or warrants or (in a case within (b) above) immediately after the Company
      fixes the said consideration but retroactively to immediately after the record
      date for the said determination. 

    

    If,
      in
      connection with a grant, issue or offer to the holders of Common Shares of
      rights or warrants entitling them to subscribe for or purchase securities
      convertible into or exchangeable for Common Shares, any such securities
      convertible into or exchangeable for Common Shares which are not subscribed
      for
      or purchased by the persons entitled thereto are offered to or subscribed by
      others (whether as places or members of the public or pursuant to underwriting
      arrangements or otherwise) no further adjustments shall be required or made
      to
      the Conversion Price by reason of such offer or subscription or the conversion
      or exchange of such securities.

    

    
      
        
        

      

      
        -
          18
          -

        
          

        

      

      
        
        

      

       

    

    
      	
              (iv)  
                

            	
              If
                the Company shall distribute to the holders of Common Shares evidences
                of
                its indebtedness, shares of capital stock of the Company (other than
                Common Shares), assets (excluding annual cash dividends) or rights
                or
                warrants to subscribe for or purchase shares or securities at less
                than
                fair market value (excluding those rights and warrants referred to
                in
                paragraphs (ii) and (iii) above and any rights and warrants granted,
                issued or offered to and accepted by existing employees of the Company
                in
                accordance with mandatory provisions of the applicable law), then
                the
                Conversion Price in effect on the record date for the determination
                of
                shareholders entitled to receive such distribution shall be adjusted
                in
                accordance with the following
                formula:

            

    

    

    NCP
      = OCP
 ́
      [(CMP -
      fmv)  ̧
      CMP]

    

       where:

     

    
      
        	 	
                NCP
                  and OCP have the meanings ascribed thereto in paragraph (ii)
                  above.

              
	 	 	 	 
	 	
                CMP

              	
                =

              	
                the
                  current market price per Common Share on the record date for the
                  determination of shareholders entitled to receive such
                  distribution

              
	 	 	 	 
	 	
                fmv

              	
                =

              	
                the
                  fair market value (as determined by the Company or, if pursuant
                  to the
                  applicable law such determination is to be made by application
                  to a court
                  of competent jurisdiction, as determined by such court or by an
                  appraiser
                  appointed by such court) of the portion of the evidences of indebtedness,
                  shares, assets, rights or warrants so distributed applicable to
                  one Common
                  Shares less any consideration paid for the same by the relevant
                  shareholder.

              

      

    

    

    In
      making
      a determination of the fair market value of any such rights or warrants, the
      Company shall consult a leading independent securities company or bank in Seoul
      selected by the Company and approved in writing by the Holder and shall take
      fully into account the advice received from such company or bank.

    

    Such
      adjustment shall become effective immediately after the record date for the
      determination of shareholders entitled to receive such distribution;
provided,
      that (a)
      in the case of such a distribution which must, under the applicable law, be
      submitted for approval to a general meeting of shareholders or be approved
      by a
      meeting of the Board of Directors of the Company before such distribution may
      legally be made and is so approved after the record date fixed for the
      determination of shareholders entitled to receive such distribution, such
      adjustment shall, immediately upon such approval being given by such meeting,
      become effective retroactively to immediately after such record date and (b)
      if
      the fair market value of the evidences of indebtedness, shares, assets, rights
      or warrants so distributed cannot be determined until after the record date
      fixed for the determination of shareholders entitled to receive such
      distribution, such adjustment shall, immediately upon such fair market value
      being determined, become effective retroactively immediately after such record
      date.

    

    
      	
              (v)  
                

            	
              If
                the Company shall grant, issue or offer any securities convertible
                into or
                exchangeable for Common Shares (other than in any of the circumstances
                described in paragraph (iii) above and paragraph (vii) below) and
                the
                consideration per Common Share receivable by the Company (determined
                as
                provided in paragraph (ix) below) shall be less than the current
                market
                price per Common Share on the date in Korea on which the Company
                fixes the
                said consideration (or, if the issue of such securities is subject
                to
                approval by a general meeting of shareholders, on the date on which
                the
                Board of Directors of the Company fixes the consideration to be
                recommended at such meeting), then the Conversion Price in effect
                immediately prior to the date of issue of such convertible or exchangeable
                securities shall be adjusted in accordance with the following
                formula:

            

    

    

    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    

     
      where :

     

    
      
        	 	
                NCP
                  and OCP have the meanings ascribed thereto in paragraph (ii)
                  above.

              
	 	 	 	 
	 	
                N

              	
                =

              	
                the
                  number of Common Shares outstanding (having regard to paragraph
                  (x) below)
                  at the close of business in Korea on the day immediately prior
                  to the date
                  of such issue

              
	 	 	 	 
	 	
                n

              	
                =

              	
                the
                  number of Common Shares to be issued upon conversion or exchange
                  of such
                  convertible or exchangeable securities at the initial conversion
                  or
                  exchange price or rate

              
	 	 	 	 
	 	
                v

              	
                =

              	
                the
                  number of Common Shares which the aggregate consideration receivable
                  by
                  the Company (determined as provided in paragraph (ix) below) would
                  purchase at such current market price per Common
                  Share.

              

      

    Such
      adjustment shall become effective as of the calendar day in Korea corresponding
      to the calendar day at the place of issue on which such convertible or
      exchangeable securities are issued.

    
      
        
        

      

      
        -
          19
          -

        
          

        

      

      
        
        

      

       

    

    
      	
              (vi)  
                

            	
              If
                the Company shall issue any Common Shares (other than Common Shares
                issued
                (a) on conversion of the Bonds or on conversion or exchange of any
                convertible or exchangeable securities issued by the Company prior
                to the
                Issue Date or (b) on exercise of any rights or warrants granted,
                issued or
                offered by the Company prior to the Issue Date or (c) in any of the
                circumstances described above or (d) to shareholders of any company
                which
                merges into the Company in proportion to their shareholdings in such
                company immediately prior to such merger, upon such merger) for a
                consideration per Common Share receivable by the Company (determined
                as
                provided in paragraph (ix) below) less than the current market price
                per
                Common Share on the date in Korea on which the Company fixes the
                said
                consideration (or, if the issue of such Common Shares is subject
                to
                approval by a general meeting of shareholders, on the date on which
                the
                Board of Directors of the Company fixes the consideration to be
                recommended at such meeting), then the Conversion Price in effect
                immediately prior to the issue of such additional Common Shares shall
                be
                adjusted in accordance with the following
                formula:

            

    

    

    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    

    where:

     

    
      
        	 	
                NCP
                  and OCP have the meanings ascribed thereto in paragraph (ii)
                  above.

              
	 	 	 	 
	 	
                N

              	
                =

              	
                the
                  number of Common Shares outstanding (having regard to paragraph
                  (x) below)
                  at the close of business in Korea on the day immediately prior
                  to the date
                  of issue of such additional Common Shares.

              
	 	 	 	 
	 	
                n

              	
                =

              	
                the
                  number of additional Common Shares issued as aforesaid.

              
	 	 	 	 
	 	
                v

              	
                =

              	
                the
                  number of Common Shares which the aggregate consideration receivable
                  by
                  the Company (determined as provided in paragraph (ix) below) would
                  purchase at such current market price per Common
                  Share.

              

      

    Such
      adjustment shall become effective as of the calendar day in the Korea of the
      issue of such additional Common Shares.

    

    
      	
              (vii)  
                

            	
              If
                the Company shall issue rights or warrants to subscribe for or purchase
                Common Shares or securities convertible into or exchangeable for
                Common
                Shares (other than any rights or warrants granted, issued or offered
                to
                the holders of Common Shares and to existing employees of the Company
                in
                accordance with mandatory provisions of the applicable law) and the
                consideration per Common Share receivable by the Company (determined
                as
                provided in paragraph (ix) below) shall be less than the current
                market
                price per Common Share on the date in Korea on which the Company
                fixes the
                said consideration (or, if the issue of such rights or warrants is
                subject
                to approval by a general meeting of shareholders, on the date on
                which the
                Board of Directors of the Company fixes the consideration to be
                recommended at such meeting), then the Conversion Price in effect
                immediately prior to the date of the issue of such rights or warrants
                shall be adjusted in accordance with the following
                formula:

            

    

    

    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    

    where:

     

    
      
        	 	
                NCP
                  and OCP have the meanings ascribed thereto in paragraph (ii)
                  above.

              
	 	 	 	 
	 	
                N

              	
                =

              	
                the
                  number of Common Shares outstanding (having regard to paragraph
                  (x) below)
                  at the close of business in Korea on the day immediately prior
                  to the date
                  of such issue

              
	 	 	 	 
	 	
                n

              	
                =

              	
                the
                  number of Common Shares to be issued on exercise of such rights
                  or
                  warrants and (if applicable) conversion or exchange of such convertible
                  or
                  exchangeable securities at the said consideration

              
	 	 	 	 
	 	
                v

              	
                =

              	
                the
                  number of Common Shares which the aggregate consideration receivable
                  by
                  the Company (determined as provided in paragraph (ix) below) would
                  purchase at such current market price per Common
                  Share.

              

      

    Such
      adjustment shall become effective as of the calendar day in Korea corresponding
      to the calendar day at the place of issue on which such rights or warrants
      are
      issued.

    

    
      
        
        

      

      
        -
          20
          -

        
          

        

      

      
        
        

      

    

    
      	(viii)  	
              For
                the purposes of this
                Clause (C), the current market price per Common Share on any date
                shall be
                deemed to be the volume-weighted average of the daily closing prices
                of
                the Common Shares for the 30 consecutive trading days commencing
                45
                trading days before such date. The closing price of the Common Shares
                for
                each trading day shall be the last reported selling price of the
                Common
                Shares as reported by the KOSDAQ for such day or, if no sale takes
                place
                on such day, the higher of the closing bid or offered price of the
                Common
                Shares on the KOSDAQ. For the purposes of this paragraph (viii),
                the term
                “trading
                day”
                means a day when the KOSDAQ is open for business, but does not include
                a
                day when (a) no such last selling price or closing bid or offered
                price is
                reported and (b) (if the Common Shares are not admitted to trading
                on such
                exchange)
                no such closing bid and offered prices are furnished as aforesaid.
                If
                during the said 45 trading days or any period thereafter up to but
                excluding the date as of which the adjustment of the Conversion Price
                in
                question shall be effected, any event (other than the event which
                requires
                the adjustment in question) shall occur which gives rise to a separate
                adjustment to the Conversion Price under the provisions of this
                Clause (C), then the current market price as determined above shall
                be
                adjusted in such manner and to such extent as a leading independent
                securities company or bank in Seoul selected by the Company and approved
                in writing by the Holders
                shall in its absolute discretion deem appropriate and fair to compensate
                for the effect thereof.

            

    

     

    
      
        	 
	
                      
                  (ix)  For
                  the purposes of any calculation of the consideration receivable
                  by the
                  Company
                  pursuant to paragraphs (ii), (iii), (v), (vi) and (vii) of Condition
                  2(C),
                  the following provisions shall be
                  applicable:

              

      

    

     

    

      
        	 	
                (a)

              	
                in
                  the case of the issue of Common Shares for cash, the consideration
                  shall
                  be the amount of such cash;

              
	 	 	 
	 	
                (b)

              	
                in
                  the case of the issue of Common Shares for a consideration in whole
                  or in
                  part other than cash, the consideration other than cash shall be
                  deemed to
                  be the fair value thereof as determined by an independent financial
                  institution or, if pursuant to applicable law of Korea such determination
                  is to be made by application to a court of competent jurisdiction,
                  as
                  determined by such court or an appraiser appointed by such court,
                  irrespective of the accounting treatment thereof;

              
	 	 	 
	 	
                (c)

              	
                in
                  the case of the issue (whether initially or upon the exercise of
                  rights or
                  warrants) of securities convertible into or exchangeable for Common
                  Shares, the aggregate consideration receivable by the Company shall
                  be
                  deemed to be the consideration received by the Company for such
                  securities
                  and (if applicable) rights or warrants plus the additional consideration
                  (if any) to be received by the Company upon (and assuming) the
                  conversion
                  or exchange of such securities at the initial conversion or exchange
                  price
                  or rate and (if applicable) the exercise of such rights or warrants
                  at the
                  initial subscription or purchase price (the consideration in each
                  case to
                  be determined in the same manner as provided in this paragraph
                  (ix) of
                  Condition 2(C)) and the consideration per Common Share receivable
                  by the
                  Company shall be such aggregate consideration divided by the number
                  of
                  Common Shares to be issued upon (and assuming) such conversion
                  or exchange
                  at the initial conversion or exchange price or rate and (if applicable)
                  the exercise of such rights or warrants at the initial subscription
                  or
                  purchase price;

              
	 	 	 
	 	
                (d)

              	
                in
                  the case of the issue of rights or warrants to subscribe for or
                  purchase
                  Common Shares, the aggregate consideration receivable by the Company
                  shall
                  be deemed to be the consideration received by the Company for any
                  such
                  rights or warrants plus the additional consideration to be received
                  by the
                  Company upon (and assuming) the exercise of such rights or warrants
                  at the
                  initial subscription or purchase price (the consideration in each
                  case to
                  be determined in the same manner as provided in this paragraph
                  (ix) of
                  Condition 2(C)) and the consideration per Common Share receivable
                  by the
                  Company shall be such aggregate consideration divided by the number
                  of
                  Common Shares to be issued upon (and assuming) the exercise of
                  such rights
                  or warrants at the initial subscription or purchase
                  price;

              
	 	 	 
	 	
                (e)

              	
                if
                  any of the consideration referred to in any of the preceding paragraphs
                  of
                  this paragraph (viii)(c) of Condition 2(C) is receivable in a currency
                  other than Korean Won, such consideration shall (in any case where
                  there
                  is a fixed rate of exchange between Korean Won and the relevant
                  currency
                  for the purposes of the issue of the Common Shares, the conversion
                  or
                  exchange of such securities or the exercise of such rights or warrants)
                  be
                  translated into Korean Won for the purposes of this paragraph (ix)
                  of
                  Condition 2(C) at such fixed rate of exchange and shall (in all
                  other
                  cases) be translated into Korean Won at such rate of exchange as
                  may be
                  determined in good faith by an independent financial institution
                  to be the
                  spot rate ruling at the close of business on the date as of which
                  the said
                  consideration is required to be calculated as aforesaid;
                  

              
	 	 	 
	 	
                (f)

              	
                in
                  the case of the issue of Common Shares credited as fully paid out
                  of
                  retained earnings or capitalisation of reserves at their par value,
                  the
                  aggregate consideration receivable by the Company shall be deemed
                  to be
                  zero (and accordingly the number of Common Shares which such aggregate
                  consideration receivable by the Company could purchase at the relevant
                  current market price per Common Share shall also be deemed to be
                  zero);
                  and

              
	 	 	 
	 	
                (g)

              	
                in
                  making any such determination, no deduction shall be made for any
                  commissions or any expenses paid or incurred by the
                  Company.

              

      

    

     

    
      	
              (x)  
                

            	
              If,
                at the time of computing an adjustment (the “later
                adjustment”)
                of the Conversion Price pursuant to any of paragraphs (ii), (iii),
                (v),
                (vi) and (vii) above, the Conversion Price already incorporates an
                adjustment made (or taken or to be taken into account pursuant to
                the
                proviso to paragraph (xi) below) to reflect an issue of Common Shares
                or
                of securities convertible into or exchangeable for Common Shares
                or of
                rights or warrants to subscribe for or purchase Common Shares or
                securities, to the extent that the number of such Common Shares or
                securities taken into account for the purposes of such adjustment
                exceeds
                the number of such Common Shares in issue at the time relevant for
                ascertaining the number of outstanding Common Shares for the purposes
                of
                computing the later adjustment, such Common Shares shall be deemed
                to be
                outstanding for the purposes of making such
                computation.

            

    

    

    
      	
              (xi)  
                

            	
              No
                adjustment of the Conversion Price shall be required unless such
                adjustment would require an increase or decrease in such price of
                at least
                Korean Won 10; provided,
                that any adjustment which by reason of this paragraph (xi) is not
                required
                to be made shall be carried forward and taken into account (as if
                such
                adjustment had been made at the time when it would have been made
                but for
                the provisions of this paragraph (xi)) in any subsequent adjustment.
                All
                calculations under this Condition 2(C) shall be made to the nearest
                Korean
                Won.

            

    

     

    
      
        
        

      

      
        -
          21
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              (xii)  
                

            	
              Notwithstanding
                the provisions of this Condition 2(C), the Conversion Price shall
                not be
                reduced below the par value of the Common Shares as a result of any
                adjustment made hereunder unless under applicable law then in effect
                Bonds
                may be converted at such reduced Conversion Price into legally issued,
                fully-paid Common Shares.

            

    

    

    
      	
              (xiii)  
                

            	
              Any
                references herein to the date on which a consideration is “fixed”
                shall, where the consideration is originally expressed by reference
                to a
                formula which cannot be expressed an actual cash amount until a later
                date, be construed as a reference to the first day on which such
                actual
                cash amount can be ascertained.

            

    

    

    
      	
              (xiv)  
                

            	
              No
                adjustment involving an increase in the Conversion Price will be
                made,
                except in the case of a consolidation of the Common Shares, as referred
                to
                in paragraph (i) of Condition 2(C).

            

    

    

    
      	
              (xv)  
                

            	
              The
                Company may purchase its Common Shares to the extent permitted by
                law.

            

    

    

    
      	
              (xvi)  
                

            	
              Notice
                of any adjustment in the Conversion Price shall be given to Holder
                in
                accordance with Condition 9 as soon as practicable after the determination
                thereof.

            

    

    

    
      	
              (xvii)   
                

            	
              Where
                more than one 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 a leading investment bank of international repute (acting
                as
                expert), selected by the Company and approved in writing by the Holder
                at
                the expense of the Company, 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 a leading investment bank of international
                repute (acting as expert), selected by the Company and approved in
                writing
                by the Holder at the expense of the Company, to be in their opinion
                appropriate in order to give such intended
                result.

            

    

    
 

    
      
        	
                (D)

              	
                The
                  Conversion Price shall be subject to resetting as
                  follows:

              

      

    

    

    
      	
              (i)  
                

            	
              If
                the higher of (x) the simple arithmetic average of (i) the volume
                weighted
                average of the Closing Prices (as defined below) of the Common Shares
                on
                the KOSDAQ for the one month prior to each relevant Setting Date
                (as
                defined below), (ii) the volume weighted average of the Closing Prices
                for
                the one week prior to the relevant Setting Date, and (iii) the Closing
                Price one trading day prior to the relevant Setting Date, being rounded
                upwards (if necessary) to the nearest Korean Won, and (y) the Closing
                Price at the close of business in Korea one trading day prior to
                each
                relevant Setting Date (the higher of (x) and (y), “Adjusted
                Share Price”)
                is lower than the then applicable Conversion Price on the relevant
                Setting
                Date, then the Conversion Price shall be adjusted to the Adjusted
                Share
                Price in effect on and from the relevant Setting Date (such adjusted
                Conversion Price being rounded upwards (if necessary) to the nearest
                Korean Won). 

            

    

    

    PROVIDED
      THAT:

    

    
      	 	
              (1)

            	
              the
                provisions of Condition 2(C) shall apply mutatis
                mutandis to
                this Condition 2(D)(i) 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
                2(C);

            

    

    

    
      	 	
              (2)

            	
              any
                such adjustment to the Conversion Price pursuant to this Condition
                2(D)(i)
                shall be limited so that the Conversion Price shall not be reduced
                below
                70 per cent. of (x) the Initial Conversion Price or (y) if any adjustment
                has been made to the Conversion Price in accordance with Condition
                2(C),
                such adjusted Conversion Price;

            

    

    

    
      
        
        

      

      
        -
          22
          -

        
          

        

      

      
        
        

      

    

    
      	 	
              (3)

            	
              the
                Conversion Price shall not be reduced below the par value of the
                Common
                Shares (currently Korean Won 500 per Common Share as of the Issue
                Date) as
                a result of any adjustment made hereunder unless under applicable
                law then
                in effect, the Bonds may be converted at such reduced Conversion
                Price
                into legally issued, fully-paid and non-assessable Common
                Shares;

            

    

    

    
      	 	
              (4)

            	
              the
                adjustment of the Conversion Price in respect of any Setting Date
                shall be
                subject to the provisions of the applicable law and regulations then
                in
                effect; and

            

    

    

    
      	 	
              (5)

            	
              for
                the avoidance of doubt (x) any adjustments to the Conversion Price
                made
                pursuant to this Condition 2(D)(i) shall only be downward adjustments,
                (y)
                no adjustment will be made where such adjustment would be less than
                Korean
                Won 10 and (z) an adjustment may be made in respect of a Setting
                Date
                notwithstanding that an adjustment may have been made in respect
                of a
                prior Setting Date or Setting
                Dates.

            

    

    

      

        
          	
                  (ii)   
                    

                	
                  Notwithstanding
                    anything to the contrary in these Conditions, in the event that
                    the
                    Company’s Common Shares become de-registered or de-listed from the KOSDAQ,
                    the Conversion Price shall be immediately adjusted to the par
                    value of the
                    Common Shares with effect on and from the date such event takes
                    effect.

                
	 	 
	 	
                  The
                    term “Closing
                    Price”
                    for any day means the last selling price or, if no sales take
                    place on
                    such day, the closing bid or offered price in each case as reported
                    by the
                    KOSDAQ are listed for such day. The term “trading
                    day”
                    is a day when the Stock Exchange the Common Shares are listed
                    is open for
                    business, but does not include a day when (a) no such last selling
                    price
                    or closing bid or offered price is reported and (b) (if the Common
                    Shares
                    is not admitted to trading on such Stock Exchange) no such closing
                    bid and
                    offered prices are furnished as aforesaid. If during the said
                    45 trading
                    days or any period thereafter up to but excluding the date as
                    of which the
                    adjustment of the Conversion Price in question shall be effected,
                    any
                    event (other than the event which requires the adjustment in
                    question)
                    shall occur which gives rise to a separate adjustment to the
                    Conversion
                    Price under the provisions of Condition 2(C), then the current
                    market
                    price as determined above shall be adjusted in such manner and
                    to such
                    extent as a leading independent securities company or bank in
                    New York
                    selected by the Company and approved in writing by the Holder
                    shall in its
                    absolute discretion deem appropriate and fair to compensate for
                    the effect
                    thereof.

                
	 	 
	 	
                  The
                    term “Setting
                    Date”
                    means a day falling one calendar month after the Issue Date (i.e.
                    May 20,
                    2007) and thereafter every three calendar months after the previous
                    Setting Date (starting with August 20, 2007) up to one month
                    prior to the
                    Maturity Date. If any Setting Date would otherwise fall on a
                    day which is
                    not a Business Day, it shall be postponed to the next day which
                    is a
                    Business Day unless it would thereby fall into the next calendar
                    month in
                    which event it shall be brought forward to the immediately preceding
                    Business Day.

                
	 	 
	 	
                  Such
                    adjustments (if any) shall be notified promptly to the Holder
                    in
                    accordance with Condition 9.

                

        

      

      

        
          	
                  (E)

                   

                	
                  If,
                    while any Conversion Right is or is capable of being or becoming
                    exercisable, there shall be any adjustment to the Conversion
                    Price, the
                    Company shall (i) as soon as practicable notify the Holder of
                    particulars
                    of the event giving rise to the adjustment, the Conversion Price
                    after
                    such adjustment, the date on which such adjustment takes effect
                    and such
                    other particulars and information as the Holder may require and
                    (ii)
                    promptly after the date upon which such adjustment takes effect,
                    give
                    notice to the Holder in a form previously approved in writing
                    by the
                    Holder, stating that the Conversion Price has been adjusted and
                    setting
                    both the Conversion Price in effect prior to such adjustment,
                    the adjusted
                    Conversion Price and the effective date of such adjustment. The
                    Conversion
                    Notice shall be made in a form agreed upon by and between the
                    Company and
                    the Holders.

                   

                

        

      

    

     

    
      
        
        

      

      
        -
          23
          -

        
          

        

      

      
        
        

      

    

    

      
        	
                3.

                 

              	
                Redemption
                  at Maturity

                 

              
	 	
                Unless
                  previously redeemed or converted or purchased and in each case
                  canceled as
                  herein provided, the Company will redeem on the Maturity Date the
                  Bonds at
                  one hundred per cent. (100%) of their face principal amount and
                  interest
                  on the amount of the Bonds calculated at the compounded rate of
                  eight per
                  cent. (8%) per annum. 

              
	 	 
	 	 
	
                4.

                 

              	
                Redemption
                  at the option of the Company

                 

              
	 	
                At
                  any time after April 20 2008, if the Closing Price of a Common
                  Share of
                  the Company remains higher than 135% of the Conversion Price then
                  in
                  effect for thirty (30) consecutive trading dates of the KOSDAQ
                  and the
                  Holder fails to exercise its Conversion Rights during such thirty
                  day
                  period, on the trading date immediately following the end of such
                  thirty
                  day period, the Company may send a notice requesting the Holder
                  to
                  exercise his Conversion Right within five (5) trading dates from
                  the date
                  of receipt of such notice. If the Holder fails to exercise his
                  Conversion
                  Right during such five (5) day period, the Company may redeem all
                  or some
                  of the issued and outstanding Bonds at 100% of the principal amount
                  of the
                  Bonds without any interest or premium thereon.

                 

              
	
                5.

                 

              	
                Charges,
                  Taxes and Expenses

                 

              
	 	
                Issuance
                  of the equity interest upon the conversion of the Bonds shall be
                  made
                  without charge to the Holder for any issue or transfer tax or other
                  incidental expense in respect of the issuance of such equity interest,
                  all
                  of which taxes and expenses shall be paid by the Company.

                 

              
	
                6.

                 

              	
                Events
                  of Default

                 

              
	 	
                If
                  any of the following events (each, an “Event
                  of Default”)
                  occurs and is continuing, the Company shall promptly inform the
                  Holder of
                  such Event of Default. In such case, the Holder at its discretion
                  may give
                  notice to the Company that the Bonds are, and they shall immediately
                  become, due and payable, in which case the entire unpaid principal
                  balance
                  of the Bonds and all of the unpaid interest accrued thereon shall
                  be
                  immediately due and payable. 

                 

              
	
                (i)

              	
                Non-Payment

              
	 	
                 

                The
                  Company fails to pay principal, premium, interest and/or any other
                  amount
                  owing by the Company to the Holder hereunder when due and payable
                  and such
                  failure continues for seven (7) days; or

              
	 	 
	
                (ii)

              	
                Breach
                  of Other Obligations

              
	 	
                 

                The
                  Company defaults in the performance or observance of or compliance
                  with
                  any of its obligations set out in this Agreement and/or these Conditions
                  which default is incapable of remedy or, if it is capable of remedy,
                  is
                  not remedied within thirty (30) days after such default;
                  or

              
	 	 
	
                (iii)

              	
                Breach
                  of Representation or Warranty

              
	 	
                 

                Any
                  representation or warranty given by the Company under these Conditions
                  is
                  no longer correct in material respect on the date on which it was
                  made or
                  repeated and this situation continues for a period of thirty (30)
                  days;
                  or

              

      

       

      
        
          
          

        

        
          -
            24
            -

          
            

          

        

        
          
          

        

      

    

    

      
        	
                 

                (iv)

              	
                 

                Cross
                  Default

              
	
                 

                a.

              	
                 

                Any
                  other present or future indebtedness for borrowed money of the
                  Company
                  becomes due and payable prior to its stated maturity by reason
                  of an Event
                  of Default; or

              
	
                 

                b.

              	
                 

                Any
                  such indebtedness for borrowed money is not paid when due, as the
                  case may
                  be, within any applicable grace period originally provided for;
                  or

              
	
                 

                c.

              	
                 

                The
                  Company fails to pay when due (or within any applicable grace period
                  originally provided for) any amount payable by it under any present
                  or
                  future guarantee or indemnity in respect of indebtedness for borrowed
                  money.

              
	
                 

                (v)

              	
                 

                Enforcement
                  Proceedings

              
	 	
                 

                A
                  distress, execution or other legal process is levied, enforced
                  or sued
                  upon or against any material part of the property, assets or revenues
                  of
                  the Company and is not discharged or stayed within ninety (90)
                  days of
                  having been so levied, enforced or sued out unless enforcement
                  or suit is
                  being contested in good faith and by appropriate proceedings;
                  or

              
	
                 

                (vi)

              	
                 

                Security
                  Enforced

              
	 	
                 

                An
                  encumbrancer takes possession or a receiver, manager or other similar
                  person is appointed over, or an attachment order is issued in respect
                  of
                  the whole or any material part of the undertaking, property, assets
                  or
                  revenues of the Company and in any such case such possession, appointment
                  or attachment is not stayed or terminated or the debt on account
                  of which
                  such possession was taken or appointment or attachment was made
                  is not
                  discharged or satisfied within thirty (30) days of such possession,
                  appointment or the issue of such order; or

              
	
                 

                (vii)

              	
                 

                Insolvency

              
	 	
                 

                The
                  Company is declared by a court of competent jurisdiction to be
                  insolvent,
                  bankrupt or unable to pay its debts, or stops, suspends or threatens
                  to
                  stop or suspend payment of all or a material part of its debts
                  as they
                  mature or applies for or consents to or suffers the appointment
                  of an
                  administrator, liquidator or receiver or other similar person in
                  respect
                  of the Company or over the whole or any material part of the undertaking,
                  property, assets or revenues of the Company pursuant to any insolvency
                  law
                  and such appointment is not discharged within thirty (30) days
                  of its
                  taking effect or takes any proceedings under any law for a readjustment
                  or
                  deferment of its obligations or any part of them or makes or enters
                  into a
                  general assignment or an arrangement or composition with or for
                  the
                  benefit of its creditors except, in any such case, for the purpose
                  of and
                  followed by a reconstruction, amalgamation, reorganization, merger
                  or
                  consolidation on terms approved by the Holder; or

              
	
                 

                (viii)

              	
                 

                Winding-up

              
	 	
                 

                An
                  order of a court of competent jurisdiction is made or an effective
                  resolution passed for the winding-up or dissolution of the Company
                  or the
                  Company ceases to carry on all or any material part of its business
                  or
                  operations except, in any such case, for the purpose of and followed
                  by a
                  reconstruction, amalgamation, reorganization, merger or consolidation
                  on
                  terms approved by the Holder; or

              

      

       

       

      
        
          
          

        

        
          -
            25
            -

          
            

          

        

        
          
          

        

      

    

    

      
        	
                 

                (ix)

              	
                 

                Expropriation

              
	 	
                 

                Any
                  governmental authority or agency compulsorily purchases or expropriates
                  all or any material part of the assets of the Company without fair
                  compensation; or

              
	
                 

                (x)

              	
                 

                Unlawfulness

              
	 	
                 

                The
                  Company is in breach of any law or regulation in any jurisdiction
                  in
                  material respects to which it and/or any of its properties are
                  subject.

              
	
                 

                (xi)

              	
                 

                Analogous
                  Events

              
	 	
                 

                Any
                  event, which under the laws of the U.S. has an analogous effect
                  to any of
                  the events referred to in (vii) and (viii) above,
                  occurs.

              
	 	 
	
                7.

                 

              	
                Replacement
                  of Bonds

                 

              
	 	
                Upon
                  receipt by the Company of evidence reasonably satisfactory to it
                  of the
                  loss, theft or destruction of the Bonds and of indemnity or security
                  reasonably satisfactory to it, the Company will make and deliver
                  a new
                  security which shall carry the same rights to interest (unpaid
                  and to
                  accrue) carried by the Bonds, stating that such security is issued
                  in
                  replacement of the Bonds, making reference to the original date
                  of
                  issuance of the Bonds (and any successors hereto) and dated as
                  of such
                  cancellation, in lieu of the Bonds.

                 

              
	
                8.
                  

                 

              	
                Governing
                  Law and Jurisdiction

                 

              
	 	
                The
                  Bonds shall be construed in accordance with the laws of the Republic
                  of
                  Korea, excluding
                  its conflicts of laws rules.

              
	 	 
	
                9.

                 

              	
                Dispute
                  Resolution 

                 

              
	 	
                The
                  Company and the Holder shall attempt in good faith to resolve all
                  disputes, controversies or claims arising out of or in connection
                  with the
                  interpretation or application of the provisions of the terms and
                  conditions hereto or in connection with the determination of any
                  matters
                  which are subject to objective determination pursuant to the terms
                  and
                  conditions hereto (each, a “Dispute”)
                  by mutual agreement. If any Dispute cannot be resolved by the parties
                  hereto pursuant to above or otherwise, then such Dispute shall
                  be brought
                  to the Seoul Central District Court of Korea.

              
	 	 
	
                10.

                 

              	
                Notices

                 

              
	 	
                Any
                  notice, request or other communication required or permitted hereunder
                  shall be in writing and shall be deemed to have been duly given
                  if
                  personally delivered or mailed by registered or certified mail,
                  postage
                  prepaid, or by recognized overnight courier or personal delivery
                  at the
                  respective addresses of the parties as set forth in the Convertible
                  Bonds
                  Subscription Agreement or on the register maintained by the Company.
                  Any
                  party hereto may change its address for future notice hereunder
                  by giving
                  notice of such change to the other party. Notice shall conclusively
                  be
                  deemed to have been given where received.

                 

              

      

       

      
        
          
          

        

        
          -
            26
            -

          
            

          

        

        
          
          

        

      

    

    

      

        
          	
                  11.

                	
                  Miscellaneous
                    

                
	 	 
	
                  (A)

                   

                	
                  No
                    Waiver. 

                   

                
	 	
                  No
                    failure or delay by the Holder to exercise any right hereunder
                    shall
                    operate as a waiver thereof, nor shall any single or partial
                    exercise of
                    any right, power or privilege preclude any other right, power
                    or
                    privilege.

                   

                
	
                  (B)

                   

                	
                  Attorneys’
                    Fees. 

                   

                
	 	
                  If
                    the Holder retains an attorney for collection of the Bonds, or
                    if any suit
                    or proceeding is brought for the recovery of all, or any part
                    of, or for
                    protection of the indebtedness respected by the Bonds, then the
                    Company
                    agrees to pay all costs and expenses of the suit or proceeding,
                    or any
                    appeal thereof, incurred by the Holder, including without limitation,
                    reasonable attorneys' fees.

                   

                
	
                  (C)

                   

                	
                  Default
                    Rate. 

                   

                
	 	
                  The
                    default interest rate shall be the compounded rate of nineteen
                    per cent.
                    (19%) per annum. 

                   

                
	
                  (D)

                   

                	
                  Assignment.
                    

                   

                
	 	
                  The
                    Holder may assign, transfer or establish security interests on
                    the Bonds,
                    in whole or in part, at the Holder's sole discretion to any other
                    person
                    subject to restrictions under the relevant laws of Korea.
                    The Company shall cooperate with and provide any reasonably necessary
                    assistance to the Holder to complete and effect such assignment,
                    transfer
                    or establishment of security
                    interest.

                

        

      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        -
          27
          -CNCN form 8-K 04-19-2007 EX 10.2

    

    

    

    

    

    

    

    

    

    CONVERTIBLE
      BONDS SUBSCRIPTION AGREEMENT

    

    

    by
      and
      between

    

    

    

    

    Cintel
      Corp.

    Subscriber

    

    and

    

    

    STS
      Semiconductor & Telecommunications Co., Ltd.

    Issuer

    

    

    

    

    

    

    

    

    

    

    April
      19,
      2007

    

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CONVERTIBLE
      BONDS SUBSCRIPTION AGREEMENT

    

     

    This
      CONVERTIBLE
      BONDS SUBSCRIPTION AGREEMENT (the "Agreement")
      is
      made and entered into as of April 19, 2007 by and between the parties stated
      hereunder:

     

    
      	(1)  	
              STS
                Semiconductor & Telecommunications Co., Ltd.,
                a
                company incorporated under the laws of the Republic of Korea
                (“Korea”)
                having its principal office at 555-9, Baekseok-Dong, Cheonan,
                Chungcheongnam-Do, Korea (the “Company”);
                and. 

            

    

     

    
      	(2)  	
              Cintel
                Corp., a
                corporation incorporated under the laws of the State of Nevada having
                its
                principal office at 9900 Corporate Campus Drive Suite 3000 Louisville,
                KY
                40223, U.S.A. (the “Subscriber”)

            

    

     

    Recitals

     

    WHEREAS,
      the
      Company has authorized the sale of convertible bonds in an aggregate principal
      amount of Korean Won (“KRW”
or
      “Won”)
      27,000,000,000 (Twenty Seven Billion Won) (the “Bonds”
or
      “Convertible
      Bonds”),
      convertible into shares of the Company’s common stock, having the par value of
      KRW 500 (Five Hundred Won) (the “Common
      Stock”);
      and

     

    WHEREAS,
      the Subscriber desires to subscribe for the Bonds on the terms and conditions
      set forth herein. 

     

    NOW
      THEREFORE,
      in
      consideration of the foregoing recitals and the mutual promises,
      representations, warranties and covenants hereinafter set forth and for other
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto agree as follows:

     

    

      
        	 	
                1.

                 

              	
                Issuance
                  of the Convertible Bonds. 

                 

              
	 	 	
                Pursuant
                  to the terms and conditions set forth in this Agreement on the
                  Closing
                  Date (as defined below), the Company shall issue to the Subscriber,
                  and
                  the Subscriber shall subscribe for KRW 27,000,000,000 (Twenty Seven
                  Billion Won) Convertible Bonds due on April 20, 2009 in accordance
                  with
                  the terms and conditions set forth in Exhibit A. The Bonds will
                  be issued
                  at an issue price (the “Subscription
                  Price”)
                  equal to 100 per cent. of the principal amount of the Convertible
                  Bonds.

                 

              
	 	 	 
	 	
                2.

                 

              	
                Payment
                  of Subscription Price for the Convertible Bonds. 

                 

              
	 	 	
                The
                  Subscription Price for the Convertible Bonds shall be paid or caused
                  to be
                  paid by the Subscriber to the Company at 10 a.m., Seoul, Korea
                  time, on
                  the Closing Date in same day funds.

                 

              
	 	 	 
	 	
                3.

                 

              	
                Closing
                  

                 

              
	 	
                3.1

                 

              	
                Closing
                  Date and Place.
                  The closing of the issuance and subscription of the Convertible
                  Bonds (the
                  “Closing”)
                  will be held at the office of the Company or such other place as
                  agreed
                  between the parties hereto, at 10 a.m., Seoul, Korea time, on April
                  20,
                  2007, or such other date as agreed between the parties hereto (the
                  “Closing
                  Date”).
                  

                 

              

      

    

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

    

      
        	 	
                3.2

              	
                Conditions
                  to Closing.
                  The Closing is conditional upon fulfillment or waiver by the Company
                  of
                  the followings:

                 

              

      

    

    
      	(i)  	
              The
                issue and subscription of the Convertible Bonds on the terms and
                conditions herein provided shall not violate any requirements of
                law
                applicable to the Company or the Subscriber;

            

    

     

    
      	(ii)  	
              The
                Subscriber and the Company shall have completed or obtained all requisite
                governmental or internal approvals, consents and filing of reports;
                and

            

    

    

    
      	(iii)  	
              The
                Subscriber shall have reported its subscription of the Convertible
                Bonds
                to the Bank of Korea.

            

    

     

    

      
        	 	
                3.3

                 

              	
                Closing
                  Deliveries of the Company

                 

              

      

    

     

    On
      the
      Closing Date, the Company shall deliver or cause to be delivered to the
      Subscriber all the following documents at the same time, in form and substance
      reasonably satisfactory to the Subscriber:

     

    
      	(i)  	
              a
                receipt signed by a duly authorized officer of the Company, acknowledging
                receipt of the Subscription Price;

            

    

     

    
      	(ii)  	
              bond
                certificates representing the Convertible Bonds;
                

            

    

     

    
      	(iii)  	
              a
                certificate of a duly authorized officer of the Company attaching
                copies,
                certified by such officer as true and complete, of the resolutions
                of its
                board of directors in connection with the authorization and approval
                of
                the execution, delivery and performance of this Agreement and the
                consummation of the transaction contemplated hereunder and of all
                other
                documents evidencing all necessary corporate action taken in connection
                therewith; 

            

    

     

    
      	(iv)  	
              a
                certified copy of the Commercial Registry extract of the Company
                dated as
                of a date no later than the date
                hereof;

            

    

     

    
      	(v)  	
              the
                Articles of Incorporation of the Company;
                and

            

    

     

    
      	(vi)  	
              such
                other documents as the Subscriber may reasonably
                request.

            

    

     

    

      
        	 	
                4.

              	
                Termination
                  

              
	 	 	 
	 	
                4.1

                 

              	
                Termination
                  of Agreement. This Agreement may be terminated by notice in writing
                  at any
                  time prior to the Closing by:

                 

              

      

    

    
    

    
      	(i)  	
              the
                Company or the Subscriber, if any governmental authority of competent
                jurisdiction shall have issued any judgment, injunction, order, ruling
                or
                decree or taken any other action restraining, enjoining or otherwise
                prohibiting the consummation of the transactions contemplated by
                this
                Agreement and such judgment, injunction, order, ruling, decree or
                other
                action becomes final and non-appealable; provided, that the party
                seeking
                to terminate this Agreement pursuant to this clause (i) shall have
                used its best and reasonable efforts to have such judgment, injunction,
                order, ruling or decree lifted, vacated or
                denied;

            

    

     

    
      	(ii)  	
              the
                Company and the Subscriber, if the Company and the Subscriber so
                mutually
                agree in writing; 

            

    

     

    
      	(iii)  	
              the
                Company or the Subscriber, if there has been a material breach on
                the part
                of the other party of its representations, warranties and undertakings,
                and the failure to perform its obligations, set forth in this Agreement
                and the other party fails to cure such breach in fourteen (14) calendar
                days after the other party receives a notice of such breach;
                

            

    

     

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

    
      	(iv)  	
              the
                Company or the Subscriber, if any of the conditions specified Section
                3.2
                hereof has not been satisfied or waived;
                and.

            

    

     

    
      	(v)  	
              the
                Subscriber (i) if trading in any securities of the Company has been
                suspended or limited on the Korea Securities Dealers Automated Quotation
                Division of the Korea Exchange (the “KOSDAQ”)
                or (ii) if trading generally on the KOSDAQ or the Korea Exchange
                has been
                suspended or limited, or minimum or maximum prices for trading have
                been
                fixed, or (iii) maximum ranges for prices have been required, by
                the
                KOSDAQ or the Korea Exchange or any other governmental authority,
                or a
                material disruption has occurred in commercial banking or bond settlement
                or clearance services in Korea.

            

    

    

      
        	 	
                4.2

                 

              	
                Effect
                  of Termination. If this Agreement is terminated in accordance with
                  Section 4.1 hereof and the transactions contemplated hereby are not
                  consummated, this Agreement shall become null and void and shall
                  be of no
                  further force and effect. No party shall be under any liability
                  to the
                  other party in respect of this Agreement, only if this Agreement
                  is
                  terminated pursuant to Article 4.1(i), (ii) and (v) hereof. 

                 

              
	 	
                4.3

                 

              	
                Indemnification.
                  In case of termination hereof under Article 4.1(iii) or (iv) above,
                  the
                  party with the fault causing such termination shall indemnify and
                  hold the
                  other party, its directors, officers, employees, sub-contractors
                  or agents
                  harmless from any and all reasonable losses and damages incurred
                  by the
                  non-breaching party.

                 

              
	 	 	 
	 	
                5.

                 

              	
                Representations,
                  Warranties and undertakings of the Company. 

                 

              
	 	
                5.1

              	
                Representations
                  and Warranties: The Company represents to the Subscriber as of
                  the date of
                  this Agreement and the Closing
                  Date:

              

      

    

    

      
        	
                a.

              	
                that
                  the Company is duly organized and validly existing under the law
                  of the
                  jurisdiction in which it is incorporated, and has the requisite
                  corporate
                  power to own its properties and to carry on its business as now
                  being
                  conducted; 

              
	 	 
	
                b.

              	
                that
                  the Company is duly qualified as a corporation to do business and
                  is in
                  good standing in every jurisdiction in which the nature of the
                  business
                  conducted by it makes such qualification necessary and where the
                  failure
                  so to qualify would have a Material Adverse Effect; 

              
	 	 
	 	
                “Material
                  Adverse Effect”
                  means any material adverse effect on the business, properties,
                  operations,
                  assets, financial condition or results of operations of the Subscriber
                  or
                  the Company, as the case may be, taken as a whole, or on the transactions
                  contemplated hereby or by the agreements or instruments to be entered
                  into
                  in connection herewith.

              
	 	 
	
                c.

              	
                that
                  (i) the Company has the requisite corporate power and authority
                  to execute
                  and deliver this Agreement and to perform its obligations under
                  this
                  Agreement, and to issue the Convertible Bonds and the shares of
                  Common
                  Stock issuable upon conversion of the Convertible Bonds (the “Bond
                  Shares”),
                  in accordance with the terms hereof, (ii) the execution and delivery
                  of
                  this Agreement by the Company and the consummation by it of the
                  transactions contemplated hereby have been duly authorized by its
                  board of
                  directors and no further consent or authorization of the Company,
                  or its
                  board of directors or stock holder is required, (iii) this Agreement
                  has
                  been duly executed and delivered, and (iv) this Agreement constitutes
                  a
                  valid and binding obligation of the Company enforceable against
                  the
                  Company in accordance with its
                  terms;

              

      

       

    

    
      
        
        

      

      
        -
          4
          -

        
          

        

      

      
        
        

      

      

        
          	
                  d.

                	
                  that
                    the Company has an authorized
                    share capital of 200,000,000 shares with the par value
                    of
                    Won 500 and an issued and outstanding share capital of 15,066,357
                    common
                    shares as of the date hereof;

                
	 	 
	
                  e.

                	
                  that
                    all of the outstanding shares have been duly listed and admitted
                    for
                    trading on the KOSDAQ;

                
	 	 
	
                  f.

                	
                  that
                    the Convertible Bonds are duly authorized and are validly issued,
                    fully
                    paid and non-assessable, free of any encumbrances, and are not
                    subject to
                    preemptive rights of the Company’s Articles of Incorporation, By-laws and
                    other constitutional documents;

                
	 	 
	
                  g.

                	
                  that
                    the Company has available, and will maintain available, free
                    from
                    pre-emptive or other rights, out of its authorized but unissued
                    shares
                    such number of the Bond Shares as would or may be required to
                    be issued
                    upon conversion of the Convertible Bonds.

                
	 	 
	
                  h.

                	
                  that
                    the execution, delivery and performance of this Agreement and
                    the
                    Convertible Bonds issued by the Company and the consummation
                    by the
                    Company of the transactions contemplated hereby will not (i)
                    result in a
                    violation of the Certificate of Incorporation, By-laws or other
                    constitutional documents of the Company or (ii) conflict with,
                    or
                    constitute a default (or an event which with notice or lapse
                    of time or
                    both could become a default) in material respects under, or give
                    to others
                    any rights of termination, amendment or cancellation of, any
                    agreement,
                    indenture or instrument to which the Company is a party, or (iii)
                    result
                    in a violation of any law, rule, regulation, order, judgment
                    or decree
                    (including federal and state securities laws and regulations)
                    in material
                    respects applicable to the Company or by which any material property
                    or
                    asset of the Company is bound or affected;

                
	 	 
	
                  i.

                	
                  that
                    except as specifically contemplated by this Agreement and as
                    required
                    under the Korea Securities and Exchange Act and the regulations
                    thereunder, the Company is not required to obtain any consent,
                    authorization or order of, or make any filing or registration
                    with, any
                    court or governmental agency or any regulatory or self regulatory
                    agency
                    in order for it to execute, deliver or perform any of its obligations
                    under this Agreement in accordance with the terms
                    hereof;

                
	 	 
	
                  j.

                	
                  that
                    there is no action, suit, proceeding, inquiry or investigation
                    before or
                    by any court, public board, government agency, self-regulatory
                    organization or body pending or, to the knowledge of the Company,
                    threatened against or affecting the Company that is reasonably
                    likely to
                    have a Material Adverse Effect;

                
	 	 
	
                  k.

                	
                  that
                    the Company (i) owns or has the right to use, free and clear
                    of all liens,
                    claims, encumbrances, pledges, security interests, and other
                    adverse
                    interests of any kind whatsoever, all patents, inventions, know-how,
                    trade
                    secrets, trademarks, service marks, trade names, copyrights,
                    technology,
                    and all licenses and rights with respect to the foregoing, used
                    in the
                    conduct of its business as now conducted or proposed to be conducted
                    without, to the best knowledge of the Company, infringing upon
                    or
                    otherwise acting adversely to the right or claimed right of any
                    person,
                    the Company or other entity, (ii) is not obligated or under any
                    liability
                    whatsoever to make any payments by way of royalties, fees or
                    otherwise to
                    any owner or licensee of, or other claimant to, any patent, trademark,
                    service mark, trade name, copyright, know-how, technology or
                    other
                    intangible asset, with respect to the use thereof or in connection
                    with
                    the conduct of its business or otherwise and (iii) has not received
                    any
                    notice of infringement of or conflict with asserted rights of
                    others with
                    respect to any of the foregoing which, singly or in the aggregate,
                    if the
                    subject of an unfavorable decision, ruling or finding, might
                    have a
                    Material Adverse Effect;

                

        

      

      

      
        
          
          

        

        
          -
            5
            -

          
            

          

        

        
          
          

        

         

        
          
            	
                    l.

                  	
                    that
                      (i) the Company has filed or caused to be filed all income
                      tax returns
                      which is required to be filed and has paid or caused to be
                      paid all taxes
                      and all assessments received by them to the extent that such
                      taxes and
                      assessments have become due, except taxes and assessments the
                      validity or
                      amount of which is being contested in good faith by appropriate
                      proceedings and with respect to which adequate reserves have
                      been set
                      aside, and except for such returns for which the failure to
                      file would not
                      have a Material Adverse Effect upon the Company and (ii) the
                      Company has
                      paid or caused to be paid, or has established reserves that
                      the Company
                      reasonably believes to be adequate in all material respects,
                      for all
                      federal income tax liabilities and state income tax liabilities
                      applicable
                      to the Company for all fiscal years which have not been examined
                      and
                      reported on by the taxing authorities (or closed by applicable
                      statutes);

                  
	 	 
	
                    m.

                  	
                    that
                      there has been no material adverse change in the business and
                      financial
                      conditions of the Company since the date of its last audited
                      financial
                      statements;

                  
	 	 
	
                    n.

                  	
                    that
                      the
                      Company is not in violation of and is not under investigation
                      with respect
                      to and, to the best knowledge of the Company, has not been
                      threatened to
                      be charged with or given notice of any violation of, any law
                      or government
                      order, which would have a Material Adverse Effect;

                  
	 	 
	
                    o.

                  	
                    that
                      neither the Company nor any person acting on its or their behalf
                      has,
                      directly or indirectly, made offers or sales of the Convertible
                      Bonds, or
                      solicited offers to buy the Convertible Bonds, under circumstances
                      that
                      would require the registration of the Convertible Bonds
                      (or the Bond Shares issuable on conversion of the Convertible
                      Bonds) under
                      the United States Securities Act of 1933 (the “U.S.
                      Securities Act”);
                      

                  
	 	 
	
                    p.

                  	
                    that
                      neither the Company nor any person acting on its or their behalf
                      has
                      engaged in any directed selling efforts (as defined in Regulation
                      S under
                      the U.S. Securities Act) with respect to the Convertible Bonds
                      (or the
                      Bond Shares issuable on conversion thereof). The Company reasonably
                      believes that there is no substantial U.S. market interest
                      (as defined in
                      Regulation S) in its Convertible Bonds (or the Bond Shares
                      issuable on
                      conversion thereof);

                  
	 	 
	
                    q.

                  	
                    that
                      the Company is a "foreign company" (as such term is defined
                      in Regulation
                      S) and reasonably believes that there is no substantial U.S.
                      market
                      interest (as defined in Regulation S) in the debt securities,
                      the shares
                      of the Company or any securities of the same class as the shares
                      of the
                      Company and that the Company and any person acting on its or
                      their behalf
                      have complied with and will comply with the offering restrictions
                      requirement of Regulation S;

                  
	 	 
	
                    r.

                  	
                    that
                      the Company (i) is not a person described or designated in
                      the Specially
                      Designated Nationals and Blocked Persons List of the Office
                      of Foreign
                      Assets Control of the U.S. Department of the Treasury (“OFAC”)
                      or in Section 1 of the Anti-Terrorism Order or (ii) does not
                      engage in any
                      dealings or transactions with whom the Company reasonably believes
                      to be
                      any such person; and

                  
	 	 
	
                    s.

                  	
                    that
                      none of the Company, to the knowledge of the Company, any director,
                      officer, agent or employee of the Company are currently subject
                      to any
                      U.S. sanctions administered by
                      OFAC.

                  

          

        

      

    

     

    
      
        
        

      

      
        -
          6
          -

        
          

        

      

      
        
        

      

    

    

      
        	
                 

              	
                5.2    Undertaking.

              
	
                 

              	
                 

              
	
                a.

              	
                Listing.
                  The Company shall:

              
	
                 

              	
                 

                (i)    (including,
                  without limitation, furnishing to the KOSDAQ from time to time
                  any and all
                  documents, instruments, information and undertakings that may be
                  necessary) maintain a listing for all the issued shares of the
                  Company on
                  the KOSDAQ;

              
	
                 

              	
                 

                (ii)    apply
                  for listing of the Bond Shares on the KOSDAQ promptly after the
                  issue of
                  the Bond Shares, and obtain such listing as soon as practicable
                  thereafter
                  and maintain such listing; and

              
	
                 

              	
                 

                (iii)    minimise
                  any trading halt or temporary suspension of trading of the shares
                  of the
                  Company on the KOSDAQ, and, if trading of the shares on the KOSDAQ
                  is so
                  halted or temporarily suspended, limit such halt or temporary suspension
                  of trading to as short as period as possible.

              
	
                 

              	
                 

              
	
                b.

              	
                Registration
                  of Convertible Bonds and Bonds Shares The
                  Company shall register the issuance of the Convertible Bonds in
                  the bond
                  registry maintained and kept by it immediately upon the issuance
                  of the
                  Convertible Bonds. The Company shall register the issuance of the
                  Convertible Bonds with the Registry Office of the competent Korean
                  court
                  having jurisdiction over the Company in accordance with the Commercial
                  Code of Korea. In addition, the Company shall register the issuance
                  of the
                  Bond Shares to be issued upon conversion of the Convertible Bonds
                  with the
                  Registry Office of the competent Korean court having jurisdiction
                  over the
                  Company in a timely manner in accordance with the Commercial Code
                  of
                  Korea.

              
	
                 

              	
                 

              
	
                c.

              	
                Inspection
                  and Information Provision. The Company shall prepare and deliver,
                  to the
                  extent permissible under the applicable law, to the Subscriber:
                  (i) audited annual financial statements and management report within
                  90 days after the end of each fiscal year; (ii) unaudited quarterly
                  financial and management information within 45 days after the end
                  of each
                  quarter; (iii) material information concerning the management and
                  operation of the Company at least on a quarterly; (iv) copies of
                  all
                  documents or other information sent to any shareholder or bondholder
                  that
                  are material to the rights and/or obligations of the Subscriber;;
                  and (v)
                  copies of any material reports filed by the Company with any relevant
                  securities exchange, regulatory authority or government agency.
                  The
                  Company shall make available to the Subscriber, the directors or
                  other
                  responsible officers of the Subscriber as to the matters relating
                  to this
                  Agreement and copies of all notices, statements and documents in
                  connection therewith that the Subscriber may reasonably request.
                  More
                  specifically, while the Subscriber is a shareholder or bondholder
                  of the
                  Company, the Company shall, to the extent permissible under the
                  applicable
                  law, (i) give the Subscriber and its representatives reasonable
                  access to
                  the offices and properties during normal business hours of the
                  Company and
                  to books and records of the Company; (ii) furnish to the Subscriber
                  and
                  its advisors such financial and operating data and other information
                  relating to the Company as such persons shall reasonably request;
                  and
                  (iii) instruct employees and advisors of the Company to cooperate
                  with the
                  Subscriber in respect of the foregoing.

              
	
                 

              	
                 

              
	
                d.

              	
                Notice
                  Obligation: In case there is any material change at the Company,
                  the
                  Company shall promptly inform the Subscriber in
                  writing.

              

      

       

    

    
      
        
        

      

      
        -
          7
          -

        
          

        

      

      
        
        

      

    

    

      
        	 	
                5.3    Negative
                  Covenant. Unless specifically
                  permitted in writing by the Subscriber, so long as any of the Bonds
                  remain
                  outstanding, the Company undertakes with the Subscriber
                  that:

              
	 	 
	
                a.

              	
                it
                  will not take any steps for capital reduction;

              
	
                 

                b.

              	
                 

                it
                  will not
                  go
                  through the delisting process nor take any steps that may cause
                  the
                  delisting of shares of the Company; 

              
	
                 

                c.

              	
                 

                it
                  will not enter into dissolution, liquidation, bankruptcy or other
                  similar
                  proceeding;

              
	
                 

                d.

              	
                 

                it
                  will not spin-off or transfer all or substantial parts of its business
                  to
                  other entities or persons; and

              
	
                  

              	
                 

              
	
                e.

              	
                it
                  will not cause any change in control where Bokwang Group of Korea
                  will
                  decrease its interest or shares in and eventually lose the management
                  control over the Company.

              
	 	 
	 	
                5.4
                  Merger and Consolidation. The Company agrees to follow all of the
                  procedures and measures provided for the protection of the Subscriber
                  under the Commercial Code of Korea in the event the Company undertakes
                  merger or consolidation.

              
	 	 
	 	 
	 	 
	 	
                6.     
                  Miscellaneous.

                 

              
	 	
                6.1    Entire
                  Agreement. This Agreement, the exhibits and schedules hereto, and
                  the
                  other documents delivered pursuant hereto constitute the full and
                  entire
                  understanding and agreement between the parties with regard to
                  the
                  subjects hereof and no party shall be liable or bound to any other
                  in any
                  manner by any representations, warranties, covenants and agreements
                  except
                  as specifically set forth herein and therein. 

                 

              
	 	 
	 	
                6.2    Notices.
                  All
                  notices required or permitted hereunder shall be in writing and
                  shall be
                  deemed effectively given: (a) upon personal delivery to the party to
                  be notified, (b) when sent by confirmed telex or facsimile if sent
                  during normal business hours of the recipient, if not, then on
                  the next
                  business day, (c) five days after having been sent by registered or
                  certified mail, return receipt requested, postage prepaid, or (d) one
                  day after deposit with a nationally recognized overnight courier,
                  specifying next day delivery, with written verification of receipt.
                  All
                  communications shall be as follows at such other address as the
                  Company or
                  the Subscriber may designate by ten days advance written notice
                  to the
                  other parties hereto:

                 

              

      

    

    to
      the
      Subscriber:

    Cintel
      Corp.

    9900
      Corporate Campus Drive Suite 3000

    Louisville,
      KY 40223

    U.S.A.

    

    Attention: Sang
      Don
      Kim

    Telephone
      No.: 822-512-2111

    Facsimile
      No.: 822-512-5111

    

    with
      a
      copy to 

    

    Pheonix
      Asset Management Inc.

    26th
      Fl.,
      Hanwha Securities Bldg.

    23-5,
      Yoido-dong, Youngdeungpo-gu

    Seoul
      150-717, Korea

    
      
        
        

      

      
        -
          8
          -

        
          

        

      

      
        
        

      

    

    Attention: Stanley
      S.Y. Oh

    Telephone
      No.: 822-799-2202

    Facsimile
      No.: 822-799-2286

    

    to
      the
      Company:

     

    STS
      Semiconductor & Telecommunications Co., Ltd.

    555-9,
      Baekseok-Dong, Cheonan, Chungcheongnam-Do, Korea 

    

    Attention: Jong-Muk
      Wi 

    Telephone
      No.: 8241-529-0810

    Facsimile
      No.: 8241-621-5384

    

    

      
        	 	
                6.3    Titles
                  and Subtitles. The titles of the sections and subsections of this
                  Agreement are for convenience of reference only and are not to
                  be
                  considered in construing this Agreement.

                 

              
	 	
                6.4    Facsimile
                  Signatures; Counterparts. This Agreement may be executed by facsimile
                  signatures and in any number of counterparts, each of which shall
                  be an
                  original, but all of which together shall constitute one
                  instrument.

                 

              
	 	
                6.5    Broker's
                  Fees.
                  Each party hereto represents and warrants that no agent, broker,
                  investment banker, person or firm acting on behalf of or under
                  the
                  authority of such party hereto is or will be entitled to any broker's
                  or
                  finder's fee or any other commission directly or indirectly in
                  connection
                  with the transactions contemplated herein, except as specified
                  herein with
                  respect to the Company. 

                 

              
	 	
                6.6    Waiver
                  of Immunity. Each of the parties hereto irrevocably waives any
                  immunity to
                  which it or its property may at any time be or become entitled,
                  whether
                  characterized as sovereign immunity or otherwise, from any set-off
                  or
                  legal action in Korea or elsewhere, including immunity from service
                  of
                  process, immunity from jurisdiction of any court or tribunal, and
                  immunity
                  of any of its property from attachment prior to judgment or from
                  execution
                  of a judgment.

              
	 	 
	 	
                6.7    Governing
                  Law;
                  Jurisdiction. This Agreement shall be governed by and construed
                  in
                  accordance with the laws of Korea. The Seoul Central District Court
                  of
                  Korea shall have jurisdiction to settle any disputes which may
                  arise out
                  of or in connection with this Agreement and accordingly any legal action
                  or proceedings arising out of or in connection with this Agreement
                  shall
                  be brought in such court.

              
	 	 
	 	
                6.8    Successors
                  in
                  Interest. This Agreement may not be assigned or transferred by
                  the Company
                  without the prior written consent of the Subscriber. Except as
                  otherwise
                  provided herein, all provisions of this Agreement shall be binding
                  upon,
                  inure to the benefit of, and be enforceable by and against the
                  respective
                  heirs, executors, administrators, personal representatives and
                  successors
                  and permitted assigns of any of the parties to this Agreement.
                  

              
	 	 
	 	
                6.9    Severability.
                  If any term or other provision of this Agreement is invalid, illegal
                  or
                  incapable of being enforced by any rule of law or public policy,
                  all other
                  conditions and provisions of this Agreement shall nevertheless
                  remain in
                  full force and effect. Upon such determination that any term or
                  other
                  provision is invalid, illegal or incapable of being enforced, the
                  parties
                  hereto shall negotiate in good faith to modify this Agreement so
                  as to
                  effectuate the original intent of the parties as closely as possible.
                  

              

      

    
      
        
        

      

      
        -
          9
          -

        
          

        

      

      
        
        

      

    

    

      
        	 	
                6.10    Construction.
                  Each party acknowledges that its legal counsel participated in
                  the
                  preparation of this Agreement and, therefore, stipulates that the
                  rule of
                  construction that ambiguities are to be resolved against the drafting
                  party shall not be applied in the interpretation of this Agreement
                  to
                  favor any party against the other.

                 

              
	 	
                6.11    Costs,
                  Expenses and Taxes. Each of the Company and the Subscriber shall
                  be
                  responsible for any and all costs, expenses and taxes (including,
                  without
                  limitation, attorney fees) respectively incurred by it in connection
                  with
                  the execution and delivery of this Agreement and the performance
                  of its
                  obligations under this Agreement.

              
	 	 
	 	
                6.12    Confidentiality.
                  Each
                  of the Company and the Subscriber agrees
                  not to disclose to any person any information relating to the
                  business, finances or other matters of the other party that it
                  may have
                  obtained as a result of the execution of this Agreement or of which
                  it may
                  otherwise become possessed as a result of being party to this Agreement
                  or
                  the performance of its obligations hereunder. Each
                  of the Company and the Subscriber
                  shall use all reasonable endeavors to prevent any such disclosure;
                  provided, however, that the provisions of this Section 7.12 shall
                  not
                  apply:

              
	 	 
	
                (a)

              	
                to
                  the disclosure
                  of
                  any information: (i) to any person who is required to know the
                  same to
                  perform its obligations under this Agreement; (ii) already known
                  to the
                  recipient otherwise than as a result of entering into this Agreement;
                  (iii) subsequently received by the recipient which it would otherwise
                  be
                  free to disclose; (iv) which is or becomes public knowledge otherwise
                  than
                  as a result of the breach of this Section 7.12 of the recipient;
                  (v) to
                  professional advisers or auditors who receive the same under a
                  duty of
                  confidentiality on a need to know basis; and (vi) with the consent
                  of all
                  the parties to whom such confidential information relates;
                  and

              
	 	 
	
                (b)

              	
                to
                  any extent that the recipient is required to disclose any information
                  pursuant to any law or order
                  of
                  any court or pursuant to any direction, request or requirement
                  (whether or
                  not having the force of law) of any governmental or other regulatory
                  or
                  taxation authority or stock exchange on which the Convertible Bonds
                  or the
                  Bonds Shares are listed from time to time (including, without limitation,
                  any official bank examiners or regulators).

              
	 	 

      

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        -
          10
          -

        
          

        

      

      
        
        

      

    

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

     

    
      	
              For
                and on behalf of

              Cintel
                Corp.

               

               

              /s/
                Sang Don Kim

            	 	
              For
                and on behalf of

              STS
                Semiconductor & Telecommunications Co., Ltd.

               

               

              /s/
                Ha Hae Don

            
	 Name:
              Sang Don Kim
              Title:
                Chief Executive Officer 

            	 	 Name:
              Ha Hae Don  
              Title:
                Chief Executive Officer

            
	 	 	 
	 	 	 

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        -
          11
          -

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    THIS
      BOND
      HAS NOT BEEN REGISTERED AND WILL NOT BE REGISTERED UNDER THE SECURITIES AND
      EXCHANGE ACT OF KOREA (THE “SECURITIES ACT”). THIS BOND MAY NOT BE CONVERTED
      INTO THE SHARES OF COMMON STOCK FOR A PERIOD OF ONE YEAR AFTER THE ISSUE OF
      THE
      BOND, EXCEPT AS OTHERWISE PERMITTED BY APPLICABLE KOREAN LAWS AND REGULATIONS.
      

    

    Convertible
      Bond - STS
      Semiconductor & Telecommunications Co., Ltd.

    /
      Bond
      Certificate No.: [ ]

    

    Korean
      Won 27,000,000,000 (Twenty Seven Billion Korean Won)April 20, 2007 (the
“Issue
      Date”)
      

     

    (representing
      one (1) Bond with the face value of Korean Won 27,000,000,000 (Twenty Seven
      Billion Korean Won)

    

    This
      bond
      certificate may not be subdivided for a period of one year from the Issue
      Date; provided
      further that additional certificate(s) of different denomination(s) may be
      created by STS Semiconductor & Telecommunications Co., Ltd. (the
“Company”)
      in
      case of partial redemption or conversion of the Bonds by the Subscriber and/or
      the Holder. 

     

    This
      certificate is issued in respect of one (1) bond which is duly authorized issue
      of Korean Won 27,000,000,000 Convertible Bond due on April 20, 2009 (the
“Bond”)
      of the
      Company. References herein to the Conditions shall be to the terms and
      conditions of the Bond attached hereto (the “Conditions”).

    

    For
      value
      received, the Company, subject to and in accordance with the Conditions,
      promises to pay to Cintel Corp. (the “Subscriber”)
      or its
      registered assigns (collectively the “Holder”)
      upon
      presentation and surrender of this Certificate the principal sum of Korean
      Won
      27,000,000,000 (Twenty Seven Billion Korean Won) (or such other amount as is
      shown on the register of the bondholder with respect to the Bond as being
      represented by this Certificate) on April 20, 2009 (the “Maturity
      Date”)
      or on
      such earlier date as such sum becomes due and repayable under the Conditions,
      together with any other sums payable under the Conditions, all subject to and
      in
      accordance with the Conditions. 

    

    The
      coupon rate of the Bond shall be at the compounded interest rate of 0.0% per
      annum until the date of conversion thereof; however, if conversion right is
      not
      exercised during the conversion period (i.e., the period from one year after
      the
      Issue Date until one month prior to the Maturity Date), then regardless of
      the
      coupon rate, the Company shall guarantee a compounded interest rate of 4.0%
      per
      annum in total on the Bond. At any time between one year after the Issue Date
      and one month prior to the Maturity Date, the Bond may, at the option of the
      Holder, be converted into common shares in the Company by the number of shares
      which will be calculated by dividing the principal amount of the Bond by Korean
      Won 8,010, and a remaining fractional amount, if any, which is less than the
      Conversion Price (as defined in the Terms and Conditions of the Bonds), shall
      be
      returned to the Subscriber without any interest on the Maturity Date.

    

    This
      Certificate is governed by, and shall be construed in accordance with, the
      laws
      of the Republic of Korea. The Company has submitted to the exclusive
      jurisdiction of the Seoul Central District Court of Korea for all purposes
      in
      connection with this Certificate.

    
 

    IN
      WITNESS WHEREOF the Company has caused this Certificate to be duly executed
      on
      its behalf and under its corporate seal.

    

    STS
      SEMICONDUCTOR & TELECOMMUNICATIONS CO., LTD.

    

    By:
      _________________________

    Name:

    Title:

    
      
        
        

      

      
        -
          12
          -

        
          

        

      

      
        
        

      

    

     

    TERMS
      AND CONDITIONS OF THE BONDS

    

    

    The
      statements in these terms and conditions (the “Conditions”)
      constitute Korean Won 27,000,000,000 Convertible Bonds of STS Semiconductor
      & Telecommunications Co., Ltd. (the “Company”)
      due on
      April 20, 2009 (the “Bonds”)
      and
      the holder of the Bonds (the “Holder”)
      is
      entitled to the benefit of and is bound by all the provisions of the Conditions.
      The term “Agreement” as used herein shall refer to the Convertible Bonds
      Subscription Agreement executed by and between the Company and the Subscriber
      dated as of April 19, 2007.

    

    

      
        	
                1.
                  

                 

              	
                Status,
                  Type, Denomination, Repayment of Principal and Interest

                 

              
	 	
                The
                  Bonds constitute direct, unsecured and unsubordinated obligations
                  of the
                  Company and rank at least with all other present and future unsecured
                  and
                  unsubordinated debt and obligations of the Company. The Bonds are
                  in
                  registered form (Ki-Myoung-Shik).
                  The Bonds are due and payable as follows:

                 

              
	 	 
	
                (A)

                 

              	
                The
                  principal amount of the Bonds, together with all accrued and unpaid
                  interest then outstanding, shall be due and payable on April 20,
                  2009 (the
                  “Maturity
                  Date”).
                  

                 

              
	
                (B)
                  

              	
                Certificate(s)
                  of different denomination(s) may be created by the Company only
                  after one
                  (1) year from the Issue Date in case of partial redemption or conversion
                  of the Bonds by the Subscriber and/or the Holder.
                  

              
	 	 
	
                (C)

                 

              	
                The
                  coupon rate of the Bonds shall be at the compounded interest rate
                  of 0.0%
                  per annum until the date of conversion thereof; however, if conversion
                  right is not exercised during the conversion period (i.e., the
                  period from
                  one year after the Issue Date until one month prior to the Maturity
                  Date),
                  then regardless of the coupon rate, the Company shall guarantee
                  a
                  compounded interest rate of 4.0% per annum in total on the Bonds.
                  

                 

              
	
                2.

                 

              	
                Conversion

                 

              
	
                (A)
                  

                 

              	
                Conversion
                  Period and Conversion Price

                 

              
	 	
                At
                  any time between one year after the issuance date of the Bonds
                  and one
                  month prior to the Maturity Date, the Holder has a right to convert
                  any
                  Bond, whether wholly or in part, into shares of common stock of
                  the
                  Company (the “Common
                  Shares”)
                  at the option of the Holder (the “Conversion
                  Right)”.
                  The number of the Common Shares to be issued will be determined
                  by
                  dividing the principal amount of the Bonds deposited for conversion
                  by the
                  Conversion Price, as adjusted herein, at the Conversion Date (both
                  as
                  hereinafter defined), and a remaining fractional amount, if any,
                  which is
                  less than the Conversion Price shall be returned to the Holder
                  without any
                  interest on the Maturity Date. 

                 

              
	 	
                The
                  price at which the Common Shares of the Company will be issued
                  upon
                  conversion will be Korean Won 8,010 per Common Share (the “Initial
                  Conversion Price”)
                  but will be subject to adjustment in the manner provided in Conditions
                  2(C) and 2(D) (the “Conversion
                  Price”).

                 

              
	
                (B)
                  

                 

              	
                Procedure
                  for Conversion

                 

              
	 	
                 

                To
                  exercise the Conversion Right attaching to any Bond, the Holder
                  must
                  complete, execute and deposit at his own expense during normal
                  business
                  hours at the specified office of the Company a notice of conversion
                  (a
                  “Conversion
                  Notice”)
                  in duplicate in the form obtainable from the Company together with
                  the
                  relevant Bond. 

              

      

    

      

    
      
        
        

      

      
        -
          13
          -

        
          

        

      

      
        
        

      

    

     

    As
      a
      condition precedent to conversion, on
      or
      prior to delivering a Conversion Notice, a Holder, who is a foreigner or foreign
      corporation, exercising its Conversion Right must obtain an investment
      registration card issued by the Korean Financial Supervisory Service by
      registering its identity with the Korean Financial Supervisory Service in
      accordance with applicable Korean laws and regulations, including the
      regulations of the Korean Financial Supervisory Commission unless it has
      previously obtained an investment registration card. However, the registration
      requirement does not apply to foreign investors who acquire Common Shares with
      the intention of selling such Common Shares within three months from the date
      of
      acquisition of the Common Shares. 

      

      The
      date
      on which any Bond and the Conversion Notice (in duplicate) relating thereto
      are
      deposited with the Company or, if later, the date on which all conditions
      precedent to the conversion thereof are fulfilled is hereinafter referred to
      as
      the “Deposit
      Date”
      applicable to such Bond and must fall at a time when the Conversion Right
      attaching to such Bond is expressed in these Terms and Conditions to be
      exercisable. The request for conversion shall be deemed to have been made at
      23:59 hours (Seoul time) on the Deposit Date applicable to the relevant Bond
      (herein referred to as the “Conversion
      Date”
      applicable to such Bond). A Conversion Notice once deposited may not be
      withdrawn without the consent in writing of the Company.

     

    
      With
        effect from the Conversion Date, the Company will deem the converting Holder
        to
        have become the holder of record of the number of Common Shares to be issued
        to
        such Holder upon such conversion (disregarding any retroactive adjustment
        of the
        Conversion Price referred to below prior to the time such retroactive adjustment
        shall have become effective). Thereafter the Company will, subject to any
        applicable limitations then imposed by Korean laws and regulations, according
        to
        the request made in the relevant Conversion Notices, or cause its share transfer
        agent as soon as practicable, and in any event within 10 Business Days (as
        defined below) after the Conversion Date, (i) to deliver or cause to be
        delivered to the order of the person named for that purpose in the relevant
        Conversion Notice for the time being of the share transfer agent a certificate
        or certificates for the relevant Common Shares registered in the name of
        the
        converting Holder or, in cases permitted under Korean law, any other person
        named for that purpose in the relevant Conversion Notices, or (ii) to credit
        the
        relevant Shares to the electronic book-entry account of the converting Holder,
        together with any other securities, property or cash (including, without
        limitation, cash payable pursuant to Condition 2) required to be delivered
        upon
        conversion and such assignments and other documents (if any) as may be required
        by law to effect the delivery thereof. 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 paragraphs (C) and (D) of this Condition 2 and the relevant
        Conversion Date falls on a date when the relevant adjustment has not yet
        been
        reflected in the then current Conversion Price, the Company will procure
        that
        the provisions of this paragraph shall be applied, mutatis
        mutandis,
        to such
        number of Common Shares as is equal to the excess of the number of Common
        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 Conversion
        Date over the number of Common Shares previously issued pursuant to such
        conversion, and in such event and in respect of such number of Common Shares
        references in this paragraph to the Conversion Date shall be deemed to refer
        to
        the date upon which such retroactive adjustment becomes effective (disregarding
        the fact that it becomes effective retroactively).

    

    

    
      
        
        

      

      
        -
          14
          -

        
          

        

      

      
        
        

      

    

    Any
      dividend on the Common Shares issued upon conversion of a Bond or Bonds with
      respect to the Fiscal Period (as defined below) during which the relevant
      Conversion Date falls will be paid with respect to the full Fiscal Period on
      the
      basis that the conversion took effect immediately before the beginning of such
      Fiscal Period. The Common Shares issued upon conversion of the Bonds will in
      all
      other respect rank pari
      passu
      with the
      Common Shares in issue on the relevant Conversion Date (except for any right
      the
      record date for which precedes such Conversion Date and any other right excluded
      by mandatory provisions of applicable law). “Fiscal
      Period”
      means an
      annual period commencing on January 1 and ending on December 31 in any year
      unless changed in accordance with the provisions of the Article of Incorporation
      of the Company.

    

    “Business
      Day”
means
      any day on which banks are open for business in Seoul.

    

      
        	
                 

                (C)

              	
                 

                Adjustment
                  of Conversion Price

              

      

    

    

    The
      Conversion Price shall be subject to adjustment as follows:

    
      	
              (i)(x)

            	
              If
                the Company shall (a) make a free distribution of Common Shares,
                (b)
                sub-divide its outstanding Common Shares, (c) consolidate its outstanding
                Common Shares into a smaller number of Common Shares, or (d) re-classify
                any of its Common Shares into other securities of the Company, then
                the
                Conversion Price shall be appropriately adjusted so that the Holder,
                the
                Conversion Date in respect of which occurs after the coming into
                effect of
                the adjustment described in this paragraph (i)(x), shall be entitled
                to
                receive the number of Common Shares or other securities of the Company
                which he would have held or have been entitled to receive after the
                happening of any of the events described above had such Bond been
                converted immediately prior to the happening of such event (or, if
                the
                Company has fixed a prior record date for the determination of
                shareholders entitled to receive any such free distribution of Common
                Shares or other securities issued upon any such sub-division,
                consolidation or re-classification, immediately prior to such record
                date), but without prejudice to the effect of any other adjustment
                to the
                Conversion Price made with effect from the date of the happening
                of such
                event (or such record date) or at any time thereafter. An adjustment
                made
                pursuant to this paragraph (i)(x) shall become effective immediately
                on
                the relevant event referred to above becoming effective or, if a
                record
                date is fixed therefor, immediately after such record date; provided,
                that in the case of a free distribution of Common Shares which must,
                under
                the applicable law, be submitted for approval to a general meeting
                of
                shareholders or be approved by a meeting of the Board of Directors
                of the
                Company before being legally paid or made, and which is so approved
                after
                the record date fixed for the determination of shareholders entitled
                to
                receive such distribution, such adjustment shall, immediately upon
                such
                approval being given by such meeting, become effective retroactively
                to
                immediately after such record date.

            

    

    

    If
      the
      Company shall authorize a free distribution of Common Shares which distribution
      is to be paid or made to shareholders as of a record date which is
      also:

     

    

      
        	 	
                (a)

              	
                the
                  record date for the issue of any rights or warrants which requires
                  an
                  adjustment of the Conversion Price pursuant to paragraph (ii) or
                  (iii)
                  below;

              
	 	 	 
	 	
                (b)

              	
                the
                  day immediately before the date of issue of any securities convertible
                  into or exchangeable for Common Shares which requires an adjustment
                  of the
                  Conversion Price pursuant to paragraph (v) below;

              
	 	 	 
	 	
                (c)

              	
                the
                  day immediately before the date of issue of any Common Shares which
                  requires an adjustment of the Conversion Price pursuant to paragraph
                  (vi)
                  below; or 

              
	 	 	 
	 	
                (d)

              	
                the
                  day immediately before the date of issue of any rights or warrants
                  which
                  requires an adjustment of the Conversion Price pursuant to paragraph
                  (vii)
                  below,

              
	 	 	 
	 	 	
                then
                  (except where such free distribution gives rise to a retroactive
                  adjustment of the Conversion Price under this paragraph (i)(x))
                  no
                  adjustment of the Conversion Price in respect of such free distribution
                  shall be made under this paragraph (i)(x), but in lieu thereof
                  an
                  adjustment shall be made under paragraph (ii), (iii), (v), (vi)
                  or (vii)
                  below (as the case may be) by including in the denominator of the
                  fraction
                  described therein the aggregate number of Common Shares to be issued
                  pursuant to such free distribution.

              

      

       

    

    
      
        
        

      

      
        -
          15
          -

        
          

        

      

      
        
        

      

    

    
    

    
      	
              (i)(y)

            	
              If
                the Company shall declare a dividend in Common Shares then the Conversion
                Price in effect on the date when such dividend is declared (or, if
                the
                Company has fixed a prior record date for the determination of
                shareholders entitled to receive such dividend, on such record date)
                shall
                be adjusted in accordance with the following formula:

            

    

    

    NCP
      = OCP
 ́
      [(N + y)
 ̧
      (N +
      n)]

    

    where:

     

    

      
        	 	
                NCP

              	
                =
                  

              	
                the
                  Conversion Price after such adjustment

              
	 	 	 	 
	 	
                OCP

              	
                =
                  

              	
                the
                  Conversion Price before such adjustment

              
	 	 	 	 
	 	
                N

              	
                =

              	
                the
                  number of Common Shares outstanding (having regard to paragraph
                  (x) below)
                  at the time of declaration of such dividend (or at the close of
                  business
                  in Korea on such record date as the case may be) 

              
	 	 	 	 
	 	
                n

              	
                =

              	
                the
                  number of Common Shares to be distributed to the shareholders as
                  a
                  dividend

              
	 	 	 	 
	 	
                y

              	
                =

              	
                the
                  number of Common Shares which the aggregate par value of such Common
                  Shares to be distributed to the shareholders as a dividend would
                  purchase
                  at the current market price per Common Share on the date of the
                  declaration of such dividend (or, if a prior record date has been
                  fixed as
                  aforesaid, such record date). An adjustment made pursuant to this
                  paragraph (i)(y) shall become effective as provided with respect
                  to
                  paragraph (i)(x); provided
                  that in the case of a dividend in Common Shares which must, under
                  the
                  applicable law, be submitted for approval to a general meeting
                  of
                  shareholders of the Company before being legally paid, and which
                  is so
                  approved after the record date fixed for the determination of shareholders
                  entitled to receive such dividend, such adjustment shall, immediately
                  upon
                  such approval being given by such meeting, become effective retroactively
                  to immediately after such record
                  date.

              

      

    

     

    If
      the
      Company shall declare a dividend in Common Shares which dividend is to be paid
      or made to shareholders as of a record date which is also:

     

    

      
        	 	
                (a)

              	
                the
                  record date for the issue of any rights or warrants which requires
                  an
                  adjustment of the Conversion Price pursuant to paragraph (ii) or
                  (iii)
                  below;

              
	 	 	 
	 	
                (b)

              	
                the
                  day immediately before the date of issue of any securities convertible
                  into or exchangeable for Common Shares which requires an adjustment
                  of the
                  Conversion Price pursuant to paragraph (v)
                  below;

              

      

      
        
          
          

        

        
          -
            16
            -

          
            

          

        

        
          
          

        

         

      

    

    
      
        	 	
                (c)

              	
                the
                  day immediately before the date of issue of any Common Shares which
                  requires an adjustment of the Conversion Price pursuant to paragraph
                  (vi)
                  below; or

              
	 	 	 
	 	
                (d)

              	
                the
                  day immediately before the date of issue of any rights or warrants
                  which
                  requires an adjustment of the Conversion Price pursuant to paragraph
                  (vii)
                  below,

              
	 	 	 
	 	 	
                then
                  (except where such dividend gives rise to a retroactive adjustment
                  of the
                  Conversion Price under the first paragraph of paragraph (i)(x)
                  above) no
                  adjustment of the Conversion Price in respect of such dividend
                  shall be
                  made under this paragraph (i)(y), but in lieu thereof an adjustment
                  shall
                  be made under paragraph (ii), (iii), (v), (vi) or (vii) below (as
                  the case
                  may require) by including in the denominator of the fraction described
                  therein the aggregate number of Common Shares to be issued pursuant
                  to
                  such dividend and including in the numerator of the fraction described
                  therein the number of Common Shares which the aggregate par value
                  of
                  Common Shares to be so distributed would purchase at the current
                  market
                  price per Common Share.

              

      

    

    

    
      	(ii)  	
              if
                the Company shall grant, issue or offer to the holders of Common
                Shares
                rights or warrants entitling them to subscribe for or purchase Common
                Shares:

            

    

     

    

      
        	 	
                (a)
                  

              	
                at
                  a consideration per Common Share receivable by the Company (determined
                  as
                  provided in paragraph (ix) below) which is fixed on or prior to
                  the record
                  date mentioned below and is less than the current market price
                  per Common
                  Share at such record date; or 

              
	 	 	 
	 	
                (b)

              	
                at
                  a consideration per Common Share receivable by the Company (determined
                  as
                  aforesaid) which is fixed after the record date mentioned below
                  and is
                  less than the current market price per Common Share on the date
                  the
                  Company fixes the said consideration, then the Conversion Price
                  in effect
                  (in a case within (a) above) on the record date for the determination
                  of
                  shareholders entitled to receive such rights or warrants or (in
                  a case
                  within (b) above) on the date the Company fixes the said consideration
                  shall be adjusted in accordance with the following formula:

              

      

    

     

    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    

    where:

    

      
        	 	
                NCP

              	
                =

              	
                the
                  Conversion Price after such adjustment

              
	 	 	 	 
	 	
                OCP

              	
                =

              	
                the
                  Conversion Price before such adjustment

              
	 	 	 	 
	 	
                N

              	
                =

              	
                the
                  number of Common Shares outstanding (having regard to paragraph
                  (x) below)
                  at the close of business in Korea (in a case within (a) above)
                  on such
                  record date or (in a case within (b) above) on the date the Company
                  fixes
                  the said consideration

              
	 	 	 	 
	 	
                n

              	
                =

              	
                the
                  number of Common Shares initially to be issued upon exercise of
                  such
                  rights or warrants at the said consideration

              
	 	 	 	 
	 	
                v

              	
                =

              	
                the
                  number of Common Shares which the aggregate consideration receivable
                  by
                  the Company (determined as provided in paragraph (ix) below) would
                  purchase at such current market price per Common Share specified
                  in (a)
                  or, as the case may be, (b)
                  above.

              

      

    

     

    
      
        
        

      

      
        -
          17
          -

        
          

        

      

      
        
        

      

    

    Such
      adjustment shall become effective (in a case within (a) above) immediately
      after
      the record date for the determination of shareholders entitled to receive such
      rights or warrants or (in a case within (b) above) immediately after the Company
      fixes the said consideration but retroactively to immediately after the record
      date for the said determination.

    

    If,
      in
      connection with a grant, issue or offer to the holders of Common Shares of
      rights or warrants entitling them to subscribe for or purchase Common Shares,
      any Common Shares which are not subscribed for or purchased by the persons
      entitled thereto are offered to or subscribed by others (whether as places
      or
      members of the public or pursuant to underwriting arrangements or otherwise),
      no
      further adjustment shall be required or made to the Conversion Price by reason
      of such offer or subscription.

    

      
        	 	
                (iii)

              	
                If
                  the Company shall grant, issue or offer to the holders of Common
                  Shares
                  rights or warrants entitling them to subscribe for or purchase
                  any
                  securities convertible into or exchangeable for Common Shares (other
                  than
                  those rights and warrants granted, issued or offered to and accepted
                  by
                  existing employees of the Company in accordance with mandatory
                  provisions
                  of the applicable law):

              
	 	 	 	 
	 	 	
                (a)

              	
                at
                  a consideration per Common Share receivable by the Company (determined
                  as
                  provided in paragraph (ix) below) which is fixed on or prior to
                  the record
                  date mentioned below and is less than the current market price
                  per Common
                  Share at such record date; or

              
	 	 	 	 
	 	 	
                (b)

              	
                at
                  a consideration per Common Share receivable by the Company (determined
                  as
                  aforesaid) which is fixed after the record date mentioned below
                  and is
                  less than the current market price per Common Share on the date
                  the
                  Company fixes the said consideration,

              
	 	 	 	 
	 	 	 	
                then
                  the Conversion Price in effect (in a case within (a) above) on
                  the record
                  date for the determination of shareholders entitled to receive
                  such rights
                  or warrants or (in a case within (b) above) on the date the Company
                  fixes
                  the said consideration shall be adjusted in accordance with the
                  following
                  formula:

              

      

    

    

    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    

      
      where:

    

      
        	 	
                NCP
                  and OCP have the meanings ascribed thereto in paragraph (ii)
                  above.

              
	 	 	 	 
	 	
                N

              	
                =

              	
                the
                  number of Common Shares outstanding (having regard to paragraph
                  (x) below)
                  at the close of business in Korea (in a case within (a) above)
                  on such
                  record date or (in a case within (b) above) on the date the Company
                  fixes
                  the said consideration 

              
	 	 	 	 
	 	
                n

              	
                =

              	
                the
                  number of Common Shares initially to be issued upon exercise of
                  such
                  rights or warrants and conversion or exchange of such convertible
                  or
                  exchangeable securities at the said consideration

              
	 	 	 	 
	 	
                v

              	
                =

              	
                the
                  number of Common Shares which the aggregate consideration receivable
                  by
                  the Company (determined as provided in paragraph (ix) below) would
                  purchase at such current market price per Common Share specified
                  in (a)
                  or, as the case may be, (b) above.

              

      

      
        
          
          

        

        
          -
            18
            -

          
            

          

        

        
          
          

        

      

    

    Such
      adjustment shall become effective (in a case within (a) above) immediately
      after
      the record date for the determination of shareholders entitled to receive such
      rights or warrants or (in a case within (b) above) immediately after the Company
      fixes the said consideration but retroactively to immediately after the record
      date for the said determination. 

    

    If,
      in
      connection with a grant, issue or offer to the holders of Common Shares of
      rights or warrants entitling them to subscribe for or purchase securities
      convertible into or exchangeable for Common Shares, any such securities
      convertible into or exchangeable for Common Shares which are not subscribed
      for
      or purchased by the persons entitled thereto are offered to or subscribed by
      others (whether as places or members of the public or pursuant to underwriting
      arrangements or otherwise) no further adjustments shall be required or made
      to
      the Conversion Price by reason of such offer or subscription or the conversion
      or exchange of such securities.

    

    
      	
               
                (iv)

            	
              If
                the Company shall distribute to the holders of Common Shares evidences
                of
                its indebtedness, shares of capital stock of the Company (other than
                Common Shares), assets (excluding annual cash dividends) or rights
                or
                warrants to subscribe for or purchase shares or securities at less
                than
                fair market value (excluding those rights and warrants referred to
                in
                paragraphs (ii) and (iii) above and any rights and warrants granted,
                issued or offered to and accepted by existing employees of the Company
                in
                accordance with mandatory provisions of the applicable law), then
                the
                Conversion Price in effect on the record date for the determination
                of
                shareholders entitled to receive such distribution shall be adjusted
                in
                accordance with the following
                formula:

            

    

    

    NCP
      = OCP
 ́
      [(CMP -
      fmv)  ̧
      CMP]

    

      
      where:

    

      
        	 	
                NCP
                  and OCP have the meanings ascribed thereto in paragraph (ii)
                  above.

              
	 	 	 	 
	 	
                CMP

              	
                =

              	
                the
                  current market price per Common Share on the record date for the
                  determination of shareholders entitled to receive such
                  distribution

              
	 	 	 	 
	 	
                fmv

              	
                =

              	
                the
                  fair market value (as determined by the Company or, if pursuant
                  to the
                  applicable law such determination is to be made by application
                  to a court
                  of competent jurisdiction, as determined by such court or by an
                  appraiser
                  appointed by such court) of the portion of the evidences of indebtedness,
                  shares, assets, rights or warrants so distributed applicable to
                  one Common
                  Shares less any consideration paid for the same by the relevant
                  shareholder.

              

      

       

    

    In
      making
      a determination of the fair market value of any such rights or warrants, the
      Company shall consult a leading independent securities company or bank in Seoul
      selected by the Company and approved in writing by the Holder and shall take
      fully into account the advice received from such company or bank.

    

    Such
      adjustment shall become effective immediately after the record date for the
      determination of shareholders entitled to receive such distribution;
provided,
      that (a)
      in the case of such a distribution which must, under the applicable law, be
      submitted for approval to a general meeting of shareholders or be approved
      by a
      meeting of the Board of Directors of the Company before such distribution may
      legally be made and is so approved after the record date fixed for the
      determination of shareholders entitled to receive such distribution, such
      adjustment shall, immediately upon such approval being given by such meeting,
      become effective retroactively to immediately after such record date and (b)
      if
      the fair market value of the evidences of indebtedness, shares, assets, rights
      or warrants so distributed cannot be determined until after the record date
      fixed for the determination of shareholders entitled to receive such
      distribution, such adjustment shall, immediately upon such fair market value
      being determined, become effective retroactively immediately after such record
      date.

    

    
      
        
        

      

      
        -
          19
          -

        
          

        

      

      
        
        

      

    

    
      	
               
                (v)

            	
              If
                the Company shall grant, issue or offer any securities convertible
                into or
                exchangeable for Common Shares (other than in any of the circumstances
                described in paragraph (iii) above and paragraph (vii) below) and
                the
                consideration per Common Share receivable by the Company (determined
                as
                provided in paragraph (ix) below) shall be less than the current
                market
                price per Common Share on the date in Korea on which the Company
                fixes the
                said consideration (or, if the issue of such securities is subject
                to
                approval by a general meeting of shareholders, on the date on which
                the
                Board of Directors of the Company fixes the consideration to be
                recommended at such meeting), then the Conversion Price in effect
                immediately prior to the date of issue of such convertible or exchangeable
                securities shall be adjusted in accordance with the following
                formula:

            

    

    

    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    

      
      where :

    

      
        	 	
                NCP
                  and OCP have the meanings ascribed thereto in paragraph (ii)
                  above.

              
	 	 	 	 
	 	
                N

              	
                =

              	
                the
                  number of Common Shares outstanding (having regard to paragraph
                  (x) below)
                  at the close of business in Korea on the day immediately prior
                  to the date
                  of such issue

              
	 	 	 	 
	 	
                n

              	
                =

              	
                the
                  number of Common Shares to be issued upon conversion or exchange
                  of such
                  convertible or exchangeable securities at the initial conversion
                  or
                  exchange price or rate

              
	 	 	 	 
	 	
                v

              	
                =

              	
                the
                  number of Common Shares which the aggregate consideration receivable
                  by
                  the Company (determined as provided in paragraph (ix) below) would
                  purchase at such current market price per Common
                  Share.

              

      

    

     

    Such
      adjustment shall become effective as of the calendar day in Korea corresponding
      to the calendar day at the place of issue on which such convertible or
      exchangeable securities are issued.

    

    
      	
               
                (vi)

            	
              If
                the Company shall issue any Common Shares (other than Common Shares
                issued
                (a) on conversion of the Bonds or on conversion or exchange of any
                convertible or exchangeable securities issued by the Company prior
                to the
                Issue Date or (b) on exercise of any rights or warrants granted,
                issued or
                offered by the Company prior to the Issue Date or (c) in any of the
                circumstances described above or (d) to shareholders of any company
                which
                merges into the Company in proportion to their shareholdings in such
                company immediately prior to such merger, upon such merger) for a
                consideration per Common Share receivable by the Company (determined
                as
                provided in paragraph (ix) below) less than the current market price
                per
                Common Share on the date in Korea on which the Company fixes the
                said
                consideration (or, if the issue of such Common Shares is subject
                to
                approval by a general meeting of shareholders, on the date on which
                the
                Board of Directors of the Company fixes the consideration to be
                recommended at such meeting), then the Conversion Price in effect
                immediately prior to the issue of such additional Common Shares shall
                be
                adjusted in accordance with the following
                formula:

            

    

    

    
      
        
        

      

      
        -
          20
          -

        
          

        

      

      
        
        

      

    

    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    

      
      where:

     

    
      
        	 	
                NCP
                  and OCP have the meanings ascribed thereto in paragraph (ii)
                  above.

              
	 	 	 	 
	 	
                N

              	
                =

              	
                the
                  number of Common Shares outstanding (having regard to paragraph
                  (x) below)
                  at the close of business in Korea on the day immediately prior
                  to the date
                  of issue of such additional Common Shares.

              
	 	 	 	 
	 	
                n

              	
                =

              	
                the
                  number of additional Common Shares issued as aforesaid.

              
	 	 	 	 
	 	
                v

              	
                =

              	
                the
                  number of Common Shares which the aggregate consideration receivable
                  by
                  the Company (determined as provided in paragraph (ix) below) would
                  purchase at such current market price per Common
                  Share.

              

      

    

    

    Such
      adjustment shall become effective as of the calendar day in the Korea of the
      issue of such additional Common Shares.

    

    
      	
               
                (vii)

            	
              If
                the Company shall issue rights or warrants to subscribe for or purchase
                Common Shares or securities convertible into or exchangeable for
                Common
                Shares (other than any rights or warrants granted, issued or offered
                to
                the holders of Common Shares and to existing employees of the Company
                in
                accordance with mandatory provisions of the applicable law) and the
                consideration per Common Share receivable by the Company (determined
                as
                provided in paragraph (ix) below) shall be less than the current
                market
                price per Common Share on the date in Korea on which the Company
                fixes the
                said consideration (or, if the issue of such rights or warrants is
                subject
                to approval by a general meeting of shareholders, on the date on
                which the
                Board of Directors of the Company fixes the consideration to be
                recommended at such meeting), then the Conversion Price in effect
                immediately prior to the date of the issue of such rights or warrants
                shall be adjusted in accordance with the following
                formula:

            

    

    

    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    

      
      where:

     

    
      
        	 	
                NCP
                  and OCP have the meanings ascribed thereto in paragraph (ii)
                  above.

              
	 	 	 	 
	 	
                N

              	
                =

              	
                the
                  number of Common Shares outstanding (having regard to paragraph
                  (x) below)
                  at the close of business in Korea on the day immediately prior
                  to the date
                  of such issue

              
	 	 	 	 
	 	
                n

              	
                =

              	
                the
                  number of Common Shares to be issued on exercise of such rights
                  or
                  warrants and (if applicable) conversion or exchange of such convertible
                  or
                  exchangeable securities at the said consideration

              
	 	 	 	 
	 	
                v

              	
                =

              	
                the
                  number of Common Shares which the aggregate consideration receivable
                  by
                  the Company (determined as provided in paragraph (ix) below) would
                  purchase at such current market price per Common
                  Share.

              

      

    
      
        
        

      

      
        -
          21
          -

        
          

        

      

      
        
        

      

    

    Such
      adjustment shall become effective as of the calendar day in Korea corresponding
      to the calendar day at the place of issue on which such rights or warrants
      are
      issued.

    

    
      	(viii)  	
              For
                the purposes of this
                Clause (C), the current market price per Common Share on any date
                shall be
                deemed to be the volume-weighted average of the daily closing prices
                of
                the Common Shares for the 30 consecutive trading days commencing
                45
                trading days before such date. The closing price of the Common Shares
                for
                each trading day shall be the last reported selling price of the
                Common
                Shares as reported by the KOSDAQ for such day or, if no sale takes
                place
                on such day, the higher of the closing bid or offered price of the
                Common
                Shares on the KOSDAQ. For the purposes of this paragraph (viii),
                the term
                “trading
                day”
                means a day when the KOSDAQ is open for business, but does not include
                a
                day when (a) no such last selling price or closing bid or offered
                price is
                reported and (b) (if the Common Shares are not admitted to trading
                on such
                exchange)
                no such closing bid and offered prices are furnished as aforesaid.
                If
                during the said 45 trading days or any period thereafter up to but
                excluding the date as of which the adjustment of the Conversion Price
                in
                question shall be effected, any event (other than the event which
                requires
                the adjustment in question) shall occur which gives rise to a separate
                adjustment to the Conversion Price under the provisions of this
                Clause (C), then the current market price as determined above shall
                be
                adjusted in such manner and to such extent as a leading independent
                securities company or bank in Seoul selected by the Company and approved
                in writing by the Holders
                shall in its absolute discretion deem appropriate and fair to compensate
                for the effect thereof.

            

    

    

    
      	(ix)  	
              For
                the purposes of any calculation of the consideration receivable by
                the
                Company
                pursuant to paragraphs (ii), (iii), (v), (vi) and (vii) of Condition
                2(C),
                the following provisions shall be
                applicable:

            

    

     

    
      
        	 	
                (a)

              	
                in
                  the case of the issue of Common Shares for cash, the consideration
                  shall
                  be the amount of such cash;

              
	 	 	 
	 	
                (b)

              	
                in
                  the case of the issue of Common Shares for a consideration in whole
                  or in
                  part other than cash, the consideration other than cash shall be
                  deemed to
                  be the fair value thereof as determined by an independent financial
                  institution or, if pursuant to applicable law of Korea such determination
                  is to be made by application to a court of competent jurisdiction,
                  as
                  determined by such court or an appraiser appointed by such court,
                  irrespective of the accounting treatment thereof;

              
	 	 	 
	 	
                (c)

              	
                in
                  the case of the issue (whether initially or upon the exercise of
                  rights or
                  warrants) of securities convertible into or exchangeable for Common
                  Shares, the aggregate consideration receivable by the Company shall
                  be
                  deemed to be the consideration received by the Company for such
                  securities
                  and (if applicable) rights or warrants plus the additional consideration
                  (if any) to be received by the Company upon (and assuming) the
                  conversion
                  or exchange of such securities at the initial conversion or exchange
                  price
                  or rate and (if applicable) the exercise of such rights or warrants
                  at the
                  initial subscription or purchase price (the consideration in each
                  case to
                  be determined in the same manner as provided in this paragraph
                  (ix) of
                  Condition 2(C)) and the consideration per Common Share receivable
                  by the
                  Company shall be such aggregate consideration divided by the number
                  of
                  Common Shares to be issued upon (and assuming) such conversion
                  or exchange
                  at the initial conversion or exchange price or rate and (if applicable)
                  the exercise of such rights or warrants at the initial subscription
                  or
                  purchase price;

              

      

    

     

    
      
        
        

      

      
        -
          22
          -

        
          

        

      

      
        
        

    

    

    
      	
               
                (x)

            	
              If,
                at the time of computing an adjustment (the “later
                adjustment”)
                of the Conversion Price pursuant to any of paragraphs (ii), (iii),
                (v),
                (vi) and (vii) above, the Conversion Price already incorporates an
                adjustment made (or taken or to be taken into account pursuant to
                the
                proviso to paragraph (xi) below) to reflect an issue of Common Shares
                or
                of securities convertible into or exchangeable for Common Shares
                or of
                rights or warrants to subscribe for or purchase Common Shares or
                securities, to the extent that the number of such Common Shares or
                securities taken into account for the purposes of such adjustment
                exceeds
                the number of such Common Shares in issue at the time relevant for
                ascertaining the number of outstanding Common Shares for the purposes
                of
                computing the later adjustment, such Common Shares shall be deemed
                to be
                outstanding for the purposes of making such
                computation.

            

    

    

    
      	
               
                (xi)

            	
              No
                adjustment of the Conversion Price shall be required unless such
                adjustment would require an increase or decrease in such price of
                at least
                Korean Won 10; provided,
                that any adjustment which by reason of this paragraph (xi) is not
                required
                to be made shall be carried forward and taken into account (as if
                such
                adjustment had been made at the time when it would have been made
                but for
                the provisions of this paragraph (xi)) in any subsequent adjustment.
                All
                calculations under this Condition 2(C) shall be made to the nearest
                Korean
                Won.

            

    

    

    
      
        
        

      

      
        -
          23
          -

        
          

        

      

      
        
        

      

    

    
      	
               
                (xii)

            	
              Notwithstanding
                the provisions of this Condition 2(C), the Conversion Price shall
                not be
                reduced below the par value of the Common Shares as a result of any
                adjustment made hereunder unless under applicable law then in effect
                Bonds
                may be converted at such reduced Conversion Price into legally issued,
                fully-paid Common Shares.

            

    

    

    
      	
               
                (xiii)

            	
              Any
                references herein to the date on which a consideration is “fixed”
                shall, where the consideration is originally expressed by reference
                to a
                formula which cannot be expressed an actual cash amount until a later
                date, be construed as a reference to the first day on which such
                actual
                cash amount can be ascertained.

            

    

    

    
      	
               
                (xiv)

            	
              No
                adjustment involving an increase in the Conversion Price will be
                made,
                except in the case of a consolidation of the Common Shares, as referred
                to
                in paragraph (i) of Condition 2(C).

            

    

    

    
      	
               
                (xv)

            	
              The
                Company may purchase its Common Shares to the extent permitted by
                law.

            

    

    

    
      	
               
                (xvi)

            	
              Notice
                of any adjustment in the Conversion Price shall be given to Holder
                in
                accordance with Condition 9 as soon as practicable after the determination
                thereof.

            

    

    

    
      	
               
                (xvii)

            	
              Where
                more than one 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 a leading investment bank of international repute (acting
                as
                expert), selected by the Company and approved in writing by the Holder
                at
                the expense of the Company, 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 a leading investment bank of international
                repute (acting as expert), selected by the Company and approved in
                writing
                by the Holder at the expense of the Company, to be in their opinion
                appropriate in order to give such intended
                result.

            

    

     

    
      
        	
                (D)

              	
                The
                  Conversion Price shall be subject to resetting as
                  follows:

              

      

    

    

    
      	
               
                (i)

            	
              If
                the higher of (x) the simple arithmetic average of (i) the volume
                weighted
                average of the Closing Prices (as defined below) of the Common Shares
                on
                the KOSDAQ for the one month prior to each relevant Setting Date
                (as
                defined below), (ii) the volume weighted average of the Closing Prices
                for
                the one week prior to the relevant Setting Date, and (iii) the Closing
                Price one trading day prior to the relevant Setting Date, being rounded
                upwards (if necessary) to the nearest Korean Won, and (y) the Closing
                Price at the close of business in Korea one trading day prior to
                each
                relevant Setting Date (the higher of (x) and (y), “Adjusted
                Share Price”)
                is lower than the then applicable Conversion Price on the relevant
                Setting
                Date, then the Conversion Price shall be adjusted to the Adjusted
                Share
                Price in effect on and from the relevant Setting Date (such adjusted
                Conversion Price being rounded upwards (if necessary) to the nearest
                Korean Won). 

            

    

    

    PROVIDED
      THAT:

    

    
      	           
              	
              (1)

            	
              the
                provisions of Condition 2(C) shall apply mutatis
                mutandis to
                this Condition 2(D)(i) 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
                2(C);

            

    

    

    
      	    	
              (2)

            	
              any
                such adjustment to the Conversion Price pursuant to this Condition
                2(D)(i)
                shall be limited so that the Conversion Price shall not be reduced
                below
                70 per cent. of (x) the Initial Conversion Price or (y) if any adjustment
                has been made to the Conversion Price in accordance with Condition
                2(C),
                such adjusted Conversion Price;

            

    

    

    
      
        
        

      

      
        -
          24
          -

        
          

        

      

      
        
        

      

    

    
      	 	
              (3)

            	
              the
                Conversion Price shall not be reduced below the par value of the
                Common
                Shares (currently Korean Won 500 per Common Share as of the Issue
                Date) as
                a result of any adjustment made hereunder unless under applicable
                law then
                in effect, the Bonds may be converted at such reduced Conversion
                Price
                into legally issued, fully-paid and non-assessable Common
                Shares;

            

    

    

    
      	 	
              (4)

            	
              the
                adjustment of the Conversion Price in respect of any Setting Date
                shall be
                subject to the provisions of the applicable law and regulations then
                in
                effect; and

            

    

    

    
      	 	
              (5)

            	
              for
                the avoidance of doubt (x) any adjustments to the Conversion Price
                made
                pursuant to this Condition 2(D)(i) shall only be downward adjustments,
                (y)
                no adjustment will be made where such adjustment would be less than
                Korean
                Won 10 and (z) an adjustment may be made in respect of a Setting
                Date
                notwithstanding that an adjustment may have been made in respect
                of a
                prior Setting Date or Setting
                Dates.

            

    

    

    
      	
               
                (ii)

            	
              Notwithstanding
                anything to the contrary in these Conditions, in the event that the
                Company’s Common Shares become de-registered or de-listed from the KOSDAQ,
                the Conversion Price shall be immediately adjusted to the par value
                of the
                Common Shares with effect on and from the date such event takes
                effect.

            

    

    

    The
      term
“Closing
      Price”
for
      any
      day means the last selling price or, if no sales take place on such day, the
      closing bid or offered price in each case as reported by the KOSDAQ are listed
      for such day. The term “trading
      day”
is
      a
      day when the Stock Exchange the Common Shares are listed is open for business,
      but does not include a day when (a) no such last selling price or closing bid
      or
      offered price is reported and (b) (if the Common Shares is not admitted to
      trading on such Stock Exchange) no such closing bid and offered prices are
      furnished as aforesaid. If during the said 45 trading days or any period
      thereafter up to but excluding the date as of which the adjustment of the
      Conversion Price in question shall be effected, any event (other than the event
      which requires the adjustment in question) shall occur which gives rise to
      a
      separate adjustment to the Conversion Price under the provisions of Condition
      2(C), then the current market price as determined above shall be adjusted in
      such manner and to such extent as a leading independent securities company
      or
      bank in New York selected by the Company and approved in writing by the Holder
      shall in its absolute discretion deem appropriate and fair to compensate for
      the
      effect thereof.

    

    
      	 	
              The
                term “Setting
                Date”
                means a day falling one calendar month after the Issue Date (i.e.
                May 20,
                2007) and thereafter every three calendar months after the previous
                Setting Date (starting with August 20, 2007) up to one month prior
                to the
                Maturity Date. If any Setting Date would otherwise fall on a day
                which is
                not a Business Day, it shall be postponed to the next day which is
                a
                Business Day unless it would thereby fall into the next calendar
                month in
                which event it shall be brought forward to the immediately preceding
                Business Day.

            

    

     

    Such
      adjustments (if any) shall be notified promptly to the Holder in accordance
      with
      Condition 9.

    

    

      
        	
                (E)

                 

              	
                If,
                  while any Conversion Right is or is capable of being or becoming
                  exercisable, there shall be any adjustment to the Conversion Price,
                  the
                  Company shall (i) as soon as practicable notify the Holder of particulars
                  of the event giving rise to the adjustment, the Conversion Price
                  after
                  such adjustment, the date on which such adjustment takes effect
                  and such
                  other particulars and information as the Holder may require and
                  (ii)
                  promptly after the date upon which such adjustment takes effect,
                  give
                  notice to the Holder in a form previously approved in writing by
                  the
                  Holder, stating that the Conversion Price has been adjusted and
                  setting
                  both the Conversion Price in effect prior to such adjustment, the
                  adjusted
                  Conversion Price and the effective date of such adjustment. The
                  Conversion
                  Notice shall be made in a form agreed upon by and between the Company
                  and
                  the Holders.

                 

              

      

    

     

    
      
        
          
          

        

        
          -
            25
            -

          
            

          

        

        
          
          

        

      

       

    

    
      
        	
                3.

                 

              	
                Redemption
                  at Maturity

                 

              
	
                 

              	
                Unless
                  previously redeemed or converted or purchased and in each case
                  canceled as
                  herein provided, the Company will redeem on the Maturity Date the
                  Bonds at
                  one hundred per cent. (100%) of their face principal amount and
                  interest
                  on the amount of the Bonds calculated at the compounded rate of
                  eight per
                  cent. (4%) per annum. 

              
	
                 

              	
                 

              
	
                4.

                 

              	
                Redemption
                  at the option of the Bondholder

                 

              
	
                 

              	
                At
                  any time during the period from May 21 2007 to March 19 2009, the
                  Holder
                  may by completing, signing and depositing a notice of redemption
                  in
                  duplicate at the the Company during the normal business hours of
                  such
                  Company not more than sixty days, but not less than thirty days
                  prior to
                  the early redemption date, which shall not fall after March 19,
                  2009 , set
                  forth in the redemption notice (the “Put
                  Date”)
                  require the Company to redeem all or some of the Bonds held by
                  him on the
                  relevant Put Date at its face value together with accrued interest
                  on the
                  principal amount to be repaid calculated at the compounded rate
                  of four
                  per cent. (4.0%) per annum.

                 

              
	
                 

              	
                 

              
	
                5.

                 

              	
                Redemption
                  at the option of the Company

                 

              
	
                 

              	
                At
                  any time after April 20 2008, if the Closing Price of a Common
                  Share of
                  the Company remains higher than 135% of the Conversion Price then
                  in
                  effect for twenty (20) consecutive trading dates of the KOSDAQ
                  and the
                  Holder fails to exercise its Conversion Rights during such twenty
                  day
                  period, on the trading date immediately following the end of such
                  twenty
                  day period, the Company may send a notice requesting the Holder
                  to
                  exercise his Conversion Right within five (5) trading dates from
                  the date
                  of receipt of such notice. If the Holder fails to exercise his
                  Conversion
                  Right during such five (5) day period, the Company may redeem all
                  or some
                  of the issued and outstanding Bonds at 100% of the principal amount
                  of the
                  Bonds without any interest or premium thereon.

                 

              
	
                6.

                 

              	
                Charges,
                  Taxes and Expenses

                 

              
	
                 

              	
                Issuance
                  of the equity interest upon the conversion of the Bonds shall be
                  made
                  without charge to the Holder for any issue or transfer tax or other
                  incidental expense in respect of the issuance of such equity interest,
                  all
                  of which taxes and expenses shall be paid by the Company.

                 

              
	
                7.

                 

              	
                Events
                  of Default

                 

              
	
                 

              	
                If
                  any of the following events (each, an “Event
                  of Default”)
                  occurs and is continuing, the Company shall promptly inform the
                  Holder of
                  such Event of Default. In such case, the Holder at its discretion
                  may give
                  notice to the Company that the Bonds are, and they shall immediately
                  become, due and payable, in which case the entire unpaid principal
                  balance
                  of the Bonds and all of the unpaid interest accrued thereon shall
                  be
                  immediately due and payable. 

                 

              
	 	 

      

    

     

    
      
        
        

      

      
        -
          26
          -

        
          

        

      

      
        
        

      

    

    

      
        	
                (i)

              	
                Non-Payment

              
	 	
                 

                The
                  Company fails to pay principal, premium, interest and/or any other
                  amount
                  owing by the Company to the Holder hereunder when due and payable
                  and such
                  failure continues for seven (7) days; or

              
	 	 
	
                (ii)

              	
                Breach
                  of Other Obligations

              
	 	
                 

                The
                  Company defaults in the performance or observance of or compliance
                  with
                  any of its obligations set out in this Agreement and/or these Conditions
                  which default is incapable of remedy or, if it is capable of remedy,
                  is
                  not remedied within thirty (30) days after such default;
                  or

              
	 	 
	
                (iii)

              	
                Breach
                  of Representation or Warranty

              
	 	
                 

                Any
                  representation or warranty given by the Company under these Conditions
                  is
                  no longer correct in material respect on the date on which it was
                  made or
                  repeated and this situation continues for a period of thirty (30)
                  days;
                  or

              
	
                 

                (iv)

              	
                 

                Cross
                  Default

              
	 	
                 

                a.    Any
                  other present or future indebtedness for borrowed money of the
                  Company
                  becomes due and payable prior to its stated maturity by reason
                  of an Event
                  of Default; or

              
	 	
                 

                b.    Any
                  such indebtedness for borrowed money is not paid when due, as the
                  case may
                  be, within any applicable grace period originally provided for;
                  or

              
	 	
                 

                c.    The
                  Company fails to pay when due (or within any applicable grace period
                  originally provided for) any amount payable by it under any present
                  or
                  future guarantee or indemnity in respect of indebtedness for borrowed
                  money.

              
	
                 

                (v)

              	
                 

                Enforcement
                  Proceedings

              
	 	
                 

                A
                  distress, execution or other legal process is levied, enforced
                  or sued
                  upon or against any material part of the property, assets or revenues
                  of
                  the Company and is not discharged or stayed within ninety (90)
                  days of
                  having been so levied, enforced or sued out unless enforcement
                  or suit is
                  being contested in good faith and by appropriate proceedings;
                  or

              
	
                 

                (vi)

              	
                 

                Security
                  Enforced

              
	 	
                 

                An
                  encumbrancer takes possession or a receiver, manager or other similar
                  person is appointed over, or an attachment order is issued in respect
                  of
                  the whole or any material part of the undertaking, property, assets
                  or
                  revenues of the Company and in any such case such possession, appointment
                  or attachment is not stayed or terminated or the debt on account
                  of which
                  such possession was taken or appointment or attachment was made
                  is not
                  discharged or satisfied within thirty (30) days of such possession,
                  appointment or the issue of such order; or

              
	
                 

                (vii)

              	
                 

                Insolvency

              
	 	
                 

                The
                  Company is declared by a court of competent jurisdiction to be
                  insolvent,
                  bankrupt or unable to pay its debts, or stops, suspends or threatens
                  to
                  stop or suspend payment of all or a material part of its debts
                  as they
                  mature or applies for or consents to or suffers the appointment
                  of an
                  administrator, liquidator or receiver or other similar person in
                  respect
                  of the Company or over the whole or any material part of the undertaking,
                  property, assets or revenues of the Company pursuant to any insolvency
                  law
                  and such appointment is not discharged within thirty (30) days
                  of its
                  taking effect or takes any proceedings under any law for a readjustment
                  or
                  deferment of its obligations or any part of them or makes or enters
                  into a
                  general assignment or an arrangement or composition with or for
                  the
                  benefit of its creditors except, in any such case, for the purpose
                  of and
                  followed by a reconstruction, amalgamation, reorganization, merger
                  or
                  consolidation on terms approved by the Holder;
                  or

              

      

    

     

    
      
        
        

      

      
        -
          27
          -

        
          

        

      

      
        
        

      

      

        
          	
                   

                  (viii)

                	
                   

                  Winding-up

                
	 	
                   

                  An
                    order of a court of competent jurisdiction is made or an effective
                    resolution passed for the winding-up or dissolution of the Company
                    or the
                    Company ceases to carry on all or any material part of its business
                    or
                    operations except, in any such case, for the purpose of and followed
                    by a
                    reconstruction, amalgamation, reorganization, merger or consolidation
                    on
                    terms approved by the Holder; or

                
	
                   

                  (ix)

                	
                   

                  Expropriation

                
	 	
                   

                  Any
                    governmental authority or agency compulsorily purchases or expropriates
                    all or any material part of the assets of the Company without
                    fair
                    compensation; or

                
	
                   

                  (x)

                	
                   

                  Unlawfulness

                
	 	
                   

                  The
                    Company is in breach of any law or regulation in any jurisdiction
                    in
                    material respects to which it and/or any of its properties are
                    subject.

                
	
                   

                  (xi)

                	
                   

                  Analogous
                    Events

                
	 	
                   

                  Any
                    event, which under the laws of the U.S. has an analogous effect
                    to any of
                    the events referred to in (vii) and (viii) above,
                    occurs.

                
	 	 
	
                  8.

                   

                	
                  Replacement
                    of Bonds

                   

                
	
                   Upon
                    receipt by the Company of evidence reasonably satisfactory to
                    it of the
                    loss, theft or destruction of the Bonds and of indemnity or security
                    reasonably satisfactory to it, the Company will make and deliver
                    a new
                    security which shall carry the same rights to interest (unpaid
                    and to
                    accrue) carried by the Bonds, stating that such security is issued
                    in
                    replacement of the Bonds, making reference to the original date
                    of
                    issuance of the Bonds (and any successors hereto) and dated as
                    of such
                    cancellation, in lieu of the Bonds.

                   

                
	
                  9.
                    

                   

                	
                  Governing
                    Law and Jurisdiction

                   

                
	 The
                  Bonds shall be construed in accordance with the laws of the Republic
                  of
                  Korea, excluding
                  its conflicts of laws rules.
	 	 
	
                  10.

                   

                	
                  Dispute
                    Resolution 

                   

                
	 The
                  Company and the Holder shall attempt in good faith to resolve all
                  disputes, controversies or claims arising out of or in connection
                  with the
                  interpretation or application of the provisions of the terms and
                  conditions hereto or in connection with the determination of any
                  matters
                  which are subject to objective determination pursuant to the terms
                  and
                  conditions hereto (each, a “Dispute”)
                  by mutual agreement. If any Dispute cannot be resolved by the parties
                  hereto pursuant to above or otherwise, then such Dispute shall
                  be brought
                  to the Seoul Central District Court of
                  Korea.

        

      

    

    

    
      
        
        

      

      
        -
          28
          -

        
          

        

      

      
        
        

      

    

     

    

      
        	
                11.

                 

              	
                Notices

                 

              
	
                Any
                  notice, request or other communication required or permitted hereunder
                  shall be in writing and shall be deemed to have been duly given
                  if
                  personally delivered or mailed by registered or certified mail,
                  postage
                  prepaid, or by recognized overnight courier or personal delivery
                  at the
                  respective addresses of the parties as set forth in the Convertible
                  Bonds
                  Subscription Agreement or on the register maintained by the Company.
                  Any
                  party hereto may change its address for future notice hereunder
                  by giving
                  notice of such change to the other party. Notice shall conclusively
                  be
                  deemed to have been given where received.

                 

              
	
                12.

              	
                Miscellaneous
                  

              
	 	 
	
                (A)

                 

              	
                No
                  Waiver. 

                 

              
	
                No
                  failure or delay by the Holder to exercise any right hereunder
                  shall
                  operate as a waiver thereof, nor shall any single or partial exercise
                  of
                  any right, power or privilege preclude any other right, power or
                  privilege.

                 

              
	
                (B)

                 

              	
                Attorneys’
                  Fees. 

                 

              
	
                If
                  the Holder retains an attorney for collection of the Bonds, or
                  if any suit
                  or proceeding is brought for the recovery of all, or any part of,
                  or for
                  protection of the indebtedness respected by the Bonds, then the
                  Company
                  agrees to pay all costs and expenses of the suit or proceeding,
                  or any
                  appeal thereof, incurred by the Holder, including without limitation,
                  reasonable attorneys' fees.

                 

              
	
                (C)

                 

              	
                Default
                  Rate. 

                 

              
	
                The
                  default interest rate shall be the compounded rate of nineteen
                  per cent.
                  (19%) per annum. 

                 

              
	
                (D)

                 

              	
                Assignment.
                  

                 

              
	
                The
                  Holder may assign, transfer or establish security interests on
                  the Bonds,
                  in whole or in part, at the Holder's sole discretion to any other
                  person
                  subject to restrictions under the relevant laws of Korea.
                  The Company shall cooperate with and provide any reasonably necessary
                  assistance to the Holder to complete and effect such assignment,
                  transfer
                  or establishment of security
                  interest.

              

      

    

     

     

    
      
        
        

      

      
        -
          29
          -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]