Document:

EXECUTION
        COPY

       

    

     

    AMENDED
      AND RESTATED NOTES PURCHASE AGREEMENT

    

    by
      and
      among

    

    AMERICAN
      DAIRY, INC.

    as
      the
      Company

    

    AMERICAN
      FLYING CRANE CORPORATION

    LANGFANG
      FEIHE DAIRY COMPANY LIMITED

    GANHAN
      FEIHE DAIRY COMPANY LIMITED

    SHANXI
      FEIHESANTAI BIOTECHNOLOGY SCIENTIFIC AND COMMERCIAL CO., LIMITED

    HEILONGJIANG
      FEIHE DAIRY CO., LIMITED

    BAIQUAN
      FEIHE DAIRY CO., LIMITED

    BEIJING
      FEIHE BIOTECHNOLOGY SCIENTIFIC AND COMMERCIAL CO., LIMITED

    as
      the
      Subsidiaries

    

    LENG
      YOU-BIN

    LIU
      HUA

    as
      the
      Controlling Shareholders

    

    AND

    

    CITADEL
      EQUITY FUND LTD.

    as
      the
      Purchaser

    

    

    Dated:
      June 1, 2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    This
      Amended and Restated Notes Purchase Agreement (this “Agreement”)
      is
      dated as of June 1, 2007, by and between American Dairy, Inc., a Utah
      corporation (the “Company”),
      the
      other Group Companies listed on the signature pages hereto, the Controlling
      Shareholders (as defined below), and Citadel Equity Fund Ltd. (the “Purchaser”).

     

    WHEREAS,
      the Company, the Group Companies, the Controlling Shareholders and the Purchaser
      entered into the Notes Purchase Agreement, dated May 25, 2007 (the “Prior
      Agreement");
      

     

    WHEREAS,
      the parties to the Prior Agreement desire to amend and restate the Prior
      Agreement in its entirety pursuant to the terms set forth in this Agreement;
      

     

    WHEREAS,
      the parties to the Prior Agreement have agreed that the Prior Agreement shall
      be
      of no further force and effect upon the execution and delivery of this Agreement
      and further that the rights granted to the parties hereto under this Agreement
      shall supersede the rights granted to such parties under the Prior Agreement;
      

    

    WHEREAS,
      the Company proposes to issue, and the Purchaser proposes to purchase, the
      Company’s Guaranteed Senior Secured Convertible Notes due 2012 in an aggregate
      principal amount not exceeding US$80,000,000 (the “Note
      Purchase Amount”)
      on the
      terms of this Agreement; and

     

    WHEREAS,
      the Company and the Purchaser acknowledge and agree that subject to and upon
      the
      exercise of the right of first refusal (the “Prior
      ROFR”)
      held
      by certain investors named in the signature pages to the Subscription Agreement,
      dated October 2, 2006 (the “Prior
      Subscription Agreement”),
      between the Company and such investors, the Note Purchase Amount may be reduced
      by the aggregate principal amount of the Other Notes (as defined below) to
      be
      purchased by such investors who exercise the Prior ROFR with respect to the
      Notes (as defined below) (the “Other
      Investors”),
      but
      in no event by an amount more than US$20,000,000.

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and promises contained
      herein and for other good and valuable consideration the receipt and adequacy
      of
      which are hereby acknowledged, the parties hereto agree as follows:

     

    1.  Definitions

     

    For
      all
      purposes of this Agreement, except as otherwise expressly provided or unless
      the
      context otherwise requires the following terms shall have the meanings set
      forth
      below. Defined terms used but not otherwise defined herein shall have the
      meanings given to such terms in the other Sections of this Agreement or the
      Indenture (as defined below).

     

    “Accession
      Letter”
has
      the
      meaning given in Section 3(c).

     

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

     

    “AFC”
means
      American Flying Crane Corporation, a wholly owned subsidiary of the Company,
      a
      Delaware corporation.

     

    “Affiliate”
of
      any
      specified Person means:

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

            	
              any
                other Person who is a director or officer
                of:

            

    

     

    
      	 	
              (1)

            	
              such
                specified Person, 

            

    

     

    
      	 	
              (2)

            	
              any
                Subsidiary of such specified Person,
                or

            

    

     

    
      	 	
              (3)

            	
              any
                Person described in clause (a) above.

            

    

     

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

     

    “Agreement”
has
      the
      meaning given in the recitals.

     

    “AI”
has
      the
      meaning given in Section 3(b).

     

    “Applicable
      Agreements”
has
      the
      meaning given in Section 6(i).

     

    “Applicable
      Law”
has
      the
      meaning given in Section 6(i).

     

    “BaiQuan”
means
      BaiQuan Feihe Dairy Co., Limited, a wholly-owned subsidiary of Feihe,
      incorporated under the laws of PRC.

     

    “Beijing
      Feihe”
means
      Beijing Feihe Biotechnology Scientific and Commercial Co., Limited, 95% of
      the
      registered capital of which is owned by Feihe and 5% of the registered capital
      of which is held in trust for the Company, incorporated under the laws of
      PRC.

     

    “Business
      Day”
has
      the
      meaning given in the Conditions.

     

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

     

    “Charter
      Documents”
has
      the
      meaning given in Section 6(i).

     

    “Clearing
      Facilities”
means
      Clearstream and Euroclear.

     

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

     

    “Closing”
means,
      unless otherwise specified herein, the First Closing or the Second Closing,
      as
      the context may require.

     

    “Closing
      Date”
means,
      unless otherwise specified herein, the First Closing Date or the Second Closing
      Date, as the context may require.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Collateral
      Agents”
means
      the Offshore Collateral Agent and the Onshore Collateral Agent.

     

    “Commission”
means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
means
      shares of common stock of the Company, par value US$0.001 per
      share.

     

    “Company”
has
      the
      meaning given in the recitals.

     

    “Conditions”
means
      the terms and conditions of the Notes.

     

    “Controlling Shareholder”
means
      any of Mr. Leng You-Bin and Mr. Liu Hua.

     

    “Conversion
      Shares”
means
      shares of Common Stock issuable under the conversion of the Notes.

     

    “Disclosure
      Schedule”
has
      the
      meaning given in Section 6.

     

    “Environmental
      Laws”
has
      the
      meaning given in Section 6(cc).

     

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

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    “Feihe”
means
      Heilongjiang Feihe Dairy Co., Limited, a wholly-owned subsidiary of AFC,
      incorporated under the laws of PRC.

     

    “FCPA”
has
      the
      meaning given in Section 6(ee).

     

    “Filing
      Agent”
has
      the
      meaning given in Section 9(j). 

     

    “Filing
      Statements”
has
      the
      meaning given in Section 9(j). 

     

    “First
      Closing”
      has the
      meaning given in Section 5(a).

     

    “First
      Closing Amount”
      has the
      meaning given in Section 3(a).

     

    “First
      Closing Date”
      means
      the date of the First Closing.

     

    “Fully-Diluted”
has
      the
      meaning given in Section 6(d)(ii).

     

    “GAAP”
has
      the
      meaning given in Section 6(a)(i).

     

    “GanHan”
means
      GanHan Feihe Dairy Company Limited, a wholly-owned subsidiary of the Company,
      incorporated under the laws of PRC.

     

    “Governmental
      Authority”
has
      the
      meaning given in Section 6(i).

     

    “Group
      Companies”
means
      the Company, AFC, LangFang, GanHan, Shanxi, Feihe, BaiQuan, Beijing Feihe and
      the Company’s other existing and future, direct and indirect, Subsidiaries.

     

    “Guarantees”
has
      the
      meaning given in Section 4. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Guarantor”
has
      the
      meaning given in Section 4. 

     

    “Indemnified
      Party”
has
      the
      meaning given in Section 10(a).

     

    “Indemnifying
      Party”
has
      the
      meaning given in Section 10(a).

     

    “Indenture”
means
      an indenture dated as of the First Closing Date by and among the Company, other
      Group Companies and the Trustee, a form of which is attached hereto as
Exhibit
      A.

     

    “Intellectual
      Property”
has
      the
      meaning given in Section 6(r)(i).

     

    “Investor
      Rights Agreement”
means
      the investor rights agreement dated the First Closing Date by and among the
      Company, the other Group Companies, the Controlling Shareholders and the
      Purchaser, a form of which is attached hereto as Exhibit
      B.

     

    “LangFang”
means
      LangFang Feihe Dairy Company Limited, a wholly-owned subsidiary of the Company,
      incorporated under the laws of PRC.

     

    “Lien”
means
      a
      mortgage, charge, pledge, lien, hypothecation or other security interest
      securing any obligation of any person or any other agreement or arrangement
      having a similar effect.

     

    “Material
      Adverse Change”
has
      the
      meaning given in Section 6(t)(ii).

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on:

     

    (a) the
      business, management, operations, prospects, property, earnings, assets,
      regulatory status, liabilities or condition (financial or otherwise) of the
      Group Companies taken as a whole;

     

    (b) the
      ability of the Group Companies or any Controlling Shareholder to perform its
      material obligations under the Transaction Documents; or

     

    (c) the
      validity or enforceability of the Transaction Documents or the rights and
      remedies of any holder of the Notes under the Notes.

     

    “Money
      Laundering Laws”
has
      the
      meaning given in Section 6(jj).

     

    “Most
      Recent Balance Sheet”
has
      the
      meaning given in Section 6(t)(iii).

     

    “Non-Competition
      Agreements”
means
      (i) a non-competition agreement dated as of the First Closing Date between
      Mr.
      Leng You-Bin and the Company and (ii) a non-competition agreement dated as
      of
      the First Closing Date between Mr. Liu Hua and the Company, a form of which
      is
      attached hereto as Exhibit
      C.

     

    “Notes”
has
      the
      meaning given in Section 3.

     

    “Note
      Purchase Amount”
has
      the
      meaning given in the recitals.

     

    “OFAC”
has
      the
      meaning given in Section 6(ii).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Offshore
      Collateral Agent”
      means
      The
      Bank of New York, acting as collateral agent under the Offshore Share Pledge
      Agreement.

     

    “Offshore
      Collateral Agent”
      means
      the
      collateral agent under the Offshore Share Pledge Agreement.

     

    “Offshore
      Share Pledge Agreement”
means
      a
      share pledge agreement dated as of the First Closing Date among Mr. Leng
      You-Bin, the Company and the Offshore Collateral Agent, a form of which is
      attached hereto as Exhibit
      D.

     

    “Onshore
      Share Pledge Agreement”
means
      a
      share pledge agreement to be entered into subject
      to the completion of the undertakings and conditions set forth in Section 7(p),
      pursuant to which a perfected first-priority Lien on all of the equity interests
      of the PRC Subsidiaries will be pledged for the benefit of the holders of the
      Notes. 

     

    “Other
      Conversion Shares” has
      the
      meaning given in Section 3(b).

     

    “Other
      Indenture”
has
      the
      meaning given in Section 3(b).

     

    “Other
      Investors”
has
      the
      meaning given in the recitals.

     

    “Other
      Notes”
has
      the
      meaning given in Section 3(b).

     

    “Other
      Note Purchase Amount”
      has the
      meaning given in Section 3(b).

     

    “Outside
      Financing”
has
      the
      meaning given in Section 7(l).

     

    “Permits”
has
      the
      meaning given in Section 6(n).

     

    “Person”
means
      any individual, corporation, company (including any limited liability company),
      association, partnership, joint venture, trust, unincorporated organization,
      government or any agency or political subdivision thereof or any other
      entity.

     

    “PFIC”
has
      the
      meaning given in Section 6(hh).

     

    “PRC”
means
      the People’s Republic of China, not including Taiwan, Hong Kong and
      Macau.

     

    “PRC
      Subsidiaries”
means
      LangFang, GanHan, Shanxi, Feihe, BaiQuan and Beijing Feihe.

     

    “Prior
      ROFR”
has
      the
      meaning given in the recitals.

     

    “Prior
      Subscription Agreement”
has
      the
      meaning given in the recitals.

     

    “Proceedings”
has
      the
      meaning given in Section 6(m).

     

    “Proposal”
has
      the
      meaning given in Section 7(bb).

     

    “Purchaser”
has
      the
      meaning given in the recitals.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “Registration
      Rights Agreement”
means
      a
      registration rights agreement dated as of the First Closing Date between the
      Company, the Controlling Shareholders and the Purchaser, a form of which is
      attached hereto as Exhibit
      E.
      

     

    “Regulation
      S”
      has the
      meaning given in Section 3(a).

     

    “SEC
      Reports”
has
      the
      meaning given in Section 6(a)(i).

     

    “Second
      Closing”
      has the
      meaning given in Section 5(b).

     

    “Second
      Closing Amount”
      has the
      meaning given in Section 3(a).

     

    “Second
      Closing Date”
      means
      the date of the Second Closing.

     

    “Securities”
means,
      collectively, the Notes, the Conversion Shares and the Guarantees.

     

    “Security
      Documents”
means
      the Offshore Share Pledge Agreement, the relevant Uniform Commercial Code
      financing statements and the Onshore Share Pledge Agreement.

     

    “Shanxi”
means
      Shanxi Feihesantai Biotechnology Scientific and Commercial Co., Limited, a
      wholly-owned subsidiary of the Company, incorporated under the laws of
      PRC.

     

    “Subsidiary”
means,
      in respect of any Person, any corporation, company (including any limited
      liability company), association, partnership, joint venture or other business
      entity of which at least a majority of the total voting power of the voting
      stock is at the time owned or controlled, directly or indirectly,
      by:

     

    (a) such
      Person, 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    (b) such
      Person and one or more Subsidiaries of such Person, or 

     

    (c) one
      or
      more Subsidiaries of such Person. 

     

    “Tax”
has
      the
      meaning given in Section 6(q).

     

    “Trading
      Market”
has
      the
      meaning given in Section 5.

     

    “Transaction
      Documents”
means
      this Agreement, the Indenture, the Notes, the Guarantees, the Investor Rights
      Agreement, the Non-Competition Agreements, the Registration Rights Agreement
      and
      the Offshore Share Pledge Agreement, or any of them as the context may so
      require.

     

    “Trustee”
means
      The Bank of New York, acting as trustee under the Indenture.

     

    “US$”
means
      the lawful currency of the United States from time to time.

     

    2.  Rules
      of Construction.

     

    Unless
      the context otherwise requires:

    

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

     

    (b)  “or”
is
      not exclusive;

     

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

     

    (d)  all
      references in this Agreement to “Sections”, “Exhibits” and other subdivisions
      are to the designated Sections, Exhibits and subdivisions of this Agreement
      as
      originally executed;

     

    (e)  a
      reference to any person is, where relevant, deemed to be a reference to or
      to
      include, as appropriate, that person’s successors and permitted assignees or
      transferees;

     

    (f)  a
      reference to (or to any specified provision of) any agreement or document
      (including any Transaction Document) is to be construed as a reference to that
      agreement or document as it may be amended from time to time;

     

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

     

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

     

    (i)  provisions
      apply to successive events and transactions; and

     

    (j)  references
      to a statute or statutory provision are to be construed as a reference to that
      statute or statutory provision as it may be amended from time to
      time.

     

    3.  Issuance
      of Notes.
      

     

    (a) The
      Notes.

     

    Subject
      to the terms and conditions of this Agreement, the Company will, on the First
      Closing Date, (i) issue and sell to the Purchaser, and the Purchaser will
      purchase from the Company, the Company’s 600 Guaranteed Senior Secured
      Convertible Notes due 2012 (the “Notes”)
      of
      US$100,000 principal amount each, representing an aggregate principal amount
      of
      US$60,000,000 (the “First
      Closing Amount”),
      convertible into shares of Common Stock at an initial conversion price of
      US$24.00 per share, and (ii) cause the Guarantors to issue the Guarantees.
      

     

    Subject
      to the terms and conditions of this Agreement, the Company will, on the Second
      Closing Date, (i) issue and sell to the Purchaser, and the Purchaser will
      purchase from the Company, such number of the Notes as will represent an
      aggregate principal amount (the “Second
      Closing Amount”)
      equal
      to (x) US$20,000,000 less (y) the Other Note Purchase Amount (as defined below),
      convertible into shares of Common Stock at an initial conversion price of
      US$24.00 per share.

     

    The
      Notes
      will be issued pursuant to the provisions of the Indenture. The Notes will
      be
      offered and sold to the Purchaser pursuant to Regulation S (“Regulation
      S”)
      under
      the Act. Upon original issuance thereof, and until such time as the same is
      no
      longer required under the applicable requirements of the Act, the Notes and
      the
      Conversion Shares shall bear the legends relating to the offer and the sale
      of
      the Notes and the Conversion Shares as required by (i) Regulation S under the
      Act or (ii) any other applicable laws or regulations relating to the issuance
      of
      the Notes.

     

    (b) The
      Other Notes.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    On
      the
      Second Closing Date, subject to Section 3(c), the Company will issue to the
      Other Investors certain notes (the “Other
      Notes”)
      of
      US$100,000 principal amount each, representing an aggregate principal amount
      equal to no more than 25% of the Note Purchase Amount, with respect to which
      the
      Other Investors have exercised their Prior ROFR in the aggregate (the
“Other
      Note Purchase Amount”).
      

     

    The
      Other
      Notes will be issued pursuant to the provisions of a separate indenture between
      the Company and the Trustee (the “Other
      Indenture”)
      and
      will be offered and sold in the United States to certain accredited investors
      (“AIs”)
      as
      defined in Rule 501(a) under the Securities Act in a manner exempt from the
      registration requirements of the Securities Act. Upon original issuance thereof,
      and until such time as the same is no longer required under the applicable
      requirements of the Act, the Other Notes and the Conversion Shares into which
      the Other Notes are convertible (the “Other
      Conversion Shares”)
      shall
      bear the legends relating to the offer and the sale of such securities as
      required by (i) Regulation D under the Act or (ii) any other applicable laws
      or
      regulations relating to the issuance of such securities. The Other Notes sold
      in
      the United States to certain AIs will be constituted by private placement
      definitive certificates, substantially in the form to be set out in an exhibit
      to the Other Indenture.

     

    The
      Other
      Notes and the Other Indenture will have terms and conditions that are identical
      to those of the Notes and the Indenture, respectively, except for the transfer
      restrictions and related provisions required for the Other Notes to be in
      compliance with the Act. 

     

    
      	(c)  	
              Accession.

            

    

     

    Notwithstanding
      anything to the contrary herein, unless waived by the Purchaser, the Company
      shall not issue and sell Other Notes to any Other Investor unless such Other
      Investor executes and delivers an accession letter, in the form attached hereto
      as Exhibit
      F
      (the
“Accession
      Letter”),
      with
      a copy to the Purchaser. Upon the execution and delivery of the Accession
      Letter, such Other Investor shall be a party to this Agreement and be bound
      by
      the terms and conditions herein, except as set forth in such Accession Letter.
      

     

    4.  Guarantees
      and Pledges.

     

    Pursuant
      to the Indenture and to the fullest extent permitted by Applicable Laws,
      AFC and
      all
      of the Company’s other existing and future direct and indirect Subsidiaries
      (only to the extent such Subsidiary is permitted under Applicable Laws to do
      so)
      (each, a “Guarantor”)
      shall
      irrevocably and unconditionally guarantee, on a senior secured basis, to the
      Purchaser and to the Trustee the payment and performance of the Company’s
      obligations under the Transaction Documents (collectively, the “Guarantees”).

     

    The
      Notes
      and the Guarantees will be secured by (i) a perfected first-priority Lien on
      all
      of the equity interests of AFC and 30% of the equity interests of the Company
      held by Mr. Leng You-Bin pursuant to the Offshore Share Pledge Agreement and
      (ii) subject to the completion of the undertakings and conditions set forth
      in
      Section 7(p), a perfected first-priority Lien on all of the equity interests
      of
      the PRC Subsidiaries pursuant to the Onshore Share Pledge Agreement

     

    5.  Purchase,
      Sale and Delivery.

     

    (a) First
      Closing.
      

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    Subject
      to the satisfaction or waiver of all the conditions to closing set forth in
      Section 9, the issue and sale to the Purchaser of the Notes in an aggregate
      principal amount of US$60,000,000 (the “First
      Closing Amount”)
      shall
      occur at the Hong Kong office of Simpson Thacher & Bartlett LLP, on or about
      9:00 a.m., Chicago time, at a closing (the “First Closing”)
      on
      June 1, 2007 or on such other time or Business Day thereafter on or prior to
      June 15, 2007 as may be agreed upon by the Company and the Purchaser. At the
      First Closing, the Company shall deliver to the Purchaser one or more global
      certificates representing the Notes, registered in such names and denominations
      as the Purchaser may request, against payment by the Purchaser of the First
      Closing Amount as the purchase price therefor by immediately available federal
      funds bank wire transfer to such bank account or accounts as the Company shall
      have beforehand designated to the Purchaser. The Notes in an aggregate principal
      amount equal to the First Closing Amount will be represented by one or more
      global certificates in book-entry form and will be deposited on the First
      Closing Date, by or on behalf of the Company, with the Trustee as common
      depositary for Clearstream and Euroclear, or its designated custodian, and
      registered in the name of the Trustee. The Common Stock is traded on the NYSE
      Archipelago Exchange (the “Trading
      Market”).

     

    
      	(b)  	
              Second
                Closing.

            

    

     

    Subject
      to the satisfaction or waiver of all the conditions to closing set forth in
      Section 9, the issue and sale to the Purchaser of the Notes in an aggregate
      principal amount (the “Second
      Closing Amount”)
      of (x)
      US$20,000,000 less (y) the aggregate principal amount of the Other Notes to
      be
      issued and sold to the Other Investors on the same date as the date of the
      Second Closing (as defined below) shall occur at the Hong Kong office of Simpson
      Thacher & Bartlett LLP, on or about 9:00 a.m., Chicago time, at a closing
      (the “Second Closing”,
      and
      together with the First Closing, the “Closings”,
      or
      each such Closing, a “Closing”)
      on the
      date on which the Company will issue and sell the Other Notes to the Other
      Investors. The Second Closing shall occur as soon as reasonably practicable
      after the First Closing Date, but in any event without prejudice to the notice
      and acceptance periods in respect of the Prior ROFR in Section 8(m) of the
      Prior
      Subscription Agreement. At the Second Closing, the Company shall deliver to
      the
      Purchaser one or more global certificates representing the Notes, registered
      in
      such names and denominations as the Purchaser may request, against payment
      by
      the Purchaser of the Second Closing Amount as the purchase price therefor by
      immediately available federal funds bank wire transfer to such bank account
      or
      accounts as the Company shall have beforehand designated to the Purchaser.
      The
      Notes in an aggregate principal amount equal to the Second Closing Amount will
      be represented by one or more global certificates in book-entry form (which
      may
      be identical to the global certificate used for the First Closing, subject
      to
      the terms and conditions of the Indenture) and will be deposited on the Second
      Closing Date, by or on behalf of the Company, with the Trustee as common
      depositary for Clearstream and Euroclear, or its designated custodian, and
      registered in the name of the Trustee. 

     

    6.  Representations
      and Warranties of the Group Companies and the Controlling
      Shareholders.
      Except
      as set forth in the Disclosure Schedule to be made part of this Agreement upon
      delivery thereof to the Purchaser on or prior to the Closing (“Disclosure
      Schedule”)
      which
      exceptions shall be deemed part of the representations and warranties made
      hereunder, each of the Group Companies and the Controlling Shareholders, jointly
      and severally, represents and warrants to the Purchaser the following as of
      the
      date of this Agreement, and such representations and warranties shall be deemed
      to be made as of the First Closing Date (if different from the date of this
      Agreement) and the Second Closing Date, provided
      that
      each representation or warranty deemed to be made after the date of this
      Agreement shall be deemed to be made by reference to the facts and circumstances
      existing at the date on which such representation or warranty is deemed to
      be
      made (except that, for the avoidance of doubt, any representation or warranty
      that is expressed to be made by reference to the facts and circumstances
      existing as at a specific date shall be made by reference to the facts and
      circumstances existing as at such specific date): 

     

    
      
        
        

      

      
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      	(a)  	
              SEC
                Reports; Financial Statements.
                

            

    

     

    (i)
       The
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by it under the Act and the Exchange Act (the foregoing
      materials, including the exhibits thereto and documents incorporated by
      reference therein, being collectively referred to herein as the “SEC
      Reports”)
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension on
      a
      timely basis, except where the failure to file, or receive a valid extension
      of
      the timing of filing for, any SEC Reports would not be reasonably expected
      to
      have a material adverse effect, and to the Company’s best knowledge after due
      inquiry, no disciplinary actions or proceedings have been initiated against
      the
      Company and no such actions are threatened. As of the date of filing, in the
      case of SEC Reports filed pursuant to the Exchange Act, including pursuant
      to
      Section 13(a) or 15(d) thereof, for the twenty-four months preceding the date
      hereof (or such shorter period as the Company was required by law to file such
      reports, forms or other information) (and to the extent any such SEC Report
      was
      amended, then as of the date of filing of such amendment), and as of the date
      of
      effectiveness in the case of SEC Reports filed pursuant to the Act (and to
      the
      extent any such SEC Report was amended, then as of the date of effectiveness
      of
      such amendment), the SEC Reports complied in all material respects with the
      requirements of the Act and the Exchange Act and the rules and regulations
      of
      the Commission promulgated thereunder, as applicable, and none of the SEC
      Reports, as of the date of filing, in the case of SEC Reports filed pursuant
      to
      the Exchange Act (and to the extent any such SEC Report was amended, then as
      to
      the date of filing of such amendment), and as of the date of effectiveness
      in
      the case of SEC Reports filed pursuant to the Act (and to the extent any such
      SEC Report was amended, then as of the date of effectiveness of such amendment),
      contained any untrue statement of a material fact or omitted to state a material
      fact required to be stated therein or necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading. The financial statements of the Company included in the SEC Reports
      have been prepared in accordance with the applicable accounting requirements
      and
      the rules and regulations of the Commission with respect thereto as in effect
      at
      the time of filing. Such financial statements have been prepared in accordance
      with United States generally accepted accounting principles applied on a
      consistent basis during the periods involved (“GAAP”),
      except as may be otherwise specified in such financial statements or the notes
      thereto and except that unaudited financial statements may not contain all
      footnotes required by GAAP, and fairly present in all material respects the
      financial condition, results of operations and cash flows of the Company and
      its
      consolidated Subsidiaries as of and for the dates thereof and the results of
      operations and cash flows for the periods then ended, subject, in the case
      of
      unaudited statements, to normal, immaterial, year-end audit adjustments. All
      other financial, statistical, and market and industry-related data included
      in
      the SEC Reports are based on or derived from sources that the Company reasonably
      believes to be reliable and accurate. For the purposes of this Agreement, the
      term “filed” (or any derivations thereof) includes filing, furnishing or
      otherwise providing any reports, forms or other information provided to the
      Commission.

     

    (ii)
       The
      Company has not, in the 12 months preceding the date hereof, received notice
      from the Trading Market to the effect that the Company is not in compliance
      with
      the requirements of the Trading Market, and to the Company’s best knowledge
      after due inquiry, no disciplinary actions or proceedings have been initiated
      against the Company and no such actions are threatened. The Company is, and
      upon
      consummation of the transactions contemplated hereby expects to be, in
      compliance with all of the listing requirements of the Trading Market.

     

    
      
        
        

      

      
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      	(b)  	
              Ownership
                of Shares of Subsidiaries;
                Affiliates.

            

    

     

    (i)
       Schedule
      6(b)(i) of the Disclosure Schedule contains complete and correct lists of each
      Person in which the Company owns, directly or indirectly, any Capital Stock
      or
      similar equity interests, showing, as to each Subsidiary, the correct name
      thereof, the jurisdiction of its organization, and the percentage of shares
      of
      each class of its Capital Stock or similar equity interests outstanding owned
      by
      the Company and each other Subsidiary.

     

    (ii)
       All
      of
      the outstanding shares of Capital Stock or similar equity interests of each
      Subsidiary shown in Schedule 6(b)(i) of the Disclosure Schedule as being owned
      by the Company and its Subsidiaries have been validly issued, are fully paid
      and
      non-assessable and are owned by the Company or another Subsidiary free and
      clear
      of any Lien.

     

    (iii)
       Except
      as
      disclosed in Schedule 6(b)(iii) of the Disclosure Schedule, no Subsidiary is
      a
      party to, or otherwise subject to any legal or regulatory restriction or any
      agreement (other than this Agreement) restricting the ability of such Subsidiary
      to pay dividends out of profits or make any other similar distributions of
      profits to the Company or any of its Subsidiaries that owns outstanding shares
      of Capital Stock or similar equity interests of such Subsidiary.

     

    (c)  Organization.
      Except
      as disclosed in Schedule 6(c) of the Disclosure Schedule, each of the Group
      Companies (i) has been duly organized, is validly existing and is in good
      standing under the laws of its jurisdiction of organization, (ii) has all
      requisite power and authority to carry on its business and to own, lease and
      operate its properties and assets, and (iii) is duly qualified or licensed
      to do
      business and is in good standing as a domestic or foreign corporation or limited
      liability company, as the case may be, authorized to do business in each
      jurisdiction in which the nature of such business or the ownership or leasing
      of
      such properties requires such qualification, except where, for the purposes
      of
      (ii) or (iii) only, the failure to have all such requisite power and authority
      or to be so duly qualified or licensed does not, and would not, individually
      or
      in the aggregate, have a Material Adverse Effect.
      The
      constitutional documents and certificates of each of the PRC Subsidiaries are
      valid and have been duly approved or registered (as applicable) by competent
      PRC
      Governmental Authorities.

     

    (d)  Capitalization
      and Voting Rights.
      

     

    (i)  Capital
      Stock.
      All of
      the outstanding shares of Capital Stock or similar equity interests of the
      Company have been validly issued, are fully paid and non-assessable, and are
      free and clear of any Lien.

     

    (ii)  Issued
      and Issuable Shares.
      Except
      as set forth on Schedule 6(d)(ii) of the Disclosure Schedule, as at the date
      hereof and immediately prior to the Closing, there is no Capital Stock issued
      or
      issuable pursuant to any exercise, conversion, exchange, subscription or
      otherwise in connection with any warrants, options (including pursuant to the
      Company’s stock option plan), convertible securities or any agreement to sell or
      issue Capital Stock or securities which may be exercised, converted or exchanged
      for Capital Stock, other than the shares of the Company’s common stock to be
      issued upon the conversion of the Notes (collectively, “Fully-Diluted”).
      Prior
      to the Closing Date, the Conversion Shares issuable upon conversion of the
      Notes
      will have been duly reserved for issuance, which will constitute such percentage
      of the Company’s Capital Stock on a Fully Diluted basis immediately following
      the Closing, assuming no exercise of the Prior ROFR, as disclosed in Schedule
      6(d) of the Disclosure Schedule. When duly issued upon conversion of the Notes
      in accordance with the terms of the Notes, the Conversion Shares will have
      been
      validly issued, fully paid and non-assessable, and the issuance of the
      Conversion Shares will not be subject to any preemptive or similar right. Except
      as set forth on Schedule 6(d)(ii), all of the issued and outstanding shares
      of
      each of the Group Company’s Capital Stock as of the Closing are duly authorized,
      validly issued, fully paid and non-assessable, were issued in accordance with
      the registration or qualification provisions of the Act, if applicable, and
      any
      relevant “blue sky” laws of the United States, if applicable, or pursuant to
      valid exemptions therefrom and were issued in compliance with other applicable
      laws (including, without limitation, applicable PRC laws, rules and regulations)
      and are not subject to any rescission right or put right on the part of the
      holder thereof nor does any holder thereof have the right to require the Company
      to repurchase such Capital Stock.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (iii)  Voting
      and Other Agreements.
      Except
      as set forth on Schedule 6(d)(iii) of the Disclosure Schedule, as at the date
      hereof and immediately prior to the Closing, there are no outstanding (A)
      options, warrants or other rights to purchase from any Group Company, (B)
      agreements, contracts, arrangements or other obligations of any Group Company
      to
      issue, or (C) other rights to convert any obligation into or exchange any
      securities for, in the case of each of clauses (A) through (C), shares of
      Capital Stock of, or other ownership or equity interests in, any Group Company.
      Except as set forth on Schedule 6(d)(iii) of the Disclosure Schedule, the
      Company is not a party or subject to any agreement or understanding and there
      is
      no agreement or understanding with any Person that affects or relates to (x)
      the
      voting or giving of written consents with respect to any security of the Company
      (including, without limitation, any voting agreements, voting trust agreements,
      shareholder agreements or similar agreements) or the voting by a director of
      the
      Company, (y) the sale, transfer or other disposition with respect to any
      security of the Company or (z) any restrictions with respect to the issuance
      or
      sale of the Notes or the consummation of the transactions contemplated under
      the
      Transaction Documents, or any provisions that would adversely affect the
      interests of the holders of the Notes or the consummation of the transactions
      contemplated under the Transaction Documents, including without limitation
      any
      right of first refusal or right to be consulted or to make a comparable offer
      with respect to the Notes, held by any security holder, creditor or anyone
      who
      holds similar rights in the Company (other than the holders of the
      Notes).

     

    (e)  No
      Registration Rights.
      Except
      as set forth on Schedule 6(e) of the Disclosure Schedule, no holder of
      securities of any of the Group Companies is or will be entitled to have any
      registration rights with respect to such securities.

     

    (f)  Authorization.
      (i)
      Each of the Group Companies has all requisite corporate power and authority
      to
      execute, deliver and perform its obligations under each of the Transaction
      Documents to which it is a party and to consummate the transactions contemplated
      thereby, (ii) this Agreement has been duly authorized, executed and delivered
      by
      the Group Companies and the Controlling Shareholders. and (iii) each of the
      Transaction Document has been duly authorized and when executed and delivered
      by
      the Group Companies and the Controlling Shareholders (to the extent they are
      parties thereto) shall constitute a legal, valid and binding obligation of
      each
      of the Group Companies and the Controlling Shareholders (to the extent they
      are
      parties thereto) enforceable against the Group Companies and the Controlling
      Shareholders (to the extent they are parties thereto) in accordance with its
      terms, except as limited by applicable bankruptcy, insolvency, reorganization,
      moratorium and other laws of general application affecting enforcement of
      creditors’ rights generally.

     

    (g)  Valid
      Issuance of Notes and the Guarantees.
      The
      Notes, when issued, sold and delivered in accordance with the terms thereof
      and
      for the consideration set forth herein, will be free of restrictions on
      transfer, other than restrictions on transfer under applicable state and federal
      securities laws. Assuming the accuracy of the Purchaser’s representations in
      Section 8 below, the Notes will be issued in compliance with applicable state
      and federal securities laws. The Notes have been duly authorized by the Company
      and, when executed and delivered by the Company, authenticated by the Trustee,
      and delivered to the Purchaser, in accordance with the terms of this Agreement,
      the Notes will have been duly executed, issued and delivered by the Company
      and
      will constitute legal, valid and binding obligations of the Company, enforceable
      against the Company in accordance with their terms, except as limited by
      applicable bankruptcy, insolvency, reorganization, moratorium and other laws
      of
      general application affecting enforcement of creditors’ rights generally. The
      Guarantees have been duly authorized, and, when the Notes have been duly
      executed, authenticated and issued in accordance with the provisions of the
      Indenture and delivered to and paid for by the Purchaser with the Guarantees
      endorsed thereon by the Guarantors, will constitute the legal, valid and binding
      obligations of each Guarantor entitled to the benefits of the
      Indenture.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (h)  Valid
      Issuance of Conversion Shares.
      The
      conversion rights attached to the Notes, when the Notes are issued on the
      applicable Closing Date, will provide for the right to convert the Notes into
      (i) up to 2,500,000 shares of Common Stock of the Company (subject to
      subdivision or consolidation thereof) as of the first Closing Date (as
      calculated immediately following the First Closing and assuming the conversion
      of all the Notes for an aggregate principal amount equal to the First Closing
      Amount) and (ii) up to such number of Common Stock of the Company (subject
      to
      subdivision or consolidation thereof) as of the Second Closing Date as will
      permit conversion of all the Notes for an aggregate principal amount equal
      to
      the sum of the First Closing Amount and the Second Closing Amount. The
      Conversion Shares have been duly and validly authorized for issuance by the
      Company, and when issued pursuant to the terms of the Notes and the Indenture,
      will be validly issued, fully paid and non-assessable, not subject to any
      preemptive or similar rights, free from all taxes, Liens, charges and security
      interests with respect to the issuance thereof and free of restrictions on
      transfer other than as expressly contemplated by the Transaction
      Documents.

     

    (i)  Compliance
      with Instruments.
      None of
      the Group Companies is in violation of its respective articles of incorporation,
      certificate of incorporation, by-laws or other organizational documents (the
      “Charter
      Documents”).
      None
      of the Group Companies is, nor does any condition exist (with the passage of
      time or otherwise) that could reasonably be expected to cause any of the Group
      Companies to be, (i) in violation of any statute, rule, regulation, law or
      ordinance, or any judgment, decree or order applicable to any of the Group
      Companies or any of their properties (collectively, “Applicable
      Law”)
      of any
      federal, state, national, provincial, local or other governmental authority,
      governmental or regulatory agency or body, court, arbitrator or self-regulatory
      organization of applicable jurisdictions (each, a “Governmental
      Authority”),
      or
      (ii) except as disclosed in Schedule 6(i) of the Disclosure Schedule, in breach
      of or in default in any material respect under any bond, debenture, note or
      other evidence of indebtedness, indenture, mortgage, deed of trust, lease or
      any
      other agreement or instrument to which any of them is a party or by which any
      of
      them or their respective property is bound (collectively, “Applicable
      Agreements”).

     

    (j)  No
      Conflicts.
      Neither
      the execution, delivery or performance of this Agreement or any other
      Transaction Document nor the consummation of any of the transactions
      contemplated herein or therein will conflict with, violate, constitute a breach
      of or a default (with the passage of time or otherwise) under, require the
      consent of any Person or a Governmental Authority (other than consents already
      obtained) or result in the imposition of a Lien (other than a Lien arising
      under
      the Security Documents and the transactions contemplated by the Transaction
      Documents) on any assets of any of the Group Companies under or pursuant to
      (i)
      the Charter Documents, (ii) any Applicable Agreement, or (iii) any Applicable
      Law. Except as disclosed in Schedule 6(j) of the Disclosure Schedule,
      immediately following consummation of the transactions contemplated in the
      Transaction Documents, no default will exist under the Indenture.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (k)  Security
      Interests.
      When
      executed and delivered, the Offshore Share Pledge Agreement will create valid
      and enforceable first-priority security interests in favor of the Offshore
      Collateral Agent in all the Pledged Collateral (as defined therein), which
      security interests will secure the repayment of the Notes and the other
      obligations purported to be secured thereby and when the share certificates
      representing such Pledged Collateral, together with the Powers (as defined
      therein) are delivered to the Offshore Collateral Agent, such security interests
      will be perfected. Except
      as
      disclosed in Schedule 6(k) of the Disclosure Schedule, when
      executed and delivered and subject to the approval by and filing with the
      relevant Governmental Authority, the Onshore Share Pledge Agreement will create
      valid and enforceable first-priority security interests in favor of the
      collateral agent appointed thereunder in all the equity interest in the PRC
      Subsidiaries which security interests will secure the repayment of the Notes
      and
      the other obligations purported to be secured thereby. 

     

    (l)  Governmental
      Filings.
      Except
      as set forth in Schedule 6(l) of the Disclosure Schedule, no filing with,
      consent, approval, authorization or order of, any Governmental Authority is
      required to be made by any of the Group Companies for the consummation of the
      transactions contemplated by the Transaction Documents, except (i) as have
      been
      made or obtained prior to the date of this Agreement or obtained after the
      Closing in accordance with the terms of the Transaction Documents, (ii) as
      may
      be necessary to perfect security interest granted pursuant to the Security
      Documents (and for the avoidance of doubt, the security interest granted under
      the Offshore Share Pledge Agreement shall be perfected as described in Section
      6(k) above) and (iii) as may be required under the Act or state securities
      or
“blue sky” laws. 

     

    (m)  Proceedings.
      There
      is no action, claim, suit, demand, hearing, notice of violation or deficiency,
      or proceeding, domestic or foreign (collectively, “Proceedings”),
      pending or, to the best knowledge of the Company after due inquiry, threatened,
      that seeks to restrain, enjoin, prevent the consummation of, or otherwise
      challenges any of the Transaction Documents or any of the transactions
      contemplated therein.

     

    (n)  Permits.
      Except
      as set forth in Schedule 6(n) of the Disclosure Schedule, each of the Group
      Companies possesses all material licenses, permits, certificates, consents,
      orders, approvals and other authorizations from, and has made all declarations
      and filings with, all Governmental Authorities, presently required or necessary
      to own or lease, as the case may be, and to operate their respective properties
      and to carry on their respective businesses as now conducted (“Permits”).
      All
      of the Permits are valid and in full force and effect. Each of the Group
      Companies has fulfilled and performed all of its respective obligations with
      respect to such Permits and no event has occurred which allows, or after notice
      or lapse of time could allow, revocation or termination thereof or result in
      any
      other material impairment of the rights of the holder of any such Permit. None
      of the Group Companies has received actual notice of any Proceeding relating
      to
      revocation or modification of any such Permit.

     

    (o)  Title
      to Property.
      Except
      as set forth in Schedule 6(o) of the Disclosure Schedule, each of the Group
      Companies has good and marketable title to all real property and personal
      property owned by it that is material to their respective businesses, in each
      case free and clear of any Liens as of the Closing Date, except such Liens
      as
      permitted under the Transaction Documents. For real property not owned by any
      of
      the Group Companies and currently used or planned to be used for the business
      operations of the Group Companies, each of such Group Companies has good and
      marketable title to all leasehold estates in real and personal property being
      leased by it that is material to their respective businesses and, in each case
      free and clear of all Liens as of the Closing Date.

     

    (p)  Insurance.
      Schedule 6(p) of the Disclosure Schedule contains a complete and correct list
      of
      insurance policies insuring the Group Companies and their respective businesses,
      assets, employees, officers and directors. All such insurance policies insuring
      the Group Companies and their respective businesses, assets, employees, officers
      and directors are in full force and effect. Each of the Group Companies is
      in
      compliance with the terms of such policies and instruments in all material
      respects, and there are no claims by any of the Group Companies under any such
      policy or instrument as to which, to the Company’s best knowledge after due
      inquiry, any insurance company is denying liability or defending under a
      reservation of rights clause. None of the Group Companies has been refused
      any
      insurance coverage sought or applied for, and none of the Group Companies has
      any reason to believe that it will not be able to renew its existing insurance
      coverage as and when such coverage expires or to obtain similar coverage from
      similar insurers as may be necessary to continue its business.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (q)  Taxes.
      All Tax
      returns required to be filed by each of the Group Companies have been filed
      (taking into account all extensions of due dates), and all such returns are
      true, complete and correct in all material respects. All Taxes that are due
      from
      each of the Group Companies have been paid other than those (i) currently
      payable without penalty or interest or (ii) being diligently contested in good
      faith and by appropriate proceedings and for which adequate reserves have been
      established in accordance with GAAP. To the best knowledge of the Company after
      due inquiry, there are no proposed Tax assessments against any of the Group
      Companies. The accruals and reserves on the books and records of each of Group
      Companies in respect of any Tax liability for any Taxable period not finally
      determined are adequate to meet any assessments of Tax for any such period.
      For
      purposes of this Agreement, the term “Tax”
and
      “Taxes”
shall
      mean all federal, state, national, provincial, local and foreign taxes, and
      other assessments of a similar nature (whether imposed directly or through
      withholding), including any interest, additions to tax, or penalties applicable
      thereto.

     

    (r)  Intellectual
      Property. 

     

    (i) Each
      of
      the Group Companies owns, or is validly licensed under, or has the right to
      use,
all
      patents, patent rights, licenses, inventions, copyrights, know-how (including
      trade secrets and other unpatented and/or unpatentable proprietary or
      confidential information, systems, software or procedures), trademarks, service
      marks, trade names or master works, whether or not
      registered, filed, or issued under the authority of any governmental
      authority,
      (collectively, “Intellectual
      Property”)
      necessary
      for the conduct of its business and, except as set forth in Schedule 6(r) of
      the
      Disclosure Schedule, all Intellectual Properties owned by the Group Companies
      necessary for the conduct of their businesses are valid and in full force and
      effect. As of the Closing Date, such Intellectual Property is or will be free
      and clear of all Liens, except where the failure to own, possess, or have the
      right to use such Intellectual Property does not, and would not, individually
      or
      in the aggregate, have a Material Adverse Effect. To the Company’s best
      knowledge after due inquiry, no Proceedings have been asserted by any Person
      challenging the use of any such Intellectual Property by any of the Group
      Companies or questioning the validity or effectiveness of the Intellectual
      Property or any license or agreement related thereto, and, to the Company’s best
      knowledge after due inquiry, there are no facts which would form a valid basis
      for any such Proceeding. To the Company’s best knowledge after due inquiry, the
      use of such Intellectual Property any of the Group Companies will not infringe
      on the Intellectual Property rights of any other Person. 

     

    (ii) To
      the
      extent permitted by applicable law, each of the Group Companies has taken
      reasonable steps and measures to establish and preserve ownership of or right
      to
      use all Intellectual Property material to the operation of its business,
      including any Intellectual Property that was jointly developed with any
      third-parties, or any Intellectual Property for which improper or unauthorized
      disclosure would impair its value or validity, and has made all appropriate
      filings, registrations and payments of fees in connection with the foregoing.
      To
      the Company’s best knowledge after due inquiry, there is no infringement or
      misappropriation by any other Person of any Intellectual Property of any of
      the
      Group Companies. No Proceedings in which any of the Group Companies alleges
      that
      any Person is infringing upon, or otherwise violating, any Intellectual Property
      of any of the Group Companies are pending, and none has been served, instituted
      or asserted by any of the Group Companies.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (iii) To
      the
      best knowledge of the Company after due inquiry, no former or current employee,
      no former or current consultant, and no third-party joint developer of any
      of
      the Group Companies has any rights in any Intellectual Property made, developed,
      conceived, created or written by the aforesaid employee or consultant during
      the
      period of his or her retention by the Group Companies which can be asserted
      against any Group Company.

     

    (iv) No
      Intellectual Property owned by any Group Company is the subject of any Lien,
      license or other contract granting rights or security interest therein to any
      other Person, except for Liens, licenses or other contracts granting rights
      or
      security interest that do not materially interfere with the use made and
      proposed to be made of such Intellectual Property by any Group Company. Each
      of
      the Group Companies has not (A) transferred or assigned, (B) granted an
      exclusive license to or (C) provided or licensed, any Intellectual Property
      owned by the Group Companies and necessary for the conduct of their business
      to
      any Person.

     

    (s)  Internal
      Controls.
      Each of
      the Group Companies maintains a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are
      executed in accordance with management’s general or specific authorization, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with GAAP and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management’s general or
      specific authorization and (iv) the recorded accountability for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any material differences.

     

    (t)  Financial
      Statements; No Undisclosed Liabilities.
      

     

    (i)  The
      audited consolidated financial statements and related notes of the Company
      contained in the Form 10-K for the three years ended December 31, 2006
present
      fairly in all material respects the financial position, results of operations
      and cash flows of the Company and its Subsidiaries, as of the respective dates
      and for the respective periods to which they apply and have been prepared in
      accordance with GAAP and comply as to form with the applicable requirements
      of
      Regulation S-X of the Act. 

     

    (ii)  Subsequent
      to the date of the Company’s audited financial statements filed for the year
      ended December 31, 2006, except as disclosed therein or in any subsequent SEC
      Report, (A) none of the Group Companies has incurred any liabilities, direct
      or
      contingent, that are material, individually or in the aggregate, to such Group
      Company, or has entered into any material transactions not in the ordinary
      course of business, (B) there has not been any material decrease in the Capital
      Stock or any material increase in long-term indebtedness or any material
      increase in short-term indebtedness of the Group Companies, or any payment
      of or
      declaration to pay any dividends or any other distribution with respect to
      the
      Group Companies, and (C) there has not been any material adverse change in
      the
      properties, business, prospects, operations, regulatory status, earnings,
      assets, liabilities or condition (financial or otherwise) of the Group Companies
      taken as a whole; excluding any changes caused by (x) the condition of the
      industry of the Company that do not disproportionately affect the Company,
      (y)
      the failure of the Company to meet its financial projections or (z) the
      execution and delivery of this Agreement and consummation of the transactions
      contemplated hereby (each of clauses (A), (B) and (C), a “Material
      Adverse Change”).
      To
      the best knowledge of the Company after due inquiry, there is no event that
      is
      reasonably likely to occur in the foreseeable future, which if it were to occur,
      could, individually or in the aggregate, have a Material Adverse
      Change.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (iii)  Without
      limiting the generality of the foregoing paragraph (ii), the Company has no
      liabilities or obligations (whether actual, accrued, absolute, fixed,
      contingent, liquidated, unliquidated or otherwise, and whether due or to become
      due), except for (i) liabilities or obligations shown on the balance sheet
      as of
      December 31, 2006 (the “Most
      Recent Balance Sheet”),
      (ii)
      liabilities under any agreements, contracts, commitments, licenses or leases
      which have arisen prior to the date of the Most Recent Balance Sheet and which
      are not required to be reflected in a balance sheet, or the notes thereto,
      prepared in accordance with GAAP (none of which relates to a breach of contract,
      breach of warranty, tort, infringement, environmental, health or safety matter,
      violation of Applicable Laws or proceeding brought by Governmental Authorities),
      (iii) liabilities incurred in the ordinary course of business since December
      31,
      2006 (none of which relates to a breach of contract, breach of warranty, tort,
      infringement, environmental, health or safety matter, violation of Law or
      proceeding brought by Governmental Authorities) and/or (iv) other liabilities
      that are, individually and in the aggregate, immaterial.

     

    (u)  Debt.
      All
      Debt represented by the Notes and the Guarantees is being incurred for proper
      purposes and in good faith. Based on the financial condition of the Company
      as
      of the Closing Date after giving effect to the receipt by the Company of the
      proceeds from the sale of the Securities hereunder, (i) the fair saleable value
      of the Group Companies’ assets exceeds the amount that will be required to be
      paid on or in respect of the Group Companies’ existing Debts and other
      liabilities (including contingent liabilities) as they mature; (ii) the present
      fair saleable value of the assets of the Group Companies is greater than the
      amount that will be required to pay the probable liabilities of the Group
      Companies on their respective Debt as they become absolute and mature; (iii)
      the
      Group Companies are able to realize upon their assets and pay their Debt and
      other liabilities (including contingent obligations) as they mature; (iv) the
      Group Companies’ assets do not constitute unreasonably small capital to carry on
      their respective businesses as now conducted and as proposed to be conducted
      including their respective capital needs taking into account the particular
      capital requirements of the business conducted by the Group Companies, and
      projected capital requirements and capital availability thereof; and (v) the
      current cash flow of each of the Group Companies, together with the proceeds
      the
      Company would receive, were it to liquidate all of its assets, after taking
      into
      account all anticipated uses of the cash, would be sufficient to pay all amounts
      on or in respect of its liabilities when such amounts are required to be paid.
      None of the Group Companies intends to incur Debt beyond its ability to pay
      such
      Debt as they mature (taking into account the timing and amounts of cash to
      be
      payable on or in respect of its Debt). The Company has no knowledge of any
      facts
      or circumstances which lead it to believe that it or any other Group Companies
      will file for reorganization or liquidation under the bankruptcy or
      reorganization laws of any jurisdiction within one year from the Closing Date.
      Except as set forth in Schedule 6(u) of the Disclosure Schedule, none of the
      Group Companies is, or has reason to believe it is likely to be, in default
      with
      respect to any Debt and no waiver of default is currently in effect. Except
      as
      set forth in Schedule 6(u) of the Disclosure Schedule, none of the Group
      Companies has agreed or consented to cause or permit in the future (upon the
      happening of a contingency or otherwise) any of its property, whether now owned
      or hereafter acquired, to be subject to a Lien. Except as set forth in Schedule
      6(u) of the Disclosure Schedule, none of the Group Companies is a party to,
      or
      otherwise subject to any provision contained in, any instrument evidencing
      Debt
      of any of the Group Companies, any agreement relating thereto or any other
      agreement (including, but not limited to, its charter or other organizational
      document) which limits the amount of, or otherwise imposes restrictions on
      the
      incurring of, Debt of the Company. 

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (v)  No
      Stabilization.
      None of
      the Group Companies has and, to each of its best knowledge after due inquiry,
      no
      one acting on its behalf has, (i) taken, directly or indirectly, any action
      designed to cause or to result in, or that has constituted or which might
      reasonably be expected to constitute, the stabilization or manipulation of
      the
      price of any security of any of the Group Companies to facilitate the sale
      or
      resale of any of the Securities, (ii) sold, bid for, purchased, or paid anyone
      any compensation for soliciting purchases of, the Notes, or (iii) paid or agreed
      to pay to any person any compensation for soliciting another to purchase any
      other securities of the Group Companies.

     

    (w)  No
      Sale to the U.S.
      None of
      the Group Companies, their respective Affiliates, or any person acting on its
      or
      their behalf has, directly or indirectly, made offers or sales of any security,
      or solicited offers to buy, sell or offer to sell or otherwise negotiate in
      respect of, in the United States or to any United States citizen or resident,
      any security which is or would be integrated with the sale of the Securities
      in
      a manner or under circumstances that would require the registration of the
      Securities under the Act.

     

    (x)  No
      Directed Selling Efforts.
      None of
      the Group Companies, their respective Affiliates, or any person acting on its
      or
      their behalf (other than the Purchaser, its Affiliates or persons acting on
      its
      behalf, as to whom the Company makes no representation) has engaged in any
      directed selling efforts (within the meaning of Regulation S) with respect
      to
      the Securities; and each of the Company, its Subsidiaries, their respective
      Affiliates and each person acting on its or their behalf has complied with
      the
      offering restrictions requirement of Regulation S. 

     

    (y)  No
      Registration.
      Assuming the accuracy of the Purchaser’s representations and warranties set
      forth in Section 8, no registration under the Act of the Securities is required
      for the offer and sale of the Securities in the manner contemplated herein
      or to
      qualify the Indenture under the Trust Indenture Act of 1939, as
      amended.

     

    (z)  Eligibility.
      The
      Notes satisfy the eligibility requirements of Rule 144A(d)(3) under the
      Act.

     

    (aa)  Labor
      Matters.
      None of
      the Group Companies is bound by or subject to (and none of its assets or
      properties is bound by or subject to) any written or oral, express or implied,
      contract, commitment or arrangement with any labor union, and no labor union
      has
      requested or, to the best knowledge of the Company after due inquiry, has sought
      to represent any of the employees, representatives or agents of the Group
      Companies. There is no strike or other labor dispute involving any of the
Group
      Companies pending
      or threatened, which could, individually or in the aggregate, have a Material
      Adverse Effect. There is no employment related charge, complaint, grievance,
      investigation, unfair labor practice claim or inquiry of any kind, pending
      against any of the Group
      Companies that
      could, individually or in the aggregate, have a Material Adverse Effect.

     

    (bb)  Brokers
      and Finders.
      The
      Company has not engaged any broker, finder, commission agent or other similar
      person in connection with the transactions contemplated under the Transaction
      Documents, and the Company is not under any obligation to pay any broker’s fee
      or commission in connection with such transactions.

     

    (cc)  Environmental
      Matters.
      Each of
      the Group Companies (i) is in compliance with any and all currently applicable
      foreign, federal, state, national, provincial, and local laws and regulations
      relating to the protection of the environment or hazardous or toxic substances
      or wastes, pollutants or contaminants (“Environmental
      Laws”),
      (ii) has received and is in compliance with all permits, licenses or other
      approvals required of it under applicable Environmental Laws to conduct its
      business, (iii) has not received actual notice of any actual or potential
      liability for the investigation or remediation of any disposal or release of
      hazardous or toxic substances or wastes, pollutants or contaminants, (iv) none
      of the Group Companies has knowledge of any facts which would give rise to
      any
      Proceedings, public or private, against it or any violation of Environmental
      Laws arising out of the operations of the Group Companies, except, in each
      case,
      such as would not reasonably be expected to result in a Material Adverse Effect;
      and (v) none of the Group Companies has stored any hazardous materials on real
      properties now or formerly owned, leased or operated by any of them, and has
      not
      disposed of any hazardous materials, in a manner contrary to any Environmental
      Laws except as would not reasonably be expected to result in a Material Adverse
      Effect

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (dd)  Encumbrances.
      As of
      the Closing Date, except for any such restrictions provided under the laws
      of
      the jurisdiction of incorporation of any of the Group Companies, as applicable,
      there will be no encumbrances or restrictions on the ability of any of the
      Group
      Companies (i) to pay dividends or make other distributions on such parties’
Capital Stock or to make loans or advances or pay any indebtedness to, or
      investments in, any of the Group Companies, or (ii) to transfer any of its
      property or assets to any of the Group Companies, except for such restrictions
      set forth in the Transaction Documents.

     

    (ee)  Foreign
      Corrupt Practices Act.
      None of
      the Group Companies, nor to the best knowledge of the Company after due inquiry,
      any agent or other person acting on behalf of any of the Group Companies, has,
      directly or indirectly, (i) has used any funds, or will use any proceeds from
      the sale of the Notes, for unlawful contributions, gifts, entertainment or
      other
      unlawful expenses related to foreign or domestic political activity, (ii) has
      made any unlawful payment to foreign or domestic government officials or
      employees or to any foreign or domestic political parties or campaigns from
      corporate funds, (iii) has failed to disclose fully any contribution made by
      the
      Group Companies (or made by any person acting on its behalf of which the Company
      is aware) which is in violation of law, or (iv) has violated in any material
      respect any provision of the Foreign Corrupt Practices Act of 1977, as amended,
      and the rules and regulations thereunder (the “FCPA”).

     

    (ff)  Related
      Party Transactions.
      Other
      than as set forth in the SEC Reports, no material relationship, direct or
      indirect, exists between or among any of the Group Companies or any Affiliate
      of
      the Group Companies, on the one hand, and any former or current director,
      officer, stockholder, customer or supplier of any of them (including any member
      of their immediate family), on the other hand.

     

    (gg)  Investment
      Company.
      None of
      the Group Companies is, and as a result of the offer and sale of the Securities
      contemplated herein will not be, required to register as an “investment company”
under, and as such term is defined in, the U.S. Investment Company Act of 1940,
      as amended in connection with or as a result of the offer and sale of the
      Securities.

     

    (hh)  PFIC.None
      of
      the Group Companies is or intends to become a “passive foreign investment
      company” within the meaning of Section 1297 of the Code (“PFIC”). 

     

    (ii)  OFAC.
      Neither
      the Company nor, to the best knowledge of the Company after due inquiry, any
      director, officer, agent, employee, Affiliate or Person acting on behalf of
      the
      Company is currently subject to any U.S. sanctions administered by the Office
      of
      Foreign Assets Control of the U.S. Treasury Department (“OFAC”);
      and
      the Company will not directly or indirectly use the proceeds of the sale of
      the
      Notes, or lend, contribute or otherwise make available such proceeds to any
      Subsidiary, joint venture partner or other Person or entity, towards any sales
      or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other
      country sanctioned by OFAC or for the purpose of financing the activities of
      any
      person currently subject to any U.S. sanctions administered by
      OFAC.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (jj)  Money
      Laundering Laws.
      The
      operations of each of the Group Companies are and have been conducted at all
      times in compliance with the money laundering statutes of applicable
      jurisdictions, the rules and regulations thereunder and any related or similar
      rules, regulations or guidelines, issued, administered or enforced by any
      applicable governmental agency (collectively, the “Money
      Laundering Laws”)
      and no
      action, suit or proceeding by or before any court or governmental agency,
      authority or body or any arbitrator involving any of the Group Companies with
      respect to the Money Laundering Laws is pending or, to the best knowledge of
      the
      Company after due inquiry, threatened.

     

    (kk)  Other
      Representations and Warranties Relating to the
      PRC
      Subsidiaries.
      

     

    (iv)  All
      material consents, approvals, authorizations or licenses requisite under PRC
      law
      for the due and proper establishment and operation of each of the
      PRC
      Subsidiaries
      has been
      duly obtained from the relevant PRC Governmental Authorities and are in full
      force and effect.

     

    (v)  All
      filings and registrations with the PRC Governmental Authorities required in
      respect of each of the
      PRC
      Subsidiaries
      and its
      operations including, without limitation, the registrations with the Ministry
      of
      Commerce, the State Administration of Industry and Commerce, the State
      Administration for Foreign Exchange, tax bureau and customs authorities have
      been duly completed in accordance with the relevant PRC rules and
      regulations.

     

    (vi)  Each
      of
the
      PRC
      Subsidiaries
      has
      complied with all relevant PRC laws and regulations regarding the contribution
      and payment of its registered share capital, the payment schedule of which
      has
      been approved by the relevant PRC Government Authorities. There are no
      outstanding rights of, or commitments made by the Company or any Subsidiary
      to
      sell any equity interest in the
      PRC
      Subsidiaries.

     

    (vii)  None
      of
the
      PRC
      Subsidiaries
      is in
      receipt of any letter or notice from any relevant PRC Governmental Authority
      notifying it of revocation of any licenses or qualifications issued to it or
      any
      subsidy granted to it by any PRC Governmental Authority for non-compliance
      with
      the terms thereof or with applicable PRC laws, or the need for compliance or
      remedial actions in respect of the activities carried out by any of the
      PRC
      Subsidiaries.

     

    (viii)  Each
      of
the
      PRC
      Subsidiaries
      has
      conducted its business activities within the permitted scope of business or
      has
      otherwise operated its business in compliance with all relevant legal
      requirements and with all requisite licenses and approvals granted by competent
      PRC Governmental Authorities. As to licenses, approvals and government grants
      and concessions requisite or useful for the conduct of any part of the
      business
      of any of the PRC
      Subsidiaries
      which
      are subject to periodic renewal, the Company has no knowledge of any grounds
      on
      which such requisite renewals will not be granted by the relevant PRC
      Governmental Authorities.

     

    (ix)  With
      regard to employment and staff or labor, each of the PRC Subsidiaries has
      complied with all applicable PRC laws and regulations in all material respects,
      including without limitation, laws and regulations pertaining to welfare funds,
      social benefits, medical benefits, insurance, retirement benefits, pensions
      or
      the like.

     

    (ll)  Full
      Disclosure.
      All
      disclosure furnished by or on behalf of the Company to the Purchaser regarding
      any of the Group Companies, their respective businesses and the transactions
      contemplated under the Transaction Documents, including the SEC Reports and
      the
      Disclosure Schedules to this Agreement, with respect to the representations
      and
      warranties made herein are true and correct with respect to such representations
      and warranties and do not contain any untrue statement of a material fact or
      omit to state any material fact necessary in order to make the statements made
      therein, in light of the circumstances under which they were made, not
      misleading. The Company acknowledges and agrees that the Purchaser does not
      make
      any representations or warranties with respect to the transactions contemplated
      hereby other than those specifically set forth in Section 8 hereof.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    7.  Covenants
      of the Group Companies and the Controlling Shareholders.

     

    Each
      of
      the Group Companies and, to the extent permitted under applicable law, the
      Controlling Shareholders, jointly and severally, hereby agrees: 

     

    (a)  To
      (i)
      advise the Purchaser promptly after obtaining knowledge (and, if requested
      by
      the Purchaser, confirm such advice in writing) of the issuance by any state
      securities commission of any stop order suspending the qualification or
      exemption from qualification of the Securities for offer or sale in any
      jurisdiction, or the initiation of any proceeding for such purpose by any state
      securities commission or other regulatory authority, (ii) use its commercially
      reasonable efforts to prevent the issuance of any stop order or order suspending
      the qualification or exemption from qualification of the Securities under any
      state securities or “blue
      sky”
laws,
      and (iii) if at any time any state securities commission or other regulatory
      authority shall issue an order suspending the qualification or exemption from
      qualification of the Securities under any such laws, use its commercially
      reasonable efforts to obtain the withdrawal or lifting of such order at the
      earliest possible time.

     

    (b)  So
      long
      as any of the Securities are “restricted securities” within the meaning of Rule
      905 under the Act, to, during any period in which the Company is not subject
      to
      and in compliance with Section 13 or 15(d) of the Exchange Act, provide to
      each
      holder of such restricted securities and to each prospective purchaser (as
      designated by such holder) of such restricted securities, upon the request
      of
      such holder or prospective purchaser, any information required to be provided
      by
      Rule 144A(d)(4) under the Act.

     

    (c)  Whether
      or not any of the transactions contemplated under the Transaction Documents
      are
      consummated or this Agreement is terminated, to pay (i) all costs, expenses,
      fees and taxes incident to and in connection with the preparation, issuance
      and
      delivery of the Securities, (ii) all fees and expenses of counsels, accountants
      and any other advisors, if any, retained by the Company, (iii) all expenses
      in
      connection with qualifying the Notes for settlement in the Clearing Facilities,
      (iv) all fees and expenses of the Company in connection with approval of the
      Notes for “book entry” transfer, and (v) all fees and expenses of the Trustee,
      the Conversion Agent, the Paying Agent, the Registrar and any other agents
      contemplated in the Transaction Documents.

     

    (d)  To
      do and
      perform all things required to be done and performed under the Transaction
      Documents prior to and after each Closing Date.

     

    (e)  Prior
      to
      making any public disclosure or filings as may be required by Applicable Laws
      with respect to any of the Transaction Documents and the transactions
      contemplated hereby and thereby, to provide the Purchaser and its counsels
      with
      the reasonable opportunity to review and comment on such public disclosure
      documents and consider in good faith any comments received by the Purchaser
      or
      its counsels.

     

    (f)  The
      Company shall use it best efforts to effect, and each of the Controlling
      Shareholders shall cause the Company to use its best efforts to effect, a
      Qualifying IPO on or prior to December 1, 2008. 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (g)  To
      maintain the listing and trading of the Common Stock on the Trading Market
      or on
      an alternative trading market reasonably acceptable to the Purchaser, until
      the
      time of a Qualifying IPO.

     

    (h)  For
      so
      long as the Purchaser owns any of the Securities, the Company will furnish
      to
      the Purchaser copies of all reports and other communications (financial or
      otherwise) furnished by the Company to the Trustee or to the holders of its
      Securities and, as soon as available, copies of any reports or financial
      statements furnished to or filed by the Company with the Commission or any
      national securities exchange on which any class of securities of the Company
      may
      be listed; provided,
      however,
      that
      any such report or financial statements filed on the Commission’s EDGAR database
      need not be separately furnished.

     

    (i)  During
      the two-year period after the applicable Closing Date (or such shorter period
      as
      may be provided for in Rule 144(k) under the Act, as the same may be in effect
      from time to time), not to, and not to permit any current or future Subsidiaries
      of the Company or any other affiliates (as defined in Rule 144(a) under the
      Act)
      controlled by the Company to, resell any of the Securities (issued as of such
      Closing Date) which constitute “restricted securities” under Rule 144 that have
      been reacquired by the Company, any current or future Subsidiaries of the
      Company or any other affiliates (as defined in Rule 144(a) under the Act)
      controlled by the Company, except pursuant to an effective registration
      statement under the Act.

     

    (j)  To
      pay
      all stamp, documentary and transfer taxes and other duties, if any, which may
      be
      imposed by any Governmental Authorities or any political subdivision thereof
      or
      taxing authority thereof or therein with respect to the issuance of the Notes
      or
      the sale thereof to the Purchaser.

     

    (k)  The
      Company will use its commercially reasonable efforts not to become, and cause
      its Subsidiaries not to become, a PFIC. If the Company determines that it or any
      of its Subsidiaries has become a PFIC, the Company will promptly notify the
      Purchaser and provide all information requested by the Purchaser that is
      necessary for it to make a qualified electing fund (QEF) election.

     

    (l)  Not
      register any transfer of the Notes that is not (i) made in accordance with
      the
      provisions of Regulation S, (ii) made pursuant to registration under the Act,
      or
      (iii) made pursuant to an available exemption under the Act.

     

    (m)  Prior
      to
      each Closing Date, the Company shall not, without the express prior written
      consent of the Purchaser (which consent shall be at the Purchaser’s sole
      discretion), pursue or discuss any capital raising transaction or transactions
      with any Person other than the Purchaser or its Affiliates (“Outside
      Financing”).
      

     

    (n)  Prior
      to
      each Closing Date, the Company shall not, and shall procure that its
      Subsidiaries shall not, do anything or take any step, action or measure (or
      omit
      to take the same), that has or could be reasonably expected to have,
      individually or in the aggregate, a Material Adverse Effect.

     

    (o)  The
      Company and the Mr. Leng You-Bin shall use their best efforts to have the
      financing statements timely filed under Article 9 of the Uniform Commercial
      Code
      of Utah or the District of Columbia, as applicable, with the Secretary of the
      State of the State of Utah or the District of Columbia, as applicable, in
      accordance with the Offshore Share Pledge Agreement, which initial filing shall
      be completed or caused to be completed within 10 days from the date of the
      First
      Closing.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (p)  Each
      of
      the Company and the Controlling Shareholders shall, as soon as reasonably
      practicable and to
      the
      extent permitted under PRC law,
      use
      its reasonable
      efforts
      to (i) procure a collateral agent acceptable to the Purchaser to serve as a
      collateral agent under the Onshore Share Pledge Agreement, which agreement
      shall
      be in a form acceptable to the Purchaser, (ii) obtain approvals from, and
      complete filing procedures with, relevant Governmental Authorities in order
      to
      create a valid and enforceable first-priority security interest over all of
      the
      equity interests issued by the PRC Subsidiaries, including the approval from
      the
      regional offices of the Foreign Trade & Economic Cooperation Bureau and the
      registration with the regional offices of Industrial and Commercial
      Administration Bureau or other offices to the extent required under PRC law
      or
      regulations.

     

    (q)  The
      Company shall not use the net proceeds from the sale of the Notes, in any
      amount, for any purpose other than as set forth in Section 4.23 of the
      Indenture.

     

    (r)  In
      the
      event that any of the Group Companies acquires any Person following the First
      Closing Date, such Group Company shall obtain, and the Company shall cause
      such
      Group Company to obtain, as a condition precedent to the consummation of such
      acquisition, an opinion of counsel, which includes, among others, opinions
      substantially to the effect that (i) the transaction documents governing such
      acquisition are enforceable according to their terms and (ii) neither the
      execution, delivery or performance of such transaction documents nor the
      consummation of any of the transactions contemplated therein will conflict
      with,
      violate, constitute a breach of or a default (with the passage of time or
      otherwise) under, require the consent of any Person or a Governmental Authority
      (other than consents already obtained) or result in an imposition of a Lien
      (other than a Lien arising under the transactions contemplated in such
      transaction documents) on any assets of any of such Group Company under or
      pursuant to (x) the Charter Documents, (y) the Applicable Agreements or (z)
      any
      Applicable Law. In addition, in the event that any acquisition of a Person
      by a
      Group Company is disclosed in a SEC Report filed by the Company, the Company
      shall provide, or cause to provide, a copy of such report to the Purchaser
      promptly as reasonably practicable after filing thereof. 

     

    (s)  The
      Company shall authorize and at all times keep reserved for issuance and delivery
      upon conversion of the Notes such number of Conversion Shares or other shares
      of
      the Company as are from time to time issuable upon conversion of any Notes
      and
      will, from time to time, take all necessary steps to amend its articles of
      incorporation to provide a sufficient reserve of Conversion Shares for issuance
      upon conversion of the Notes.

     

    (t)  In
      connection with the conversion of the Notes into Conversion Shares, neither
      the
      Company nor any Person acting on its behalf will take any action which would
      result in the Conversion Shares being delivered by the Company other than to
      the
      then existing holders of the Notes exclusively where no commission or other
      remuneration is paid or given directly or indirectly for soliciting the exchange
      in compliance with Section 3(a)(9) of the Act.

     

    (u)  Each
      of
      the Group Companies and the Controlling Shareholders undertakes that (i) they
      will comply with the FCPA, including, without limitation, not making use of
      the
      mails or any means or instrumentality of interstate commerce corruptly in
      furtherance of an offer, payment, promise to pay or authorization of the payment
      of any money, or other property, gift, promise to give, or authorization of
      the
      giving of value to any “foreign official” (as the term is defined in the FCPA)
      or any foreign political party or official thereof or any candidate for foreign
      political office, in contravention of the FCPA, (ii) they will conduct its
      business in compliance with the FCPA, and (iii) they will institute and maintain
      policies and procedures designed to ensure, and which are reasonably expected
      to
      continue to ensure, continued compliance therewith.

     

    
      
        
        

      

      
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    (v)  Promptly
      as reasonably practicable but in no event later than 90 days following the
      First
      Closing Date, each of the Group Companies shall obtain reasonably adequate
      insurance covering its material properties, operations, personnel and business,
      and is insured by insurers of recognized financial responsibility against such
      losses and risks and in such amounts as are prudent and customary in the
      businesses in which it is engaged.

     

    (w)  Promptly
      as reasonably practicable following the First Closing Date, each of the Group
      Companies shall execute appropriate nondisclosure and confidentiality agreements
      with their respective employees (excluding employees acting solely as sales
      representatives and without any access to Intellectual Property of any of the
      Group Companies), consultants and other Persons as necessary to establish and
      preserve ownership of or right to use all Intellectual Property material to
      the
      operation of its business, including any Intellectual Property jointly developed
      with any third parties, or any Intellectual Property for which improper or
      unauthorized disclosure would impair its value or validity and shall ensure
      that
      such agreements remain in full force and effect. 

     

    (x)  Promptly
      and to the extent reasonably practicable following the First Closing Date,
      each
      Group Company, to the extent applicable as set forth below, shall consummate
      the
      following: 

     

    (i)  payment
      by the Company of the consideration in United States dollars for the purchase
      of
      40% equity interest in Shanxi Feihe; 

     

    (ii)  amendment
      of the land use right certificates with respect to the use of the land located
      at Xiangqing Street 016, Kedo, Xiangqing Street 3-4-2, Kedo, Nutricia-related
      land and Nantong Street, Baiquan to the reasonable satisfaction of the
      Purchaser; 

     

    (iii)  payment
      of the consideration for the acquisition by Feihe of land use rights from Kedong
      BeiBei Food Plant with respect to the use of the land located at the address
      set
      forth in Schedule 7(x)(iii) of the Disclosure Schedule and procurement of the
      related land use rights certificate to the reasonable satisfaction of the
      Purchaser; 

     

    (iv)  procurement
      of the requisite approvals or waiver by the Hebei Provincial Government with
      respect to the acquisition by Langfang of the land located at the address set
      forth in Schedule 7(x)(iv) of the Disclosure Schedule; and

     

    (v)  execution
      of employment agreements with the senior officers of each of the Group
      Companies, which agreements shall contain standard non-competition,
      confidentiality and assignment of inventions provisions as customary in the
      businesses in which it is engaged.

     

    (y)  Promptly
      and to the extent reasonably practicable following the applicable Closing Date,
      Mr. Leng You-Bin shall deliver to the Offshore Collateral Agent the certificate
      representing the Pledged Stock (as defined in the Offshore Share Pledge
      Agreement) to be pledged by Mr. Leng, accompanied by undated stock powers duly
      executed in blank by Mr. Leng You-Bin pursuant to the Offshore Share Pledge
      Agreement;

     

    (z)  The
      Company covenants to timely file (or obtain extensions in respect thereof and
      file within the applicable grace period) all reports required to be filed by
      the
      Company after the date hereof pursuant to the Exchange Act. As long as the
      Conversion Shares are “restricted securities” as defined in Rule 144(a)(3), if
      the Company is not required to file reports pursuant to the Exchange Act, it
      will prepare and make publicly available in accordance with Rule 144(c) (and,
      if
      the Purchaser owns any Conversion Shares, furnish to the Purchaser) such
      information as is required to sell such Conversion Shares under Rule 144. The
      Company further covenants that it will take such further action as any holder
      of
      the Conversion Shares may reasonably request, to the extent required from time
      to time to enable such person to sell such Conversion Shares without
      registration under the Securities Act within the requirements of the exemption
      provided by Rule 144.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (aa)  The
      Company shall, by no later than the four (4) business days (in the City of
      New
      York) following each Closing Date, file a Form 8-K announcing the respective
      Closing of the transactions contemplated hereby and the material terms thereof,
      which must be reviewed and consented to by the Purchaser prior to the filing,
      which consent shall not be unreasonably withheld or delayed; and to provide
      the
      draft of such Form 8-K to the Purchaser reasonably in advance for review. The
      Company and the Purchaser shall consult with each other in issuing any other
      press releases with respect to the transactions contemplated hereby, and neither
      the Company nor the Purchaser shall issue any such press release or otherwise
      make any such public statement (i) without the prior consent of the Company,
      with respect to any press release of the Purchaser, or (ii) without the prior
      consent of the Purchaser, with respect to any press release of the Company,
      in
      either case of (i) and (ii), which consent shall not unreasonably be withheld
      or
      delayed, except if such disclosure is required by law, in which case the
      disclosing party shall promptly provide the other party with prior notice of
      such public statement or communication. Notwithstanding
      the foregoing, the Company shall not publicly disclose the name of the
      Purchaser, or include the name of the Purchaser in any other filing with the
      Commission or any regulatory agency or Trading Market, without the prior written
      consent of the Purchaser, except (x) as required by federal securities law
      in
      connection with the filing of the Documents (including signature pages thereto)
      with the Commission and (y) to the extent such disclosure is required by law
      or
      Trading Market regulations, in which case the Company shall provide the
      Purchaser with prior notice of such disclosure permitted hereunder.

     

    (bb)  From
      the
      date of this Agreement to the Second Closing Date, each of the Group Companies
      and their respective officers and directors and the Controlling Shareholders
      will not, and each of the Company and the Controlling Shareholders will cause
      its other representatives not to, directly or indirectly, (i) solicit, or
      initiate any proposal (a “Proposal”)
      relating to (A) direct or indirect acquisition or purchase of any equity
      securities (any and all shares of Capital Stock of the Group Companies,
      securities of the Group Companies convertible into, or exchangeable or
      exercisable for, such shares, and options, warrants or other rights to acquire
      such shares and any securities that represent the right to receive such equity
      securities) or any tender offer or exchange offer or (B) a merger, amalgamation,
      share exchange or consolidation or (C) a sale of all or substantially all of
      the
      assets of the Group Companies, (ii) participate in any discussions or
      negotiations regarding or furnish to any Person any information or otherwise
      facilitate any inquiries or the making of any proposal that constitutes, or
      may
      reasonably be expected to lead to, any Proposal (other than a modified Proposal
      of the Purchaser, if any, and without prejudice to the Prior ROFR), or (iii)
      authorize, engage in, or enter into any agreement or understanding with respect
      to, any Proposal. Each of the Group Companies and their respective officers
      and
      directors and the Controlling Shareholders will, and each of the Group Companies
      will cause its other representatives to, terminate any existing activities
      or
      discussions in relation to any Proposal with any other party other than the
      Purchaser and its representatives.

     

    The
      Company and the Controlling Shareholders will immediately (within one Business
      Day) advise the Purchaser of, and inform the Purchaser of the terms of, and
      the
      identity of the Person making any Proposal that any of the Group
      Companies
      or
      Controlling Shareholders or any of their representatives or Affiliates may
      receive from
      the
      date of this Agreement to the Second Closing Date.

     

    (cc)  Prior
      to
      the Second Closing Date, if the Group Companies or their respective officers
      and
      directors or the Controlling Shareholders violate any of the obligations set
      forth in Section 7(bb) above, the Company and the Controlling Shareholders,
      on a
      joint and several basis, shall pay to the Purchaser all fees and expenses
      incurred by the Purchaser in connection with the transactions contemplated
      by
      the Transaction Documents, including, without limitation, any amounts payable
      under Section 11(b) hereof and all legal and accounting fees and expenses,
      travel and accommodation fees and expenses, and due diligence fees and
      expenses.

     

    
      
        
        

      

      
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    8.  Purchaser’s
      Representations, Warranties and Agreements.
      The
      Purchaser represents and warrants to the Company that:

     

    (a)  The
      Purchaser is not a “U.S. Person” (as defined in Rule 902 of Regulation S) and it
      understands that no action has been or will be taken in any jurisdiction by
      the
      Company that would permit a public offering of the Notes or the Conversion
      Shares in any country or jurisdiction where action for that purpose is required.
      The Purchaser is not acquiring the Notes or the Conversion Shares for the
      account or benefit of any U.S. persons except in accordance with exemption
      from
      registration requirements of the Act below or in a transaction not subject
      thereto.

     

    (b)  The
      Purchaser is not acquiring the Notes or the Conversion Shares with a view to
      any
      distribution thereof that would violate the Act or the securities laws of any
      state of the United States or any other applicable jurisdiction.

     

    (c)  The
      Purchaser (A) agrees on its own behalf and on behalf of any investor account
      for
      which it has purchased the Notes and/or the Conversion Shares that it will
      not
      offer, sell or otherwise transfer any of the Notes and/or the Conversion Shares
      prior to (x) the date which is 1 year after the later of the date of the
      commencement of the offering and the date of original issuance (or of any
      predecessor of any Security proposed to be transferred by the Purchaser) and
      (y)
      such later date, if any, as may be required by applicable law, except (a) to
      the
      Company, (b) pursuant to a registration statement that has been declared
      effective under the Act, (c) for so long as any Security is eligible for resale
      pursuant to Rule 144A under the Act, to a person it reasonably believes is
      a
“qualified institutional buyer” as defined in Rule 144A that purchases for its
      own account or for the account of another qualified institutional buyer to
      whom
      notice is given that the transfer is being made in reliance on Rule 144A, (d)
      pursuant to offers and sales to Persons who are not “U.S. Persons” (within the
      meaning of Regulation S) that occur outside the United States within the meaning
      of Regulation S or (e) pursuant to any other available exemption from the
      registration requirements of the Act, and (B) agrees that it will give to each
      person to whom such Security is transferred a notice substantially to the effect
      of this paragraph. 

     

    (d)  The
      Purchaser acknowledges that the Notes and the Conversion Shares are “restricted
      securities” as defined in Rule 144 under the Act.

     

    (e)  No
      form
      of “directed selling efforts” (as defined in Rule 902 of Regulation S), general
      solicitation or general advertising in violation of the Act has been or will
      be
      used nor will any offers by means of any directed selling efforts in the United
      States be made by the Purchaser or any of its representatives in connection
      with
      the offer and sale of any of the Notes and/or the Conversion
      Shares.

     

    (f)  The
      Notes
      and/or the Conversion Shares to be acquired by the Purchaser will be acquired
      for investment for the Purchaser’s own account, not as a nominee or agent, and
      not with a view to the resale or distribution of any part thereof, and that
      the
      Purchaser has no present intention of selling, granting any participation in,
      or
      otherwise distributing the same. The Purchaser does not presently have any
      contract, undertaking, agreement or arrangement with any Person to sell,
      transfer or grant participations to such Person or to any third Person, with
      respect to any of the Notes or the Conversion Shares. 

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    9.  Conditions
      Precedent to the Obligation of the Purchaser to Purchase the
      Notes.

     

    The
      Purchaser’s obligation to purchase the Notes under this Agreement at a Closing
      is subject to the satisfaction or waiver of each of the following conditions
      on
      or prior to such Closing:

     

    (a)  All
      the
      representations and warranties of each of the Group Companies and the
      Controlling Shareholders contained in each Transaction Document shall be true
      and correct as of the date hereof and at the Closing Date. Each of the Group
      Companies and the Controlling Shareholders shall have performed, satisfied
      and
      complied with, to the Purchaser’s satisfaction in its sole discretion, all
      covenants, agreements and conditions required by the Transaction Documents
      to be
      performed, satisfied or complied with by them at or prior to the Closing.

     

    (b)  No
      injunction, restraining order or order of any nature by a Governmental Authority
      shall have been issued as of the Closing Date that could prevent or materially
      interfere with the consummation of the transactions contemplated under the
      Transaction Documents; and no stop order suspending the qualification or
      exemption from qualification of any of the Securities in any jurisdiction shall
      have been issued and no Proceeding for that purpose shall have been commenced
      or, to the best knowledge of the Company after due inquiry, be pending or
      threatened as of the Closing Date.

     

    (c)  No
      action
      shall have been taken and no Applicable Law shall have been enacted, adopted
      or
      issued that could, as of the Closing Date, reasonably be expected to prevent
      the
      consummation of the transactions contemplated under the Transaction Documents.
      No Proceeding shall be pending or, to the best knowledge of the Company after
      due inquiry, threatened other than Proceedings that if adversely determined
      could not, individually or in the aggregate, adversely affect the issuance
      or
      marketability of the Notes or the Conversion Shares, or could not, individually
      or in the aggregate, have a Material Adverse Effect. None of the Group Companies
      has taken any step, action or measure (or omitted to take the same), which
      has
      or could be reasonably expected to have, individually or in the aggregate,
      a
      Material Adverse Effect.

     

    (d)  The
      Company shall have obtained any and all approvals, consents and waivers
      necessary for consummation of the transactions contemplated by the Transaction
      Documents, including, but not limited to, all Permits, authorizations, approvals
      or consents of any Governmental Authority.

     

    (e)  The
      Purchaser shall have received on the Closing Date:

     

    (i)  a
      certificate dated the Closing Date, signed by the Chief Executive Officer of
      the
      Company on behalf of the Company to the effect that (a) the representations
      and
      warranties set forth in Section 6 are true and correct with the same force
      and
      effect as though expressly made at and as of the Closing Date, (b) the Company
      has complied with all agreements and satisfied all conditions on its part to
      be
      performed or satisfied hereunder at or prior to the Closing Date, (c) at the
      Closing Date, since the date hereof or since the date of the most recent
      financial statements in the SEC Reports, no event or events have occurred,
      no
      information has become known nor does any condition exist that could,
      individually or in the aggregate, have a Material Adverse Effect, (d) since
      the
      date of the most recent financial statements in the SEC Reports, none of the
      Group Companies has incurred any liabilities or obligations, direct or
      contingent, not in the ordinary course of business, or entered into any other
      transactions not in the ordinary course of business, and there has not been
      any
      change in the Capital Stock or long-term indebtedness of any of the Group
      Companies, in each case, which could, individually or in the aggregate, have
      a
      Material Adverse Effect, and (e) the sale of any of the Notes has not been
      enjoined (temporarily or permanently);

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    (ii)  certificates
      dated the Closing Date, signed by each of the Controlling Shareholders, to
      the
      effect that (a) the representations and warranties set forth in the Transaction
      Documents which are given by the Controlling Shareholders are true and correct
      with the same force and effect as though expressly made at and as of the Closing
      Date, and (b) each of the Controlling Shareholders has complied with all
      agreements and satisfied all conditions on its part to be performed or satisfied
      under the Transaction Documents at or prior to the Closing Date,

     

    (iii)  a
      certificate dated the Closing Date, signed by each of the Group Companies other
      than the Company, to the effect that (a) the representations and warranties
      set
      forth in the Transaction Documents which are given by such Group Company are
      true and correct with the same force and effect as though expressly made at
      and
      as of the Closing Date, and (b) such Group Company has complied with all
      agreements and satisfied all conditions on its part to be performed or satisfied
      under the Transaction Documents at or prior to the Closing Date,

     

    (iv)  a
      certificate dated the Closing Date, signed by the Secretary of the Company,
      including specimen signatures of those officers of the Company authorized to
      sign the Transaction Documents, to which the Company is a party, on behalf
      of
      the Company, attaching true, complete and up to date copies of the certificate
      of incorporation and by-laws of the Company, attaching the certificate of good
      standing of the Company and certifying as to such other maters as the Purchaser
      may reasonably require;

     

    (v)  certificates
      dated the Closing Date, signed by the Secretary or another authorized officer
      of
      each of the Group Companies other than the Company, including specimen
      signatures of those officers of such Group Company authorized to sign the
      Transaction Documents, to which such Group Company is a party, on behalf of
      such
      Group Company, attaching true, complete and up to date copies of the certificate
      of incorporation and by-laws (or other comparable constitutional documents,
      and
      including business licenses, in the case of the PRC Subsidiaries, and also
      certificates of approval, in the case of the PRC Subsidiaries that are wholly
      foreign owned entities) of such Group Company, attaching the certificate of
      good
      standing (only in the case of the Company and AFC) of such Group Company and
      certifying as to such other maters as the Purchaser may reasonably
      require;

     

    (vi)  the
      opinions of Hodgson Russ LLP, U.S. counsel to the Company and the Controlling
      Shareholders, dated the Closing Date, in the form and substance reasonably
      satisfactory to the Purchaser; and

     

    (vii)  the
      opinions of
      the
      PRC counsel
      to the
      Company and the Controlling Shareholders, dated the Closing Date, in the form
      and substance reasonably satisfactory to the Purchaser.

     

    (f)  Each
      of
      the Transaction Documents shall have been executed and delivered by all parties
      thereto, and the Purchaser shall have received a fully executed original (or
      clearly legible facsimile copy) of each Transaction Document.

     

    (g)  The
      Purchaser shall have received copies of all documents delivered under or in
      connection with the transactions contemplated in the Transaction Documents
      that
      are required to be delivered at or prior to the Closing Date.

     

    (h)  The
      Purchaser shall have received the Disclosure Schedule in form and substance
      satisfactory to the Purchaser in its sole discretion; 

     

    
      
        
        

      

      
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    (i)  None
      of
      the other parties to any of the Transaction Documents shall be in breach or
      default under their respective obligations thereunder.

     

    (j)  The
      Offshore Collateral Agent shall have received on the Closing Date:

     

    (i)  the
      certificate representing the Pledged Stock (as defined in the Offshore Share
      Pledge Agreement) to be pledged by the Company, accompanied by undated stock
      powers duly executed in blank by the Company pursuant to the Offshore Share
      Pledge Agreement;

     

    (ii)  any
      appropriately
      completed copies, which have been duly authorized for filing by the appropriate
      Person, of Uniform Commercial Code financing statements naming the Company
      and
      Mr. Leng You-Bin as debtors and the Offshore Collateral Agent as the secured
      party, or other similar instruments or documents to be filed under the Uniform
      Commercial Code of all jurisdictions as may be necessary or desirable to perfect
      the security interests of the Offshore Collateral Agent pursuant to the
      Indenture and the Share Pledge Agreement;

     

    (iii)  any
      certified
      copies of Uniform Commercial Code Requests for Information or Copies (Form
      UCC-11), or a similar search report certified by a party acceptable to the
      Offshore Collateral Agent, dated a date reasonably near to
      the
      Closing Date, listing all effective financing statements which name the Company,
      AFC or Mr. Leng You-Bin (under its present name and any previous names) as
      the
      debtor, together with copies of such financing statements (none of which shall
      cover any collateral described in the Indenture and the Share Pledge
      Agreement);

     

    (iv)  such
      other approvals, opinions, or documents as the Offshore Collateral Agent may
      reasonably request in form and substance reasonably satisfactory to the Offshore
      Collateral Agent; and

     

    (v)  the
      Offshore Collateral Agent and its counsel shall be satisfied that
      (i)
      the Lien
      granted to the Offshore Collateral Agent, for the benefit of the Secured Parties
      (as defined in the Offshore Share Pledge Agreement) in the collateral described
      above is a first priority Lien; and
      (ii)
      no Lien
      exists on any of the collateral described above other than the Lien created
      in
      favor of the Offshore Collateral Agent, for the benefit of the Secured Parties,
      pursuant to the Indenture and the Offshore Share Pledge Agreement.

     

    (k)  All
      Uniform Commercial Code financing statements or other similar financing
      statements required pursuant to Section
      9(i)
      (i),
      (ii) and
      (iii) above (collectively, the “Filing
      Statements”)
      shall
      have been delivered to CT Corporation System or another similar filing service
      company acceptable to the Offshore Collateral Agent (the “Filing
      Agent”).
      The
      Filing Agent shall have acknowledged in a writing reasonably satisfactory to
      the
      Offshore Collateral Agent and its counsel (i) the Filing Agent’s receipt of all
      Filing Statements, (ii) that the Filing Statements have either been submitted
      for filing in the appropriate filing offices or will be submitted for filing
      in
      the appropriate offices within ten days following the Closing Date and (iii)
      that the Filing Agent will notify the Offshore Collateral Agent and its counsel
      of the results of such submissions within 30 days following the Closing
      Date.

     

    (l)  The
      respective board of directors of each of the Group Companies shall have approved
      and authorized by all necessary corporate or other action (i) the execution
      and
      delivery of the Transaction Documents, (ii) all actions to be performed or
      satisfied under the Transaction Documents (including, without limitation, the
      reserve for issuance of the Conversion Shares issuable upon exercise of the
      Notes), (iii) the consummation of the transactions contemplated by the
      Transaction Documents, (iv) the pricing terms of the Notes, and (v) all other
      actions necessary in connection with the transactions contemplated by the
      Transaction Documents and the offering of the Notes, and shall have provided
      the
      Purchaser with a copy of such authorizations. 

     

    
      
        
        

      

      
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    (m)  The
      Purchaser shall have completed and be satisfied with the results of all
      business, legal and financial due diligence, and any items requiring correction
      identified by the Purchaser shall have been corrected to the Purchaser’s
      satisfaction.

     

    (n)  The
      Purchaser shall have received all necessary internal approval for the
      transactions contemplated hereunder or under the Transaction
      Documents.

     

    (o)  The
      Purchaser shall have approved a fund flow chart setting forth how the proceeds
      from the issue of the Notes will be transferred to its direct or indirect PRC
      Subsidiaries and how such PRC Subsidiaries will transfer the funds to the
      Company for purposes of the performance of the Company’s obligations under the
      Transaction Documents. 

     

    (p)  Except
      for the Prior ROFR and as set forth on Schedule 9(o) of the Disclosure Schedule,
      the Company shall have received due and proper waivers, or shall have entered
      into amendments or agreements effecting such waivers, by the security holder,
      creditor or anyone who holds similar rights in the Company (other than the
      holders of the Notes), of any restrictions with respect to the issuance or
      sale
      of the Notes or the consummation of the transactions contemplated under the
      Transaction Documents, or any provisions that would adversely affect the
      interests of the holders of the Notes or the consummation of the transactions
      contemplated under the Transaction Documents, including without limitation
      any
      right of first refusal or right to be consulted or to make a comparable offer
      with respect to the Notes, held by any such security holder, creditor or
 holder of similar rights.

     

    10.  Indemnification.

     

    (a)  Each
      of
      the Group Companies and the Controlling Shareholders (each such Person being
      referred to as an “Indemnifying
      Party”),
      jointly and severally, agrees to indemnify and hold harmless the Purchaser,
      each
      of its Affiliates and their respective officers, directors, partners,
      shareholders, counsel, employees and agents (the Purchaser and each such other
      person being referred to as an “Indemnified
      Party”),
      to
      the fullest extent lawful, from and against any losses, claims, damages,
      liabilities and reasonable expenses (or actions in respect thereof) other than
      those arising from the Purchaser’s gross negligence or willful misconduct, as
      incurred, related to or arising out of or in connection with:

     

    
      	(i)  	
              actions
                taken or omitted to be taken by any of the Group Companies or the
                Controlling Shareholders or their respective Affiliates, officers,
                directors, employees or agents (including, without limitation, the
                failure
                to take any required actions pursuant to Circular No. 75 of the PRC’s
                State Administration of Foreign Exchange, by any Controlling Shareholder
                or the shareholders, executive officers or directors of any Group
                Company); or

            

    

     

    
      	 	
              (ii)
                

            	
              any
                breach by any of the Group Companies or the Controlling Shareholders
                or
                their respective Affiliates of any of the representations, warranties,
                covenants and agreements set forth in any Transaction
                Document,

            

    

     

    
      
        
        

      

      
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    and
      will
      reimburse the Indemnified Parties for all reasonable expenses (including,
      without limitation, fees and expenses of counsel) as they are incurred in
      connection with investigating, preparing, defending or settling any such action
      or claim, whether or not in connection with litigation in which any Indemnified
      Party is a named party. If any of the Indemnified Parties’ personnel appears as
      witnesses, are deposed or are otherwise involved in the defense of any action
      against an Indemnified Party, the Indemnifying Parties will reimburse the
      Purchaser for all reasonable expenses incurred by the Purchaser by reason of
      any
      of the Indemnified Parties being involved in any such action. 

     

    (b)  As
      promptly as reasonably practical after receipt by an Indemnified Party under
      this Section 10 of notice of the commencement of any action for which such
      Indemnified Party is entitled to indemnification under this Section 10, such
      Indemnified Party will, if a claim in respect thereof is to be made against
      the
      Indemnified Party under this Section 10, notify the Indemnifying Party of the
      commencement thereof in writing; but the omission to so notify the Indemnifying
      Party (i) will not relieve such Indemnifying Party from any liability under
      paragraph (a) above unless and only to the extent it is materially prejudiced
      as
      a result thereof and (ii) will not, in any event, relieve the Indemnifying
      Party
      from any obligations to any Indemnified Party otherwise than the indemnification
      obligation provided in paragraph (a) above. In case any such action is brought
      against any Indemnified Party, and it notifies the Indemnifying Party of the
      commencement thereof, the Indemnifying Party will be entitled to participate
      therein and, to the extent that it may determine, jointly with any other
      Indemnifying Party similarly notified, to assume the defense thereof, with
      counsel satisfactory to such Indemnified Party (who shall not, except with
      the
      consent of the Indemnified Party, be counsel to the Indemnifying Party) at
      the
      expense of the Indemnifying Party; provided,
      however,
      that if
      (i) the use of counsel chosen by the Indemnifying Party to represent the
      Indemnified Party would present such counsel with a conflict of interest, (ii)
      the actual or potential defendants in, or targets of, any such action include
      both the Indemnified Party and the Indemnifying Party and the Indemnified Party
      shall have been advised by counsel that there may be one or more legal defenses
      available to it and/or other Indemnified Party that are different from or
      additional to those available to the Indemnifying Party, (iii) the Indemnifying
      Party shall not have employed counsel satisfactory to the Indemnified Party
      to
      represent the Indemnified Party within a reasonable time after notice of the
      institution of such action or (iv) the Indemnifying Party shall authorize the
      Indemnified Party to employ separate counsel at the expense of the Indemnifying
      Party, then, in each such case, the Indemnifying Party shall not have the right
      to direct the defense of such action on behalf of such Indemnified Party or
      parties and such Indemnified Party or parties shall have the right to select
      separate counsel (including local counsel) to defend such action on behalf
      of
      such Indemnified Party or parties at the expense of the Indemnifying Party.
      After notice from the Indemnifying Party to such Indemnified Party of its
      election so to assume the defense thereof and approval by such Indemnified
      Party
      of counsel appointed to defend such action, the Indemnifying Party will not
      be
      liable to such Indemnified Party under this Section 10 for any legal or other
      expenses, other than reasonable costs of investigation, subsequently incurred
      by
      such Indemnified Party in connection with the defense thereof, unless the
      Indemnified Party shall have employed separate counsel in accordance with the
      proviso to the immediately preceding sentence (it being understood, however,
      that in connection with such action the Indemnifying Party shall not be liable
      for the expenses of more than one separate counsel (in addition to local
      counsel) in any one action or separate but substantially similar actions in
      the
      same jurisdiction arising out of the same general allegations or circumstances,
      representing the Indemnified Party who are parties to such action or actions).
      The Indemnifying Party shall not, without the prior written consent of the
      Indemnified Party, effect the settlement or compromise of, or consent to the
      entry of any judgment with respect to, any pending or threatened action or
      claim
      in respect of which indemnification or contribution may be sought hereunder
      (whether or not the Indemnified Party is an actual or potential party to such
      action or claim) unless such settlement, compromise or judgment (i) includes
      an
      unconditional release of the Indemnified Party from all liability arising out
      of
      such action or claim and (ii) does not include a statement as to or an admission
      of fault, culpability or a failure to act, by or on behalf of any Indemnified
      Party.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    (c)  The
      indemnity and expense reimbursement obligations set forth herein (i) shall
      be in
      addition to any liability any of the Group Companies or the Controlling
      Shareholders may otherwise have to any Indemnified Party, (ii) shall remain
      operative and in full force and effect regardless of any investigation made
      by
      or on behalf of the Purchaser or any other Indemnified Party and (iii) shall
      be
      binding on any successor or assign of the Group Companies or their respective
      business and assets. 

     

    11.  Termination.
      

     

    (a)  The
      Purchaser may terminate this Agreement at any time prior to the Closing Date
      by
      written notice to the Company if any of the following has occurred:

     

    (i)  since
      the
      date hereof, any Material Adverse Change or any development involving or
      reasonably expected to result in a Material Adverse Effect that could, in the
      Purchaser’s sole judgment, be expected to (A) make it impracticable or
      inadvisable to proceed with the offering or delivery of the Notes on the terms
      and in the manner contemplated in this Agreement and the Indenture or (B)
      materially impair the investment quality of any of the Securities;

     

    (ii)  the
      failure of any of the Group Companies or the Controlling Shareholders to satisfy
      the conditions contained in Section 9 on or prior to the Closing
      Date;

     

    (iii)  any
      outbreak or escalation of hostilities or other national or international
      calamity or crisis, including acts of terrorism, or material adverse change
      or
      disruption in economic conditions in, or in the financial markets of, the United
      States, the European Union, the Peoples’ Republic of China or Hong Kong (it
      being understood that any such change or disruption shall be relative to such
      conditions and markets as in effect on the date hereof), if the effect of such
      outbreak, escalation, calamity, crisis, act or material adverse change in the
      economic conditions in, or in the financial markets of, the United States,
      the
      European Union, the Peoples’ Republic of China or Hong Kong could be reasonably
      expected to make it, in the Purchaser’s sole judgment, impracticable or
      inadvisable to proceed with the consummation of the transactions on the terms
      and in the manner contemplated in this Agreement or the Indenture;

     

    (iv)  suspension
      of trading in the Common Stock by the Trading Market or the suspension or
      limitation of trading generally in securities on the New York Stock Exchange,
      the American Stock Exchange, the London Stock Exchange, the Hong Kong Stock
      Exchange, the NASDAQ Capital Market or the NASDAQ Global Market or any setting
      of limitations on prices for securities on any such exchange or the NASDAQ
      Capital Market or the NASDAQ Global Market;

     

    (v)  the
      enactment, publication, decree or other promulgation after the date hereof
      of
      any Applicable Law that could be reasonably expected to have a Material Adverse
      Effect; or

     

    (vi)  the
      declaration of a banking moratorium by any federal or New York state
      Governmental Authority; or the taking of any action by any Governmental
      Authority after the date hereof in respect of its monetary or fiscal affairs
      that could reasonably be expected to have a material adverse effect on the
      financial markets in the United States, European Union, the Peoples’ Republic of
      China, Hong Kong or elsewhere.

     

    (b)  The
      Company may terminate this Agreement at any time prior to the Closing Date
      by
      written notice to the Purchaser based upon the Purchaser’s intentional breach of
      its representations, warranties, covenants and obligations under this
      Agreement.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    12.  Survival
      of Representations and Indemnities.
      The
      representations and warranties, covenants, indemnities and contribution and
      expense reimbursement provisions and other agreements of any of the Group
      Companies and the Controlling Shareholders set forth in this Agreement shall
      remain operative and in full force and effect, and will survive, regardless
      of
      (i) any investigation, or statement as to the results thereof, made by or on
      behalf of the parties hereto, and (ii) acceptance of the Notes, and payment
      for
      them hereunder.

     

    13.  Substitution
      of Purchaser.
      The
      Purchaser shall have the right to substitute any one of its Affiliates as the
      purchaser of the Notes, by written notice to the Company, which notice shall
      be
      signed by both the Purchaser and such Affiliate, shall contain such Affiliate’s
      agreement to be bound by this Agreement and shall contain a confirmation by
      such
      Affiliate of the accuracy with respect to it of the representations and
      warranties set forth in Section 8. Upon receipt of such notice, wherever the
      word “Purchaser” is used in this Agreement (other than in this Section 13), such
      word shall be deemed to refer to such Affiliate in lieu of the original
      Purchaser. In the event that such Affiliate is so substituted as a purchaser
      hereunder and such Affiliate thereafter transfers to the original Purchaser
      all
      of the Notes then held by such Affiliate, upon receipt by the Company of notice
      of such transfer, wherever the word “Purchaser” is used in this Agreement (other
      than in this Section 13), such word shall no longer be deemed to refer to such
      Affiliate, but shall refer to the original Purchaser, and the original Purchaser
      shall have all the rights of an original holder of the Notes under this
      Agreement. 

     

    14.  Miscellaneous.
      

     

    (a)  Notices
      given pursuant to any provision of this Agreement shall be addressed as follows:
      (i) if to the Company, to: Star
      City
      International Building, No. 10 Jiuxianqiao Road, C-16th
      Floor,
      Chaoyang District, Beijing, People’s Republic of China 100016,
      Fax:
      (86)
      10
      8456 7768,
      Attention:
      Mr. Leng You-Bin, with a copy to Hodgson Ross LLP, 1540 Broadway, 24th Floor,
      New York, New York 10036, Fax: 212-751-0928, Attention: Jeffrey A. Rinde, Esq.,
      and (ii) if to the Purchaser, to: c/o 131 South Dearborn Street, Chicago,
      Illinois 60609, USA, Fax: (1-312) 267 7300, Attention: Mr. Adam C. Cooper,
      with
      a copy to 18/F Chater House, 8
      Connaught Road, Central, Hong Kong, Fax: (852) 3667 5511, Attention: Mr. Andrew
      Fong and Mr. Max Liu,
      and with
      a copy to Simpson Thacher & Bartlett LLP, ICBC Tower 35th Floor, 3 Garden
      Road, Central, Hong Kong SAR, China, Fax: (852) 2869 7694, Attention: Mr.
      Youngjin Sohn, Esq.

     

    (b)  Except
      with respect to the material terms and conditions of the transactions
      contemplated by the Transaction Documents, the Company covenants and agrees
      that
      neither it nor any other person acting on its behalf will provide the Purchaser
      or its agents or counsel with any information that the Company believes
      constitutes material non-public information, unless prior thereto the Purchaser
      shall have executed a written agreement regarding the confidentiality and use
      of
      such information. The Company understands and confirms that the Purchaser shall
      be relying on the foregoing representations in effecting transactions
      contemplated hereunder.

     

    (c)  This
      Agreement has been and is made solely for the benefit of and shall be binding
      upon the parties hereto and, to the extent provided in Section 10 hereof, the
      controlling persons and their respective agents, employees, officers, directors,
      partners, counsel, and shareholders referred to in Section 10, and their
      respective heirs, executors, administrators, successors and assigns, all as
      and
      to the extent provided in this Agreement, and no other person shall acquire
      or
      have any right under or by virtue of this Agreement.

     

    (d)  THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
      OF
      THE STATE OF NEW YORK.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    (e)  The
      parties hereto agree that any suit, action or proceeding arising out of or
      based
      upon this Agreement or the transactions contemplated hereby may be instituted
      in
      any State or U.S. federal court in The City of New York and County of New York,
      and waives any objection which it may now or hereafter have to the laying of
      venue of any such proceeding, and irrevocably submits to the non-exclusive
      jurisdiction of such courts in any suit, action or proceeding.

     

    (f)  The
      parties hereto each hereby waive any right to trial by jury in any action,
      proceeding or counterclaim arising out of or relating to this
      Agreement.

     

    (g)  No
      failure to exercise, and no course of dealing with respect to, and no delay
      in
      exercising, any right, power or remedy hereunder shall operate as a waiver
      thereof; nor shall any single or partial exercise of any right, power or remedy
      hereunder preclude any other or further exercise thereof or the exercise of
      any
      other right, power or remedy.

     

    (h)  This
      Agreement may be signed in various counterparts which together shall constitute
      one and the same instrument. In the event that any signature is delivered by
      facsimile transmission, such signature shall create a valid and binding
      obligation of the party executing (or on whose behalf such signature is
      executed) with the same force and effect as if such facsimile signature page
      were an original thereof.

     

    (i)  The
      headings in this Agreement are for convenience of reference only and shall
      not
      constitute part of this Agreement nor limit or otherwise affect the meaning
      of
      any provision of this Agreement.

     

    (j)  If
      any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, in each case to the extent permitted by applicable law, and
      the
      parties hereto shall use their best efforts to find and employ an alternative
      means to achieve the same or substantially the same result as that contemplated
      by such term, provision, covenant or restriction. It is hereby stipulated and
      declared to be the intention of the parties that they would have executed the
      remaining terms, provisions, covenants and restrictions without including any
      of
      such that may be hereafter declared invalid, illegal, void or unenforceable,
      to
      the extent permitted by applicable law.

     

    (k)  This
      Agreement may be amended, modified or supplemented, and waivers or consents
      to
      departures from the provisions hereof may be given; provided
      that the
      same are in writing and signed by all of the signatories hereto.

     

    15.  Further
      Assurances.
      Notwithstanding anything contained in this Agreement to the contrary, the
      parties hereto hereby agree to, and shall, enter into all such additional
      agreements or instruments, or to make such modifications to this Agreement
      and
      the other agreements, documents and instruments contemplated hereby and by
      the
      transactions provided for herein, and to take such further actions, as are
      necessary or appropriate in connection with, and in order to ensure, the full
      and complete compliance by the Company of its obligations to, and the
      fulfillment of the rights of, the Other Investors pursuant to the Prior ROFR,
      and the Prior Subscription Agreement and the transactions contemplated
      thereby.

     

    [Signature
      Page(s) to Follow]

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    

    
      	 	 	 
	 	AMERICAN
              DAIRY, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Leng
              You-Bin
	 	
              
Name: Leng
              You-Bin
	 	Title: Chief
              Executive Officer

    

     

    
      
        	 	 	 
	 	AMERICAN
                FLYING CRANE CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/ Leng
                You-Bin
	 	
                
Name: Leng
                You-Bin
	 	Title:Legal
                Representative

      

    

     

    
      
        	 	 	 
	 	LANGFANG
                FEIHE DAIRY COMPANY LIMITED
	 
 	 
 	 
 
	 	By:  	/s/ Leng
                You-Bin
	 	
                
Name: Leng
                You-Bin
	 	Title:Legal
                Representative

      

    

     

    
      
        	 	 	 
	 	GANHAN
                FEIHE DAIRY COMPANY LIMITED
	 
 	 
 	 
 
	 	By:  	/s/ Leng
                You-Bin
	 	
                
Name: Leng
                You-Bin
	 	Title:Legal
                Representative

      

    

    
       

    

    
      
        	 	 	 
	 	SHANXI
                FEIHESANTAI BIOTECHNOLOGY SCIENTIFIC AND COMMERCIAL CO.,
                LIMITED
	 
 	 
 	 
 
	 	By:  	/s/ Leng
                You-Bin
	 	
                
Name: Leng
                You-Bin
	 	Title:Legal
                Representative

      

    

    
      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	 	 
	 	HEILONGJIANG
                FEIHE DAIRY CO., LIMITED
	 
 	 
 	 
 
	 	By:  	/s/ Leng
                You-Bin
	 	
                
Name: Leng
                You-Bin
	 	Title:Legal
                Representative

      

       

    

    
      
        	 	 	 
	 	BAIQUAN
                FEIHEI DAIRY CO., LIMITED
	 
 	 
 	 
 
	 	By:  	/s/ Leng
                You-Bin
	 	
                
Name: Leng
                You-Bin
	 	Title:Legal
                Representative

      

    

     

    
      
        	 	 	 
	 	BEIJING
                FEIHE BIOTECHNOLOGY SCIENTIFIC AND COMMERCIAL CO., LIMITED
	 
 	 
 	 
 
	 	By:  	/s/ Leng
                You-Bin
	 	
                
Name: Leng
                You-Bin
	 	Title:Legal
                Representative

      

    

    
      
        

        
          	 	 	 
	 	CONTROLLING
                  SHAREHOLDERS:
	 
 	 
 	 
 
	 	  	/s/ Leng
                  You-Bin
	 	 	
                  
Leng
                  You-Bin
	 	 	 
	 	 	 
	 	 	/s/ Liu Hua
	 	
                  
Liu
                  Hua
	 	 

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

          
            	 	 	 
	 	
                    CITADEL
                      EQUITY FUND LTD.

                  
	 	 
	 	By: Citadel Limited Partnership,
                    its Portfolio
                    Manager
	 	 
	 	By: Citadel Investment Group,
                    L.L.C., its
                    General Partner
	 	 
	 
 	 
 	 
 
	 	By:  	/s/ Andrew
                    Fong
	 	
                    
Name: Andrew
                    Fong
	 	Title: Authorized
                    Signatory

          

        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      F

    

    Form
      of the Accession Letter

    

    
      	
              To:

            	
              American
                Dairy, Inc. (the “Company”), the Group Companies, the Controlling
                Shareholders, Citadel Equity Fund Ltd. and any other parties to the
                Amended Purchase Agreement 

            

    

     

    
      	
              Date:

            	
              [●]

            

    

    

    

    THIS
      UNDERTAKING is made as of the date above written by the undersigned (the
“Acceding Party”) in relation to that certain Amended and Restated Notes
      Purchase Agreement, dated June
      1,
      2007
      (the “Amended
      Purchase Agreement”),
      by
      and among the Company, the Group Companies, the Controlling Shareholders and
      Citadel Equity Fund Ltd., as amended from time to time. Capitalized terms used
      herein but not otherwise defined in this letter shall have the respective
      meanings set forth in the Amended Purchase Agreement.

     

    In
      consideration of the undersigned being accepted as a party to the Amended
      Purchase Agreement in connection with the issuance and sale of the Other Notes,
      the undersigned hereby agrees with the parties to the Amended Purchase Agreement
      that it will abide by the terms of, and be a party to, the Amended Purchase
      Agreement (a copy of which it acknowledges that it has received).

     

    The
      undersigned hereby represents, acknowledges and agrees that:

     

    1. It
      is an
      AI, purchasing the Other Notes for its own account or for the account of one
      or
      more AIs and not acquiring the Other Notes or the Other Conversion Shares with
      a
      view to any distribution thereof that would violate the Act or the securities
      laws of any state of the United States or any other applicable
      jurisdiction.

     

    2. It
      acknowledges, and each beneficial owner of the Other Notes has been advised,
      that any sale to it is being made in reliance on an exemption from the
      registration requirements of the Act.

     

    3. It
      acknowledges that no Other Notes, Guarantees or Other Conversion Shares have
      been or will be registered under the Securities Act or any applicable U.S.
      state
      securities laws, that the Other Notes, the Guarantees and the Other Conversion
      Shares are “restricted securities” within the meaning of Rule 144(a)(3) under
      the Securities Act and that no Other Notes, Guarantees or Other Conversion
      Shares may be offered or sold within the United States or to, or for the account
      or benefit of, U.S. persons (as defined in Regulation S) except as set forth
      below.

     

    4. If
      in the
      future it decides to resell, pledge or otherwise transfer the Other Notes or
      the
      Other Conversion Shares or any beneficial interests therein, it will do so,
      only
      (a) inside the United States to a person whom the Purchaser reasonably believes
      is a qualified institutional buyer (a “QIB”)
      as
      defined in Rule 144A of the Securities Act pursuant to an exemption from
      registration under the Act, (b) outside the United States to a non-U.S. person
      in compliance with Regulation S, (c) pursuant to another exemption from
      registration under the Act (if available) or (d) pursuant to an effective
      registration statement under the Act, in each case, in accordance with all
      applicable U.S. state securities laws.

     

    
      
        
        

      

      
        F-1

        
          

        

      

      
        
        

      

       

    

    5. It
      will,
      and will require each subsequent holder of the Other Notes or the Other
      Conversion Shares to, notify any purchaser of an interest in an Other Note
      or
      Other Conversion Shares of the resale restrictions referred to in paragraphs
      (iii) and (iv) above, if then applicable.

     

    6. It
      acknowledges that the Other Notes will be in certificated form.

     

    7. The
      Other
      Conversion Shares will bear a legend setting forth the resale restrictions
      referred to in paragraphs (iii) and (iv) above.

     

    8. The
      Other
      Notes and/or the Other Conversion Shares to be acquired by such Other Investor
      will be acquired for investment for its own account, not as a nominee or agent,
      and not with a view to the resale or distribution of any part thereof, and
      that
      it has no present intention of selling, granting any participation in, or
      otherwise distributing the same. Such Other Investor does not presently have
      any
      contract, undertaking, agreement or arrangement with any Person to sell,
      transfer or grant participations to such Person or to any third Person, with
      respect to any of the Other Notes or the Other Conversion Shares.

     

    9. On
      each
      day from the date on which it acquires the Other Notes, through and including
      the date on which it disposes of its interests in such Other Notes, either
      that
      (a) it is not an “employee benefit plan” as defined in Section 3(3) of ERISA,
      subject to Title I of ERISA, a “plan” (defined in Section 4975(e)(1) of the
      Code, subject to Section 4975 of the Code (including without limitation, an
      individual retirement account), an entity whose underlying assets include the
      assets of any such employee benefit plan or plan by reason of Department of
      Labor Regulation section 2510.3-10 or otherwise, or a governmental or church
      plan which is subject to any federal, state or local law that is substantially
      similar to the provisions of Section 406 of ERISA or Section 4975 of the Code
      or
      (b) its purchase, holding and disposition of such Notes will not result in
      a
      prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
      (or, in the case of a governmental or church plan, any substantially similar
      federal, state or local law) unless an exemption is available with respect
      to
      such transactions and all the conditions of such exemption have been
      satisfied.

     

    This
      undertaking shall be governed by, and construed in accordance with, the laws
      of
      the State of New York.

     

    
      	 	
              [Name
                of the Other Investor]

              

              

              By:
                ___________________________

              Name:

              Title:

            

    

     

     

    
      
        
        

      

      
        F-2EXECUTION
      COPY

     

    
      

      

    

     
AMERICAN
      DAIRY, INC.

     

    as
      the
      Company

    

     

    AMERICAN
      FLYING CRANE CORPORATION

    as
      the
      Guarantor

     

    and

     

    THE
      BANK
      OF NEW YORK,

    a
      New
      York banking corporation

    as
      the
      Trustee

     

    
      
        

      

       

    

    INDENTURE

     

    Dated
      June 1, 2007

     

    
      
 

    1.0%
      Guaranteed Senior Secured Convertible Notes due 2012  

     

    
      

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    TABLE
      OF CONTENTS

    

      
        	 	 	 	 	
                Page

              
	 	 	 	 	 
	
                ARTICLE
                  1

              	 	 
	 	 	 	 	 
	
                DEFINITIONS

              	 	 
	 	 	 
	
                Section
                  1.01.

              	 	
                Definitions

              	 	
                1

              
	
                Section
                  1.02.

              	 	
                Other
                  Definitions

              	 	
                31

              
	
                Section
                  1.03.

              	 	
                Rules
                  of Construction.

              	 	
                32

              
	 	 	 	 	 
	
                ARTICLE
                  2

              	 	 
	 	 	 	 	 
	
                ISSUE,
                  DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

              	 	 
	 	 	 
	
                Section
                  2.01.

              	 	
                Designation
                  Amount and Issue of Notes

              	 	
                33

              
	
                Section
                  2.02.

              	 	
                Form
                  of Notes

              	 	
                33

              
	
                Section
                  2.03.

              	 	
                Date
                  and Denomination of Notes; Payments of Interest

              	 	
                35

              
	
                Section
                  2.04.

              	 	
                Execution
                  of Notes

              	 	
                36

              
	
                Section
                  2.05.

              	 	
                Exchange
                  and Registration of Transfer of Notes; Restrictions on
                  Transfer

              	 	
                36

              
	
                Section
                  2.06.

              	 	
                Mutilated,
                  Destroyed, Lost or Stolen Notes

              	 	
                38

              
	
                Section
                  2.07.

              	 	
                Temporary
                  Notes

              	 	
                39

              
	
                Section
                  2.08.

              	 	
                Cancellation
                  of Notes

              	 	
                40

              
	
                Section
                  2.09.

              	 	
                Defaulted
                  Interest

              	 	
                40

              
	
                Section
                  2.10.

              	 	
                ISIN
                  Numbers

              	 	
                40

              
	
                Section
                  2.11.

              	 	
                Further
                  Issuances

              	 	
                41

              
	 	 	 	 	 
	
                ARTICLE
                  3

              	 	 
	 	 	 	 	 
	
                REDEMPTION
                  AND REPURCHASE OF NOTES

              	 	 
	 	 	 	 	 
	
                Section
                  3.01.

              	 	
                Redemption
                  at Maturity

              	 	
                41

              
	
                Section
                  3.02.

              	 	
                Offer
                  to Purchase

              	 	
                41

              
	 	 	 	 	 
	
                ARTICLE
                  4

              	 	 
	 	 	 	 	 
	
                PARTICULAR
                  COVENANTS OF THE COMPANY

              	 	 
	 	 	 	 	 
	
                Section
                  4.01.

              	 	
                Payment
                  of Principal and Interest

              	 	
                44

              
	
                Section
                  4.02.

              	 	
                Maintenance
                  of Office or Agency

              	 	
                44

              
	
                Section
                  4.03.

              	 	
                Provisions
                  as to Paying Agent

              	 	
                45

              
	
                Section
                  4.04.

              	 	
                Existence

              	 	
                46

              
	
                Section
                  4.05.

              	 	
                Maintenance
                  of Properties

              	 	
                46

              
	
                Section
                  4.06.

              	 	
                Payment
                  of Taxes and Other Claims

              	 	
                46

              
	
                Section
                  4.07.

              	 	
                Stay,
                  Extension and Usury Laws

              	 	
                46

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

         

      

      
        	
                Section
                  4.08.

              	 	
                Payments
                  for Consent

              	 	
                47

              
	
                Section
                  4.09.

              	 	
                Incurrence
                  of Additional Debt; Financial Covenants

              	 	
                47

              
	
                Section
                  4.10.

              	 	
                Restricted
                  Payments

              	 	
                47

              
	
                Section
                  4.11.

              	 	
                Liens

              	 	
                49

              
	
                Section
                  4.12.

              	 	
                Asset
                  Sales

              	 	
                49

              
	
                Section
                  4.13.

              	 	
                Restrictions
                  on Distributions from Subsidiaries

              	 	
                51

              
	
                Section
                  4.14.

              	 	
                Affiliate
                  Transactions

              	 	
                52

              
	
                Section
                  4.15.

              	 	
                Issuance
                  or Sale of Capital Stock of Subsidiaries

              	 	
                53

              
	
                Section
                  4.16.

              	 	
                Maintenance
                  of Consolidated Tangible Net Worth

              	 	
                54

              
	
                Section
                  4.17.

              	 	
                Repurchase
                  at the Option of Holders Following a Change of Control

              	 	
                54

              
	
                Section
                  4.18.

              	 	
                Future
                  Guarantors

              	 	
                54

              
	
                Section
                  4.19.

              	 	
                Business
                  Activities; Charter Documents

              	 	
                54

              
	
                Section
                  4.20.

              	 	
                Sale
                  and Leaseback Transactions

              	 	
                55

              
	
                Section
                  4.21.

              	 	
                Impairment
                  of Security Interest

              	 	
                55

              
	
                Section
                  4.22.

              	 	
                Amendments
                  to Security Documents

              	 	
                55

              
	
                Section
                  4.23.

              	 	
                Use
                  of Proceeds

              	 	
                55

              
	
                Section
                  4.24.

              	 	
                Maintenance
                  of Insurance

              	 	
                56

              
	
                Section
                  4.25.

              	 	
                Qualifying
                  IPO

              	 	
                56

              
	
                Section
                  4.26.

              	 	
                Repurchase
                  Upon Termination of Trading

              	 	
                56

              
	
                Section
                  4.27.

              	 	
                Government
                  Approvals and Licenses; Compliance with Law

              	 	
                56

              
	
                Section
                  4.28.

              	 	
                Engage
                  Qualified Auditing Firms

              	 	
                57

              
	
                Section
                  4.29.

              	 	
                Notes
                  to Rank Senior

              	 	
                57

              
	
                Section
                  4.30.

              	 	
                Compliance
                  Certificate

              	 	
                57

              
	
                Section
                  4.31.

              	 	
                Additional
                  Interest Notice

              	 	
                58

              
	
                Section
                  4.32.

              	 	
                Calculation
                  of Original Issue Discount

              	 	
                58

              
	
                Section
                  4.33.

              	 	
                Reports
                  by the Company and Provision of Information

              	 	
                58

              
	
                Section
                  4.34.

              	 	
                Other
                  Notes and Other Indenture

              	 	
                59

              
	 	 	 	 	 
	
                ARTICLE
                  5

              	 	 
	 	 	 	 	 
	
                SUCCESSORS

              	 	 
	 	 	 	 	 
	
                Section
                  5.01.

              	 	
                Merger,
                  Consolidation and Sale of Assets

              	 	
                59

              
	
                Section
                  5.02.

              	 	
                Successor
                  Corporation Substituted

              	 	
                61

              
	 	 	 	 	 
	
                ARTICLE
                  6

              	 	 
	 	 	 	 	 
	
                REMEDIES
                  OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT

              	 	 
	 	 	 	 	 
	
                Section
                  6.01.

              	 	
                Events
                  of Default

              	 	
                61

              
	
                Section
                  6.02.

              	 	
                Payments
                  of Notes on Default; Suit Therefor

              	 	
                65

              
	
                Section
                  6.03.

              	 	
                Application
                  of Monies Collected by Trustee

              	 	
                67

              
	
                Section
                  6.04.

              	 	
                Proceedings
                  by Noteholder

              	 	
                67

              
	
                Section
                  6.05.

              	 	
                Proceedings
                  by Trustee

              	 	
                68

              
	
                Section
                  6.06.

              	 	
                Remedies
                  Cumulative and Continuing

              	 	
                68

              
	
                Section
                  6.07.

              	 	
                Direction
                  of Proceedings and Waiver of Defaults by Majority of Holders of
                  the
                  Combined Notes

              	 	
                69

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

         

      

      
        	
                Section
                  6.08.

              	 	
                Notice
                  of Default

              	 	
                69

              
	
                Section
                  6.09.

              	 	
                Undertaking
                  to Pay Costs

              	 	
                69

              
	 	 	 	 	 
	
                ARTICLE
                  7

              	 	 
	 	 	 	 	 
	
                THE
                  TRUSTEE

              	 	 
	 	 	 	 	 
	
                Section
                  7.01.

              	 	
                Duties
                  and Responsibilities of Trustee

              	 	
                70

              
	
                Section
                  7.02.

              	 	
                Rights
                  of Trustee

              	 	
                71

              
	
                Section
                  7.03.

              	 	
                No
                  Responsibility for Recitals, Etc

              	 	
                74

              
	
                Section
                  7.04.

              	 	
                Trustee,
                  Paying Agents, Conversion Agents, Collateral Agents, Common Depositary
                  or
                  Registrar May Own Notes

              	 	
                74

              
	
                Section
                  7.05.

              	 	
                Monies
                  to Be Held in Trust

              	 	
                74

              
	
                Section
                  7.06.

              	 	
                Compensation
                  and Expenses of Trustee

              	 	
                74

              
	
                Section
                  7.07.

              	 	
                Eligibility
                  of Trustee

              	 	
                75

              
	
                Section
                  7.08.

              	 	
                Resignation
                  or Removal of Trustee

              	 	
                75

              
	
                Section
                  7.09.

              	 	
                Acceptance
                  by Successor Trustee

              	 	
                76

              
	
                Section
                  7.10.

              	 	
                Succession
                  by Merger

              	 	
                77

              
	
                Section
                  7.11.

              	 	
                Trustee’s
                  Application for Instructions from the Company

              	 	
                78

              
	
                Section
                  7.12.

              	 	
                Reports
                  by Trustee

              	 	
                78

              
	
                Section
                  7.13.

              	 	
                Certain
                  Provisions

              	 	
                78

              
	 	 	 	 	 
	
                ARTICLE
                  8

              	 	 
	 	 	 	 	 
	
                SUPPLEMENTAL
                  INDENTURES

              	 	 
	 	 	 	 	 
	
                Section
                  8.01.

              	 	
                Supplemental
                  Indentures Without Consent of Noteholders

              	 	
                79

              
	
                Section
                  8.02.

              	 	
                Supplemental
                  Indenture with Consent of Noteholders

              	 	
                80

              
	
                Section
                  8.03.

              	 	
                Effect
                  of Supplemental Indenture

              	 	
                82

              
	
                Section
                  8.04.

              	 	
                Notation
                  on Notes

              	 	
                82

              
	
                Section
                  8.05.

              	 	
                Evidence
                  of Compliance of Supplemental Indenture to Be Furnished to
                  Trustee

              	 	
                82

              
	 	 	 	 	 
	
                ARTICLE
                  9

              	 	 
	 	 	 	 	 
	
                GUARANTEES

              	 	 
	 	 	 	 	 
	
                Section
                  9.01.

              	 	
                Guarantee

              	 	
                83

              
	
                Section
                  9.02.

              	 	
                Limitation
                  on Guarantor Liability

              	 	
                84

              
	
                Section
                  9.03.

              	 	
                Execution
                  and Delivery of Guarantee

              	 	
                85

              
	
                Section
                  9.04.

              	 	
                Guarantors
                  May Consolidate, etc., on Certain Terms

              	 	
                86

              
	
                Section
                  9.05.

              	 	
                Releases
                  Following Merger, Consolidation or Sale of Assets, Etc

              	 	
                86

              
	 	 	 	 	 
	
                ARTICLE
                  10

              	 	 
	 	 	 	 	 
	
                COLLATERAL
                  AND SECURITY

              	 	 
	 	 	 	 	 
	
                Section
                  10.01.

              	 	
                Security
                  Documents

              	 	
                87

              

      

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

         

      

      
        	
                Section
                  10.02.

              	 	
                Future
                  Guarantor Pledgors

              	 	
                88

              
	
                Section
                  10.03.

              	 	
                Recording
                  and Opinions

              	 	
                89

              
	
                Section
                  10.04.

              	 	
                Release
                  of Collateral

              	 	
                90

              
	
                Section
                  10.05.

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

              	 	
                91

              
	
                Section
                  10.06.

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

              	 	
                91

              
	
                Section
                  10.07.

              	 	
                Termination
                  of Security Interest

              	 	
                91

              
	 	 	 	 	 
	
                ARTICLE
                  11

              	 	 
	 	 	 	 	 
	
                SATISFACTION
                  AND DISCHARGE OF INDENTURE

              	 	 
	 	 	 	 	 
	
                Section
                  11.01.

              	 	
                Discharge
                  of Indenture

              	 	
                91

              
	
                Section
                  11.02.

              	 	
                Deposited
                  Monies to Be Held in Trust by Trustee

              	 	
                92

              
	
                Section
                  11.03.

              	 	
                Paying
                  Agent to Repay Monies Held

              	 	
                92

              
	
                Section
                  11.04.

              	 	
                Return
                  of Unclaimed Monies

              	 	
                93

              
	
                Section
                  11.05.

              	 	
                Reinstatement

              	 	
                93

              
	 	 	 	 	 
	
                ARTICLE
                  12

              	 	 
	 	 	 	 	 
	
                THE
                  NOTEHOLDERS

              	 	 
	 	 	 	 	 
	
                Section
                  12.01.

              	 	
                Action
                  by Noteholders

              	 	
                93

              
	
                Section
                  12.02.

              	 	
                Proof
                  of Execution by Noteholders

              	 	
                93

              
	
                Section
                  12.03.

              	 	
                Who
                  Are Deemed Absolute Owners

              	 	
                94

              
	
                Section
                  12.04.

              	 	
                Company-owned
                  Notes Disregarded

              	 	
                94

              
	
                Section
                  12.05.

              	 	
                Revocation
                  of Consents; Future Holders Bound

              	 	
                94

              
	 	 	 	 	 
	
                ARTICLE
                  13

              	 	 
	 	 	 	 	 
	
                MEETINGS
                  OF NOTEHOLDERS

              	 	 
	 	 	 	 	 
	
                Section
                  13.01.

              	 	
                Purpose
                  of Meetings

              	 	
                95

              
	
                Section
                  13.02.

              	 	
                Call
                  of Meetings by Company or Noteholders

              	 	
                95

              
	
                Section
                  13.03.

              	 	
                Qualifications
                  for Voting

              	 	
                96

              
	
                Section
                  13.04.

              	 	
                Regulations

              	 	
                96

              
	
                Section
                  13.05.

              	 	
                Voting

              	 	
                96

              
	
                Section
                  13.06.

              	 	
                No
                  Delay of Rights by Meeting

              	 	
                97

              
	 	 	 	 	 
	
                ARTICLE
                  14

              	 	 
	 	 	 	 	 
	
                CONVERSION
                  OF NOTES

              	 	 
	 	 	 	 	 
	
                Section
                  14.01.

              	 	
                Right
                  to Convert

              	 	
                97

              
	
                Section
                  14.02.

              	 	
                Exercise
                  of Conversion Right; Issuance of Common Stock on Conversion; No
                  Adjustment
                  for Interest or Dividends

              	 	
                98

              
	
                Section
                  14.03.

              	 	
                Cash
                  Payments in Lieu of Fractional Shares

              	 	
                99

              

      

       

      
        
          
          

        

        
          iv

          
            

          

        

        
          
          

        

         

      

      
        	
                Section
                  14.04.

              	 	
                Conversion
                  Rate

              	 	
                99

              
	
                Section
                  14.05.

              	 	
                Adjustment
                  of Conversion Rate

              	 	
                100

              
	
                Section
                  14.06.

              	 	
                Effect
                  of Reclassification, Consolidation, Merger or Sale

              	 	
                109

              
	
                Section
                  14.07.

              	 	
                Taxes
                  on Shares Issued

              	 	
                110

              
	
                Section
                  14.08.

              	 	
                Reservation
                  of Shares; Shares to Be Fully Paid; Compliance with Governmental
                  Requirements; Listing of Common Stock

              	 	
                110

              
	
                Section
                  14.09.

              	 	
                Responsibility
                  of Trustee

              	 	
                111

              
	
                Section
                  14.10.

              	 	
                Notice
                  to Holders Prior to Certain Actions

              	 	
                111

              
	
                Section
                  14.11.

              	 	
                Shareholder
                  Rights Plans

              	 	
                112

              
	 	 	 	 	 
	
                ARTICLE
                  15

              	 	 
	 	 	 	 	 
	
                MISCELLANEOUS
                  PROVISIONS

              	 	 
	 	 	 	 	 
	
                Section
                  15.01.

              	 	
                Provisions
                  Binding on Company’s Successors

              	 	
                112

              
	
                Section
                  15.02.

              	 	
                Official
                  Acts by Successor Corporation

              	 	
                112

              
	
                Section
                  15.03.

              	 	
                Addresses
                  for Notices, Etc.

              	 	
                113

              
	
                Section
                  15.04.

              	 	
                Governing
                  Law

              	 	
                114

              
	
                Section
                  15.05.

              	 	
                Evidence
                  of Compliance with Conditions Precedent; Certificates to
                  Trustee

              	 	
                114

              
	
                Section
                  15.06.

              	 	
                Legal
                  Holidays

              	 	
                114

              
	
                Section
                  15.07.

              	 	
                Company
                  Responsible for Making Calculations

              	 	
                114

              
	
                Section
                  15.08.

              	 	
                Benefits
                  of Indenture

              	 	
                114

              
	
                Section
                  15.09.

              	 	
                Table
                  of Contents, Headings, Etc.

              	 	
                115

              
	
                Section
                  15.10.

              	 	
                Authenticating
                  Agent

              	 	
                115

              
	
                Section
                  15.11.

              	 	
                Indenture
                  and Notes Solely Corporate Obligations

              	 	
                116

              
	
                Section
                  15.12.

              	 	
                Execution
                  in Counterparts

              	 	
                116

              
	
                Section
                  15.13.

              	 	
                Severability

              	 	
                116

              

      

    

     

    
      
        	
                Exhibit
                  A

              	
                -

              	
                FORM
                  OF NOTE

              
	
                Exhibit
                  B

              	
                -

              	
                FORM
                  OF NOTATION OF GUARANTEE

              
	
                Exhibit
                  C

              	
                -

              	
                FORM
                  OF CERTIFICATE OF TRANSFER

              
	
                Exhibit
                  D

              	
                -

              	
                FORM
                  OF RESTRICTIVE LEGEND FOR COMMON STOCK ISSUED UPON
                  CONVERSION

              
	
                Exhibit
                  E

              	
                -

              	
                FORM
                  OF SECURITY DOCUMENTS

              

      

    

     

    
      
        
        

      

      
        v

        
          

        

      

      
        
        

      

    

    INDENTURE

     

    INDENTURE
      dated June 1, 2007, between AMERICAN
      DAIRY, INC.,
      a Utah
      corporation (hereinafter called the “Company”),
      the
      parties listed on the signature pages hereto, and THE BANK OF NEW YORK, a New
      York banking corporation, as trustee hereunder (hereinafter called the
“Trustee”).

     

    WITNESSETH:

     

    WHEREAS,
      for its lawful corporate purposes, the Company has duly authorized the issue
      of
      its 1.0% Guaranteed Senior Secured Convertible Notes due 2012 (hereinafter
      called the “Notes”),
      in an
      aggregate principal amount not to exceed $80,000,000 and, to provide the terms
      and conditions upon which the Notes are to be authenticated, issued and
      delivered, the Company has duly authorized the execution and delivery of this
      Indenture; and

     

    WHEREAS,
      for its lawful corporate purposes, each Guarantor has duly authorized the issue
      of its Guarantee of the Notes and, to provide the terms and conditions upon
      which the Guarantee is to be issued and delivered, each Guarantor has duly
      authorized the execution and delivery of this Indenture; and

     

    WHEREAS,
      the Notes, the certificate of authentication to be borne by the Notes, a form
      of
      notation of Guarantee, a form of Assignment, a form of Purchase Notice and
      a
      form of Conversion Notice to be borne by the Notes are to be substantially
      in
      the forms hereinafter provided for; and

     

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

     

    NOW,
      THEREFORE, THIS INDENTURE WITNESSETH:

     

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

     

    ARTICLE
      1

     

    DEFINITIONS

     

    Section
      1.01.   Definitions.
      

     

    The
      terms
      defined in this Section (except as herein otherwise expressly provided or unless
      the context otherwise requires) for all purposes of this Indenture and of any
      indenture supplemental hereto shall have the respective meanings specified
      in
      this Section. All other terms used in this Indenture that are defined in the
      Securities Act (except as herein otherwise expressly provided or unless the
      context otherwise requires) shall have the meanings assigned to such terms
      in
      the Securities Act as in force at the date of the execution of this Indenture.
      The words “herein”, “hereof”, “hereunder” and words of similar import refer to
      this Indenture as a whole and not to any particular Article, Section or other
      subdivision. The terms defined in this Article include the plural as well as
      the
      singular.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Additional
      Amounts”
means,
      with respect to any Note:

     

    (a)
      an
      amount equal to 3.0% of the principal amount of such Note due and payable by
      the
      Company to the holder thereof if a Qualifying IPO has not occurred on or before,
      or the listing of the Common Stock on the exchange on which the Qualifying
      IPO
      has been effected has not been maintained as of, December 1, 2008, such
      Additional Amounts being due and payable no later than December 8, 2008;
      and

     

    (b)
      an
      amount equal to 1.0% of the principal amount of such Note due and payable by
      the
      Company to the holder thereof if
      on May
      1, 2008, if the Company has not complied with Section 4.28(a); and

     

    (c) an
      amount
      equal to 1.0% of the principal amount of such Note due and payable by the
      Company to the holder thereof if
      on or
      before April 15 of the year subsequent to any fiscal year (starting with fiscal
      year 2009) for which the Company has not complied with Section
      4.28(b).

     

    For
      all
      purposes of this Indenture, the term “premium” shall include Additional Amounts,
      if any, with respect to the Notes.

     

    “Additional
      Assets”
      means:

     

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

     

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

     

    “Additional
      Interest”
means
      (a) an annual rate of interest equal to 5.0% payable on the outstanding Notes
      if
      no Qualifying IPO has occurred on or before December 1, 2008, such interest
      accruing from and including such date (or, if Interest has been paid since
      such
      date, from and including the most recent interest payment date thereafter)
      to
      but excluding each date of payment thereof and (b) any additional interest
      payable pursuant to Section 2(d) of the Registration Rights
      Agreement.

     

    “AFC”
means
      American Flying Crane Corporation, a Delaware corporation and a wholly-owned
      Subsidiary of the Company,.

     

    “Affiliate”
of
      any
      specified Person means:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    (1)
      such
      specified Person, 

     

    (2)
      any
      Subsidiary of such specified Person, or

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    (6)
      any
      disposition in a single transaction or a series of related transactions of
      assets for aggregate consideration of less than $2.5 million.

     

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

     

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

     

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

     

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

     

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

     

    (b)
      the
      sum of all such payments.

     

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

     

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

     

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

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Cash
      Equivalents”
means
      any of the following: 

     

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

     

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

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (a)
      the
      Permitted Holders cease to be the Beneficial Owners, directly or indirectly,
      of
      at least 30% of the total voting power of the Voting Stock of the Company,
      whether as a result of the issuance of securities of the Company, any merger,
      consolidation, liquidation or dissolution of the Company, any direct or indirect
      transfer of securities by the Permitted Holders or otherwise (for purposes
      of
      this definition of “Chang of Control”, the Permitted Holders will be deemed to
      Beneficially Own any Voting Stock of a specified corporation held by a parent
      corporation so long as the Permitted Holders Beneficially Own, directly or
      indirectly, in the aggregate more than 30% of the total voting power of the
      Voting Stock of such parent corporation); or

     

    (c)
      any
“person” or “group” of related persons (as such terms are used in Sections 13(d)
      and 14(d) of the Exchange Act), other than one or more Permitted Holders,
acquires
      Control of the Company. The term “Control” as used in the preceding sentence
      means the right to appoint and/or remove all or the majority of the members
      of
      the Company’s Board of Directors or other governing body, whether obtained
      directly or indirectly, and whether obtained by ownership of share capital,
      the
      possession of voting rights, contract or otherwise;
      or

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (c)
      any
“person” or “group” of related persons (as such terms are used in Sections 13(d)
      and 14(d) of the Exchange Act), other than one or more Permitted Holders, is
      or
      becomes the Beneficial Owner, directly or indirectly, of a greater percentage
      of
      the total voting power of the Voting Stock of the Company (or its successor
      by
      merger, consolidation or purchase of all or substantially all of its assets)
      than the Permitted Holders (for the purposes of this definition of “Change of
      Control”, such person or group shall be deemed to Beneficially Own any Voting
      Stock of a specified corporation held by a parent corporation so long as such
      person or group Beneficially Owns, directly or indirectly, in the aggregate
      more
      than 30% of the total voting power of the Voting Stock of such parent
      corporation); or

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    “Combined
      Notes”
means
      the Notes and the Other Notes, considered as a single series for the purpose
      of
      voting of the Notes and the Other Notes and actions taken by the Combined
      Noteholders, including without limitation, Articles 6 and 12. 

     

    “Combined
      Noteholders”
means
      the Noteholders of the Notes and the Other Notes, acting as holders of a single
      series of the Combined Notes for the purpose of voting and taking actions with
      respect to the Notes and the Other Notes, including without limitation, Articles
      6 and 12.

     

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

     

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

     

    “Common
      Depositary”
means,
      with respect to the Notes issuable or issued in global form, The Bank of New
      York Depository (Nominees) Limited, or registered assigns, as the Common
      Depositary for Euroclear and Clearstream with respect to the Notes, and any
      and
      all successors thereto appointed as depositary hereunder and having become
      such
      pursuant to the applicable provisions of this Indenture.

     

    “Common
      Stock”
means
      any stock of any class of the Company which has no preference in respect of
      dividends or of amounts payable in the event of any voluntary or involuntary
      liquidation, dissolution or winding up of the Company and which is not subject
      to redemption by the Company. Subject to the provisions of Section
      14.06,
      however, shares issuable on conversion of Notes shall include only shares of
      the
      class designated as common stock of the Company at the date of this Indenture
      (namely, the Common Stock, par value $0.001) or shares of any class or classes
      resulting from any reclassification or reclassifications thereof and which
      have
      no preference in respect of dividends or of amounts payable in the event of
      any
      voluntary or involuntary liquidation, dissolution or winding up of the Company
      and which are not subject to redemption by the Company; provided
      that, if
      at any time there shall be more than one such resulting class, the shares of
      each such class then so issuable on conversion shall be substantially in the
      proportion which the total number of shares of such class resulting from all
      such reclassifications bears to the total number of shares of all such classes
      resulting from all such reclassifications.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Company”
means
      the corporation named as the “Company” in the first paragraph of this Indenture,
      and, subject to the provisions of Article
      5
      and
Section
      14.06,
      shall
      include its successors and assigns.

     

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

     

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

     

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

     

    (c)
      capitalized interest, 

     

    (d)
      non-cash interest expense, 

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    (d)
      any
      extraordinary gain or loss, and

     

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

     

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

     

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

     

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

     

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

     

    (1)
      any
      accumulated deficit, and 

     

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

     

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

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

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

     

    “Conversion
      Price”
as
      of
      any day will equal $100,000 divided by the Conversion Rate as of such
      date.

     

    “Corporate
      Trust Office”
shall
      be the address of the Trustee specified in Section
      15.03
      hereof,
      or such other address as to which the Trustee may give notice to the
      Company.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Definitive
      Note”
means
      a
      certificated Note registered in the name of the holder thereof and issued in
      accordance with Section
      2.05
      or
2.07
      hereof,
      in substantially the form of Exhibit
      A
      hereto
      except that such Note shall not bear the Global Note Legend and shall not have
      the “Schedule of Exchanges of Interests in the Global Note” attached
      thereto.

     

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

     

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

     

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

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (2)
      Consolidated Interest Expense,

     

    (3)
      depreciation, 

     

    (4)
      amortization of intangibles, and 

     

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

     

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

     

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

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    “Ex-Dividend
      Time”
means,
      with respect to any distribution on shares of Common Stock, the first date
      on
      which the shares of Common Stock trade regular way on the principal securities
      market on which the shares of Common Stock are then traded without the right
      to
      receive such distribution.

     

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

     

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

     

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

     

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

     

    “Fehei”
means
      Heilongjiang Feihe Dairy Co., Limited, a limited liability company organized
      and
      existing under the laws of the PRC and a wholly-owned Subsidiary of
      AFC.

     

    “Financial
      and Operational Trigger”
means,
      for the Company and its Subsidiaries on a consolidated basis, that net income
      for a fiscal year shall be less than the US dollar amount (or its equivalent
      in
      RMB, calculated at the exchange rate for conversion of US dollars into RMB
      quoted by the People’s Bank of China on the last Business Day of such Fiscal
      Quarter) indicated in the table below opposite such fiscal year: 

    

      
        	
                Fiscal
                  Year Ending

              	 	
                Net
                  Income

              
	
                December
                  31, 2007

              	 	
                $24.2
                  million

              
	
                December
                  31, 2008

              	 	
                $34.7
                  million

              
	
                December
                  31, 2009

              	 	
                $50.6
                  million

              

      

    

    

    The
      calculation of “net income” for the purposes of this definition shall be as
      reported in the Company’s audited financial statements for the applicable fiscal
      year, and shall be made in accordance with GAAP consistently applied, after
      deducting “income tax expense” and the amount, if any, for minority interest
      that may arise, but without adding any “other comprehensive income” or any
      extraordinary income and without deducting any non-cash interest
      expense.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    “Interest”
means,
      when used with reference to the Notes, any interest payable under the terms
      of
      the Notes, including Additional Interest, if any.

     

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

     

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

     

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

     

    “Investor
      Rights Agreement”
means
      the investor rights agreement dated the Issue Date by and among the Company,
      AFC, the Operating Subsidiaries, the Shareholders and Citadel Equity Fund
      Ltd.

     

    “Issue
      Date”
means
      June 1, 2007.

     

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

     

    “Leverage
      Ratio”
means
      the ratio of:

     

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

     

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

     

    (1)
      if:

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    (2)
      if

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Notes
      Purchase Agreement”
means
      the Amended and Restated Notes purchase agreement dated June 1, 2007 by and
      among the Company, AFC, the Operating Subsidiaries and Citadel Equity Fund
      Ltd.

     

    “Notes”
is
      defined in the preamble.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    “Noteholder”
or
      “holder”
as
      applied to any Note, or other similar terms (but excluding the term “Beneficial
      Holder”), means any Person in whose name at the time a particular Note is
      registered on the Registrar’s books.

     

    “Notice
      Date”
means
      the date of mailing of the notice pursuant to Section
      3.02(b).

     

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

     

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

     

    “Officers’
      Certificate”
means
      a
      certificate, in form and substance satisfactory to the Trustee, signed by two
      Officers of the Company, at least one of whom shall be the principal executive
      officer or principal financial officer of the Company, and which certificate
      meets the requirements of Section
      15.05
      hereof
      and is delivered to the Trustee.

     

    “Operating
      Subsidiaries”
means
      (i) Feihe, (ii) BaiQuan Feihe Dairy Co., Limited, a limited liability company
      organized and existing under the laws of the PRC and a wholly-owned Subsidiary
      of Feihe, (iii) Beijing Feihe Biotechnology Scientific and Commercial Co.,
      Limited, a limited liability company organized and existing under the laws
      of
      the PRC and 95% of the registered capital of which is owned by Feihe and 5%
      of
      the registered capital of which is held in trust for the Company, (iv) GanHan
      Feihe Dairy Company Limited, a limited liability company organized and existing
      under the laws of the PRC and a wholly-owned Subsidiary of the Company, (v)
      LangFang Feihe Dairy Company Limited, a limited liability company organized
      and
      existing under the laws of the PRC and a wholly-owned Subsidiary of the Company
      and (vi) Shanxi Feihesantai Biotechnology Scientific and Commercial Co.,
      Limited, a limited liability company organized and existing under the laws
      of
      the PRC and a wholly-owned Subsidiary of the Company.

     

    “Opinion
      of Counsel”
means
      a
      written opinion, in form and substance satisfactory to the Trustee, from legal
      counsel who is acceptable to the Trustee and which meets the requirements of
      Section
      15.05
      hereof.

     

    “Other Indenture”
means
      the instrument between the Company and the Trustee governing the terms and
      conditions of the Other Notes in an aggregate principal amount not exceeding
      $20,000,000, as originally executed or, if amended or supplemented as therein
      provided, as so amended or supplemented.

     

    “Other
      Notes”
means
      the notes in an aggregate principal amount not exceeding $20,000,000, issued
      by
      the Company which shall rank pari
      passu
      with the
      Notes.

     

    “Outstanding”,
      when
      used with reference to Notes and subject to the provisions of Section
      12.04,
      means,
      as of any particular time, all Notes authenticated and delivered by the Trustee
      under this Indenture, except:

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (a)
      Notes
      theretofore canceled by the Trustee or delivered to the Trustee for
      cancellation;

     

    (b)
      Notes, or portions thereof, (i) for the redemption of which monies in the
      necessary amount shall have been deposited in trust with the Trustee or with
      any
      paying agent (other than the Company) or (ii) which shall have been otherwise
      discharged in accordance with Article
      11;

     

    (c)
      Notes
      in lieu of which, or in substitution for which, other Notes shall have been
      authenticated and delivered pursuant to the terms of Section
      2.06;
      and

     

    (d)
      Notes
      converted into Common Stock pursuant to Article
      14
      and
      Notes deemed not outstanding pursuant to Article
      3.

     

    “Permitted
      Holders”
means
      Mr. Leng You-Bin, a resident
      of Beijing in the PRC, and his estate, spouse, ancestors and lineal descendants,
      the legal representatives of any of the foregoing and the trustees
      of
      any bona fide trusts of which the foregoing are the sole beneficiaries or the
      grantors, or any Person of which the foregoing Beneficially Owns, individually
      or collectively with any of the foregoing, at least 30% of the total voting
      power of the Voting Stock of such Person.

     

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

     

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

     

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

     

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

     

    (d)
       cash
      and
      Cash Equivalents; 

     

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

     

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

     

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

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    “Permitted
      Liens”
      means:

     

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

     

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

     

    (c)
       Liens
      securing Debt of an Operating Subsidiary under Credit Facilities, provided
      that any
      such Lien is limited to the Property of such Operating Subsidiary;

     

    (d) leases,
      licenses, subleases and sublicenses of assets (including, without limitation,
      real property and intellectual property rights) which do not materially
      interfere with the ordinary conduct of the business of the Company or any of
      the
      Subsidiaries;

     

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

     

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

     

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

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    (1)
       the
      outstanding principal amount, or, if greater, the committed amount, of the
      Debt
      (and other obligations thereunder) secured by Liens described under clause
      (h),
      (i) or (l) above, as the case may be, at the time the original Lien became
      a
      Permitted Lien under this Indenture, and 

     

    (2)
       an
      amount
      necessary to pay any fees and expenses, including premiums and defeasance costs,
      incurred by the Company or such Subsidiary in connection with such
      Refinancing;
      and

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (n)
       judgment
      Liens not giving rise to en Event of Default so long as such Lien is adequately
      bonded and any appropriate legal proceedings which may have been duly initiated
      for the review of such judgment have not been finally terminated or the period
      within which such proceedings may be initiated has not expired.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    “Predecessor
      Note” of
      any
      particular Note means every previous Note evidencing all or a portion of the
      same Debt as that evidenced by such particular Note; and any Note authenticated
      and delivered under Section
      2.06
      in lieu
      of a lost, destroyed or stolen Note shall be deemed to evidence the same Debt
      as
      the lost, destroyed or stolen Note.

     

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

     

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

     

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

     

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

     

    “Qualifying
      IPO”
means
      a
      public offering of Common Stock of the Company pursuant to an effective
      registration statement under the Securities Act that results in (i) at least
      25%
      of the Company’s issued and outstanding share capital being publicly held by
      Persons other than any Affiliate of the Company or the Permitted Holders, (ii)
      the product of (x) the number of shares of Common Stock of the Company
      (including other securities of the Company that are convertible into Common
      Stock of the Company, on an as-converted basis) and (y) the Closing Sale Price
      of the Company’s Common Stock on the date of listing in connection with the
      Qualifying IPO, shall be at least $500,000,000 (unless such percentage in (i)
      above or dollar amount in (ii) above be otherwise agreed by the holders of
      a
      majority in aggregate principal amount of the Combined Notes then outstanding),
      (iii) the minimum number of holders of the Company’s Common Stock as required by
      the securities exchange on which such Common Stock is listed in connection
      with
      such Qualifying IPO and (iv) listing of the Common Stock on the New York Stock
      Exchange, the
      Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market
      or
      any
      other market consented to by the
      holders of a majority in aggregate principal amount of the Combined Notes then
      outstanding.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    “Redemption
      Price”
means
      the amount calculated in accordance with the following formula, rounded (if
      necessary) to two decimal places with 0.005 being rounded upwards:

     

    
      	
              Redemption
                Price = I x (1 + r)d/360

            
	 
	
              Where:

            	 	 
	
              I

            	
              =

            	
              Issue
                price (100% of principal amount) of the Notes;

            
	
              r

            	
              =

            	
              18.0%
                expressed as a decimal; and

            
	
              d

            	
              =

            	
              number
                of days from and including the Issue Date to but excluding, the date
                for
                redemption or repurchase, calculated on the basis of a 360-day year
                consisting of 12 months of 30 days each, and in the case of an incomplete
                month, the actual number of days elapsed.

            
	 	 	 

    

    For
      the
      avoidance of doubt, if the date fixed for redemption is one of the following
      semi-annual dates, the Redemption Price for each US$100,000 principal amount
      shall be as set out in the table below in respect of such semi-annual
      date:

     

    
      	
              Semi-annual
                Date

            	 	
              Redemption
                Price (US$)

            	 
	
              December
                1, 2007

            	 	
              US$

            	
              108,627.80

            	 
	
              June
                1, 2008

            	 	 	
              118,000.00

            	 
	
              December
                1, 2008

            	 	 	
              128,180.81

            	 
	
              June
                1, 2009

            	 	 	
              139,240.00

            	 
	
              December
                1, 2009

            	 	 	
              151,253.36

            	 
	
              June
                1, 2010

            	 	 	
              164,303.20

            	 
	
              December
                1, 2010

            	 	 	
              178,478.96

            	 
	
              June
                1, 2011

            	 	 	
              193,877.78

            	 
	
              December
                1, 2011

            	 	 	
              210,605.17

            	 
	
              June
                1, 2012

            	 	 	
              228,775.78

            	 
	 	 	 	 	 

    

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

     

    “Registration
      Rights Agreement”
means
      the registration rights agreement dated the Issue Date by and among the Company,
      AFC, the Shareholders and Citadel Equity Fund Ltd.

     

    “Related
      Business”
means
      the business of processing, manufacturing, marketing and/or distributing of
      soybean powder, walnut powder, rice cereal, milk powder or other dairy and
      related food products in the PRC or any other country, including any other
      activities related thereto.

     

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

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    “Repurchase
      Amount”
means,
      with respect to any Note, the Redemption Price plus
      any
      accrued and unpaid Interest and any other interest payable pursuant to
Section
      4.01
      on such
      Note (including post-petition interest in any proceeding under any Bankruptcy
      Law) and interest accrued on overdue principal (and, to the extent lawful,
      on
      overdue installments of interest) and premium, if any.

     

    “Responsible
      Officer”
shall
      mean, when used with respect to the Trustee, any officer within the corporate
      trust department of the Trustee with direct responsibility for the
      administration of this Indenture.

     

    “Restricted
      Payment”
      means:

     

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

     

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

     

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

     

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

     

    “RMB”
means
      the lawful currency of the PRC.

     

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

     

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

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    “Senior
      Debt”
of
      the
      Company means:

     

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

     

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

     

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

     

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

     

    (c)
       all
      obligations of the Company 

     

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

     

    (2)
      under
      Hedging Obligations, or 

     

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

     

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

     

     provided,
      however,
      that
      Senior Debt shall not include:

     

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

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Shareholders”
means
      Mr. Leng You-Bin and Mr. Liu Hua.

     

    “Significant
      Subsidiary”
means
      any Subsidiary that would be a “significant subsidiary” of the Company within
      the meaning of Rule 1-02 under Regulation S-X promulgated by the
      Commission.

     

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

     

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

     

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

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    “Termination
      of Trading”
will
      be
      deemed to have occurred if, (i) the Common Stock (or other common stock,
      depositary receipts, ordinary shares or other certificates representing common
      equity interests into which the Notes are then convertible) is neither listed
      for trading on a United States national securities exchange, listed for trading
      on a United States national or regional securities exchange nor approved for
      trading on any of the Nasdaq’s Capital Market, Global Market or Global Select
      Market, (ii) trading in the Common Stock on any such exchange or market has
      been
      suspended for more than ten consecutive Trading Days, or (iii) a transaction
      or
      event (whether by means of an exchange offer, liquidation, tender offer,
      consolidation, merger, combination, reclassification, recapitalization or
      otherwise) occurs in connection with which all or substantially all of the
      Common Stock is exchanged for, converted into, or acquired for, consideration
      which is not all or substantially all common stock, depositary receipts,
      ordinary shares or other certificates representing common equity interests
      that
      are (or, upon consummation of or immediately following such transaction or
      event, will be) listed on a United States national securities exchange or
      approved (or, upon consummation of or immediately following such transaction
      or
      event, will be approved) for quotation on the Nasdaq Capital Market, Nasdaq
      Global Market, Nasdaq Global Select Market or any similar United States system
      of automated dissemination of quotations of securities prices.

     

    “Transaction
      Document”
means
      this Indenture, the Notes, the Guarantees, Notes Purchase Agreement, the
      Investor Rights Agreement, the Registration Rights Agreement, the Security
      Documents, certain Non-Competition Agreements dated the Issue Date by and
      between the Company and each of the Shareholders, or any of them as the context
      may so require.

     

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

     

    “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the Nasdaq Capital Market, the American
      Stock Exchange, the New York Stock Exchange, the NYSE Archipelago Exchange,
      the
      Nasdaq Global Market or the Nasdaq Global Select Market.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    “Trading
      Reference VWAP”
means,
      as of March 1 or September 1 of each year, the simple arithmetic average of
      the
      VWAPs for the thirty Trading Days preceding such March 1 or September 1, as
      the
      case may be, as proportionally adjusted for any subdivision, consolidation,
      reclassification or similar event of the Common Stock; provided
      that if
      the actual Trading Reference VWAP be less than $12.00, the Trading Reference
      VWAP shall be deemed to be exactly $12.00.

     

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

     

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

     

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

     

    “VWAP”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
      the daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the Trading Market on which the Common Stock
      is
      then listed or quoted for trading as reported by Bloomberg Financial L.P.
      through its “Volume at Price” functions (based on a Trading Day from 9:30 a.m.
      (New York City time) to 4:02 p.m. (New York City time); or (b) if the Common
      Stock is not then listed or quoted on a Trading Market and if prices for the
      Common Stock are then reported in the “Pink Sheets” published by Pink Sheets,
      LLC (or a similar organization or agency succeeding to its functions of
      reporting prices), the average of the highest closing bid price and lowest
      closing ask price of any of the market makers for such security as reported,
      and
      in each of the foregoing clauses ignoring any block trade (which for purposes
      of
      this definition means any transfer of more than 100,000 shares).  If
      the
      VWAP cannot be calculated for such security on such date on any of the foregoing
      bases, the VWAP
      of such
      security on such date shall be the fair market value as mutually determined
      by
      the Company and the Noteholders of at least a majority in aggregate principal
      amount of the Combined Notes then outstanding.

     

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

     

    Section
      1.02.   Other
      Definitions.

    

      
        	
                Term

              	 	
                Defined
                  in

                Section

              	 
	
                “Additional
                  Interest Notice”

              	 	 	
                4.31

              	 
	
                “Adjustment
                  Event”

              	 	 	
                14.05(n

              	
                )

              
	
                “Affiliate
                  Transaction”

              	 	 	
                4.14

              	 
	
                “Allocable
                  Excess Proceeds”

              	 	 	
                4.12

              	 
	
                “Asset
                  Sale Offer”

              	 	 	
                4.12

              	 
	
                “Authentication
                  Order”

              	 	 	
                2.04

              	 
	
                “Benefited
                  Party”

              	 	 	
                9.01

              	 
	
                “Change
                  of Control Offer”

              	 	 	
                4.17(a

              	
                )

              
	
                “Conversion
                  Date”

              	 	 	
                14.02

              	 
	
                “Conversion
                  Notice”

              	 	 	
                14.02

              	 
	
                “Conversion
                  Rate”

              	 	 	
                14.04

              	 
	
                “Current
                  Market Price”

              	 	 	
                14.05(j

              	
                )

              
	
                “Determination
                  Date”

              	 	 	
                14.05(n

              	
                )

              
	
                “Event
                  of Default”

              	 	 	
                6.01

              	 
	
                “Excess
                  Proceeds”

              	 	 	
                4.12

              	 
	
                “Exchange
                  Act Filings”

              	 	 	
                4.33(a

              	
                )

              
	
                “Expiration
                  Time”

              	 	 	
                14.05(f

              	
                )

              
	
                “Future
                  Guarantor”

              	 	 	
                9.03

              	 
	
                “Future
                  Guarantor Pledgor”

              	 	 	
                10.02(b

              	
                )

              
	
                “Guarantor
                  Pledgor”

              	 	 	
                10.02(b

              	
                )

              
	
                “Interest
                  Payment Date”

              	 	 	
                2.03

              	 
	
                “Non-electing
                  share”

              	 	 	
                14.06

              	 
	
                “Offer
                  Amount”

              	 	 	
                3.02(b

              	
                )

              
	
                “Offer
                  Period”

              	 	 	
                3.02(c

              	
                )

              
	
                “Offer
                  to Purchase”

              	 	 	
                3.02(a

              	
                )

              
	
                “Paying
                  Agent”

              	 	 	
                4.02

              	 
	
                “Purchase
                  Date”

              	 	 	
                3.02(c

              	
                )

              
	
                “Purchase
                  Price”

              	 	 	
                3.02(b

              	
                )

              
	
                “Purchased
                  Shares”

              	 	 	
                14.05(f

              	
                )

              
	
                “Record
                  Date”

              	 	 	
                14.05(j

              	
                )

              
	
                “Registrar”

              	 	 	
                4.02

              	 
	
                “Rule
                  144A Information”

              	 	 	
                4.33(b

              	
                )

              
	
                “Securities”

              	 	 	
                14.05(d

              	
                )

              
	
                “Security
                  Register”

              	 	 	
                4.02

              	 
	
                “Termination
                  of Trading Offer”

              	 	 	
                4.26

              	 
	
                “Trigger
                  Event”

              	 	 	
                14.05(d

              	
                )

              

      

       

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      Section
        1.03.   Rules
        of Construction.

       

    

    (a) Unless
      the context otherwise requires:

     

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

     

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

     

    (iii) “or”
is
      not exclusive;

     

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

    
       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

       

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

     

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

     

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

     

    (viii) provisions
      apply to successive events and transactions; 

     

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

     

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

     

    ARTICLE
      2

     

    ISSUE,
      DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

     

    Section
      2.01.   Designation
      Amount and Issue of Notes.
      

     

    The
      Notes
      shall be designated as “1.0% Guaranteed Senior Secured Convertible Notes due
      2012”. Notes in the initial aggregate principal amount of $60,000,000 upon the
      execution of this Indenture, or from time to time thereafter, may be executed
      by
      the Company and delivered to the Trustee for authentication, and the Trustee
      shall thereupon authenticate and deliver said Notes to or upon the written
      order
      of the Company, signed by its Chairman of the Board, Chief Executive Officer,
      President or any Vice President (whether or not designated by a number or
      numbers or word or words added before or after the title “Vice President”), the
      Treasurer or any Assistant Treasurer or the Secretary or Assistant Secretary,
      without any further action by the Company hereunder. 

     

    Section
      2.02.   Form
      of Notes.
      

     

    (a) The
      Notes
      and the Trustee’s certificate of authentication to be borne by such Notes shall
      be substantially in the form set forth in Exhibit
      A.
      The
      terms and provisions contained in the form of Note attached as Exhibit
      A
      hereto
      shall constitute, and are hereby expressly made, a part of this Indenture and,
      to the extent applicable, the Company, the Guarantors and the Trustee, by their
      execution and delivery of this Indenture, expressly agree to such terms and
      provisions and to be bound thereby.

     

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

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (c) So
      long
      as the Notes are eligible for book-entry settlement with the Common Depositary,
      or unless otherwise required by law, or otherwise contemplated by Section
      2.05(a),
      all of
      the Notes will be represented by one or more Notes in global form registered
      in
      the name of the Common Depositary or the nominee of the Common Depositary.
      The
      transfer and exchange of beneficial interests in any such Global Note shall
      be
      effected through the Common Depositary in accordance with this Indenture and
      the
      applicable procedures of the Common Depositary. Except as provided in
Section
      2.05(a),
      beneficial owners of a Global Note shall not be entitled to have certificates
      registered in their names, will not receive or be entitled to receive physical
      delivery of certificates in definitive form and will not be considered holders
      of such Global Note.

     

    (d) Any
      Global Note shall represent such of the outstanding Notes as shall be specified
      therein and shall provide that it shall represent the aggregate amount of
      outstanding Notes from time to time endorsed thereon and that the aggregate
      amount of outstanding Notes represented thereby may from time to time be
      increased or reduced to reflect redemptions, repurchases, conversions,
      transfers, exchanges or further issuances permitted hereby. Any endorsement
      of a
      Global Note to reflect the amount of any increase or decrease in the amount
      of
      outstanding Notes represented thereby shall be made by the Trustee or the
      Custodian, at the direction of the Trustee, in such manner and upon instructions
      given by the holder of such Notes in accordance with this Indenture. Payment
      of
      principal of, premium, if any, and Interest on any Global Note shall be made
      to
      the holder of such Note.

     

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

     

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

     

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

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    Upon
      the
      occurrence of any of the events set forth in clauses (1) or (2) of the
      immediately preceding paragraph, the Company shall execute, and, upon receipt
      of
      an Authentication Order in accordance with Section
      2.04
      hereof,
      the Trustee shall authenticate and deliver, Definitive Notes, in authorized
      denominations, in an aggregate principal amount equal to the principal amount
      of
      the Global Notes in exchange for such Global Notes.

     

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

     

    Section
      2.03.   Date
      and
      Denomination of Notes; Payments of Interest.
      

     

    The
      Notes
      shall be issuable in registered form without coupons in denominations of
      $100,000 principal amount and integral multiples thereof. Each Note shall be
      dated the date of its authentication and shall bear Interest from the date
      specified on the face of the form of Note attached as Exhibit
      A
      hereto.
      Interest on the Notes shall be computed on the basis of a 360-day year comprised
      of twelve 30-day months.

     

    The
      Person in whose name any Note (or its Predecessor Note) is registered on the
      Security Register at the close of business on any record date with respect
      to
      any interest payment date shall be entitled to receive the Interest payable
      on
      such interest payment date, except that the Interest payable upon redemption
      or
      repurchase will be payable to the Person to whom principal is payable pursuant
      to such redemption or repurchase (unless the redemption date or the repurchase
      date, as the case may be, falls after a record date and on or prior to the
      corresponding interest payment date, in which case accrued and unpaid Interest
      to, but excluding, such redemption date or repurchase date shall be payable
      on
      such interest payment date to the holders of such Notes registered as such
      on
      the applicable record date).

     

    Notwithstanding
      the foregoing, if any Note (or portion thereof) is converted into Common Stock
      during the period after a record date for the payment of Interest to, but
      excluding, the next succeeding interest payment date and such Note (or portion
      thereof) has been called or tendered for redemption on a redemption date which
      occurs during such period, the Company shall not be required to pay interest
      on
      such interest payment date in respect of any such Note (or portion thereof).
      Interest shall be payable at the office of the Company maintained by the Company
      for such purposes in the City of New York, which shall initially be an office
      or
      agency of the Trustee. The Company shall pay Interest (i) on any Notes in
      certificated form by (x) check mailed to the address of the Person entitled
      thereto as it appears in the Security Register (or upon written notice, by
      wire
      transfer in immediately available funds, if such Person is entitled to Interest
      on aggregate principal in excess of $1 million) or (y) by transfer to an account
      maintained by such person in the City of New York or
      (ii)
      on any Global Note by wire transfer of immediately available funds to the
      account of the Common Depositary or its nominee. The term “record date” with
      respect to any interest payment date shall mean the May 17 or November 17
      preceding the applicable June 1 or December 1 interest payment date (each,
      an
“Interest
      Payment Date”),
      respectively.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    Section
      2.04.   Execution
      of Notes.
      

     

    The
      Notes
      shall be signed in the name and on behalf of the Company by the manual or
      facsimile signature of its Chairman of the Board, Chief Executive Officer,
      President or any Vice President (whether or not designated by a number or
      numbers or word or words added before or after the title “Vice President”) and
      attested by the manual or facsimile signature of its Secretary or any of its
      Assistant Secretaries or its Treasurer or any of its Assistant Treasurers (which
      may be printed, engraved or otherwise reproduced thereon, by facsimile or
      otherwise). Only such Notes as shall bear thereon a certificate of
      authentication substantially in the form set forth on the form of Note attached
      as Exhibit
      A
      hereto upon
      a
      written order of the Company signed by an Officer (an “Authentication
      Order”),
      manually executed by the Trustee (or an authenticating agent appointed by the
      Trustee as provided by Section
      15.10),
      shall
      be entitled to the benefits of this Indenture or be valid or obligatory for
      any
      purpose. Such certificate by the Trustee (or such an authenticating agent)
      upon
      any Note executed by the Company shall be conclusive evidence that the Note
      so
      authenticated has been duly authenticated and delivered hereunder and that
      the
      holder is entitled to the benefits of this Indenture.

     

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

     

    Section
      2.05.   Exchange
      and Registration of Transfer of Notes; Restrictions on Transfer.

     

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

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

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

     

    (h) Neither
      the Company nor the Trustee nor any Registrar shall be required to exchange
      or
      register a transfer of (a) any Notes or portions thereof surrendered for
      conversion pursuant to Article
      14
      or (b)
      any Notes or portions thereof tendered for purchase pursuant to Section
      3.02
      (and not
      withdrawn).

     

    (i) Until
      the
      expiration of the holding period applicable to sales thereof under Rule 144(k)
      under the Securities Act (or any successor provision), any certificate
      evidencing such Note (and all securities issued in exchange therefor or
      substitution thereof, other than Common Stock, if any, issued upon conversion
      thereof, which shall bear the legend set forth in Exhibit
      D,
      if
      applicable) shall bear a legend set forth in Exhibit
      A,
      unless
      such Note has been sold pursuant to a registration statement that has been
      declared effective under the Securities Act (and which continues to be effective
      at the time of such transfer) or pursuant to Rule 144 under the Securities
      Act
      or any similar provision then in force, or unless otherwise agreed by the
      Company in writing, with written notice thereof to the Trustee.

     

    (j) Any
      stock
      certificate representing Common Stock issued upon conversion of such Note shall
      bear a legend substantially in the form of Exhibit
      D.

     

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

     

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

     

    Section
      2.06. Mutilated,
      Destroyed, Lost or Stolen Notes.
      

     

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

     

    
      
        
        

      

      
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    Following
      receipt by the Trustee or such authenticating agent, as the case may be, of
      satisfactory security or indemnity and evidence, as described in the preceding
      paragraph, the Trustee or such authenticating agent may authenticate any such
      substituted Note and make available for delivery such Note. Upon the issuance
      of
      any substituted Note, the Company or the Trustee, as the case may be, may
      require the payment by the holder of a sum sufficient to cover any tax,
      assessment or other governmental charge that may be imposed in relation thereto
      and any other expenses connected therewith. In case any Note which has matured
      or is about to mature or has been called for redemption or has been tendered
      for
      repurchase upon a Termination of Trading (and
      not
      withdrawn) or
      is to
      be converted into Common Stock shall become mutilated or be destroyed, lost
      or
      stolen, the Company may, instead of issuing a substitute Note, pay or authorize
      the payment of or convert or authorize the conversion of the same (without
      surrender thereof except in the case of a mutilated Note), as the case may
      be,
      if the applicant for such payment or conversion shall furnish to the Company,
      to
      the Trustee and, if applicable, to such authenticating agent such security
      or
      indemnity as may be required by them to save each of them harmless for any
      loss,
      liability, cost or expense caused by or in connection with such substitution,
      and, in every case of destruction, loss or theft, the applicant shall also
      furnish to the Company, the Trustee and, if applicable, any paying agent or
      conversion agent evidence to their satisfaction of the destruction, loss or
      theft of such Note and of the ownership thereof.

     

    Every
      substitute Note issued pursuant to the provisions of this Section by virtue
      of
      the fact that any Note is destroyed, lost or stolen shall constitute an
      additional contractual obligation of the Company, whether or not the destroyed,
      lost or stolen Note shall be found at any time, and shall be entitled to all
      the
      benefits of (but shall be subject to all the limitations set forth in) this
      Indenture equally and proportionately with any and all other Notes duly issued
      hereunder. If, after the delivery of such replacement Note, a protected
      purchaser of the original Note in lieu of which such replacement Note was issued
      presents for payment, registration or conversion of such original Note, the
      Trustee shall be entitled to recover such replacement Note from the Person
      to
      whom it was delivered or any Person taking therefrom, except a protected
      purchaser, and shall be entitled to recover upon the security or indemnity
      provided therefor to the extent of any loss, damage, cost or expense incurred
      by
      the Company, the Trustee and any authenticating agent in connection
      therewith.

     

    Section
      2.07. Temporary
      Notes.
      

     

    Pending
      the preparation of Notes in certificated form, the Company may execute and
      the
      Trustee or an authenticating agent appointed by the Trustee shall, upon the
      written request of the Company, authenticate and deliver temporary Notes
      (printed or lithographed). Temporary Notes shall be issuable in any authorized
      denomination, and substantially in the form of the Notes in certificated form,
      but with such omissions, insertions and variations as may be appropriate for
      temporary Notes, all as may be determined by the Company. Every such temporary
      Note shall be executed by the Company and authenticated by the Trustee or such
      authenticating agent upon the same conditions and in substantially the same
      manner, and with the same effect, as the Notes in certificated form. Without
      unreasonable delay, the Company will execute and deliver to the Trustee or
      such
      authenticating agent Notes in certificated form and thereupon any or all
      temporary Notes may be surrendered in exchange therefor, at each office or
      agency maintained by the Company pursuant to Section
      4.02
      and the
      Trustee or such authenticating agent shall authenticate and make available
      for
      delivery in exchange for such temporary Notes an equal aggregate principal
      amount of Notes in certificated form. Such exchange shall be made by the Company
      at its own expense and without any charge therefor. Until so exchanged, the
      temporary Notes shall in all respects be entitled to the same benefits and
      subject to the same limitations under this Indenture as Notes in certificated
      form authenticated and delivered hereunder.

     

    
      
        
        

      

      
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    Section
      2.08.  Cancellation
      of Notes.
      

     

    All
      Notes
      surrendered for the purpose of payment, redemption, repurchase, conversion,
      exchange or registration of transfer shall, if surrendered to the Company or
      any
      paying agent or any Registrar or any conversion agent, be surrendered to the
      Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall
      be
      promptly canceled by it, and no Notes shall be issued in lieu thereof except
      as
      expressly permitted by any of the provisions of this Indenture. The Trustee
      shall dispose of such canceled Notes in accordance with its customary
      procedures. If the Company shall acquire any of the Notes, such acquisition
      shall not operate as a redemption, repurchase or satisfaction of the
      indebtedness represented by such Notes unless and until the same are delivered
      to the Trustee for cancellation.

     

    Section
      2.09.   Defaulted
      Interest.
      

     

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

     

    Section
      2.10.   ISIN
      Numbers.
      

     

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

     

    
      
        
        

      

      
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    Section
      2.11.  Further
      Issuances.
      

     

    The
      Company may from time to time without notice to or the consent of the
      Noteholders, create and issue further debt securities ranking pari
      passu
      with the
      Notes in all respects, provided
      that such
      further debt securities issued after the date of this Indenture shall not exceed
      an aggregate principal amount of $20,000,000. The Company may consolidate such
      further debt securities with the Notes then outstanding to form a single
      series,
      provided that
      the
      aggregate principal amount of the Notes so consolidated shall not exceed
      $80,000,000. The Company may deliver an Officer’s Certificate to the Trustee
      directing the Trustee or the Registrar to authenticate and deliver further
      securities in an aggregate principal amount specified in such Officer’s
      Certificate (subject to the limitations set forth in the preceding two
      sentences) and the Trustee or the Registrar shall authenticate and deliver
      such
      further securities. The Company shall promptly notify the Trustee of any such
      further issue. Such further notes will be represented by an increase in the
      aggregate principal amount of the Global Notes.

     

    ARTICLE
      3

     

    REDEMPTION
      AND REPURCHASE OF NOTES

     

    Section
      3.01.   Redemption
      at Maturity.
      

     

    Unless
      previously redeemed or converted or purchased and cancelled in accordance with
      this Indenture, the Company shall redeem the Notes at the Repurchase Amount
      on
      June 1, 2012.

     

    The
      Notes
      may not be redeemed at the election of the Company, in whole or in part at
      any
      time prior to June 1, 2012.

     

    Section
      3.02.   Offer
      to Purchase.

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

    (vii) that
      holders electing to have a Note purchased pursuant to any Offer to Purchase
      shall be required to surrender the Note, with the form entitled “Purchase
      Notice” on the reverse of the Note completed, or transfer by book-entry
      transfer, to the Company, the Common Depositary, if appointed by the Company,
      or
      a Paying Agent at the address specified in the notice before the close of
      business on the third Business Day before the Purchase Date;

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

    (ii) surrender
      to the Trustee the Notes properly accepted to be cancelled by the Trustee in
      accordance Section
      2.08
      hereof,
      together with an Officers’ Certificate stating the aggregate principal amount of
      Notes or portions of Notes being purchased by the Company and that such Notes
      or
      portions thereof were accepted for payment by the Company in accordance with
      the
      terms of this Section. 

     

    (e) Upon
      receipt of the Notes in accordance with Section
      3.02(d)(i),
      the
      Company shall promptly, and in any event within (1) Business Day after the
      Purchase Date, deliver to each tendering holder the Purchase Price. In the
      event
      that any portion of the Notes surrendered is not purchased by the Company,
      the
      Company shall promptly execute and issue a new Note in a principal amount equal
      to such unpurchased portion of the Note surrendered, and, upon receipt of an
      Authentication Order in accordance with Section
      2.04
      hereof,
      the Trustee shall authenticate and deliver (or cause to be transferred by
      book-entry) such new Note to such holder, in a principal amount equal to any
      unpurchased portion of the Note surrendered; provided,
      however,
      that
      each such new Note shall be in a principal amount of $100,000 or an integral
      multiple thereof. Any Note not so accepted shall be promptly mailed or delivered
      by the Company to the holder thereof.

     

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

     

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

     

    
      
        
        

      

      
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    ARTICLE
      4

     

    PARTICULAR
      COVENANTS OF THE COMPANY

     

    Section
      4.01.   Payment
      of Principal and Interest.
      

     

    The
      Company covenants and agrees that it will duly and punctually pay or cause
      to be
      paid the principal of (including the purchase price upon an Offer to Purchase
      or
      the repurchase price upon repurchase, in each case pursuant to Article
      3)
      and
      Interest, on each of the Notes at the places, at the respective times and in
      the
      manner provided herein and in the Notes. The
      Company shall pay Additional Amounts upon the occurrence of any events, in
      the
      amounts and at the times specified in the definition of “Additional Amounts” in
Section
      1.01
      hereof.

     

    The
      Company shall pay, from time to time on demand, interest (including
      post-petition interest in any proceeding under any Bankruptcy Law) accrued
      on
      overdue principal and premium, if any, at a rate that is 5% per annum in excess
      of the rate then in effect from the due date and ending on the date immediately
      preceding the related Interest Payment Date; it shall pay interest (including
      post-petition interest in any proceeding under any Bankruptcy Law) on overdue
      installments of interest (without regard to any applicable grace periods),
      from
      time to time on demand at the same rate to the extent lawful.

     

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

     

    Section
      4.02.   Maintenance
      of Office or Agency.
      

     

    The
      Company will maintain an office or agency in the City of New York, where the
      Notes may be surrendered for registration of transfer or exchange (“Registrar”)
      or for
      presentation for payment or for conversion, redemption or repurchase
      (“Paying
      Agent”)
      and
      where notices and demands to or upon the Company in respect of the Notes and
      this Indenture may be served. The Registrar shall keep a register (the
“Security
      Register”)
      of the
      Notes and of their registration of transfer and exchange. The Company will
      give
      prompt written notice to the Trustee of the location, and any change in the
      location, of such office or agency not designated or appointed by the Trustee.
      If at any time the Company shall fail to maintain any such required office
      or
      agency or shall fail to furnish the Trustee with the address thereof, such
      presentations, surrenders, notices and demands may be made or served at the
      Corporate Trust Office.

     

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

     

    The
      Company hereby initially designates the Trustee as paying agent, Registrar,
      Custodian and conversion agent and each of the Corporate Trust Office and the
      office of agency of the Trustee in City of New York, shall be considered as
      one
      such office or agency of the Company for each of the aforesaid
      purposes.

     

    So
      long
      as the Trustee is the Registrar, the Trustee agrees to mail, or cause to be
      mailed, the notices set forth in Section
      7.08(a)
      and the
      third paragraph of Section
      7.09.
      If
      co-registrars have been appointed in accordance with this Section, the Trustee
      shall mail such notices only to the Company and the holders of Notes it can
      identify from its records.

     

    
      
        
        

      

      
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    Section
      4.03.   Provisions
      as to Paying Agent.
      

     

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

     

    (i) that
      it
      will hold all sums held by it as such agent for the payment of the principal
      of
      or Interest on the Notes (whether such sums have been paid to it by the Company
      or by any other obligor on the Notes) in trust for the benefit of the holders
      of
      the Notes;

     

    (ii) that
      it
      will give the Trustee notice of any failure by the Company (or by any other
      obligor on the Notes) to make any payment of the principal of or Interest on
      the
      Notes when the same shall be due and payable; and

     

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

     

    The
      Company shall, on the Business Day prior to each due date of the principal
      or
      Interest on the Notes, deposit with the paying agent a sum (in funds which
      are
      immediately available on the due date for such payment) sufficient to pay such
      principal or Interest, and (unless such paying agent is the Trustee) the Company
      will promptly notify the Trustee in writing of any failure to take such action;
      provided
      that if
      such deposit is made on the due date, such deposit shall be received by the
      paying agent by 10:00 a.m. New York City time, on such date.

     

    (b) If
      the
      Company shall act as its own paying agent, it will, on the Business Day prior
      to
      each due date of the principal of or Interest on the Notes, set aside, segregate
      and hold in trust for the benefit of the holders of the Notes a sum sufficient
      to pay such principal or Interest so becoming due and will promptly notify
      the
      Trustee in writing of any failure to take such action and of any failure by
      the
      Company (or any other obligor under the Notes) to make any payment of the
      principal of or Interest on the Notes when the same shall become due and
      payable.

     

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

     

    (d) Anything
      in this Section to the contrary notwithstanding, the agreement to hold sums
      in
      trust as provided in this Section is subject to Sections
      11.03
      and
11.04.

     

    
      
        
        

      

      
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    The
      Trustee shall not be responsible for the actions of any other paying agents
      (including the Company if acting as its own paying agent) and shall have no
      control of any funds held by such other paying agents.

     

    Section
      4.04.   Existence.
      

     

    Subject
      to Article
      5,
      the
      Company will do or cause to be done all things necessary to preserve and keep
      in
      full force and effect its existence and rights (charter and statutory);
provided
      that the
      Company shall not be required to preserve any such right if the Company shall
      determine that the preservation thereof is no longer desirable in the conduct
      of
      the business of the Company and that the loss thereof is not disadvantageous
      in
      any material respect to the Noteholders.

     

    Section
      4.05.   Maintenance
      of Properties.
      

     

    The
      Company will cause all properties used or useful in the conduct of its business
      or the business of any Significant Subsidiary to be maintained and kept in
      good
      condition, repair and working order and supplied with all necessary equipment
      and will cause to be made all necessary repairs, renewals, replacements,
      betterments and improvements thereof, all as in the judgment of the Company
      may
      be necessary so that the business carried on in connection therewith may be
      properly and advantageously conducted at all times; provided
      that
      nothing in this Section shall prevent the Company from discontinuing the
      operation or maintenance of any of such properties if such discontinuance is,
      in
      the judgment of the Company, desirable in the conduct of its business or the
      business of any subsidiary and not disadvantageous in any material respect
      to
      the Noteholders.

     

    Section
      4.06.   Payment
      of Taxes and Other Claims.
      

     

    The
      Company will pay or discharge, or cause to be paid or discharged, before the
      same may become delinquent, (i) all taxes, assessments and governmental charges
      levied or imposed upon the Company or any Significant Subsidiary or upon the
      income, profits or property of the Company or any Significant Subsidiary, (ii)
      all claims for labor, materials and supplies which, if unpaid, might by law
      become a lien or charge upon the property of the Company or any Significant
      Subsidiary and (iii) all stamp taxes and other duties, if any, which may be
      imposed by the United States or any political subdivision thereof or therein
      in
      connection with the issuance, transfer, exchange, conversion, redemption or
      repurchase of any Notes or with respect to this Indenture; provided
      that, in
      the case of clauses (i) and (ii), the Company shall not be required to pay
      or
      discharge or cause to be paid or discharged any such tax, assessment, charge
      or
      claim (A) if the failure to do so will not, in the aggregate, have a material
      adverse impact on the Company, or (B) if the amount, applicability or validity
      is being contested in good faith by appropriate proceedings.

     

    Section
      4.07.   Stay,
      Extension and Usury Laws.
      

     

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

     

    
      
        
        

      

      
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    Section
      4.08.   Payments
      for Consent.

     

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

     

    Section
      4.09.   Incurrence
      of Additional Debt;
      Financial Covenants.

     

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

     

    (b) The
      Company shall maintain a Leverage Ratio, as determined as of the last day of
      each Fiscal Quarter, for the four Fiscal Quarters ending on such day, not
      exceeding (x) 5.75 to 1.00 from the Issue date through December 31, 2007, (y)
      4.00 to 1.00 from January 1, 2008 through December 31, 2008 and (z) 3.00 to
      1.00
      thereafter.

     

    (c) Notwithstanding
      anything to the contrary contained in this Section,

     

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

     

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

     

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

     

    Section
      4.10.   Restricted
      Payments.

     

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

     

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

     

    
      
        
        

      

      
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    (b) the
      Company could not Incur at least $1.00 of additional Debt in compliance with
      Section
      4.09,
      or

     

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

     

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

     

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

     

    (3) the
      sum
      of:

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
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    Notwithstanding
      the foregoing limitation, the Company may:

     

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

     

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

     

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

     

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

     

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

     

    Section
      4.11.   Liens.

     

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

     

    Section
      4.12.   Asset
      Sales.

     

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

     

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

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    When
      the
      aggregate amount of Excess Proceeds exceeds $5.0 million (taking into account
      income earned on such Excess Proceeds, if any), the Company will be required
      to
      make an offer to repurchase (the “Asset
      Sale Offer”)
      the
      Notes, which offer shall be in the amount of the Allocable Excess Proceeds
      (rounded to the nearest $100,000), on a pro
      rata
      basis
      according to principal amount, at the Repurchase Amount, in accordance with
      the
      procedures (including prorating in the event of oversubscription) set forth
      in
Section
      3.02.
      To the
      extent that any portion of the amount of Net Available Cash remains after
      compliance with the preceding sentence and provided
      that
      all
      holders of Notes have been given the opportunity to tender their Notes for
      repurchase in accordance with Section
      3.02,
      the
      Company or such Subsidiary may use such remaining amount first to Repay the
      Credit Facilities or any other Senior Debt of the Company or any Guarantor
      or
      Debt of any Subsidiary of the Company that is not a Guarantor (excluding, in
      any
      such case, any Debt owed to the Company or an Affiliate of the Company), and
      only thereafter, for any purpose permitted by this Indenture, and the amount
      of
      Excess Proceeds will be reset to zero. 

     

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

     

    (a) the
      Excess Proceeds and 

     

    (b) a
      fraction, 

     

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

     

    (2) the
      denominator of which is the sum of the aggregate principal amount of the Notes
      outstanding on the date of the Asset Sale Offer and the aggregate principal
      amount (or accreted value, if applicable) of other Debt of the Company
      outstanding on the date of the Asset Sale Offer that is pari
      passu in
      right
      of payment with the Notes and subject to terms and conditions in respect of
      Asset Sales similar in all material respects to this Section and requiring
      the
      Company to make an offer to repurchase such Debt at substantially the same
      time
      as the Asset Sale Offer.

     

    
      
        
        

      

      
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    Section
      4.13.   Restrictions
      on Distributions from Subsidiaries.

     

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

     

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

     

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

     

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

     

    The
      foregoing limitations will not apply:

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    Section
      4.14.   Affiliate
      Transactions.

     

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

     

    (a) the
      terms
      of such Affiliate Transaction are:

     

    (1) set
      forth
      in writing, 

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    The
      Company shall not:

     

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

     

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

     

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

     

    (1) directors’
      qualifying shares, 

     

    (2) to
      secure
      the Notes and the Other Notes,

     

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

     

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

     

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

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

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

     

    Section
      4.16.   Maintenance
      of Consolidated Tangible Net Worth.

     

    The
      Company shall not, on the Issue Date (after giving effect to the issuance of
      the
      Notes) or at the end of any Fiscal Quarter thereafter, permit its Consolidated
      Tangible Net Worth to be less than the Consolidated Tangible Net Worth
      Threshold. The “Consolidated Tangible Net Worth Threshold” shall be equal to $60
      million from the Issue Date until the first annual anniversary thereof, and
      at
      each annual anniversary of the Issue Date shall increase by an amount equal
      to
      $10 million.

     

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

     

    (a) Upon
      the
      occurrence of a Change of Control, the Company shall, within 7 days thereafter
      notify the Trustee and the holders of such Change of Control, and within 30
      days
      of a Change of Control, make an offer (the “Change
      of Control Offer”)
      pursuant to the procedures set forth in Section
      3.02.
      Each
      holder shall have the right to accept such offer and require the Company to
      repurchase all or any portion (equal to $100,000 or an integral multiple
      thereof) of such holder’s Notes pursuant to the Change of Control Offer at a
      purchase price, in cash equal to the Repurchase Amount.

     

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

     

    Section
      4.18.   Future
      Guarantors.

     

    (a) Each
      of
      the Operating Subsidiaries hereby agrees, and each of the Company and AFC hereby
      agrees, jointly and severally, to cause each Operating Subsidiary, to execute
      and deliver to the Trustee a Guarantee to the fullest extent permitted under
      applicable laws (including the laws of the PRC) and subject to obtaining all
      necessary Governmental Approvals. 

     

    (b) The
      Company shall cause each Person that becomes a Subsidiary following the Issue
      Date to execute and deliver to the Trustee a Guarantee at the time such Person
      becomes a Subsidiary, provided
      that, in
      the case of a Person that becomes a Subsidiary incorporated in the PRC, the
      Company shall cause such Subsidiary to execute and deliver to the Trustee a
      Guarantee to the fullest extent permitted by applicable laws (including the
      laws
      of the PRC) and subject to obtaining all necessary Governmental Approval.

     

    Section
      4.19.   Business
      Activities;
      Charter
      Documents.

     

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

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    (b) The
      Company shall not, and the Company shall not permit any of its Subsidiaries
      to,
      amend, alter, waive or repeal any provision of the certificate of incorporation,
      memorandum and articles of association or any other organizational or
      constitutional documents of the Company or its Subsidiaries in a way that would
      be adverse to the interests of the holders of the Notes.

     

    Section
      4.20.   Sale
      and Leaseback Transactions.

     

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

     

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

     

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

     

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

     

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

     

    Section
      4.21.   Impairment
      of Security Interest.

     

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

     

    Section
      4.22.   Amendments
      to Security Documents.

     

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

     

    Section
      4.23.   Use
      of
      Proceeds.

     

    The
      Company will not use the net proceeds from the sale of the Notes, in any amount,
      for any purpose other than for
      Capital Expenditures, Repayment of Debt of the Operating Subsidiaries
      outstanding as of the Issue Date, acquisitions and general corporate purposes,
      and pending the application of all of such net proceeds in such
      manner,
      to
      invest the portion of such net proceeds not yet so applied in Cash Equivalents;
      provided
      that the
      Company shall deliver, or cause to be delivered, to the Trustee, an Officers’
Certificate and an Opinion of Counsel, each stating to the effect that all
      relevant Governmental Approval has been obtained by the Governmental Authority,
      and no violation of laws, rules, regulations or orders of any Governmental
      Authority by any of the Company or the Subsidiaries has occurred or will occur
      in connection with, or as a result of, the consummation of any such acquisition
      or performance of their respective obligations under the related transaction
      documents within 30 days after the consummation of any such acquisition.

     

    
      
        
        

      

      
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    Section
      4.24.   Maintenance
      of Insurance.

     

    The
      Company shall, and shall cause its Subsidiaries to, maintain the currently
      existing and additional insurance policies to be obtained covering the risks
      of
      the business carried on by the Company. 

     

    Section
      4.25.   Qualifying IPO.

     

    The
      Company shall make such filings, registrations or qualifications and take all
      other necessary action and will use its best efforts to obtain such consents,
      approvals and authorizations, if any, and satisfy all conditions that may be
      required in connection with listing the Company’s common stock in a Qualifying
      IPO and shall use its best efforts to complete a Qualifying IPO by no later
      than
      December 1, 2008 and maintain such listing continuously thereafter.

     

    Section
      4.26.   Repurchase
      Upon Termination of Trading.

     

    Upon
      the
      occurrence of a Termination of Trading, the Company shall, within 7 days
      thereafter notify the Trustee and the holders of such Termination of Trading,
      and within 30 days of a Termination of Trading, make an offer (the “Termination
      of Trading Offer”)
      pursuant to the procedures set forth in Section
      3.02.
      Each
      holder shall have the right to accept such offer and require the Company to
      repurchase all or any portion (equal to $100,000 or an integral multiple of
      $100,000) of such holder’s Notes pursuant to the Termination of Trading Offer at
      a purchase price, in cash equal to the Repurchase Amount.

     

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

     

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

     

    
      
        
        

      

      
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    Section
      4.28.   Engage
      Qualified Auditing Firms. 

     

    (a) The
      Company shall, by no later than May 1, 2008, appoint any one of the following
      accounting firms as auditor of the Company and its Subsidiaries to audit the
      Company’s consolidated annual financial statements for the fiscal year beginning
      January 1, 2008 and perform interim reviews of the Company’s consolidated
      quarterly financial statements, all in accordance with Regulation S-X:
      PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, KPMG, BDO
      International, Grant Thornton International, RSM International, Baker Tilly
      International, Horwath International, Moores Rowland International, Moss Adams,
      J.H. Cohn, Crowe Chizek and Co. LLC, Plante & Moran PLLC or BKD
      LLP.

     

    (b) The
      Company shall, for any fiscal year beginning on or after January 1, 2008, engage
      any one of the accounting firms set forth in paragraph (a) above as the primary
      auditor of the Company and its Subsidiaries and shall cause such auditor to
      audit the Company's consolidated annual financial statements and perform interim
      reviews of the Company's consolidated quarterly financial statements, all in
      accordance with Regulation S-X.

     

    Section
      4.29.   Notes
      to Rank Senior.

     

    The
      Notes
      are senior secured obligations of the Company and rank pari passu in right
      of
      payment with all existing and future debt of the Company that is not
      subordinated to the Notes and rank senior in right of payment to any future
      subordinated obligations of the Company. The Guarantees are senior unsecured
      obligations of the Guarantors and rank pari passu in right of payment with
      all
      existing and future debt of the Guarantors that is not subordinated to the
      Guarantees and rank senior in right of payment to any future subordinated
      obligations of the Guarantors. 

    

    Section
      4.30.   Compliance
      Certificate.
      

     

    The
      Company shall deliver to the Trustee, within one hundred twenty (120) days
      after
      the end of each fiscal year of the Company, a certificate signed by either
      the
      principal executive officer, principal financial officer or principal accounting
      officer of the Company, stating whether or not to the best knowledge of the
      signer thereof the Company is in default in the performance and observance
      of
      any of the terms, provisions and conditions of this Indenture (without regard
      to
      any period of grace or requirement of notice provided hereunder) and, if the
      Company shall be in default, specifying all such defaults and the nature and
      the
      status thereof of which the signer may have knowledge.

     

    The
      Company will deliver to the Trustee, forthwith upon becoming aware of (i) any
      default in the performance or observance of any covenant, agreement or condition
      contained in this Indenture, or (ii) any Event of Default, an Officers’
Certificate specifying with particularity such Default or Event of Default
      and
      further stating what action the Company has taken, is taking or proposes to
      take
      with respect thereto.

     

    Any
      notice required to be given under this Section shall be delivered to a
      Responsible Officer of the Trustee at its Corporate Trust Office.

     

    
      
        
        

      

      
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    Section
      4.31.   Additional Interest Notice.
      

     

    In
      the
      event that the Company is required to pay Additional Interest to holders of
      Notes pursuant to the terms hereof, the Company will provide written notice
      (“Additional
      Interest Notice”)
      to the
      Trustee and the holders of the Company’s obligation to pay Additional Interest
      no later than fifteen (15) days prior to the proposed payment date for the
      Additional Interest, and the Additional Interest Notice shall set forth the
      amount of Additional Interest to be paid by the Company on such payment
      date.

     

    Section
      4.32.   Calculation
      of Original Issue Discount.
      

     

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

     

    Section
      4.33.   Reports
      by the Company and Provision of Information.
      

     

    (a) At
      any
      time when the Company is subject to Section 13 or 15(d) of the Exchange Act,
      and
      to the extent such reports, information and documents are not available on
      the
      Commission’s EDGAR System, the Company shall deliver to the Trustee within 30
      days after it files with the Commission copies of the annual reports and of
      the
      information, documents, and other reports (or copies of such portions of any
      of
      the foregoing as the Commission may be rules and regulations prescribe), if
      any,
      which the Company is required to file with the Commission pursuant to Section
      13
      or 15(d) of the Exchange Act (“Exchange
      Act Filings”);
      provided,
      however, the
      Company shall not be required to deliver to the Trustee any materials for which
      the Company has sought and received confidential treatment by the Commission.
      The Company shall promptly provide written notice to the Trustee if and when
      it
      begins to make all of its Exchange Act Filings via the Commission’s EDGAR System
      in lieu of paper filings. Delivery of such annual reports, information and
      documents and other reports to the Trustee is for informational purposes only
      and the Trustee’s receipt of such shall not constitute constructive notice of
      any information contained therein or determinable from information contained
      therein, including the Company’s compliance with any of its covenants hereunder
      (as to which the Trustee is entitled to rely exclusively on an Officer’s
      Certificate).

     

    (b) At
      any
      time when the Company is not subject to Section 13 or 15(d) of the Exchange
      Act,
      upon the request of a holder of the Notes, the Company will promptly furnish
      or
      cause to be furnished Rule 144A Information to such holder, to a prospective
      purchaser of such Notes designated by such holder, to a beneficial owner of
      such
      Notes (as designated in writing to the Company by such holder) or to a
      prospective purchaser designated by such beneficial owner, as the case may
      be,
      in order to permit compliance by such holder or beneficial owner with Rule
      144A
      in connection with the resale of such Notes by such holder or beneficial owner;
      provided,
      however,
      that
      the Company shall not be required to furnish such information in connection
      with
      any request made on or after the date which is five years from the later of
      the
      Issue Date and the date such Notes (or any predecessor Notes or the Notes
      surrendered for conversion) was acquired from the Company or an “affiliate” of
      the Company within the meaning of Rule 144; and provided
      further,
      that
      the Company shall not be required to furnish such information at any time to
      a
      prospective purchaser located outside the United States who is not a “U.S.
      Person” within the meaning of Regulation S if such Securities may then be sold
      to such prospective purchaser in accordance with Regulation S (or any successor
      provision thereto). As used herein, “Rule
      144A Information”
means
      such information as is specified pursuant to Rule 144A(d)(4) under the U.S.
      Securities Act (or any successor provision thereto).

     

    
      
        
        

      

      
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    Section
      4.34.   Other
      Notes and Other Indenture.
      

     

    The
      Company shall issue the Other Notes and execute the Other Indenture only on
      terms and conditions (other than the transfer restrictions and related
      provisions for the Other Notes to be in compliance with the Securities Act)
      that
      are substantially identical to those of the Notes and the Indenture,
      respectively, except as approved in writing, prior to the issuance of such
      Other
      Notes or the execution of such Other Indenture, by the holders of at least
      a
      majority in aggregate principal amount of the Notes then
      outstanding.

     

    ARTICLE
      5

     

    SUCCESSORS

     

    Section
      5.01.   Merger,
      Consolidation and Sale of Assets.

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

    Section
      5.02.   Successor
      Corporation Substituted.

     

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

     

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

     

    (b) a
      lease.

     

    ARTICLE
      6

     

    REMEDIES
      OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT

     

    Section
      6.01.   Events
      of Default.
      

     

    In
      case
      one or more of the following Events of Default (whatever the reason for such
      Event of Default and whether it shall be voluntary or involuntary or be effected
      by operation of law or pursuant to any judgment, decree or order of any court
      or
      any order, rule or regulation of any administrative or governmental body) shall
      have occurred and be continuing:

     

    (a) default
      in the payment of any installment of Interest upon any of the Notes as and
      when
      the same shall become due and payable and continuance of such default for a
      period of fifteen (15) days; or

     

    
      
        
        

      

      
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    (b) default
      in the payment of the principal of, and premium, if any, on, any of the Notes
      as
      and when the same shall become due and payable either at maturity or in
      connection with any redemption, repurchase or otherwise, in each case pursuant
      to Article
      3,
      by
      acceleration or otherwise, including
      payment of Additional Amounts pursuant to Section
      4.01;
      or

     

    (c) default
      in the Company’s obligation to provide an Offer to Purchase when required in
      connection with an Asset Sale, a Change of Control or Termination of Trading
      as
      provided in Section
      3.02;
      or

     

    (d) failure
      to comply with Section
      5.01;

     

    (e) failure
      on the part of the Company duly to observe or perform any other of the covenants
      or agreements on the part of the Company in the Notes or in this Indenture
      (other than a covenant or agreement a default in whose performance or whose
      breach is elsewhere in this Section specifically dealt with
      and
      other than the failure to comply with Section
      4.25
      or
Section
      4.28,
      for
      which payment of Additional Amounts is provided for hereunder and is governed
      by
Section
      4.01))
      continued for a period of thirty (30) days after the date on which written
      notice of such failure, requiring the Company to remedy the same, shall have
      been given to the Company by the Trustee, or the Company and a Responsible
      Officer of the Trustee by the holders of at least twenty-five percent (25%)
      in
      aggregate principal amount of the Combined Notes at the time outstanding
      determined in accordance with Section
      12.04;
      or

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

    (h) a
      default
      under any Debt by the Company or any of its Subsidiaries that results in
      acceleration of the maturity of such Debt, or failure to pay any such Debt
      when
      due, in an aggregate amount greater than $2.0 million or its foreign currency
      equivalent at the time;

     

    (i) any
      final
      non-appealable judgment or judgments for, the payment of money in an aggregate
      amount in excess of $2.0 million (or its foreign currency equivalent at the
      time) that shall be rendered against the Company or any of its
      Subsidiaries;

     

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

     

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

     

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

     

    
      
        
        

      

      
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    (m) the
      Company or the Operating Subsidiaries amends or modifies their respective
      constitutive documents in such a manner that would have a Material Adverse
      Effect or engages any business other than a Related Business;

     

    (n) 
      the
      Indenture, the Notes, any Guarantee or any loan made directly or indirectly
      from
      the Company to the Operating Subsidiaries or any Security Document, shall be
      (A)
      declared by any Governmental Authority to be illegal or unenforceable or (B)
      terminated prior to its scheduled termination date; 

     

    (o) (i)
      the
      confiscation, expropriation or nationalization by any Governmental Authority
      of
      any Property of the Company or any of its Subsidiaries; or (ii) if such
      revocation or repudiation could reasonably be expected to have a Material
      Adverse Effect, the revocation or repudiation by any Governmental Authority
      of
      any previously granted Governmental Approval to the Operating Subsidiaries
      that
      is material to the operation of the Related Business; or (iii) the imposition
      or
      introduction of material and discriminatory taxes, tariffs, royalties, customs
      or excise duties imposed on the Operating Subsidiaries, or the material and
      discriminatory withdrawal or suspension of material privileges or specifically
      granted material rights of a fiscal nature; or

     

    (p) failure
      by the Company or any Affiliate thereof (other than any Person who is an
      Affiliate solely because such Person is a holder of Notes) to cure any
      non-compliance with any of the agreements in the Investor Rights Agreement
      or
      the Registration Rights Agreement within 30 days after written notice from
      the
      other party (or parties) to such agreements demanding the cure of such
      non-compliance if such failure continues for 30 days after written notice is
      given to the Company by the Trustee or the holders of not less than 25% in
      aggregate principal amount of the Notes then outstanding specifying the default,
      demanding that it be remedied and stating that such notice is a “Notice of
      Default,” 

    

    then,
      and
      in each and every such case (other than an Event of Default specified in
Section
      6.01(f)
      or
6.01(g)),
      unless
      the principal of all of the Notes shall have already become due and payable,
      either the Trustee or the holders of not less than twenty-five percent (25%)
      in
      aggregate principal amount of the Combined Notes then outstanding hereunder
      determined in accordance with Section
      12.04,
      by
      notice in writing to the Company (and to the Trustee if given by Noteholders),
      may declare the principal of all the Notes, the Interest accrued thereon to
      be
      due and payable immediately, and upon any such declaration the same shall become
      and shall be immediately due and payable, anything in this Indenture or in
      the
      Notes contained to the contrary notwithstanding. If an Event of Default
      specified in Section
      6.01(f)
      or
6.01(g)
      occurs,
      the principal of all the Notes and the Interest accrued thereon shall be
      immediately and automatically due and payable without necessity of further
      action. 

     

    This
      provision, however, is subject to the conditions that if, at any time after
      the
      principal of the Notes shall have been so declared due and payable, and before
      any judgment or decree for the payment of the monies due shall have been
      obtained or entered as hereinafter provided, (i) the Company shall pay or shall
      deposit with the Trustee a sum sufficient to pay all matured installments of
      Interest upon all Notes and the principal of any and all Notes which shall
      have
      become due otherwise than by acceleration (with interest on overdue installments
      of Interest (to the extent that payment of such interest is enforceable under
      applicable law) and on such principal at the rate borne by the Notes, to the
      date of such payment or deposit) and amounts due to the Trustee pursuant to
      Section
      7.06,
      (ii) if
      any and all defaults under this Indenture, other than the nonpayment of
      principal of and accrued Interest on Notes which shall have become due by
      acceleration, shall have been cured or waived pursuant to Section
      6.07,
      then
      and in every such case the holders of a majority in aggregate principal amount
      of the Combined Notes then outstanding, by written notice to the Company and
      to
      the Trustee, may waive all Defaults or Events of Default and rescind and annul
      such declaration and its consequences; but no such waiver or rescission and
      annulment shall extend to or shall affect any subsequent Default or Event of
      Default, or shall impair any right consequent thereon. The Company shall notify
      in writing a Responsible Officer of the Trustee, promptly upon becoming aware
      thereof, of any Event of Default.

     

    
      
        
        

      

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

     

    Section
      6.02.   Payments
      of Notes on Default; Suit Therefor.
      

     

    The
      Company covenants that (a) in case default shall be made in the payment of
      any
      installment of Interest upon any of the Notes as and when the same shall become
      due and payable, and such default shall have continued for a period of thirty
      (30) days, or (b) in case default shall be made in the payment of the principal
      of any of the Notes as and when the same shall have become due and payable,
      whether at maturity of the Notes or in connection with any redemption or
      repurchase, by or under this Indenture by declaration or otherwise, then, upon
      demand of the Trustee, the Company will pay to the Trustee, for the benefit
      of
      the holders of the Notes, the whole amount that then shall have become due
      and
      payable on all such Notes for principal or Interest, as the case may be, with
      interest upon the overdue principal and (to the extent that payment of such
      interest is enforceable under applicable law) upon the overdue installments
      of
      Interest at the rate borne by the Notes, plus 1% and, in addition thereto,
      such
      further amount as shall be sufficient to cover the costs and expenses of
      collection, including compensation to the Trustee, its agents, attorneys and
      counsel, and all other amounts due the Trustee under Section
      7.06.
      Until
      such demand by the Trustee, the Company may pay the principal of and Interest
      on
      the Notes to the registered holders, whether or not the Notes are
      overdue.

     

    In
      case
      the Company shall fail forthwith to pay such amounts upon such demand, the
      Trustee, in its own name and as trustee of an express trust, shall be entitled
      and empowered to institute any actions or proceedings at law or in equity for
      the collection of the sums so due and unpaid, and may prosecute any such action
      or proceeding to judgment or final decree, and may enforce any such judgment
      or
      final decree against the Company or any other obligor on the Notes and collect
      in the manner provided by law out of the property of the Company or any other
      obligor on the Notes wherever situated the monies adjudged or decreed to be
      payable.

     

    
      
        
        

      

      
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    In
      case
      there shall be pending proceedings for the bankruptcy or for the reorganization
      of the Company or any other obligor on the Notes under any Bankruptcy Law,
      or in
      case a receiver, assignee or trustee in bankruptcy or reorganization,
      liquidator, sequestrator or similar official shall have been appointed for
      or
      taken possession of the Company or such other obligor, the property of the
      Company or such other obligor, or in the case of any other judicial proceedings
      relative to the Company or such other obligor upon the Notes, or to the
      creditors or property of the Company or such other obligor, the Trustee,
      irrespective of whether the principal of the Notes shall then be due and payable
      as therein expressed or by declaration or otherwise and irrespective of whether
      the Trustee shall have made any demand pursuant to the provisions of this
      Section, shall be entitled and empowered, by intervention in such proceedings
      or
      otherwise, to file and prove a claim or claims for the whole amount of principal
      and Interest owing and unpaid in respect of the Notes, and, in case of any
      judicial proceedings, to file such proofs of claim and other papers or documents
      as may be necessary or advisable in order to have the claims of the Trustee
      and
      of the Noteholders allowed in such judicial proceedings relative to the Company
      or any other obligor on the Notes, its or their creditors, or its or their
      property, and to collect and receive any monies or other property payable or
      deliverable on any such claims, and to distribute the same after the deduction
      of any amounts due the Trustee under Section
      7.06,
      and to
      take any other action with respect to such claims, including participating
      as a
      member of any official committee of creditors, as it reasonably deems necessary
      or advisable, and, unless prohibited by law or applicable regulations, and
      any
      receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
      custodian or similar official is hereby authorized by each of the Noteholders
      to
      make such payments to the Trustee, and, in the event that the Trustee shall
      consent to the making of such payments directly to the Noteholders, to pay
      to
      the Trustee any amount due it for compensation, expenses, advances and
      disbursements, including counsel fees and expenses incurred by it up to the
      date
      of such distribution. To the extent that such payment of compensation, expenses,
      advances and disbursements out of the estate in any such proceedings shall
      be
      denied for any reason, payment of the same shall be secured by a lien on, and
      shall be paid out of, any and all distributions, dividends, monies, securities
      and other property which the holders of the Notes may be entitled to receive
      in
      such proceedings, whether in liquidation or under any plan of reorganization
      or
      arrangement or otherwise.

     

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

     

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

     

    
      
        
        

      

      
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    Section
      6.03.   Application
      of Monies Collected by Trustee.
      

     

    Any
      monies or property collected by the Trustee pursuant to this Article shall
      be
      applied in the order following, at the date or dates fixed by the Trustee for
      the distribution of such monies or property, upon presentation of the several
      Notes and either (i) stamping thereon the payment, if only partially paid,
      or
      (ii) upon surrender thereof, if fully paid.

     

    FIRST:
      To
      the payment of all amounts due the Trustee under Section
      7.06
      in
      connection with the Trustee’s performance of its duties under this
      Indenture, the Security Documents or the Notes, including the collection or
      distribution of such amounts held or realized or in connection with expenses
      incurred in enforcing its remedies under the Security Documents and preserving
      the Collateral and all amounts for which the Trustee is entitled to
      indemnification under the Security Documents;

     

    SECOND:
      In case the principal of the outstanding Notes shall not have become due and
      be
      unpaid, to the payment of Interest on the Notes in default in the order of
      the
      maturity of the installments of such Interest, with interest (to the extent
      that
      such interest has been collected by the Trustee) upon the overdue installments
      of Interest at the rate specified in the Notes, such payments to be made ratably
      to the Persons entitled thereto;

     

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

     

    FOURTH:
      To the payment of the remainder, if any, to the Company or the Guarantors or
      to
      whomever may be lawfully entitled thereto.

     

    Section
      6.04.   Proceedings
      by Noteholder.
      

     

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

     

    
      
        
        

      

      
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    Notwithstanding
      any other provision of this Indenture and any provision of any Note, the right
      of any holder of any Note to receive payment of the principal of (including
      the
      purchase price upon an Offer to Purchase or the repurchase price, in each case
      pursuant to Article
      3)
      and
      accrued Interest on such Note, on or after the respective due dates expressed
      in
      such Note or in the event of an Offer to Purchase or a repurchase, as the case
      may be, or to institute suit for the enforcement of any such payment on or
      after
      such respective dates against the Company shall not be impaired or affected
      without the consent of such holder.

     

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

     

    Section
      6.05.   Proceedings
      by Trustee.
      

     

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

     

    Section
      6.06.   Remedies
      Cumulative and Continuing.
      

     

    Except
      as
      provided in Section
      2.06,
      all
      powers and remedies given by this Article to the Trustee or to the Noteholders
      shall, to the extent permitted by law, be deemed cumulative and not exclusive
      of
      any thereof or of any other powers and remedies available to the Trustee or
      the
      holders of the Notes, by judicial proceedings or otherwise, to enforce the
      performance or observance of the covenants and agreements contained in this
      Indenture, and no delay or omission of the Trustee or of any holder of any
      of
      the Notes to exercise any right or power accruing upon any Default or Event
      of
      Default occurring and continuing as aforesaid shall impair any such right or
      power, or shall be construed to be a waiver of any such default or any
      acquiescence therein, and, subject to the provisions of Section
      6.04,
      every
      power and remedy given by this Article or by law to the Trustee or to the
      Noteholders may be exercised from time to time, and as often as shall be deemed
      expedient, by the Trustee or by the Noteholders.

     

    
      
        
        

      

      
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    Section
      6.07.   Direction
      of Proceedings and Waiver of Defaults by Majority of Holders
      of the Combined Notes.
      

     

    The
      holders of a majority in aggregate principal amount of the Combined Notes at
      the
      time outstanding determined in accordance with Section
      12.04
      shall
      have the right to direct the time, method and place of conducting any proceeding
      for any remedy available to the Trustee or exercising any trust or power
      conferred on the Trustee; provided
      that (a)
      such direction shall not be in conflict with any rule of law or with this
      Indenture, (b) the Trustee may take any other action which is not inconsistent
      with such direction, (c) the Trustee may decline to take any action that would
      benefit some Noteholder to the detriment of other Noteholders and (d) the
      Trustee may decline to take any action that would involve the Trustee in
      personal liability. Subject to Section
      6.01,
      the
      holders of a majority in aggregate principal amount of the Combined Notes at
      the
      time outstanding determined in accordance with Section
      12.04
      may, on
      behalf of the holders of all of the Notes, waive any past Default or Event
      of
      Default hereunder and its consequences except (i) a default in the payment
      of
      Interest on, or the principal of, the Notes, (ii) a failure by the Company
      to
      convert any Notes into Common Stock, (iii) a
      default
      in the payment of the purchase price pursuant to Section
      3.02,
      or
      (iv) a
      default in respect of a covenant or provisions hereof which under Article
      8
      cannot
      be modified or amended without the consent of the holders of each or all of
      the
      Notes then outstanding or affected thereby. Upon any such waiver, the Company,
      the Trustee and the holders of the Notes shall be restored to their former
      positions and rights hereunder; but no such waiver shall extend to any
      subsequent or other Default or Event of Default or impair any right consequent
      thereon. Whenever any Default or Event of Default hereunder shall have been
      waived as permitted by this Section, said Default or Event of Default shall
      for
      all purposes of the Notes and this Indenture be deemed to have been cured and
      to
      be not continuing; but no such waiver shall extend to any subsequent or other
      Default or Event of Default or impair any right consequent thereon.

     

    Section
      6.08.   Notice
      of Default.
      

     

    If
      the
      Trustee receives notice of any Default or Event of Default from the Company,
      the
      Trustee shall mail to all Noteholders, as the names and addresses of such
      holders appear upon the Security Register, Notice of the Default or Event of
      Default within 90 days after it occurs, unless the Default or Event of Default
      shall have been cured or waived before the giving of such notice; provided
      that
      except in the case of default in the payment of the principal of or Interest
      on
      any of the Notes, the Trustee shall be protected in withholding such notice
      if
      and so long as a trust committee of directors and/or Responsible Officers of
      the
      Trustee in good faith determines that the withholding of such notice is in
      the
      interests of the Noteholders.

     

    Section
      6.09.   Undertaking
      to Pay Costs.
      

     

    All
      parties to this Indenture agree, and each holder of any Note by his acceptance
      thereof shall be deemed to have agreed, that any court may, in its discretion,
      require, in any suit for the enforcement of any right or remedy under this
      Indenture, or in any suit against the Trustee for any action taken or omitted
      by
      it as Trustee, the filing by any party litigant in such suit of an undertaking
      to pay the costs of such suit and that such court may in its discretion assess
      reasonable costs, including reasonable attorneys’ fees and expenses, against any
      party litigant in such suit, having due regard to the merits and good faith
      of
      the claims or defenses made by such party litigant; provided
      that the
      provisions of this Section (to the extent permitted by law) shall not apply
      to
      any suit instituted by the Trustee, to any suit instituted by any Noteholder,
      or
      group of Noteholders, holding in the aggregate more than ten percent in
      principal amount of the Notes at the time outstanding determined in accordance
      with Section
      12.04,
      or to
      any suit instituted by any Noteholder for the enforcement of the payment of
      the
      principal of or Interest on any Note on or after the due date expressed in
      such
      Note or to any suit for the enforcement of the right to convert any Note in
      accordance with the provisions of Article
      14.

     

    
      
        
        

      

      
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    ARTICLE
      7

     

    THE
      TRUSTEE

     

    Section
      7.01.   Duties
      and Responsibilities of Trustee.
      

     

    The
      Trustee, prior to the occurrence of an Event of Default and after the curing
      of
      all Events of Default which may have occurred, undertakes to perform such duties
      and only such duties as are specifically set forth in this Indenture. In case
      an
      Event of Default has occurred (which has not been cured or waived), the Trustee
      shall exercise such of the rights and powers vested in it by this Indenture,
      and
      use the same degree of care and skill in their exercise, as a prudent person
      would exercise or use under the circumstances in the conduct of such person’s
      own affairs.

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
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    (b) the
      Trustee shall not be liable for any error of judgment made in good faith by
      a
      Responsible Officer or Officers of the Trustee, unless the Trustee was negligent
      in ascertaining the pertinent facts;

     

    (c) the
      Trustee shall not be liable with respect to any action taken or omitted to
      be
      taken by it in good faith in accordance with the written direction of the
      holders of not less than a majority in principal amount of the Combined Notes
      at
      the time outstanding determined as provided in Section
      12.04
      relating
      to the time, method and place of conducting any proceeding for any remedy
      available to the Trustee, or exercising any trust or power conferred upon the
      Trustee under this Indenture;

     

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

     

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

     

    (f) if
      any
      party fails to deliver a notice relating to an event the fact of which, pursuant
      to this Indenture, requires notice to be sent to the Trustee, the Trustee may
      conclusively rely on its failure to receive such notice as reason to act as
      if
      no such event occurred; and

     

    (g) the
      Trustee shall not be deemed to have knowledge of any Default or Event of Default
      hereunder unless a Responsible Officer of the Trustee at the Corporate Trust
      Office shall have been notified in writing of such Default or Event of Default
      by the Company or the holders of at least 25% in aggregate principal amount
      of
      the Combined Notes.

     

    None
      of
      the provisions contained in this Indenture shall require the Trustee to expend
      or risk its own funds or otherwise incur personal financial liability in the
      performance of any of its duties or in the exercise of any of its rights or
      powers, if there is reasonable ground for believing that the repayment of such
      funds or adequate indemnity against such risk or liability is not reasonably
      assured to it.

     

    Section
      7.02.   Rights
      of Trustee.
      

     

    (a) The
      Trustee may conclusively rely and shall be protected in acting upon any
      resolution, certificate, statement, instrument, opinion, report, notice,
      request, consent, order, bond, debenture, note, coupon or other paper or
      document (whether in its original or facsimile form) believed by it in good
      faith to be genuine and to have been signed or presented by the proper party
      or
      parties.

     

    (b) Any
      request, direction, order or demand of the Company mentioned herein shall be
      sufficiently evidenced by an Officers’ Certificate (unless other evidence in
      respect thereof be herein specifically prescribed); and any resolution of the
      Board of Directors may be evidenced to the Trustee by a copy thereof certified
      by the Secretary or an Assistant Secretary of the Company; the Trustee shall
      be
      entitled to accept such certificate as sufficient and conclusive evidence of
      the
      fulfillment of the applicable conditions precedent, in which event it shall
      be
      conclusive and binding on the Noteholders.

     

    
      
        
        

      

      
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    (c) The
      Trustee may consult with counsel of its own selection and any advice or Opinion
      of Counsel shall be full and complete authorization and protection in respect
      of
      any action taken or omitted by it hereunder in good faith and in accordance
      with
      such advice or Opinion of Counsel; the Trustee shall be entitled to accept
      such
      opinion as sufficient and conclusive evidence of the fulfillment of the
      applicable conditions precedent, in which event it shall be conclusive and
      binding on the Noteholders.

     

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

     

    (e) The
      Trustee shall not be bound to make any investigation into the facts or matters
      stated in any resolution, certificate, statement, instrument, opinion, report,
      notice, request, direction, consent, order, bond, debenture or other paper
      or
      document, but the Trustee may make such further inquiry or investigation into
      such facts or matters as it may see fit, and, if the Trustee shall determine
      to
      make such further inquiry or investigation, it shall be entitled to examine
      the
      books, records and premises of the Company, personally or by agent or attorney
      at the expense of the Company, and shall incur no liability of any kind by
      reason of such inquiry or investigation.

     

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

     

    (g) The
      Trustee shall not be liable for any action taken, suffered or omitted to be
      taken by it in good faith and reasonably believed by it to be authorized or
      within the discretion or rights or powers conferred upon it by this
      Indenture.

     

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

     

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

     

    
      
        
        

      

      
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    (j) Any
      permissive right or authority granted to the Trustee shall not be construed
      as a
      mandatory duty.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Notwithstanding
      any provision herein to the contrary, the Trustee shall not be obligated to
      take
      any action with respect to an Event of Default pursuant to Sections 6.01(k),
      6.01(m)
      and
6.01(o),
      unless
      it has been first notified to do so in writing by the Holders of at least 25%
      in
      aggregate principal amount of the outstanding Combined Notes.

     

    
      
        
        

      

      
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    Section
      7.03.   No
      Responsibility for Recitals, Etc.
      

     

    The
      recitals contained herein and in the Notes (except in the Trustee’s certificate
      of authentication) shall be taken as the statements of the Company, and the
      Trustee assumes no responsibility for the correctness of the same. The Trustee
      makes no representations as to the validity or sufficiency of this Indenture
      or
      of the Notes. The Trustee shall not be accountable for the use or application
      by
      the Company of any Notes or the proceeds of any Notes authenticated and
      delivered by the Trustee in conformity with the provisions of this
      Indenture.

     

    Section
      7.04.   Trustee,
      Paying Agents, Conversion Agents, Collateral Agents, Common Depositary or
      Registrar May Own Notes.
      

     

    The
      Trustee, any paying agent, any conversion agent, Collateral Agent, Common
      Depositary or Registrar, in its individual or any other capacity, may become
      the
      owner or pledgee of Notes with the same rights it would have if it were not
      Trustee, paying agent, conversion agent, Collateral Agent, Common Depositary
      or
      Registrar.

     

    Section
      7.05.   Monies
      to Be Held in Trust.
      

     

    Subject
      to the provisions of Section
      11.04,
      all
      monies received by the Trustee shall, until used or applied as herein provided,
      be held in trust for the purposes for which they were received. Money held
      by
      the Trustee in trust hereunder need not be segregated from other funds except
      to
      the extent required by law. The Trustee shall be under no liability for interest
      on any money received by it hereunder except as may be agreed in writing from
      time to time by the Company and the Trustee.

     

    Section
      7.06.   Compensation
      and Expenses of Trustee.
      

     

    The
      Company and each Guarantor, jointly and severally, covenants and agrees to
      pay
      to the Trustee from time to time, and the Trustee shall be entitled to, such
      compensation for all services rendered by it hereunder in any capacity (which
      shall not be limited by any provision of law in regard to the compensation
      of a
      trustee of an express trust) as mutually agreed to from time to time in writing
      between the Company and the Trustee, and the Company and each Guarantor, jointly
      and severally, will pay or reimburse the Trustee upon its request for all
      expenses, disbursements and advances incurred or made by the Trustee in
      accordance with any of the provisions of this Indenture and the Security
      Documents (including the compensation and the expenses and disbursements of
      its
      counsel and of all Persons not regularly in its employ), except any such
      expense, disbursement or advance as shall be determined to have been caused
      by
      its own gross negligence or willful misconduct. The Company and each Guarantor,
      jointly and severally, also covenants to indemnify the Trustee and any
      predecessor Trustee (or any officer, director or employee of the Trustee) in
      any
      capacity under this Indenture and the Security Documents (which, for the
      avoidance of doubt, includes its duties as Collateral Agent, paying agent,
      conversion agent, Common Depositary or Registrar) and its agents and any
      authenticating agent for, and to hold them harmless against, any and all loss,
      liability, damage, claim or expense, including taxes (other than taxes based
      on
      the income of the Trustee) incurred without gross negligence, bad faith or
      willful misconduct on the part of the Trustee or such officers, directors,
      employees and agents or authenticating agent, as the case may be, and arising
      out of or in connection with the acceptance or administration of this trust
      or
      in any other capacity hereunder, including the costs and expenses of defending
      themselves against any claim (whether asserted by the Company, any holder or
      any
      other Person) of liability in the premises. The obligations of the Company
      under
      this Section to compensate or indemnify the Trustee and to pay or reimburse
      the
      Trustee for expenses, disbursements and advances shall be secured by a lien
      prior to that of the Notes upon all property and funds held or collected by
      the
      Trustee as such, except funds held in trust for the benefit of the holders
      of
      particular Notes. The obligation of the Company under this Section shall survive
      the satisfaction and discharge of this Indenture pursuant to Article
      11
      hereof,
      the termination of this Indenture and the Security Documents, the resignation
      or
      removal of the Trustee or payment in full of the Notes through the expiration
      of
      the applicable statute of limitations.

     

    
      
        
        

      

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

     

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

     

    Section
      7.07.   Eligibility
      of Trustee.
      

     

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

     

    Section
      7.08.   Resignation
      or Removal of Trustee.

     

    (a) The
      Trustee may at any time resign by giving written notice of such resignation
      to
      the Company and to the holders of Notes. Upon receiving such notice of
      resignation, the Company shall promptly appoint a successor trustee by written
      instrument, in duplicate, executed by order of the Board of Directors, one
      copy
      of which instrument shall be delivered to the resigning Trustee and one copy
      to
      the successor trustee. If no successor trustee shall have been so appointed
      and
      have accepted appointment sixty (60) days after the mailing of such notice
      of
      resignation to the Noteholders, the resigning Trustee may, upon ten (10)
      Business Days’ notice to the Company and the Combined Noteholders, petition, at
      the expense of the Company, any court of competent jurisdiction for the
      appointment of a successor trustee, or, any Noteholder who has been a bona
      fide
      holder of a Note or Notes for at least six (6) months may, subject to the
      provisions of Section
      6.09,
      on
      behalf of himself and all others similarly situated, petition any such court
      for
      the appointment of a successor trustee. Such court may thereupon, after such
      notice, if any, as it may deem proper and prescribe, appoint a successor
      trustee.

     

    
      
        
        

      

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

     

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

     

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

     

    then,
      in
      any such case, the Company may remove the Trustee and appoint a successor
      trustee by written instrument, in duplicate, executed by order of the Board
      of
      Directors, one copy of which instrument shall be delivered to the Trustee so
      removed and one copy to the successor trustee, or, subject to the provisions
      of
Section
      6.09,
      any
      Noteholder who has been a bona fide holder of a Note or Notes for at least
      six
      (6) months may, on behalf of himself and all others similarly situated, petition
      any court of competent jurisdiction for the removal of the Trustee and the
      appointment of a successor trustee; provided
      that if
      no successor Trustee shall have been appointed and have accepted appointment
      sixty (60) days after either the Company or such Noteholder has removed the
      Trustee, or the Trustee resigns, the Trustee so removed may petition, at the
      expense of the Company, any court of competent jurisdiction for an appointment
      of a successor trustee. Such court may thereupon, after such notice, if any,
      as
      it may deem proper and prescribe, remove the Trustee and appoint a successor
      trustee.

     

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

     

    (d) Any
      resignation or removal of the Trustee and appointment of a successor trustee
      pursuant to any of the provisions of this Section shall become effective upon
      acceptance of appointment by the successor trustee as provided in Section
      7.09.

     

    (e) Notwithstanding
      the replacement of the Trustee pursuant to this Section, the Company’s
      obligations under Section
      7.06
      shall
      continue for the benefit of the retiring Trustee.

     

    Section
      7.09.   Acceptance
      by Successor Trustee.
      

     

    Any
      successor trustee appointed as provided in Section
      7.08
      shall
      execute, acknowledge and deliver to the Company and to its predecessor trustee
      an instrument accepting such appointment hereunder, and thereupon the
      resignation or removal of the predecessor trustee shall become effective and
      such successor trustee, without any further act, deed or conveyance, shall
      become vested with all the rights, powers, duties and obligations of its
      predecessor hereunder, with like effect as if originally named as trustee
      herein; but, nevertheless, on the written request of the Company or of the
      successor trustee, the trustee ceasing to act shall, upon payment of any amount
      then due it pursuant to the provisions of Section
      7.06,
      execute
      and deliver an instrument transferring to such successor trustee all the rights
      and powers of the trustee so ceasing to act. Upon request of any such successor
      trustee, the Company shall execute any and all instruments in writing for more
      fully and certainly vesting in and confirming to such successor trustee all
      such
      rights and powers. Any trustee ceasing to act shall, nevertheless, retain a
      lien
      upon all property and funds held or collected by such trustee as such, except
      for funds held in trust for the benefit of holders of particular Notes, to
      secure any amounts then due it pursuant to the provisions of Section
      7.06.

     

    
      
        
        

      

      
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    No
      successor trustee shall accept appointment as provided in this Section unless,
      at the time of such acceptance, such successor trustee shall be eligible under
      the provisions of Section
      7.07.

     

    Upon
      acceptance of appointment by a successor trustee as provided in this Section,
      the Company (or the former trustee, at the written direction of the Company)
      shall mail or cause to be mailed notice of the succession of such trustee
      hereunder to the holders of Notes at their addresses as they shall appear on
      the
      Security Register. If the Company fails to mail such notice within ten (10)
      days
      after acceptance of appointment by the successor trustee, the successor trustee
      shall cause such notice to be mailed at the expense of the Company.

     

    Section
      7.10.   Succession
      by Merger.
      

     

    Any
      corporation into which the Trustee may be merged or converted or with which
      it
      may be consolidated, or any corporation resulting from any merger, conversion
      or
      consolidation to which the Trustee shall be a party, or any corporation
      succeeding to all or substantially all of the corporate trust business of the
      Trustee (including any trust created by this Indenture), shall be the successor
      to the Trustee hereunder without the execution or filing of any paper or any
      further act on the part of any of the parties hereto, provided
      that in
      the case of any corporation succeeding to all or substantially all of the
      corporate trust business of the Trustee, such corporation shall be eligible
      under the provisions of Section
      7.09.
      The
      Trustee shall provide the Company with a written notice within thirty (30)
      days
      after the closing of such merger, conversion or consolidation.

     

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

     

    
      
        
        

      

      
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    Section
      7.11.   Trustee’s
      Application for Instructions from the Company.
      

     

    Any
      application by the Trustee for written instructions from the Company (other
      than
      with regard to any action proposed to be taken or omitted to be taken by the
      Trustee that affects the rights of the holders of the Notes under this
      Indenture) may, at the option of the Trustee, set forth in writing any action
      proposed to be taken or omitted by the Trustee under this Indenture and the
      date
      on and/or after which such action shall be taken or such omission shall be
      effective. The Trustee shall not be liable for any action taken by, or omission
      of, the Trustee in accordance with a proposal included in such application
      on or
      after the date specified in such application (which date shall not be less
      than
      three (3) Business Days after the date any Officer of the Company actually
      receives such application, unless any such Officer shall have consented in
      writing to any earlier date) unless prior to taking any such action (or the
      effective date in the case of an omission), the Trustee shall have received
      written instructions in response to such application specifying the action
      to be
      taken or omitted.

     

    Section
      7.12.   Reports
      by Trustee.
      

     

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

     

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

     

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

     

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

     

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

     

    Section
      7.13.   Certain
      Provisions.

     

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

     

    
      
        
        

      

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

     

    ARTICLE
      8

     

    SUPPLEMENTAL
      INDENTURES

     

    Section
      8.01.   Supplemental
      Indentures Without Consent of Noteholders.
      

     

    The
      Company, when authorized by the resolutions of the Board of Directors, and
      the
      Trustee may, from time to time, and at any time enter into an indenture or
      indentures supplemental hereto for one or more of the following
      purposes:

     

    (a) make
      provision with respect to the conversion rights of the holders of Notes pursuant
      to the requirements of Section
      14.05
      and
      the
      purchase obligations of the Company pursuant to the requirements of Section
      3.02.;

     

    (b) to
      convey, transfer, assign, mortgage or pledge to the Trustee as security for
      the
      Notes, any property or assets;

     

    (c) to
      evidence the succession of another Person to the Company, or successive
      successions, and the assumption by the successor Person of the covenants,
      agreements and obligations of the Company pursuant to Article
      11;

     

    (d) to
      add to
      the covenants of the Company such further covenants, restrictions or conditions
      as the Board of Directors and the Trustee shall consider to be for the benefit
      of the holders of Notes, and to make the occurrence, or the occurrence and
      continuance, of a default in any such additional covenants, restrictions or
      conditions a Default or an Event of Default permitting the enforcement of all
      or
      any of the several remedies provided in this Indenture as herein set forth;
      provided
      that, in
      respect of any such additional covenant, restriction or condition, such
      supplemental indenture may provide for a particular period of grace after
      Default (which period may be shorter or longer than that allowed in the case
      of
      other Defaults) or may provide for an immediate enforcement upon such default
      or
      may limit the remedies available to the Trustee upon such Default;

     

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

      

    

     

    (e) to
      provide for the issuance under this Indenture of Notes in coupon form (including
      Notes registrable as to principal only) and to provide for exchangeability
      of
      such Notes with the Notes issued hereunder in fully registered form and to
      make
      all appropriate changes for such purpose;

     

    (f) to
      cure
      any ambiguity or to correct or supplement any provision contained herein or
      in
      any supplemental indenture that may be defective or inconsistent with any other
      provision contained herein or in any supplemental indenture, or to make such
      other provisions in regard to matters or questions arising under this Indenture
      that shall not materially adversely affect the interests of the holders of
      the
      Notes;

     

    (g) to
      evidence and provide for the acceptance of appointment hereunder by a successor
      Trustee with respect to the Notes;

     

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

     

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

     

    (j) to
      increase, from time to time, the per annum interest rate on the Notes for any
      period.

     

    Upon
      the
      written request of the Company, accompanied by a copy of the resolutions of
      the
      Board of Directors certified by its Secretary or Assistant Secretary authorizing
      the execution of any supplemental indenture (in form satisfactory to the
      Trustee), the Trustee is hereby authorized to join with the Company in the
      execution of any such supplemental indenture, to make any further appropriate
      agreements and stipulations that may be therein contained and to accept the
      conveyance, transfer and assignment of any property thereunder; provided
      that the
      Trustee shall not be obligated to, but may in its discretion, enter into any
      supplemental indenture that affects the Trustee’s own rights, duties or
      immunities under this Indenture or otherwise.

     

    Any
      supplemental indenture authorized by the provisions of this Section may be
      executed by the Company and the Trustee without the consent of the holders
      of
      any of the Notes at the time outstanding, notwithstanding any of the provisions
      of Section
      8.02.

     

    Section
      8.02.   Supplemental
      Indenture with Consent of Noteholders.
      

     

    With
      the
      consent (evidenced as provided in Article
      12)
      of the
      holders of a majority in aggregate principal amount of the Combined Notes at
      the
      time outstanding, the Company, when authorized by the resolutions of the Board
      of Directors, and the Trustee may, from time to time and at any time, enter
      into
      an indenture or indentures supplemental hereto for the purpose of adding any
      provisions to or changing in any manner or eliminating any of the provisions
      of
      this Indenture or any supplemental indenture or of modifying in any manner
      the
      rights of the holders of the Notes; provided
      that no
      such supplemental indenture shall:

     

    (a) extend
      the fixed maturity of any Note; 

     

    
      
        
        

      

      
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    (b) reduce
      the rate or extend the time of payment of Interest thereon; 

     

    (c) reduce
      the principal amount thereof or reduce any amount payable on redemption or
      repurchase thereof; 

     

    (d) change
      the obligation of the Company to repurchase any Note upon the happening of
      a
      Termination of Trading in a manner adverse to the holders of Notes;

     

    (e) impair
      the right of any Noteholder to institute suit for the payment thereof;

     

    (f) make
      the
      principal thereof or Interest thereon payable in any coin or currency other
      than
      that provided in the Notes; 

     

    (g) impair
      the right to convert the Notes into Common Stock or reduce the number of shares
      of Common Stock or any other property receivable by a Noteholder upon conversion
      subject to the terms set forth herein, including Section
      14.05,
      in each
      case, without the consent of the holder of each Note so affected; 

     

    (h) modify
      any of the provisions of this Section or Section
      6.07,
      except
      to increase any such percentage or to provide that certain other provisions
      of
      this Indenture cannot be modified or waived without the consent of the holder
      of
      each Note so affected; 

     

    (i) change
      any obligation of the Company to maintain an office or agency in the places
      and
      for the purposes set forth in Section
      4.02;
      

     

    (j) reduce
      the quorum or voting requirements set forth in Article
      13;
      

     

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

     

    (l) release
      the security interest granted in favor of the holders of the Notes in the
      Collateral other than pursuant to the terms of the Security
      Documents;

     

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

     

    (n) reduce
      the amount payable as Additional Amounts;

     

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

     

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

     

    
      
        
        

      

      
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    (q) make
      any
      change in any Guarantee that would adversely affect the holders; or

     

    (r) reduce
      the aforesaid percentage of Combined Notes, the holders of which are required
      to
      consent to any such supplemental indenture, 

     

    in
      each
      case, without the consent of the holders of all Notes then
      outstanding.

     

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

     

    It
      shall
      not be necessary for the consent of the Combined Noteholders under this Section
      to approve the particular form of any proposed supplemental indenture, but
      it
      shall be sufficient if such consent shall approve the substance
      thereof.

     

    Section
      8.03.   Effect
      of Supplemental Indenture.
      

     

    Upon
      the
      execution of any supplemental indenture pursuant to the provisions of this
      Article, this Indenture shall be and shall be deemed to be modified and amended
      in accordance therewith and the respective rights, limitation of rights,
      obligations, duties and immunities under this Indenture of the Trustee, the
      Company and the holders of the Combined Notes shall thereafter be determined,
      exercised and enforced hereunder, subject in all respects to such modifications
      and amendments and all the terms and conditions of any such supplemental
      indenture shall be and shall be deemed to be part of the terms and conditions
      of
      this Indenture for any and all purposes.

     

    Section
      8.04.   Notation
      on Notes.
      

     

    Notes
      authenticated and delivered after the execution of any supplemental indenture
      pursuant to the provisions of this Article may bear a notation in form approved
      by the Trustee as to any matter provided for in such supplemental indenture.
      If
      the Company or the Trustee shall so determine, new Notes so modified as to
      conform, in the opinion of the Trustee and the Board of Directors, to any
      modification of this Indenture contained in any such supplemental indenture
      may,
      at the Company’s expense, be prepared and executed by the Company, authenticated
      by the Trustee (or an authenticating agent duly appointed by the Trustee
      pursuant to Section
      15.10)
      and
      delivered in exchange for the Notes then outstanding, upon surrender of such
      Notes then outstanding.

     

    Section
      8.05.   Evidence
      of Compliance of Supplemental Indenture to Be Furnished to
      Trustee.
      

     

    Prior
      to
      entering into any supplemental indenture, the Trustee shall be provided with,
      in
      addition to the documents required by Section
      15.05,
      an
      Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any
      supplemental indenture executed pursuant hereto complies with the requirements
      of this Article and is otherwise authorized or permitted by this
      Indenture.

     

    
      
        
        

      

      
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    ARTICLE
      9

     

    GUARANTEES

     

    Section
      9.01.   Guarantee.

     

    Subject
      to this Article
      9,
      each
      Guarantor hereby unconditionally guarantees to each holder of a Note
      authenticated and delivered by the Trustee and to the Trustee and its successors
      and assigns: (a) the due and punctual payment of the principal of, premium,
      if
      any, and interest on the Notes, subject to any applicable grace period, whether
      at Stated Maturity, by acceleration, redemption or otherwise, the due and
      punctual payment of interest on the overdue principal of and premium, if any,
      and, to the extent permitted by law, interest, and the due and punctual
      performance of all other obligations of the Company to the holders or the
      Trustee under this Indenture or any other agreement with or for the benefit
      of
      the holders or the Trustee, all in accordance with the terms hereof and thereof;
      and (b) in case of any extension of time of payment or renewal of any Notes
      or
      any of such other obligations, that same shall be promptly paid in full when
      due
      or performed in accordance with the terms of the extension or renewal, whether
      at Stated Maturity, by acceleration pursuant to Section
      6.01,
      redemption or otherwise. Failing payment when due of any amount so guaranteed
      or
      any performance so guaranteed for whatever reason, the Guarantors shall be
      jointly and severally obligated to pay the same immediately. Each Guarantor
      agrees that this is a guarantee of payment and not a guarantee of
      collection.

     

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

     

    
      
        
        

      

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

     

    Each
      Guarantor agrees that it shall not be entitled to any right of subrogation
      in
      relation to the holders in respect of any obligations guaranteed hereby until
      payment in full of all obligations guaranteed hereby. Each Guarantor further
      agrees that, as between the Guarantors, on the one hand, and the holders and
      the
      Trustee, on the other hand, (x) the maturity of the obligations guaranteed
      hereby may be accelerated as provided in Section
      6.01
      hereof
      for the purposes of this Guarantee, notwithstanding any stay, injunction or
      other prohibition preventing such acceleration in respect of the obligations
      guaranteed hereby and (y) in the event of any declaration of acceleration of
      such obligations as provided in Section
      6.01
      hereof,
      such obligations (whether or not due and payable) shall forthwith become due
      and
      payable by the Guarantors for the purpose of this Guarantee. The Guarantors
      shall have the right to seek contribution from any non-paying Guarantor so
      long
      as the exercise of such right does not impair the rights of the holders under
      the Guarantee.

     

    Section
      9.02.   Limitation
      on Guarantor Liability.

     

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

     

    
      
        
        

      

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

     

    Section
      9.03.   Execution
      and Delivery of Guarantee.

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

    ARTICLE
      10

     

    COLLATERAL
      AND SECURITY

     

    Section
      10.01.   Security
      Documents.

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

    (B) all
      proceeds of the Collateral applied under the Security Documents shall be
      allocated and distributed as set forth in Section
      6.03.

     

    Section
      10.02.   Future
      Guarantor Pledgors.

     

    (a) To
      the
      fullest extent permitted under applicable laws (including the laws of the PRC),
      the Company and AFC shall pledge and to cause each Future Guarantor to pledge
      the Capital Stock of any current or future Subsidiary (other than the Capital
      Stock of AFC already pledged under the Security Documents) in each case owned
      by
      the Company, AFC or such Future Guarantor, on a first priority basis (subject
      to
      Permitted Liens) in order to secure the obligations of the Company under the
      Notes and this Indenture and of such Future Guarantor under its Guarantee,
      and
      use its best efforts to obtain any necessary Governmental Approvals and take
      all
      other actions necessary thereto.

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    Section
      10.03.   Recording
      and Opinions.

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

    Section
      10.04.   Release
      of Collateral.

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      10.07.   Termination
      of Security Interest.

     

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

     

    ARTICLE
      11

     

    SATISFACTION
      AND DISCHARGE OF INDENTURE

     

    Section
      11.01.   Discharge
      of Indenture.
      

     

    When
      (a)
      the Company shall deliver to the Trustee for cancellation all Notes theretofore
      authenticated (other than any Notes that have been mutilated, destroyed, lost
      or
      stolen and in lieu of or in substitution for which other Notes shall have been
      authenticated and delivered) and not theretofore canceled, or (b) all the Notes
      not theretofore canceled or delivered to the Trustee for cancellation shall
      have
      become due and payable, or are by their terms to become due and payable within
      three years or are to be called for redemption within three years under
      arrangements satisfactory to the Trustee for the giving of notice of redemption,
      and the Company shall deposit with the Trustee, in trust, funds sufficient
      to
      pay at maturity or upon redemption of all of the Notes (other than any Notes
      that shall have been mutilated, destroyed, lost or stolen and in lieu of or
      in
      substitution for which other Notes shall have been authenticated and delivered)
      not theretofore canceled or delivered to the Trustee for cancellation, including
      principal and Interest due or to become due to such date of maturity or
      redemption date, as the case may be, accompanied by a verification report,
      as to
      the sufficiency of the deposited amount, from an independent certified
      accountant or other financial professional satisfactory to the Trustee, and
      if
      the Company shall also pay or cause to be paid all other sums payable hereunder
      by the Company, and in the case of either clause (a) or (b), no Default or
      Event
      of Default with respect to this Indenture or the Notes shall have occurred
      and
      be continuing on the date of such deposit or shall occur as a result of such
      deposit and such deposit shall not result in a breach or violation of, or
      constitute a default under, any other instrument or agreement to which the
      Company is a party or by which it is bound, then this Indenture shall cease
      to
      be of further effect (except as to (i) remaining rights of registration of
      transfer, substitution and exchange and conversion of Notes, (ii) rights
      hereunder of Noteholders to receive payments of principal of and Interest on
      the
      Notes and the other rights, duties and obligations of Noteholders, as
      beneficiaries hereof with respect to the amounts, if any, so deposited with
      the
      Trustee and (iii) the rights, obligations and immunities of the Trustee
      hereunder), and the Trustee, on written demand of the Company accompanied by
      an
      Officers’ Certificate and an Opinion of Counsel as required by Section
      15.05
      and at
      the cost and expense of the Company, shall execute proper instruments
      acknowledging satisfaction of and discharging this Indenture; the Company,
      however, hereby agrees to reimburse the Trustee for any costs or expenses
      thereafter incurred by the Trustee and to compensate the Trustee for any
      services thereafter rendered by the Trustee in connection with this Indenture
      or
      the Notes. The Trustee shall hold in trust money deposited with it pursuant
      to
      this Article. It shall apply the deposited money through the Paying Agent and
      in
      accordance with this Indenture to the payment of principal of and Interest
      on
      the Notes. 

     

    
      
        
        

      

      
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    Section
      11.02.   Deposited
      Monies to Be Held in Trust by Trustee.
      

     

    Subject
      to Section
      11.04,
      all
      monies deposited with the Trustee pursuant to Section
      11.01
      shall be
      held in trust for the sole benefit of the Noteholders, and such monies shall
      be
      applied by the Trustee to the payment, either directly or through any paying
      agent (including the Company if acting as its own paying agent), to the holders
      of the particular Notes for the payment or redemption of which such monies
      have
      been deposited with the Trustee of all sums due and to become due thereon for
      principal, premium, if any, and Interest.

     

    Section
      11.03.   Paying
      Agent to Repay Monies Held.
      

     

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

     

    
      
        
        

      

      
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    Section
      11.04.   Return
      of Unclaimed Monies.
      

     

    Subject
      to the requirements of applicable law, any monies deposited with or paid to
      the
      Trustee for payment of the principal or Interest on Notes and not applied but
      remaining unclaimed by the holders of Notes for two years (or such shorter
      period of time under applicable escheat law) after the date upon which the
      principal of or Interest on such Notes, as the case may be, shall have become
      due and payable, shall be repaid to the Company by the Trustee on demand and
      all
      liability of the Trustee shall thereupon cease with respect to such monies;
      and
      the holder of any of the Notes shall thereafter look only to the Company for
      any
      payment that such holder may be entitled to collect unless an applicable
      abandoned property law designates another Person.

     

    Section
      11.05.   Reinstatement.
      

     

    If
      the
      Trustee or the paying agent is unable to apply any money in accordance with
      Section
      11.02
      by
      reason of any order or judgment of any court or governmental authority
      enjoining, restraining or otherwise prohibiting such application, the Company’s
      obligations under this Indenture and the Notes shall be revived and reinstated
      as though no deposit had occurred pursuant to Section
      11.01
      until
      such time as the Trustee or the paying agent is permitted to apply all such
      money in accordance with Section
      11.02;
      provided
      that, if
      the Company makes any payment of Interest on or principal of any Note following
      the reinstatement of its obligations, the Company shall be subrogated to the
      rights of the holders of such Notes to receive such payment from the money
      held
      by the Trustee or paying agent.

     

    ARTICLE
      12

     

    THE
      NOTEHOLDERS

     

    Section
      12.01.   Action
      by Noteholders.
      

     

    Whenever
      in this Indenture it is provided that the holders of a specified percentage
      in
      aggregate principal amount of the Combined Notes may take any action (including
      the making of any demand or request, the giving of any notice, consent or waiver
      or the taking of any other action), the fact that, at the time of taking any
      such action, the holders of such specified percentage have joined therein may
      be
      evidenced (a) by any instrument or any number of instruments of similar tenor
      executed by Noteholders in person or by agent or proxy appointed in writing,
      or
      (b) by the record of the holders of Notes voting in favor thereof at any meeting
      of Combined Noteholders duly called and held in accordance with the provisions
      of Article
      13,
      or (c)
      by a combination of such instrument or instruments and any such record of such
      a
      meeting of Combined Noteholders. Whenever the Company or the Trustee solicits
      the taking of any action by the Combined Noteholders, the Company or the Trustee
      may fix in advance of such solicitation a date as the record date for
      determining holders entitled to take such action. The record date shall be
      not
      more than fifteen (15) days prior to the date of commencement of solicitation
      of
      such action.

     

    Section
      12.02.   Proof
      of Execution by Noteholders.
      

     

    Subject
      to the provisions of Sections
      7.01,
      7.02
      and
13.04,
      proof
      of the execution of any instrument by a Noteholder or its agent or proxy shall
      be sufficient if made in accordance with such reasonable rules and regulations
      as may be prescribed by the Trustee or in such manner as shall be satisfactory
      to the Trustee. The holding of Notes shall be proved by the registry of such
      Notes or by a certificate of the Registrar.

     

    
      
        
        

      

      
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    The
      record of any Combined Noteholders’ meeting shall be proved in the manner
      provided in Section
      13.05.

     

    Section
      12.03.   Who
      Are Deemed Absolute Owners.
      

     

    The
      Company, the Trustee, any paying agent, any conversion agent, any Collateral
      Agent, Common Depositary and any Registrar may deem the Person in whose name
      such Note shall be registered upon the Security Register to be, and may treat
      it
      as, the absolute owner of such Note (whether or not such Note shall be overdue
      and notwithstanding any notation of ownership or other writing thereon made
      by
      any Person other than the Company or any Registrar) for the purpose of receiving
      payment of or on account of the principal of and Interest on such Note, for
      conversion of such Note and for all other purposes; and neither the Company
      nor
      the Trustee nor any paying agent, Collateral Agent, Common Depositary,
      conversion agent nor any Registrar shall be affected by any notice to the
      contrary. All such payments so made to any holder for the time being, or upon
      such holder’s order, shall be valid and, to the extent of the sum or sums so
      paid, effectual to satisfy and discharge the liability for monies payable upon
      any such Note.

     

    Section
      12.04.   Company-owned
      Notes Disregarded.
      

     

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

     

    Section
      12.05.   Revocation
      of Consents; Future Holders Bound.
      

     

    At
      any
      time prior to (but not after) the evidencing to the Trustee, as provided in
      Section
      12.01,
      of the
      taking of any action by the holders of the percentage in aggregate principal
      amount of the Combined Notes specified in this Indenture in connection with
      such
      action, any holder of a Note or an Other Note which is shown by the evidence
      to
      be included in the Combined Notes the holders of which have consented to such
      action may, by filing written notice with the Trustee at its Corporate Trust
      Office and upon proof of holding as provided in Section
      12.02,
      revoke
      such action so far as concerns such Note or Other Note. Except as aforesaid,
      any
      such action taken by the holder of any Note or Other Note shall be conclusive
      and binding upon such holder and upon all future holders and owners of such
      Note
      or Other Note and of any Notes or Other Notes issued in exchange or substitution
      therefor, irrespective of whether any notation in regard thereto is made upon
      such Note or Other Note or any Note or Other Notes issued in exchange or
      substitution therefor.

     

    
      
        
        

      

      
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    ARTICLE
      13

     

    MEETINGS
      OF NOTEHOLDERS

     

    Section
      13.01.   Purpose
      of Meetings.
      

     

    A
      meeting
      of Combined Noteholders may be called at any time and from time to time pursuant
      to the provisions of this Article for any of the following
      purposes:

     

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

     

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

     

    (c) to
      consent to the execution of an indenture or indentures supplemental hereto
      pursuant to the provisions of Section
      8.02;
      or

     

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

     

    Section
      13.02.   Call
      of Meetings by Company or Noteholders.
      

     

    In
      case
      at any time the Company, pursuant to a resolution of its Board of Directors,
      or
      the holders of at least twenty-five percent (25%) in aggregate principal amount
      of the Combined Notes then outstanding, shall have requested the Trustee to
      call
      a meeting of Combined Noteholders, by written request setting forth in
      reasonable detail the action proposed to be taken at the meeting, and the
      Trustee shall not have mailed the notice of such meeting within twenty (20)
      days
      after receipt of such request, then the Company or such Combined Noteholders
      may
      determine the time and the place for such meeting and may call such meeting
      to
      take any action authorized in Section
      13.01
      by
      mailing notice a notice of meeting. Notice of every meeting of the Combined
      Noteholders, setting forth the time and place of such meeting and in general
      terms the action proposed to be taken at such meeting and the establishment
      of
      any record date pursuant to Section
      12.01,
      shall
      be mailed to holders of Combined Notes at their addresses as they shall appear
      on the Security Register. Such notice shall also be mailed to the Company.
      Such
      notices shall be mailed not less than twenty (20) nor more than ninety (90)
      days
      prior to the date fixed for the meeting.

     

    
      
        
        

      

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

     

    Section
      13.03.   Qualifications
      for Voting.
      

     

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

     

    Section
      13.04.   Regulations.
      

     

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

     

    The
      Company or the Combined Noteholders calling the meeting, as the case may be,
      shall, by an instrument in writing, appoint a temporary chairman of the meeting.
      A permanent chairman and a permanent secretary of the meeting shall be elected
      by vote of the holders of a majority in principal amount of the Combined Notes
      represented at the meeting and entitled to vote at the meeting.

     

    Subject
      to the provisions of Section
      12.04,
      at any
      meeting each Noteholder or proxyholder shall be entitled to one vote for each
      $100,000 principal amount of Notes or Other Notes held or represented by him;
      provided
      that no
      vote shall be cast or counted at any meeting in respect of any Note or Other
      Note challenged as not outstanding and ruled by the chairman of the meeting
      to
      be not outstanding. The chairman of the meeting shall have no right to vote
      other than by virtue of Notes or Other Notes held by him or instruments in
      writing as aforesaid duly designating him as the proxy to vote on behalf of
      other Noteholders or Other Noteholders. Any meeting of Combined Noteholders
      duly
      called pursuant to the provisions of Section
      13.02
      may be
      adjourned from time to time by the holders of a majority of the aggregate
      principal amount of the Combined Notes represented at the meeting, whether
      or
      not constituting a majority of the aggregate principal amount of the Combined
      Notes outstanding, the latter of which shall constitute a quorum, and the
      meeting may be held as so adjourned without further notice.

     

    Section
      13.05.   Voting.
      

     

    The
      vote
      upon any resolution submitted to any meeting of the Combined Noteholders shall
      be by written ballot on which shall be subscribed the signatures of the holders
      of Notes or Other Notes or of their representatives by proxy and the outstanding
      principal amount of the Notes or Other Notes held or represented by them. The
      permanent chairman of the meeting shall appoint two inspectors of votes who
      shall count all votes cast at the meeting for or against any resolution and
      who
      shall make and file with the secretary of the meeting their verified written
      reports in duplicate of all votes cast at the meeting. A record in duplicate
      of
      the proceedings of each meeting of the Combined Noteholders shall be prepared
      by
      the secretary of the meeting, and there shall be attached to said record the
      original reports of the inspectors of votes on any vote by ballot taken thereat
      and affidavits by one or more persons having knowledge of the facts setting
      forth a copy of the notice of the meeting and showing that said notice was
      mailed as provided in Section
      13.02.
      The
      record shall show the principal amount of the Combined Notes voting in favor
      of
      or against any resolution. The record shall be signed and verified by the
      affidavits of the permanent chairman and secretary of the meeting and one of
      the
      duplicates shall be delivered to the Company and the other to the Trustee to
      be
      preserved by the Trustee, the latter to have attached thereto the ballots voted
      at the meeting.

     

    
      
        
        

      

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

     

    Section
      13.06.   No
      Delay of Rights by Meeting.
      

     

    Nothing
      contained in this Article shall be deemed or construed to authorize or permit,
      by reason of any call of a meeting of the Combined Noteholders or any rights
      expressly or impliedly conferred hereunder to make such call, any hindrance
      or
      delay in the exercise of any right or rights conferred upon or reserved to
      the
      Trustee or to the or Other Notes Noteholders under any of the provisions of
      this
      Indenture or of the Notes or the Other Indenture or of the Other
      Notes.

     

    ARTICLE
      14

     

    CONVERSION
      OF NOTES

     

    Section
      14.01.   Right
      to Convert.

     

    (a) Subject
      to and upon compliance with the provisions of this Indenture, the holder of
      any
      Note shall have the right, at such holder’s option at any time prior to the
      close of business on the date of maturity of the Notes, to convert the principal
      amount of the Note, or any portion of such principal amount which is a multiple
      of $100,000, into fully paid and non-assessable shares of Common Stock (as
      such
      shares shall then be constituted) at the Conversion Rate in effect at such
      time,
      by surrender of the Note so to be converted in whole or in part, together with
      any required funds, under the circumstances described in this Section and in
      the
      manner provided in Section
      14.02.
      

     

    (b) A
      Note in
      respect of which a holder is electing to exercise its option to require the
      Company to purchase such holder’s Notes upon an Asset Sale Offer, Change of
      Control Offer or Termination of Trading Offer pursuant to Section
      3.02 may
      be
      converted only if such holder withdraws its election in accordance with
Section
      3.02.
      A
      holder of Notes is not entitled to any rights of a holder of Common Stock until
      such holder has converted his Notes to Common Stock, and only to the extent
      such
      Notes are deemed to have been converted to Common Stock under this
      Article.

     

    
      
        
        

      

      
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    Section
      14.02.   Exercise
      of Conversion Right; Issuance of Common Stock on Conversion; No Adjustment
      for
      Interest or Dividends.
      

     

    In
      order
      to exercise the conversion right with respect to any Note in certificated form,
      the Company must receive at the office or agency of the Company maintained
      for
      that purpose or, at the option of such holder, the Corporate Trust Office,
      such
      Note with the original or facsimile of the form entitled “Conversion
      Notice”
on
      the
      reverse thereof, duly completed and manually signed, together with such Notes
      duly endorsed for transfer, accompanied by the funds, if any, required by this
      Section. Such notice shall also state the name or names (with address or
      addresses) in which the certificate or certificates for shares of Common Stock
      which shall be issuable on such conversion shall be issued, and shall be
      accompanied by transfer or similar taxes, if required pursuant to Section
      14.07.

     

    In
      order
      to exercise the conversion right with respect to any interest in a Global Note,
      the beneficial holder must complete, or cause to be completed, the appropriate
      instruction form for conversion pursuant to the Common Depositary’s book-entry
      conversion program, deliver, or cause to be delivered, by book-entry delivery
      an
      interest in such Global Note, furnish appropriate endorsements and transfer
      documents if required by the Company or the Trustee or conversion agent, and
      pay
      the funds, if any, required by this Section and any transfer taxes if required
      pursuant to Section
      14.07.

     

    As
      promptly as practicable after satisfaction of the requirements for conversion
      set forth above, subject to compliance with any restrictions on transfer if
      shares issuable on conversion are to be issued in a name other than that of
      the
      Noteholder (as if such transfer were a transfer of the Note or Notes (or portion
      thereof) so converted), the Company shall issue and shall deliver to such
      Noteholder at the office or agency maintained by the Company for such purpose
      pursuant to Section
      4.02
      a
      certificate or certificates for the number of full shares of Common Stock
      issuable upon the conversion of such Note or portion thereof as determined
      by
      the Company in accordance with the provisions of this Article and a check or
      cash in respect of any fractional interest in respect of a share of Common
      Stock
      arising upon such conversion, calculated by the Company as provided in
Section
      14.03.
      In case
      any Note of a denomination greater than $100,000 shall be surrendered for
      partial conversion, and subject to Section
      2.03,
      the
      Company shall execute and the Trustee shall authenticate and deliver to the
      holder of the Note so surrendered, without charge to such holder, a new Note
      or
      Notes in authorized denominations in an aggregate principal amount equal to
      the
      unconverted portion of the surrendered Note.

     

    Each
      conversion shall be deemed to have been effected as to any such Note (or portion
      thereof) on the date (the “Conversion
      Date”)
      on
      which the requirements set forth above in this Section have been satisfied
      as to
      such Note (or portion thereof), and the Person in whose name any certificate
      or
      certificates for shares of Common Stock shall be issuable upon such conversion
      shall be deemed to have become on said date the holder of record of the shares
      represented thereby; provided
      that any
      such surrender on any date when the stock transfer books of the Company shall
      be
      closed shall constitute the Person in whose name the certificates are to be
      issued as the record holder thereof for all purposes on the next succeeding
      day
      on which such stock transfer books are open, but such conversion shall be at
      the
      Conversion Rate in effect on the date upon which such Note shall be
      surrendered.

     

    
      
        
        

      

      
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    Any
      Note
      or portion thereof surrendered for conversion during the period from the close
      of business on the record date for any Interest Payment Date to the close of
      business on the Business Day preceding such Interest Payment Date shall be
      accompanied by payment, in immediately available funds or other funds acceptable
      to the Company, of an amount equal to the Interest otherwise payable on such
      Interest Payment Date on the principal amount being converted; provided
      that no
      such payment need be made (1) if the Company has specified a Purchase Date
      that
      is after a record date and on or prior to the next Interest Payment Date or
      (2)
      to the extent of any overdue Interest, if any overdue Interest exists at the
      time of conversion with respect to such Note. Except as provided above in this
      Section, no payment or other adjustment shall be made for Interest accrued
      on
      any Note converted or for dividends on any shares issued upon the conversion
      of
      such Note as provided in this Article.

     

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

     

    Upon
      the
      conversion of a Note, that portion of the accrued but unpaid
      Interest,
      including accrued Additional Interest, if any, to
      the
      Conversion Date, with respect to the converted Note shall not be canceled,
      extinguished or forfeited, but rather shall be deemed to be paid in full to
      the
      holder thereof through delivery of the Common Stock (together with the cash
      payment, if any in lieu of fractional shares) in exchange for the Note being
      converted pursuant to the provisions hereof, and the Fair Market Value of such
      shares of Common Stock (together with any such cash payment in lieu of
      fractional shares) shall be treated as issued, to the extent thereof, first
      in
      exchange for and in satisfaction of the Company’s obligation to pay the
      principal amount of the converted Note, the accrued but unpaid
      Interest,
      including accrued Additional Interest, if any, through
      the Conversion Date and the balance, if any, of such Fair Market Value of such
      Common Stock (and any such cash payment) shall be treated as issued in exchange
      for and in satisfaction of the right to convert the Note being converted
      pursuant to the provisions hereof.

     

    Section
      14.03.   Cash
      Payments in Lieu of Fractional Shares.
      

     

    No
      fractional shares of Common Stock or scrip certificates representing fractional
      shares shall be issued upon conversion of Notes. If more than one Note shall
      be
      surrendered for conversion at one time by the same holder, the number of full
      shares that shall be issuable upon conversion shall be computed on the basis
      of
      the aggregate principal amount of the Notes (or specified portions thereof
      to
      the extent permitted hereby) so surrendered. If any fractional share of stock
      would be issuable upon the conversion of any Note or Notes, the Company shall
      make an adjustment and payment therefor in cash at the Closing Sale Price on
      the
      last Trading Day immediately preceding the Conversion Date thereof to the holder
      of Notes. 

     

    Section
      14.04.   Conversion
      Rate.
      

     

    Each
      $100,000 principal amount of the Notes shall be initially convertible into
      4,166 shares
      of
      Common Stock at the initial Conversion Price of $24.00 per share, as specified
      in the form of Note (herein called the “Conversion
      Rate”)
      attached as Exhibit
      A
      hereto,
      subject to adjustment as provided in this Article.

     

    
      
        
        

      

      
        99

        
          

        

      

      
        
        

      

    

     

    Section
      14.05.   Adjustment
      of Conversion Rate.
      

     

    The
      Conversion Rate shall be adjusted from time to time by the Company as
      follows:

     

    (a) In
      case
      the Company shall hereafter pay a dividend or make a distribution to all holders
      of the outstanding Common Stock in shares of Common Stock, the Conversion Rate
      shall be increased so that the same shall equal the rate determined by
      multiplying the Conversion Rate in effect at the opening of business on the
      date
      following the date fixed for the determination of shareholders entitled to
      receive such dividend or other distribution by a fraction,

     

    (i) the
      numerator of which shall be the sum of the number of shares of Common Stock
      outstanding at the close of business on the date fixed for the determination
      of
      shareholders entitled to receive such dividend or other distribution plus the
      total number of shares of Common Stock constituting such dividend or other
      distribution; and

     

    (ii) the
      denominator of which shall be the number of shares of Common Stock outstanding
      at the close of business on the date fixed for such determination,

     

    such
      increase to become effective immediately after the opening of business on the
      day following the date fixed for such determination. For the purpose of this
      paragraph (a), the number of shares of Common Stock at any time outstanding
      shall not include shares held in the treasury of the Company. The Company will
      not pay any dividend or make any distribution on shares of Common Stock held
      in
      the treasury of the Company. If any dividend or distribution of the type
      described in this Section
      14.05(a)
      is
      declared but not so paid or made, the Conversion Rate shall again be adjusted
      to
      the Conversion Rate that would then be in effect if such dividend or
      distribution had not been declared.

     

    (b) In
      case
      the Company shall issue rights or warrants to all holders of its outstanding
      shares of Common Stock entitling them (for a period expiring within forty-five
      (45) days after the date fixed for determination of shareholders entitled to
      receive such rights or warrants) to subscribe for or purchase shares of Common
      Stock at a price per share less than the Current Market Price immediately
      preceding the date such distribution is first publicly announced by the Company,
      the Conversion Rate shall be increased so that the same shall equal the rate
      determined by multiplying the Conversion Rate in effect immediately prior to
      the
      date fixed for determination of shareholders entitled to receive such rights
      or
      warrants by a fraction,

     

    (i) the
      numerator of which shall be the number of shares of Common Stock outstanding
      on
      the date fixed for determination of shareholders entitled to receive such rights
      or warrants plus the total number of additional shares of Common Stock offered
      for subscription or purchase, and

     

    
      
        
        

      

      
        100

        
          

        

      

      
        
        

      

    

     

    (ii) the
      denominator of which shall be the sum of the number of shares of Common Stock
      outstanding at the close of business on the date fixed for determination of
      shareholders entitled to receive such rights or warrants plus the number of
      shares that the aggregate offering price of the total number of shares so
      offered would purchase at a price equal to the Current Market Price immediately
      preceding the date such distribution is first publicly announced by the
      Company,

     

    such
      adjustment shall be successively made whenever any such rights or warrants
      are
      issued, and shall become effective immediately after the opening of business
      on
      the day following the date fixed for determination of shareholders entitled
      to
      receive such rights or warrants. To the extent that shares of Common Stock
      are
      not delivered after the expiration of such rights or warrants, the Conversion
      Rate shall be readjusted to the Conversion Rate that would then be in effect
      had
      the adjustments made upon the issuance of such rights or warrants been made
      on
      the basis of delivery of only the number of shares of Common Stock actually
      delivered. If such rights or warrants are not so issued, the Conversion Rate
      shall again be adjusted to be the Conversion Rate that would then be in effect
      if such date fixed for the determination of shareholders entitled to receive
      such rights or warrants had not been fixed. In determining whether any rights
      or
      warrants entitle the holders to subscribe for or purchase shares of Common
      Stock
      at a price less than the Current Market Price immediately preceding the date
      such distribution is first publicly announced by the Company, and in determining
      the aggregate offering price of such shares of Common Stock, there shall be
      taken into account any consideration received by the Company for such rights
      or
      warrants and any amount payable on exercise or conversion thereof, the value
      of
      such consideration, if other than cash, to be determined by the Board of
      Directors.

     

    (c) In
      case
      outstanding shares of Common Stock shall be subdivided into a greater number
      of
      shares of Common Stock, the Conversion Rate in effect at the opening of business
      on the day following the day upon which such subdivision becomes effective
      shall
      be proportionately increased, and, conversely, in case outstanding shares of
      Common Stock shall be combined into a smaller number of shares of Common Stock,
      the Conversion Rate in effect at the opening of business on the day following
      the day upon which such combination becomes effective shall be proportionately
      reduced, such increase or reduction, as the case may be, to become effective
      immediately after the opening of business on the day following the day upon
      which such subdivision or combination becomes effective.

     

    (d) In
      case
      the Company shall, by dividend or otherwise, distribute to all holders of Common
      Stock shares of any class of capital stock of the Company or evidences of its
      indebtedness or assets (including securities, but excluding any rights or
      warrants referred to in Section
      14.05(b),
      and
      excluding any dividend or distribution (x) paid exclusively in cash or (y)
      referred to in Section
      14.05(a)
      (any of
      the foregoing hereinafter in this Section
      14.05(d)
      called
      the “Securities”)),
      then, in each such case (unless the Company elects to reserve such Securities
      for distribution to the Noteholders upon the conversion of the Notes so that
      any
      such holder converting Notes will receive upon such conversion, in addition
      to
      the shares of Common Stock to which such holder is entitled, the amount and
      kind
      of such Securities which such holder would have received if such holder had
      converted its Notes into Common Stock immediately prior to the Record Date
      for
      such distribution of the Securities) the Conversion Rate shall be increased
      so
      that the same shall be equal to the rate determined by multiplying the
      Conversion Rate in effect on the Record Date with respect to such distribution
      by a fraction,

     

    
      
        
        

      

      
        101

        
          

        

      

      
        
        

      

    

     

    (i) the
      numerator of which shall be the Current Market Price on such Record Date;
      and

     

    (ii) the
      denominator of which shall be the Current Market Price on such Record Date
      less
      the Fair Market Value (as determined by the Board of Directors, whose
      determination shall be conclusive, and described in a resolution of the Board
      of
      Directors) on the Record Date of the portion of the Securities so distributed
      applicable to one share of Common Stock,

     

    such
      adjustment to become effective immediately prior to the opening of business
      on
      the day following such Record Date; provided
      that, if
      the then Fair Market Value (as so determined) of the portion of the Securities
      so distributed applicable to one share of Common Stock is equal to or greater
      than the Current Market Price on the Record Date, in lieu of the foregoing
      adjustment, adequate provision shall be made so that each Noteholder shall
      have
      the right to receive upon conversion the amount of Securities such holder would
      have received had such holder converted each Note on the Record Date. If such
      dividend or distribution is not so paid or made, the Conversion Rate shall
      again
      be adjusted to be the Conversion Rate that would then be in effect if such
      dividend or distribution had not been declared. If the Board of Directors
      determines the Fair Market Value of any distribution for purposes of this
Section
      14.05(d)
      by
      reference to the actual or when issued trading market for any securities, it
      must in doing so consider the prices in such market over the same period used
      in
      computing the Current Market Price on the applicable Record Date.
      Notwithstanding the foregoing, if the Securities distributed by the Company
      to
      all holders of its Common Stock consist of capital stock of, or similar equity
      interests in, a Subsidiary or other business unit, the Conversion Rate shall
      be
      increased so that the same shall be equal to the rate determined by multiplying
      the Conversion Rate in effect on the Record Date with respect to such
      distribution by a fraction,

     

    (i) the
      numerator of which shall be the sum of (A) the average of the Closing Sale
      Prices of the Common Stock for the ten (10) Trading Days commencing on and
      including the fifth Trading Day after the Ex-Dividend Time plus (B) the Fair
      Market Value of the securities distributed in respect of each share of Common
      Stock for which this Section
      14.05(d)
      applies,
      which shall equal the number of Securities distributed in respect of each share
      of Common Stock multiplied by the average of the closing sale prices of those
      Securities distributed (where such closing sale prices are available) for the
      ten (10) Trading Days commencing on and including the fifth Trading Day after
      the Ex-Dividend Time; and

     

    (ii) the
      denominator of which shall be the average of the Closing Sale Prices of the
      Common Stock for the ten (10) Trading Days commencing on and including the
      fifth
      Trading Day after the Ex-Dividend Time,

     

    
      
        
        

      

      
        102

        
          

        

      

      
        
        

      

    

     

    such
      adjustment to become effective immediately prior to the opening of business
      on
      the day following such Record Date; provided
      that the
      Company may in lieu of the foregoing adjustment make adequate provision so
      that
      each Noteholder shall have the right to receive upon conversion the amount
      of
      Securities such holder would have received had such holder converted each Note
      on the Record Date with respect to such distribution.

     

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

     

    No
      adjustment of the Conversion Rate shall be made pursuant to this Section
      14.05(d)
      in
      respect of rights or warrants distributed or deemed distributed on any Trigger
      Event to the extent that such rights or warrants are actually distributed,
      or
      reserved by the Company for distribution to holders of Notes upon conversion
      by
      such holders of Notes to Common Stock.

     

    For
      purposes of this Section
      14.05(d)
      and
Sections
      14.05(a)
      and
14.05(b),
      any
      dividend or distribution to which
      this
Section
      14.05(d)
      is
      applicable that also includes shares of Common Stock, or rights or warrants
      to
      subscribe for or purchase shares of Common Stock (or both), shall be deemed
      instead to be (1) a dividend or distribution of the evidences of indebtedness,
      assets or shares of capital stock other than such shares of Common Stock or
      rights or warrants (and any Conversion Rate adjustment required by this
Section
      14.05(d)
      with
      respect to such dividend or distribution shall then be made) immediately
      followed by (2) a dividend or distribution of such shares of Common Stock or
      such rights or warrants (and any further Conversion Rate adjustment required
      by
Sections
      14.05(a)
      and
14.05(b)
      with
      respect to such dividend or distribution shall then be made), except (A) the
      Record Date of such dividend or distribution shall be substituted as “the date
      fixed for the determination of shareholders entitled to receive such dividend
      or
      other distribution”, “the date fixed for the determination of shareholders
      entitled to receive such rights or warrants” and “the date fixed for such
      determination” within the meaning of Sections
      14.05(a)
      and
14.05(b)
      and (B)
      any shares of Common Stock included in such dividend or distribution shall
      not
      be deemed “outstanding at the close of business on the date fixed for such
      determination” within the meaning of Section
      14.05(a).

     

    
      
        
        

      

      
        103

        
          

        

      

      
        
        

      

    

     

    (e) In
      case
      the Company shall, by dividend or otherwise, distribute to all holders of its
      Common Stock cash (excluding any dividend or distribution in connection with
      the
      liquidation, dissolution or winding up of the Company, whether voluntary or
      involuntary), then, in such case, the Conversion Rate shall be increased so
      that
      the same shall equal the rate determined by multiplying the Conversion Rate
      in
      effect immediately prior to the close of business on such Record Date by a
      fraction,

     

    (i) the
      numerator of which shall be the Current Market Price on such Record Date;
      and

     

    (ii) the
      denominator of which shall be the Current Market Price on such Record Date
      less
      the amount of cash so distributed applicable to one share of Common
      Stock,

     

    such
      adjustment to be effective immediately prior to the opening of business on
      the
      day following the Record Date; provided
      that if
      the portion of the cash so distributed applicable to one share of Common Stock
      is equal to or greater than the Current Market Price on the Record Date, in
      lieu
      of the foregoing adjustment, adequate provision shall be made so that each
      Noteholder shall have the right to receive upon conversion the amount of cash
      such holder would have received had such holder converted each Note on the
      Record Date. If such dividend or distribution is not so paid or made, the
      Conversion Rate shall again be adjusted to be the Conversion Rate that would
      then be in effect if such dividend or distribution had not been
      declared.

     

    (f) In
      case a
      tender or exchange offer made by the Company or any Subsidiary for all or any
      portion of the Common Stock shall expire and such tender or exchange offer
      (as
      amended upon the expiration thereof) shall require the payment to shareholders
      of consideration per share of Common Stock having a Fair Market Value (as
      determined by the Board of Directors, whose determination shall be conclusive
      and described in a resolution of the Board of Directors) that as of the last
      time (the “Expiration
      Time”)
      tenders or exchanges may be made pursuant to such tender or exchange offer
      (as
      it may be amended) exceeds the Closing Sale Price of a share of Common Stock
      on
      the Trading Day next succeeding the Expiration Time, the Conversion Rate shall
      be increased so that the same shall equal the rate determined by multiplying
      the
      Conversion Rate in effect immediately prior to the Expiration Time by a
      fraction,

     

    
      
        
        

      

      
        104

        
          

        

      

      
        
        

      

    

     

    (i) the
      numerator of which shall be the sum of (x) the Fair Market Value (determined
      as
      aforesaid) of the aggregate consideration payable to shareholders based on
      the
      acceptance (up to any maximum specified in the terms of the tender or exchange
      offer) of all shares validly tendered or exchanged and not withdrawn as of
      the
      Expiration Time (the shares deemed so accepted up to any such maximum, being
      referred to as the “Purchased
      Shares”)
      and
      (y) the product of the number of shares of Common Stock outstanding (less any
      Purchased Shares) at the Expiration Time and the Closing Sale Price of a share
      of Common Stock on the Trading Day next succeeding the Expiration Time,
      and

     

    (ii) the
      denominator of which shall be the number of shares of Common Stock outstanding
      (including any tendered or exchanged shares) at the Expiration Time multiplied
      by the Closing Sale Price of a share of Common Stock on the Trading Day next
      succeeding the Expiration Time,

     

    such
      adjustment to become effective immediately prior to the opening of business
      on
      the day following the Expiration Time. If the Company is obligated to purchase
      shares pursuant to any such tender or exchange offer, but the Company is
      permanently prevented by applicable law from effecting any such purchases or
      all
      such purchases are rescinded, the Conversion Rate shall again be adjusted to
      be
      the Conversion Rate that would then be in effect if such tender or exchange
      offer had not been made.

     

    (g) On
      March
      1 and September 1 of each year, beginning with March 1, 2008, the Conversion
      Rate shall be adjusted to equal the quotient obtained by dividing (i) $100,000
      by (ii) the Trading Reference VWAP; provided
      that no
      such adjustment shall be made if the number of shares issuable upon conversion
      of the Notes at such adjusted Conversion Rate would be lower than the number
      of
      shares issuable at then existing Conversion Rate (after giving effect to prior
      adjustments permitted pursuant to this clause).

     

    (h) If
      at any
      time after the Issue Date the Company shall issue or sell its Common Stock
      at a
      price per share less than the Current Market Price then in effect (and in the
      case of subclauses (ii) or (iii) below, issue or sell Common Stock or
      any
      other securities exercisable into shares of Common Stock, whose stock
      compensation expense per share, as determined in accordance with US GAAP, is
      less than the Current Market Price then in effect),
      the
      Conversion Rate shall be increased such that the Conversion Price is equal
      to
      the lowest price or stock compensation expense per share at which the Company
      has issued or sold its Common Stock after the Issue Date such adjustment to
      take
      effect as of the date of the issuance or sale of such Common Stock; provided,
      however,
      that
      no
      adjustment shall be made to the Conversion Price for (i) the issuance of Common
      Stock pursuant to the conversion or exercise of convertible or exercisable
      securities issued or outstanding on or prior to the Issue Date or the Notes,
      (ii) the issuance of Common Stock or any other securities exercisable into
      shares of Common Stock pursuant to exercise of stock options granted or reserved
      under the Company's employee stock options existing on the Issue Date or adopted
      thereafter, or (iii) the issuance, after the Issue Date, of Common Stock or
      any
      other securities exercisable into shares of Common Stock issued or granted
      to
      third-party consultants or employees of the Company and its subsidiaries under
      the Company's employee stock options or pursuant to written contractual
      arrangements relating to the compensation for the services rendered to the
      Company or its subsidiaries by such consultants or employees, to the extent
      that
      all such shares or securities issued under subclauses (ii) or (iii) in this
      paragraph,
      in the
      aggregate, on a cumulative basis and without double counting, do not exceed
      five
      percent (5%) of the Common Stock of the Company issued and outstanding
      immediately prior to such issuance.

     

    
      
        
        

      

      
        105

        
          

        

      

      
        
        

      

    

     

    (i) If
      and at
      each time, upon completion of the annual audit of the Company’s financial
      statements a Financial and Operational Trigger shall have occurred in the
      immediately preceding fiscal year, then within five (5) Business Days following
      issuance of the audit report
      for such
      fiscal year, the Conversion Rate per
      Note
      shall be adjusted (such
      adjustment to take effect as of the date of its determination)
      to
      equal:

     

    Conversion
      Rate then in effect +
      [(A x
      B) / C],

    

    where
      

    

    
      	 	
              A
                =
                

            	
              the
                total number of shares of Common Stock issued and outstanding on
                a
                fully-diluted basis at the date of determination of such
                adjustment;
                

            

    

    

    
      	
            	B
              =	
              2.0%
                expressed as a decimal; and

            

    

    

    
      	 	
              C
                =

            	
              the
                aggregate principal amount of the Combined Notes issued on their
                respective issue dates divided by the principal amount of a
                Note.

            

    

    

    For
      the
      avoidance of doubt, the adjustments contemplated by this Section
      14.05(i) (x)
      shall
      be made upon the occurrence of each Financial and Operational Trigger,
      irrespective of the number of adjustments made prior thereto pursuant to this
      Section
      14.05(i), and (y) shall not be subject to any ceiling or floor, including the
      Conversion Rate and the Conversion Price, respectively.

     

    (j) For
      purposes of this Section
      14.05,
      the
      following terms shall have the meaning indicated:

     

    (i) “Current
      Market Price”
shall
      mean the average of the daily Closing Sale Prices per share of Common Stock
      for
      the ten (10) consecutive Trading Days ending on the earlier of the Trading
      Day
      immediately preceding the relevant date and the day before the “ex” date with
      respect to the closing of the issuance, distribution, subdivision or combination
      requiring such computation. For purpose of this paragraph, the term “ex” date,
      (1) when used with respect to any issuance or distribution, means the first
      date
      on which the Common Stock trades, regular way, on the relevant exchange or
      in
      the relevant market from which the Closing Sale Price was obtained without
      the
      right to receive such issuance or distribution, and (2) when used with respect
      to any subdivision or combination of shares of Common Stock, means the first
      date on which the Common Stock trades, regular way, on such exchange or in
      such
      market after the time at which such subdivision or combination becomes
      effective.

     

    
      
        
        

      

      
        106

        
          

        

      

      
        
        

      

    

     

    If
      another issuance, distribution, subdivision or combination to which Section
      14.05
      applies
      occurs during the period applicable for calculating “Current Market Price”
pursuant to the definition in the preceding paragraph, “Current Market Price”
shall be calculated for such period in a manner determined by the Board of
      Directors to reflect the impact of such issuance, distribution, subdivision
      or
      combination on the Closing Sale Price of the Common Stock during such
      period.

     

    (ii) “Record
      Date”
shall
      mean, with respect to any dividend, distribution or other transaction or event
      in which the holders of Common Stock have the right to receive any cash,
      securities or other property or in which the Common Stock (or other applicable
      security) is exchanged for or converted into any combination of cash, securities
      or other property, the date fixed for determination of shareholders entitled
      to
      receive such cash, securities or other property (whether such date is fixed
      by
      the Board of Directors or by statute, contract or otherwise).

     

    (k) The
      Company may make such increases in the Conversion Rate, in addition to those
      required by Section
      14.05(a)
      through
(i)
      as the
      Board of Directors considers to be advisable to avoid or diminish any income
      tax
      to holders of Common Stock or rights to purchase Common Stock resulting from
      any
      dividend or distribution of stock (or rights to acquire stock) or from any
      event
      treated as such for income tax purposes.

     

    To
      the
      extent permitted by applicable law and Nasdaq Marketplace rules, the Company
      from time to time may increase the Conversion Rate by any amount for any period
      of time if the period is at least twenty (20) Business Days, the increase is
      irrevocable during the period and the Board of Directors shall have made a
      determination that such increase would be in the best interests of the Company,
      which determination shall be conclusive. Whenever the Conversion Rate is
      increased pursuant to the preceding sentence, the Company shall mail to holders
      of record of the Notes a notice of the increase at least fifteen (15) days
      prior
      to the date the increased Conversion Rate takes effect, and such notice shall
      state the increased Conversion Rate and the period during which it will be
      in
      effect.

     

    (l) No
      adjustment in the Conversion Rate shall be required unless such adjustment
      would
      require an increase or decrease of at least one percent (1%) in such rate;
      provided
      that any
      adjustments that by reason of this Section
      14.05(l)
      are not
      required to be made shall be carried forward and taken into account in any
      subsequent adjustment. All calculations under this Article shall be made by
      the
      Company and shall be made to the nearest cent or to the nearest one-ten
      thousandth (1/10,000) of a share, as the case may be. No adjustment need be
      made
      for rights to purchase Common Stock pursuant to a Company plan for reinvestment
      of dividends or interest or for any issuance of Common Stock or convertible
      or
      exchangeable securities or rights to purchase Common Stock or convertible or
      exchangeable securities. To the extent the Notes become convertible into cash,
      assets, property or securities (other than capital stock of the Company), no
      adjustment need be made thereafter as to the cash, assets, property or such
      securities. Interest will not accrue on any cash into which the Notes are
      convertible.

     

    
      
        
        

      

      
        107

        
          

        

      

      
        
        

      

    

     

    (m) Whenever
      the Conversion Rate is adjusted as herein provided, the Company shall promptly
      file with the Trustee and any conversion agent other than the Trustee an
      Officers’ Certificate setting forth the Conversion Rate after such adjustment
      and setting forth a brief statement of the facts requiring such adjustment.
      Unless and until a Responsible Officer of the Trustee shall have received such
      Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any
      adjustment of the Conversion Rate and may assume that the last Conversion Rate
      of which it has knowledge is still in effect. Promptly after delivery of such
      certificate, the Company shall prepare a notice of such adjustment of the
      Conversion Rate setting forth the adjusted Conversion Rate and the date on
      which
      each adjustment becomes effective and shall mail such notice of such adjustment
      of the Conversion Rate to the holder of each Note at his last address appearing
      on the Security Register provided for in Section
      4.02
      of this
      Indenture, within twenty (20) days after execution thereof. Failure to deliver
      such notice shall not affect the legality or validity of any such
      adjustment.

     

    (n) In
      any
      case in which this Section provides that an adjustment shall become effective
      immediately after (1) a record date or Record Date for an event, (2) the date
      fixed for the determination of shareholders entitled to receive a dividend
      or
      distribution pursuant to Section
      14.05(a),
      (3) a
      date fixed for the determination of shareholders entitled to receive rights
      or
      warrants pursuant to Section
      14.05(b),
      or (4)
      the Expiration Time for any tender or exchange offer pursuant to Section
      14.05(f),
      (each a
“Determination
      Date”),
      the
      Company may elect to defer until the occurrence of the applicable Adjustment
      Event (as hereinafter defined) (x) issuing to the holder of any Note converted
      after such Determination Date and before the occurrence of such Adjustment
      Event, the additional shares of Common Stock or other securities issuable upon
      such conversion by reason of the adjustment required by such Adjustment Event
      over and above the Common Stock issuable upon such conversion before giving
      effect to such adjustment and (y) paying to such holder any amount in cash
      in
      lieu of any fraction pursuant to Section
      14.03.
      For
      purposes of this Section
      14.05(n),
      the
      term “Adjustment
      Event”
shall
      mean:

     

    (i) in
      any
      case referred to in clause (1) hereof, the occurrence of such
      event,

     

    (ii) in
      any
      case referred to in clause (2) hereof, the date any such dividend or
      distribution is paid or made,

     

    (iii) in
      any
      case referred to in clause (3) hereof, the date of expiration of such rights
      or
      warrants, and

     

    (iv) in
      any
      case referred to in clause (4) hereof, the date a sale or exchange of Common
      Stock pursuant to such tender or exchange offer is consummated and becomes
      irrevocable.

     

    
      
        
        

      

      
        108

        
          

        

      

      
        
        

      

    

     

    (o) For
      purposes of this Section, the number of shares of Common Stock at any time
      outstanding shall not include shares held in the treasury of the Company but
      shall include shares issuable in respect of scrip certificates issued in lieu
      of
      fractions of shares of Common Stock. The Company will not pay any dividend
      or
      make any distribution on shares of Common Stock held in the treasury of the
      Company.

     

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

     

    If
      any of
      the following events occur, namely (i) any reclassification or change of the
      outstanding shares of Common Stock (other than (x) a subdivision or combination
      to which Section
      14.05(c)
      applies)
      as a result of which holders of Common Stock shall be entitled to receive stock,
      other securities or other property or assets (including cash) with respect
      to or
      in exchange for such Common Stock, (ii) any consolidation, merger or combination
      of the Company with another Person as a result of which holders of Common Stock
      shall be entitled to receive stock, other securities or other property or assets
      (including cash) with respect to or in exchange for such Common Stock, or (iii)
      any sale or conveyance of all or substantially all of the properties and assets
      of the Company to any other Person as a result of which holders of Common Stock
      shall be entitled to receive stock, other securities or other property or assets
      (including cash) with respect to or in exchange for such Common Stock, then
      the
      Company or the successor or purchasing Person, as the case may be, shall execute
      with the Trustee a supplemental indenture (in form satisfactory to the Trustee)
      providing that each Note shall be convertible into the kind and amount of shares
      of stock, other securities or other property or assets (including cash)
      receivable upon such reclassification, change, consolidation, merger,
      combination, sale or conveyance by a holder of a number of shares of Common
      Stock issuable upon conversion of such Notes (assuming, for such purposes,
      a
      sufficient number of authorized shares of Common Stock are available to convert
      all such Notes) immediately prior to such reclassification, change,
      consolidation, merger, combination, sale or conveyance assuming such holder
      of
      Common Stock did not exercise such holder’s rights of election, if any, as to
      the kind or amount of stock, other securities or other property or assets
      (including cash) receivable upon such reclassification, change, consolidation,
      merger, combination, sale or conveyance (provided
      that, if
      the kind or amount of stock, other securities or other property or assets
      (including cash) receivable upon such reclassification, change, consolidation,
      merger, combination, sale or conveyance is not the same for each share of Common
      Stock in respect of which such rights of election shall not have been exercised
      (“Non-electing
      share”),
      then
      for the purposes of this Section the kind and amount of stock, other securities
      or other property or assets (including cash) receivable upon such
      reclassification, change, consolidation, merger, combination, sale or conveyance
      for each Non-electing share shall be deemed to be the kind and amount so
      receivable per share by a plurality of the Non-electing shares). Such
      supplemental indenture shall provide for adjustments which shall be as nearly
      equivalent as may be practicable to the adjustments provided for in this
      Article.

     

    The
      Company shall cause notice of the execution of such supplemental indenture
      to be
      mailed to each holder of Notes, at its address appearing on the Security
      Register provided for in Section
      4.02
      of this
      Indenture, within twenty (20) days after execution thereof. Failure to deliver
      such notice shall not affect the legality or validity of such supplemental
      indenture.

     

    The
      above
      provisions of this Section shall similarly apply to successive
      reclassifications, changes, consolidations, mergers, combinations, sales and
      conveyances.

     

    
      
        
        

      

      
        109

        
          

        

      

      
        
        

      

    

     

    If
      this
      Section applies to any event or occurrence, Section
      14.05
      shall
      not apply.

     

    Section
      14.07.   Taxes
      on Shares Issued.
      

     

    The
      issue
      of stock certificates on conversions of Notes shall be made without charge
      to
      the converting Noteholder for any documentary, stamp or similar issue or
      transfer tax in respect of the issue thereof. The Company shall not, however,
      be
      required to pay any such tax which may be payable in respect of any transfer
      involved in the issue and delivery of stock in any name other than that of
      the
      holder of any Note converted, and the Company shall not be required to issue
      or
      deliver any such stock certificate unless and until the Person or Persons
      requesting the issue thereof shall have paid to the Company the amount of such
      tax or shall have established to the satisfaction of the Company that such
      tax
      has been paid.

     

    Section
      14.08.   Reservation
      of Shares; Shares to Be Fully Paid; Compliance with Governmental Requirements;
      Listing of Common Stock.
      

     

    The
      Company shall provide, free from preemptive rights, out of its authorized but
      unissued shares or shares held in treasury, sufficient shares of Common Stock
      to
      provide for the conversion of the Notes from time to time as such Notes are
      presented for conversion.

     

    Before
      taking any action which would cause an adjustment increasing the Conversion
      Rate
      to an amount that would cause the Conversion Price to be reduced below the
      then
      par value, if any, of the shares of Common Stock issuable upon conversion of
      the
      Notes, the Company will take all corporate action which may, in the opinion
      of
      its counsel, be necessary in order that the Company may validly and legally
      issue shares of such Common Stock at such adjusted Conversion Rate.

     

    The
      Company covenants that all shares of Common Stock which may be issued upon
      conversion of Notes will upon issue be fully paid and non-assessable by the
      Company and free from all taxes, liens and charges with respect to the issue
      thereof.

     

    The
      Company covenants that, if any shares of Common Stock to be provided for the
      purpose of conversion of Notes hereunder require registration with or approval
      of any governmental authority under any federal or state law before such shares
      may be validly issued upon conversion, the Company will in good faith and as
      expeditiously as possible, to the extent then permitted by the rules and
      interpretations of the Commission (or any successor thereto), endeavor to secure
      such registration or approval, as the case may be.

     

    The
      Company further covenants that, if at any time the Common Stock shall be listed
      on the Nasdaq Global Market, Nasdaq Global Select Market or Nasdaq Capital
      Market or any other national securities exchange or automated quotation system,
      the Company will, if permitted by the rules of such exchange or automated
      quotation system, list and keep listed, so long as the Common Stock shall be
      so
      listed on such exchange or automated quotation system, all Common Stock issuable
      upon conversion of the Notes; provided
      that if
      the rules of such exchange or automated quotation system permit the Company
      to
      defer the listing of such Common Stock until the first conversion of the Notes
      into Common Stock in accordance with the provisions of this Indenture, the
      Company covenants to list such Common Stock issuable upon conversion of the
      Notes in accordance with the requirements of such exchange or automated
      quotation system at such time.

     

    
      
        
        

      

      
        110

        
          

        

      

      
        
        

      

    

     

    Section
      14.09.   Responsibility
      of Trustee.
      

     

    The
      Trustee and any other conversion agent shall not at any time be under any duty
      or responsibility to any Noteholder to determine the Conversion Rate or whether
      any facts exist which may require any adjustment of the Conversion Rate, or
      with
      respect to the nature or extent or calculation of any such adjustment when
      made,
      or with respect to the method employed, or herein or in any supplemental
      indenture provided to be employed, in making the same. The Trustee and any
      other
      conversion agent shall not be accountable with respect to the validity or value
      (or the kind or amount) of any shares of Common Stock, or of any securities
      or
      property, which may at any time be issued or delivered upon the conversion
      of
      any Note; and the Trustee and any other conversion agent make no representations
      with respect thereto. Neither the Trustee nor any conversion agent shall be
      responsible for any failure of the Company to issue, transfer or deliver any
      shares of Common Stock or stock certificates or other securities or property
      or
      cash upon the surrender of any Note for the purpose of conversion or to comply
      with any of the duties, responsibilities or covenants of the Company contained
      in this Article. Without limiting the generality of the foregoing, neither
      the
      Trustee nor any conversion agent shall be under any responsibility to determine
      the correctness of any provisions contained in any supplemental indenture
      entered into pursuant to Section
      14.06
      relating
      either to the kind or amount of shares of stock or securities or property
      (including cash) receivable by Noteholders upon the conversion of their Notes
      after any event referred to in such Section
      14.06
      or to
      any adjustment to be made with respect thereto, but, subject to the provisions
      of Section
      7.01,
      may
      accept as conclusive evidence of the correctness of any such provisions, and
      shall be protected in relying upon, the Officers’ Certificate (which the Company
      shall be obligated to file with the Trustee prior to the execution of any such
      supplemental indenture) with respect thereto.

     

    Section
      14.10.   Notice
      to Holders Prior to Certain Actions.
      

     

    In
      case:

     

    (a) the
      Company shall declare a dividend (or any other distribution) on its Common
      Stock
      that would require an adjustment in the Conversion Rate pursuant to Section
      14.05;
      or

     

    (b) the
      Company shall authorize the granting to the holders of all or substantially
      all
      of its Common Stock of rights or warrants to subscribe for or purchase any
      share
      of any class or any other rights or warrants; or

     

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

     

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

     

    
      
        
        

      

      
        111

        
          

        

      

      
        
        

      

    

    
       

      the
        Company shall cause to be filed with the Trustee and to be mailed to each
        Noteholder at such holder’s address appearing on the Security Register provided
        for in Section
        4.02
        of this
        Indenture, as promptly as possible but in any event at least ten (10) days
        prior
        to the applicable date hereinafter specified, a notice stating (x) the date
        on
        which a record is to be taken for the purpose of such dividend, distribution
        or
        rights or warrants, or, if a record is not to be taken, the date as of which
        the
        holders of Common Stock of record to be entitled to such dividend, distribution
        or rights are to be determined, or (y) the date on which such reclassification,
        consolidation, merger, sale, transfer, dissolution, liquidation or winding-up
        is
        expected to become effective or occur, and the date as of which it is expected
        that holders of Common Stock of record shall be entitled to exchange their
        Common Stock for securities or other property deliverable upon such
        reclassification, consolidation, merger, sale, transfer, dissolution,
        liquidation or winding-up. Failure to give such notice, or any defect therein,
        shall not affect the legality or validity of such dividend, distribution,
        reclassification, consolidation, merger, sale, transfer, dissolution,
        liquidation or winding-up.

       

    

    Section
      14.11.   Shareholder
      Rights Plans.
      

     

    Each
      share of Common Stock issued upon conversion of Notes pursuant to this Article
      shall be entitled to receive the appropriate number of rights, if any, and
      the
      certificates representing the Common Stock issued upon such conversion shall
      bear such legends, if any, in each case as may be provided by the terms of
      any
      shareholder rights plan adopted by the Company, as the same may be amended
      from
      time to time. If at the time of conversion, however, the rights have separated
      from the shares of Common Stock in accordance with the provisions of the
      applicable shareholder rights agreement so that the holders of the Notes would
      not be entitled to receive any rights in respect of Common Stock issuable upon
      conversion of the Notes, the conversion rate will be adjusted in accordance
      with
Section
      14.05(d)
      treating
      all rights previously issued as Securities for purposes of such adjustment,
      subject to readjustment in the event of the expiration, termination or
      redemption of the rights.

     

    ARTICLE
      15

     

    MISCELLANEOUS
      PROVISIONS

     

    Section
      15.01.   Provisions
      Binding on Company’s Successors.
      

     

    All
      the
      covenants, stipulations, promises and agreements by the Company contained in
      this Indenture shall bind its successors and assigns whether so expressed or
      not.

     

    Section
      15.02.   Official
      Acts by Successor Corporation.
      

     

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

     

    
      
        
        

      

      
        112

        
          

        

      

      
        
        

      

    

     

    Section
      15.03.   Addresses
      for Notices, Etc.

     

    Any
      notice or demand which by any provision of this Indenture is required or
      permitted to be given or served by the Trustee or by the holders of Notes on
      the
      Company shall be deemed to have been sufficiently given or made, for all
      purposes, if given or served by being deposited postage prepaid by registered
      or
      certified mail in a post office letter box or sent by telecopier transmission
      addressed as follows: 

    

      If
        to the
        Company:

       

      American
        Dairy, Inc.

      Star
        City
        International Building

      No.
        10
        Jiuxianqiao Road, C-16th
        Floor

      Chaoyang
        District, Beijing

      People’s
        Republic of China 100016

      Fax:
        (86)
        10
        8456 7768

      Attention:
        Mr. Leng You-Bin

       

      With
        a
        copy to:

       

      Hodgson
        Russ LLP

      1540
        Broadway, 24th
        Floor

      New
        York,
        New York 10036

      U.S.A.

      Attention:
        Jeffrey A. Rinde, Esq.

      Facsimile
        No: +1 212 751 0928 

       

      If
        to the
Trustee:

       

      The
        Bank
        of New York

      101
        Barclay Street

      Floor
        4E

      New
        York,
        NY 10286

      U.S.A.

      Attention:
        Global Finance Americas

      Facsimile
        No: +1 212 815 5802/5803

       

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

       

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

       

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

       

      
        
          
          

        

        
          113

          
            

          

        

        
          
          

        

      

    

    

    Section
      15.04.   Governing
      Law.
      

     

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

     

    Section
      15.05.   Evidence
      of Compliance with Conditions Precedent; Certificates to Trustee.
      

     

    Upon
      any
      application or demand by the Company to the Trustee to take any action under
      any
      of the provisions of this Indenture, the Company shall furnish to the Trustee
      an
      Officers’ Certificate stating that all conditions precedent, if any, provided
      for in this Indenture relating to the proposed action have been complied with,
      and an Opinion of Counsel stating that, in the opinion of such counsel, all
      such
      conditions precedent have been complied with.

     

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

     

    Section
      15.06.   Legal
      Holidays.
      

     

    In
      any
      case in which the date of maturity of Interest on or principal of the Notes
      or
      the redemption date of any Note will not be a Business Day, then payment of
      such
      Interest on or principal of the Notes need not be made on such date, but may
      be
      made on the next succeeding Business Day with the same force and effect as
      if
      made on the date of maturity or the redemption date, and no Interest shall
      accrue for the period from and after such date.

     

    Section
      15.07.   Company
      Responsible for Making Calculations.

     

    The
      Company will be responsible for making all calculations required under the
      Notes. The Company will make these calculations in good faith and absent
      manifest error, these calculations will be final and binding on the Noteholders.
      Promptly after the calculation thereof, the Company will provide to each of
      the
      Trustee and any other conversion agent and Officers’ Certificate setting forth a
      schedule of its calculations, and each of the Trustee and any other conversion
      agent is entitled to conclusively rely upon the accuracy of such calculations
      without independent verification. The Trustee will forward the Company’s
      calculations to any holder upon the written request of such holder.

     

    Section
      15.08.   Benefits
      of Indenture.
      

     

    Nothing
      in this Indenture or in the Notes, express or implied, shall give to any Person,
      other than the parties hereto, any paying agent, any authenticating agent,
      any
      conversion agent, any Collateral Agent, Common Depositary, any Registrar and
      their successors hereunder and the holders of Notes any benefit or any legal
      or
      equitable right, remedy or claim under this Indenture.

     

    
      
        
        

      

      
        114

        
          

        

      

      
        
        

      

    

     

    Section
      15.09.   Table
      of Contents, Headings, Etc.

     

    The
      table
      of contents and the titles and headings of the Articles and Sections of this
      Indenture have been inserted for convenience of reference only, are not to
      be
      considered a part hereof, and shall in no way modify or restrict any of the
      terms or provisions hereof.

     

    Section
      15.10.   Authenticating
      Agent.
      

     

    The
      Trustee may appoint an authenticating agent that shall be authorized to act
      on
      its behalf, and subject to its direction, in the authentication and delivery
      of
      Notes in connection with the original issuance thereof and transfers and
      exchanges of Notes hereunder, including under Sections
      2.04,
      2.05,
      2.06,
      2.07,
      3.02,
      and
14.02,
      as
      fully to all intents and purposes as though the authenticating agent had been
      expressly authorized by this Indenture and those Sections to authenticate and
      deliver Notes. For all purposes of this Indenture, the authentication and
      delivery of Notes by the authenticating agent shall be deemed to be
      authentication and delivery of such Notes “by the Trustee” and a certificate of
      authentication executed on behalf of the Trustee by an authenticating agent
      shall be deemed to satisfy any requirement hereunder or in the Notes for the
      Trustee’s certificate of authentication. Such authenticating agent shall at all
      times be a Person eligible to serve as trustee hereunder pursuant to
Section
      7.07.

     

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

     

    Any
      authenticating agent may at any time resign by giving written notice of
      resignation to the Trustee and to the Company. The Trustee may at any time
      terminate the agency of any authenticating agent by giving written notice of
      termination to such authenticating agent and to the Company. Upon receiving
      such
      a notice of resignation or upon such a termination, or in case at any time
      any
      authenticating agent shall cease to be eligible under this Section, the Trustee
      shall either promptly appoint a successor authenticating agent or itself assume
      the duties and obligations of the former authenticating agent under this
      Indenture and, upon such appointment of a successor authenticating agent, if
      made, shall give written notice of such appointment of a successor
      authenticating agent to the Company and shall mail notice of such appointment
      of
      a successor authenticating agent to all holders of Notes as the names and
      addresses of such holders appear on the Security Register.

     

    The
      Company agrees to pay to the authenticating agent from time to time such
      compensation for its services as shall be agreed upon in writing between the
      Company and the authenticating agent.

     

    
      
        
        

      

      
        115

        
          

        

      

      
        
        

      

    

     

    The
      provisions of Sections
      7.02,
      7.03,
      7.04
      and
12.03
      and this
      Section shall be applicable to any authenticating agent.

     

    Section
      15.11.   Indenture
      and Notes Solely Corporate Obligations.
      

     

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

     

    Section
      15.12.   Execution
      in Counterparts.
      

     

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

     

    Section
      15.13.   Severability.
      

     

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

     

    [Signature
      page(s) to follow.]

     

    
      
        
        

      

      
        116

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
      executed.

     

    
      	 	 	 
	 	
              AMERICAN
                DAIRY, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              Leng
              You-Bin
	 	
              
Name:
              Leng You-Bin
	 	Title:
              CEO

    

    
       

      
        	 	 	 
	 	
                
                  AMERICAN
                    FLYING CRANE CORPORATION

                

              
	 
 	 
 	 
 
	
              	By:  	/s/
                Leng
                You-Bin
	 	
                
Name:
                Leng You-Bin
	 	Title:
                Chairman

      

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

         

      

    

     

    
      
        
          	 	 	 
	 	
                  
                    FOR
                      THE PURPOSE OF SECTION 4.18(A) ONLY

                     

                    LANGFANG
                      FEIHE DAIRY COMPANY LIMITED

                  

                
	 
 	 
 	 
 
	
                	By:  	/s/
                  Leng
                  You-Bin
	 	
                  
Name:
                  Leng You-Bin
	 	Title:
                  Chairman

        

      

      
         

        
          
            
              	 	 	 
	 	
                      
                        GANHAN
                          FEIHE DAIRY COMPANY LIMITED

                      

                    
	 
 	 
 	 
 
	
                    	By:  	/s/
                      Leng
                      You-Bin
	 	
                      
Name:
                      Leng You-Bin
	 	Title:
                      Chairman

            

          

          
             

            
              
                
                  	 	 	 
	 	
                          
                            
                              SHANXI
                                FEIHESANTAI BIOTECHNOLOGY 

                              SCIENTIFIC
                                AND COMMERCIAL CO., LIMITED

                            

                          

                        
	 
 	 
 	 
 
	
                        	By:  	/s/
                          Leng
                          You-Bin
	 	
                          
Name:
                          Leng You-Bin
	 	Title:
                          Chairman

                

              

              
                 

                
                  
                    
                      	 	 	 
	 	
                              
                                
                                  
                                    HEILONGJIANG
                                      FEIHE DAIRY CO., LIMITED

                                  

                                

                              

                            
	 
 	 
 	 
 
	
                            	By:  	/s/
                              Leng
                              You-Bin
	 	
                              
Name:
                              Leng You-Bin
	 	Title:
                              Chairman

                    

                  

                  
                     

                    
                      
                        
                          	 	 	 
	 	
                                  
                                    
                                      
                                        BAIQUAN
                                          FEIHEI DAIRY CO., LIMITED

                                      

                                    

                                  

                                
	 
 	 
 	 
 
	
                                	By:  	/s/
                                  Liang Aiyun
	 	
                                  
Name:
                                  Liang Aiyun
	 	Title:
                                  Chairman

                        

                      

                       

                    

                  

                

              

            

          

        

      

    

    
      
        
          
          

        

        
          
          

          
            

          

        

         

      

    

    
      
         

        
          
            
              	 	 	 
	 	
                      
                        
                          
                            BEIJING
                              FEIHE BIOTECHNOLOGY SCIENTIFIC

                            AND
                              COMMERCIAL CO., LIMITED

                          

                        

                      

                    
	 
 	 
 	 
 
	
                    	By:  	/s/
                      Leng
                      You-Bin
	 	
                      
Name:
                      Leng You-Bin
	 	Title:
                      Chairman

            

          

        

      

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

         

      

    

     

    
      	 	 	 
	 	
              THE BANK OF NEW YORK,

              
                as
                  Trustee

              

            
	 
 	 
 	 
 
	
            	By:  	 
	 	
              
Name:
	 	Title:

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

         

      

    

     

    EXHIBIT
      A

     

    [FORM
      OF
      FACE OF NOTE]

     

    [UNLESS
      THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR
      BANK
      S.A./N.V. (“EUROCLEAR”), OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME
      (“CLEARSTREAM”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
      EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
      ITS
      AUTHORIZED NOMINEE OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
      REPRESENTATIVE OF EUROCLEAR OR CLEARSTREAM (AND ANY PAYMENT IS MADE TO ITS
      AUTHORIZED NOMINEE, OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
      REPRESENTATIVE OF EUROCLEAR OR CLEARSTREAM), ANY TRANSFER, PLEDGE OR OTHER
      USE
      HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
      REGISTERED OWNER HEREOF, ITS AUTHORIZED NOMINEE, HAS AN INTEREST
      HEREIN.]1 

    

    THIS
      SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY HAVE
      NOT
      BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
      AMENDED (THE “SECURITIES ACT”) OR OTHER SECURITIES LAWS OF ANY STATE OR OTHER
      JURISDICTION, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
      FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:

    

    (1) REPRESENTS
      THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
      SECURITIES ACT;

    

    (2) AGREES
      THAT IT WILL NOT WITHIN THE PERIOD SET FORTH IN RULE 144 UNDER THE SECURITIES
      ACT (CURRENTLY TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY OTHER
      THAN
      WITH RESPECT TO AFFILIATES) (A) RESELL OR OTHERWISE TRANSFER THE SECURITY
      EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY
      EXCEPT (I) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (II) TO A QUALIFIED
      INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
      (III)
      TO A NON-U.S. PERSON OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION
      S
      UNDER THE SECURITIES ACT, (IV) PURSUANT TO THE EXEMPTION FROM REGISTRATION
      PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, OR (V) PURSUANT
      TO
      A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
      ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER OR
      (B)
      ENGAGE
      IN HEDGING TRANSACTIONS WITH RESPECT TO THIS SECURITY OR THE COMMON STOCK
      ISSUABLE UPON CONVERSION OF SUCH SECURITY UNLESS IN COMPLIANCE WITH THE
      SECURITIES ACT; AND

    

      

      
        1 This
          legend should be included only if the Note is a Global Note.

      

       

    

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    

    (3) AGREES
      THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
      TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(A)(V) ABOVE) A NOTICE
      SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

    

    [IN
      CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
      TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
      MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
      RESTRICTIONS.]2 

    
      
         

        
          

        

      

      2 This
        legend should be included only if the Note is a Definitive Note.

       

    

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

    AMERICAN
      DAIRY, INC.

    

    1.0%
      GUARANTEED SENIOR SECURED CONVERTIBLE NOTES DUE 2012

    

    ISIN:
      [__________]

    Common
      Code: [___________]

     

    No.
      1
      $__________

    

    AMERICAN
      DAIRY, INC., a corporation duly organized and validly existing under the laws
      of
      the State of Utah (herein called the “Company”,
      which
      term includes any successor corporation under the Indenture referred to on
      the
      reverse hereof), for value received hereby promises to pay to The Bank of New
      York Depositary (Nominees) Limited, or registered assigns, as common depositary
      for Clearstream Banking, société anonyme and/or Euroclear Bank S.A./N.V., at the
      office or agency of the Company maintained for that purpose in accordance with
      the terms of the Indenture, in such coin or currency of the United States of
      America as at the time of payment shall be legal tender for the payment of
      public and private debts, (i) the Repurchase Amount as set forth on Schedule
      I
      hereto
      on June 1, 2012, (ii) interest, semi-annually on June 1 and December 1 of each
      year, commencing December 1, 2007 on the outstanding principal sum of the Note
      at said office or agency, in like coin or currency, at the rate per annum of
      1.0%, from and including June 1, 2007 or from the most recent Interest Payment
      Date to which interest has been paid or duly provided for to, but excluding
      the
      following Interest Payment Date and (iii) Additional Interest of (x) 5.0% per
      annum if no Qualifying IPO has occurred on or before December 1, 2008, such
      interest accruing from and including such date (or, if Interest has been paid
      since such date, from and including the most recent interest payment date
      thereafter) to but excluding each date of payment thereof and (y) any additional
      interest payable pursuant to Section 2(d) of the Registration Rights Agreement,
      (iv) Additional Amounts upon the occurrence of any events, in the amounts and
      at
      the times specified in the definition of “Additional Amounts” in Section 1.01 of
      the Indenture, and (v) interest on overdue principal and (to the extent that
      payment of such interest is enforceable under applicable law) interest at the
      rate borne by the Notes, including Additional Interest, if any, at the rate
      of
      5% per annum. 

     

    Except
      as
      otherwise provided in the Indenture, the interest payable on the Note pursuant
      to the Indenture on any June 1 or December 1 will be paid to the Person entitled
      thereto as it appears in the Security Register at the close of business on
      the
      record date, which shall be the May 17 or November 17 (whether or not a Business
      Day) next preceding such June 1 or December 1, as provided in the Indenture;
      provided
      that any
      such interest not punctually paid or duly provided for shall be payable as
      provided in the Indenture. The Company shall pay interest (i) on any Notes
      in
      certificated form by check mailed to the address of the Person entitled thereto
      as it appears in the Security Register (provided
      that the
      holder of Notes with an aggregate principal amount in excess of $1,000,000
      shall, at the written election of such holder, be paid by wire transfer of
      immediately available funds) or (ii) on any Global Note by wire transfer of
      immediately available funds to the account of the Common Depositary or its
      nominee.

     

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

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

     

    This
      Note
      shall be governed by and construed in accordance with the laws of the State
      of
      New York.

     

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

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

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

     

    
      	
              AMERICAN
                DAIRY, INC.

               

               

            	 	 
	By: 	
            	 	 	
            
	 	
              
Name:	 	 	
            
	 	Title: 	 	 	
            

    

     

    TRUSTEE’S
      CERTIFICATE OF AUTHENTICATION

    

    This
      is
      one of the Notes described in the within-named Indenture.

     

    THE
      BANK
      OF NEW YORK,

    as
      Trustee

    
       

      
        	
                AMERICAN
                  DAIRY, INC.

                 

                 

              	 	 
	By: 	
              	 	 	
              
	 	
                
Authorized
                Signatory	 	 	
              

      

       

    

    Dated:
      

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

     

    [FORM
      OF
      REVERSE OF NOTE]

    

    AMERICAN
      DAIRY, INC.

    

    1.0%
      GUARANTEED SENIOR SECURED CONVERTIBLE NOTE DUE 2012

    

    This
      Note
      is one of a duly authorized issue of Notes of the Company, designated as its
      1.0% Guaranteed Senior Secured Convertible Notes due 2012 (herein called the
      “Notes”),
      in an
      aggregate principal amount of $60,000,000 or such other amount as shown on
      the
      Security Register as being represented by this Note, issued and to be issued
      under and pursuant to an Indenture dated June 1, 2007 (herein called the
“Indenture”),
      among
      the Company, American Flying Crane Corporation, as the Guarantor,
      and The
      Bank
      of New York, a New York banking corporation, as trustee (herein called the
      “Trustee”),
      to
      which Indenture and all indentures supplemental thereto reference is hereby
      made
      for a description of the rights, limitations of rights, obligations, duties
      and
      immunities thereunder of the Trustee, the Company and the holders of the
      Notes.

     

    The
      Company may from time to time without notice to or the consent of the
      Noteholders, create and issue further debt securities ranking pari
      passu
      with the
      Notes in all respects, provided
      that such
      further debt securities issued after June 1, 2007 shall not exceed an aggregate
      principal amount of $20,000,000. The Company may consolidate such further debt
      securities with the Notes then outstanding to form a single series,
      provided that
      the
      aggregate principal amount of the Notes so consolidated shall not exceed
      $80,000,000. Such further notes will be represented by an increase in the
      aggregate principal amount of this Note.

     

    In
      case
      an Event of Default shall have occurred and be continuing, the principal of
      and
      accrued and unpaid Interest on all Notes may be declared by either the Trustee
      or the holders of not less than 25% in aggregate principal amount of the
      Combined Notes then outstanding, and upon said declaration shall become, due
      and
      payable, in the manner, with the effect and subject to the conditions provided
      in the Indenture.

     

    The
      Indenture contains provisions permitting the Company and the Trustee, with
      the
      consent of the holders of a majority in aggregate principal amount of the
      Combined Notes at the time outstanding, to execute supplemental indentures
      adding any provisions to or changing in any manner or eliminating any of the
      provisions of the Indenture or of any supplemental indenture or modifying in
      any
      manner the rights of the holders of the Notes; provided
      that no
      such supplemental indenture shall (i) extend the fixed maturity of any Note,
      (ii) reduce the rate or extend the time of payment of Interest thereon, (iii)
      reduce the principal amount thereof or reduce any amount payable upon redemption
      or repurchase thereof, (iv) change the obligation of the Company to repurchase
      any Note upon the happening of a Termination
      of Trading
      in a
      manner adverse to the holders of Notes, (v) impair the right of any Noteholder
      to institute suit for the payment thereof, (vi) make the principal thereof
      or
      interest thereon payable in any coin or currency other than that provided in
      the
      Notes, (vii) impair the right to convert the Notes into Common Stock or reduce
      the number of shares of Common Stock or any other property receivable by a
      Noteholder upon conversion subject to the terms set forth in the Indenture,
      including Section 14.05 thereof, in each case, without the consent of the holder
      of each Note so affected, (viii) modify any of the provisions of Section 8.02
      or
      Section 6.07 thereof, except to increase any such percentage or to provide
      that
      certain other provisions of the Indenture cannot be modified or waived without
      the consent of the holder of each Note so affected, (ix) change any obligation
      of the Company to maintain an office or agency in the places and for the
      purposes set forth in Section 4.02 thereof, (x) reduce the quorum or voting
      requirements set forth in Article 13, (xi) subordinate the Notes or any
      Guarantee to any other obligation of the Company or the applicable Guarantor,
      (xii) release the security interest granted in favor of the holders on the
      Notes
      in the Collateral other than pursuant to the terms of the Security Documents,
      (xiii) release any security interest that may have been granted in favor of
      the
      holders of the Notes other than pursuant to the terms of such security interest,
      (xvi) reduce the amount payable as Additional Amounts, (xv) reduce any premium
      payable upon a Change of Control or, at any time after a Change of Control
      has
      occurred, change the time at which the Change of Control Offer relating thereto
      must be made or at which the Notes must be repurchased pursuant to such Change
      of Control Offer, (xvi) at any time after the Company is obligated to make
      an
      Asset Sale Offer with the Excess Proceeds from Asset Sales, change the time
      at
      which such Asset Sale Offer must be made or at which the Notes must be
      repurchased pursuant thereto, (xvii) make any change in any Guarantee that
      would
      adversely affect the holders or (xviii) reduce the aforesaid percentage of
      Notes, the holders of which are required to consent to any such supplemental
      indenture, without the consent of the holders of all Notes then outstanding.
      Subject to the provisions of the Indenture, the holders of a majority in
      aggregate principal amount of the Combined Notes at the time outstanding may
      on
      behalf of the holders of all of the Notes waive any past Default or Event of
      Default under the Indenture and its consequences except (A) a default in the
      payment of Interest on, or the principal of, any of the Notes, (B) a failure
      by
      the Company to convert any Notes into Common Stock of the Company, (C) a default
      in the payment of the purchase price pursuant to Section 3.02 of the Indenture
      or (D) a default in respect of a covenant or provisions of the Indenture which
      under Article 10 of the Indenture cannot be modified or amended without the
      consent of the holders of each or all Combined Notes then outstanding or
      affected thereby. Any such consent or waiver by the holder of this Note (unless
      revoked as provided in the Indenture) shall be conclusive and binding upon
      such
      holder and upon all future holders and owners of this Note and any Notes which
      may be issued in exchange or substitution hereof, irrespective of whether or
      not
      any notation thereof is made upon this Note or such other Notes.

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

     

    No
      reference herein to the Indenture and no provision of this Note or of the
      Indenture shall alter or impair the obligation of the Company, which is absolute
      and unconditional, to pay the principal of and Interest on this Note at the
      place, at the respective times, at the rate and in the coin or currency herein
      prescribed.

     

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

     

    The
      Notes
      are issuable in fully registered form, without coupons, in denominations of
      $100,000 principal amount and any multiple of $100,000. At the office or agency
      of the Company referred to on the face hereof, and in the manner and subject
      to
      the limitations provided in the Indenture, without payment of any service charge
      but with payment of a sum sufficient to cover any tax, assessment or other
      governmental charge that may be imposed in connection with any registration
      or
      exchange of Notes, Notes may be exchanged for a like aggregate principal amount
      of Notes of any other authorized denominations. 

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

    

     

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

     

    In
      the
      event that the Company shall be required to commence an Asset Sale Offer, a
      Change of Control Offer or a Termination
      of Trading
      Offer,
      the Company shall mail to all holders of record of the Notes a notice which
      states the terms of such Offer to Purchase, and, in the case of a Change of
      Control Offer or Termination
      of Trading
      Offer,
      the circumstances and relevant facts regarding such event. Each holder shall
      have the right to accept such offer and require the Company to repurchase all
      or
      any portion of such holder’s Notes in cash equal to the Repurchase
      Amount.

     

    Holders
      electing to have a Note purchased pursuant to a Offer to Purchase shall deliver
      to the Company such Note with the form entitled “Purchase
      Notice”
on
      the
      reverse thereof duly completed, together with the Note, duly endorsed for
      transfer, at any time prior to the close of business on the Business Day
      immediately preceding the Purchase Date, and shall deliver the Notes to the
      Trustee (or other paying agent appointed by the Company) as set forth in the
      Indenture. 

     

    If
      the
      Purchase Date falls after a record date and on or prior the corresponding
      Interest Payment Date, then accrued and unpaid Interest to, but excluding,
      the
      Purchase Date shall be paid on such Interest Payment Date to the holders of
      record of such Notes on the applicable record date instead of to the holders
      surrendering such Notes for repurchase on such date. The Notes will be subject
      to repurchase in multiples of $100,000 principal amount. 

     

    Holders
      have the right to withdraw any Purchase Notice by delivering to the Trustee
      (or
      other paying agent appointed by the Company) a written notice of withdrawal
      up
      to the close of business on the Business Day immediately preceding the Purchase
      Date all as provided in the Indenture.

     

    If
      money
      or cash, sufficient to pay the repurchase price of all Notes or portions thereof
      to be purchased as of the Purchase Date is deposited with the Trustee (or other
      paying agent appointed by the Company), on the Purchase Date, interest will
      cease to accrue on such Notes (or portions thereof) immediately after such
      Purchase Date, and the holder thereof shall have no other rights as such other
      than the right to receive the repurchase price upon surrender of such
      Note.

     

    Subject
      to the occurrence of certain events and in compliance with the provisions of
      the
      Indenture, prior to the final maturity date of the Notes, the holder hereof
      has
      the right, at its option, to convert each $100,000 principal amount of the
      Notes
      into 4,166 shares of the Company’s Common Stock (a conversion price of
      approximately $24.00 per share), as such shares shall be constituted at the
      date
      of conversion and subject to adjustment from time to time as provided in the
      Indenture, upon surrender of this Note with the form entitled “Conversion
      Notice”
on
      the
      reverse thereof duly completed, to the Company at the office or agency of the
      Company maintained for that purpose in accordance with the terms of the
      Indenture, or at the option of such holder, the Corporate Trust Office, and,
      unless the shares issuable on conversion are to be issued in the same name
      as
      this Note, duly endorsed by, or accompanied by instruments of transfer in form
      satisfactory to the Company duly executed by, the holder or by his duly
      authorized attorney. The Company will notify the holder thereof in writing
      of
      any event triggering the right to convert the Notes as specified above in
      accordance with the Indenture.

     

    
      
        
        

      

      
        A-8

        
          

        

      

      
        
        

      

    

     

    No
      adjustment in respect of interest on any Note converted or dividends on any
      shares issued upon conversion of such Note will be made upon any conversion
      except as set forth in the next sentence. If this Note (or portion hereof)
      is
      surrendered for conversion during the period from the close of business on
      any
      record date for the payment of interest to the close of business on the Business
      Day preceding the following Interest Payment Date, this Note (or portion hereof
      being converted) must be accompanied by payment, in immediately available funds
      or other funds acceptable to the Company, of an amount equal to the interest
      otherwise payable on such Interest Payment Date on the principal amount being
      converted; provided
      that no
      such payment shall be required (1) if the Company has specified a Purchase
      Date
      that is during such period or (2) to the extent of any overdue Interest, if
      any
      overdue interest exists at the time of conversion with respect to such Note.
      

     

    No
      fractional shares will be issued upon any conversion, but an adjustment and
      payment in cash will be made, as provided in the Indenture, in respect of any
      fraction of a share which would otherwise be issuable upon the surrender of
      any
      Note or Notes for conversion.

     

    A
      Note in
      respect of which a holder is exercising its right to require repurchase upon
      a
      Asset Sale Offer, Change of Control Offer or Termination
      of Trading
      Offer on
      a Purchase Date may be converted only if such holder withdraws its election
      to
      exercise either such right in accordance with the terms of the
      Indenture.

     

    Upon
      due
      presentment for registration of transfer of this Note at the office or agency
      of
      the Company maintained for that purpose in accordance with the terms of the
      Indenture, a new Note or Notes of authorized denominations for an equal
      aggregate principal amount will be issued to the transferee in exchange thereof,
      subject to the limitations provided in the Indenture, without charge except
      for
      any tax, assessment or other governmental charge imposed in connection
      therewith.

     

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

     

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

     

    
      
        
        

      

      
        A-9

        
          

        

      

      
        
        

      

    

     

    For
      purposes of sections 1272, 1273 and 1275 of the Internal Revenue Code of 1986,
      as amended, this Note is being issued with Tax Original Issue Discount and
      the
      issue date of this Note is June 1, 2007.

     

    This
      Note
      shall be governed by and construed in accordance with the laws of New
      York.

     

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

     

    
      
        
        

      

      
        A-10

        
          

        

      

      
        
        

      

    

     

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription of the face of this Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations.

    

      
        	
                TEN
                  COM

              	
                -

              	
                as
                  tenants in common

              
	
                TEN
                  ENT

              	
                -

              	
                as
                  tenant by the entireties

              
	
                JT
                  TEN

              	
                -

              	
                as
                  joint tenants with right of survivorship under Uniform Gifts to
                  Minors Act
                  and not as tenants in common

              
	
                UNIF
                  GIFT MIN ACT

              	
                
                  -

                

              	
                Custodian
                  (Cust) (Minor)

              

      

       

    

    
    

    
      	
            	 	 	 
	
            	 	 	
              
(State)

    

     

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        A-11

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

     

    AMERICAN
      DAIRY, INC.

    

    1.0%
      Guaranteed Senior Secured Convertible Notes due 2012

     

    No.
      1

    

    The
      initial Principal Amount of this Note is SIXTY MILLION DOLLARS ($60,000,000).
      The Company will pay the Repurchase Amount as defined below. 

    

    “Repurchase
      Amount”
means,
      with respect to any Note, the Redemption Price plus
      any
      accrued and unpaid Interest on such Note (including post-petition interest
      in
      any proceeding under any Bankruptcy Law) and interest accrued on overdue
      principal (and, to the extent lawful, on overdue installments of interest)
      and
      premium, if any, at a rate that is 5% per annum in excess of the rate of
      Interest then in effect.

     

    “Redemption
      Price”
means
      the amount calculated in accordance with the following formula, rounded (if
      necessary) to two decimal places with 0.005 being rounded upwards:

     

    
      	
              Redemption
                Price = I x (1 + r)d/360

            
	
              Where:

            	 	 
	
              I

            	
              =

            	
              Issue
                price (100% of Principal Amount) of the Notes;

            
	
              r

            	
              =

            	
              18.0%
                expressed as a decimal; and

            
	
              d

            	
              =

            	
              number
                of days from and including the Issue Date to but excluding, the date
                for
                redemption, calculated on the basis of a 360-day year consisting
                of 12
                months of 30 days each, and in the case of an incomplete month, the
                actual
                number of days elapsed.

            

    

     

    For
      the
      avoidance of doubt, if the date fixed for redemption is one of the following
      semi-annual dates, the Redemption Price for each US$100,000 principal amount
      shall be as set out in the table below in respect of such semi-annual date:
      

     

    
      	
              Semi-annual
                Date

            	 	
              Redemption
                Price (US$)

            	 
	
              December
                1, 2007

            	 	
              US$

            	
              108,627.80

            	 
	
              June
                1, 2008

            	 	 	
              118,000.00

            	 
	
              December
                1, 2008

            	 	 	
              128,180.81

            	 
	
              June
                1, 2009

            	 	 	
              139,240.00

            	 
	
              December
                1, 2009

            	 	 	
              151,253.36

            	 
	
              June
                1, 2010

            	 	 	
              164,303.20

            	 
	
              December
                1, 2010

            	 	 	
              178,478.96

            	 
	
              June
                1, 2011

            	 	 	
              193,877.78

            	 
	
              December
                1, 2011

            	 	 	
              210,605.17

            	 
	
              June
                1, 2012

            	 	 	
              228,775.78

            	 

    

    

    
      
        
        

      

      
        A-12

        
          

        

      

      
        
        

      

    

     

    For
      purposes thereof, the Principal Amount has been adjusted in accordance with
      the
      terms of the Indenture as set forth below:

    

    Date
      

     

    Principal
      Amount

     

    Notation
      Explaining Principal

     

    Amount
      Recorded  

     

    Authorized
      Signature of Trustee or Custodian

    

    
      
        
        

      

      
        A-13

        
          

        

      

      
        
        

      

    

     

    CONVERSION
      NOTICE

     

    TO:
      AMERICAN DAIRY, INC.

    

    
      
        

      

       

    

    The
      undersigned registered owner of this Note hereby irrevocably exercises the
      option to convert this Note, or the portion thereof (which is $100,000 or a
      multiple thereof) below designated, into shares of Common Stock of American
      Dairy, Inc. in accordance with the terms of the Indenture referred to in this
      Note, and directs that the shares issuable and deliverable upon such conversion,
      together with any check in payment for fractional shares and any Notes
      representing any unconverted principal amount hereof, be issued and delivered
      to
      the registered holder hereof unless a different name has been indicated below.
      Capitalized terms used herein but not defined shall have the meanings ascribed
      to such terms in the Indenture. If shares or any portion of this Note not
      converted are to be issued in the name of a person other than the undersigned,
      the undersigned will provide the appropriate information below and pay all
      transfer taxes payable with respect thereto. Any amount required to be paid
      by
      the undersigned on account of interest, including additional interest, if any,
      accompanies this Note.

     

    Dated:

     

      
        

      

    

     

    
      

    

     

    Signature(s)

    Signature(s)
      must be guaranteed by an “eligible guarantor institution” meeting the
      requirements of the Registrar, which requirements include membership or
      participation in the Security Transfer Agent Medallion Program (“STAMP”) or such
      other “signature guarantee program” as may be determined by the Registrar in
      addition to, or in substitution for, STAMP.

     

     

      
        

      

    

    Fill
      in
      the registration of shares of Common Stock if to be issued, and Notes if to
      be
      delivered, other than to and in the name of the registered holder:

    

     

      
        

      

    

    (Name)

    
 

    
      

    

    (Street
      Address)

     

     

    
      

    

    (City,
      State and Zip Code)

     

    
      
        
        

      

      
        A-14

        
          

        

      

      
        
        

      

    

    

    
      

    

    Please
      print name and address

     

    Principal
      amount to be converted

    (if
      less than all): 

     

    $ ____________________    

    

    Social
      Security or Other Taxpayer

    Identification
      Number: 

     

    
      
        

      

       

    

    
      
        
        

      

      
        A-15

        
          

        

      

      
        
        

      

    

     

    PURCHASE
      NOTICE

     

    TO:
      AMERICAN DAIRY, INC.

    

    
      
        

      

    The
      undersigned registered owner of this Note hereby irrevocably acknowledges
      receipt of a notice from American Dairy, Inc. (the “Company”)
      regarding the right of holders to elect to require the Company to repurchase
      the
      Notes upon the occurrence of either an Asset Sale Offer, a Change of Control
      Offer or a Termination of Trading Offer and requests and instructs the Company
      to repay the entire principal amount of this Note, or the portion thereof (which
      is $100,000 or an integral multiple thereof) below designated, in accordance
      with the terms of the Indenture at the price of the
      Repurchase Amount, to the registered holder hereof. 

    

    Capitalized
      terms used herein but not defined shall have the meanings ascribed to such
      terms
      in the Indenture. The Notes shall be purchased by the Company as of the Purchase
      Date pursuant to the terms and conditions specified in the
      Indenture.

    

    $ 
      principal amount of the Notes to which this Purchase Notice relates (if less
      than entire principal amount) pursuant to 4.12, 4.17 or 4.26 of the Indenture,
      check the box below:

     

    o 
Section
      4.12    Purchase
      Date: _______________

     

    o 
Section
      4.17

     

    o 
Section
      4.26

     

    Dated:

     

    Signature(s):

     

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

     

    
      
        
        

      

      
        A-16

        
          

        

      

      
        
        

      

    

     

    Note
      Certificate Number (if applicable):

     

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

    

    Social
      Security or Other Taxpayer Identification Number:

    

    Assignment
      Form

     

    To
      assign
      this Note, fill in the form below: 

     

    (I)
      or
      (we) assign and transfer this Note to

     

     

      
        

      

    

    (Insert
      assignee’s social security or other tax I.D. no.)

     

    
      
 

      

    

     

    
      
 

    
      
 

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

     

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

     

    
      
 

    
      	
              Date:
                ______________

            	
            
	 	 
	 	
              Your
                Signature: __________________________________

            
	 	(Sign exactly as your name
              appears
              on the face of this Note)

    

     

    Signature
      Guarantee: 

    

    
      
        
        

      

      
        A-17

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    FORM
      OF NOTATION OF GUARANTEE

     

    For
      value
      received, each Guarantor (which term includes any successor Person under the
      Indenture), jointly and severally, unconditionally guarantees, to the extent
      set
      forth in the Indenture and subject to the provisions in the Indenture, dated
      June 1, 2007 (the “Indenture”),
      among
      American Dairy, Inc., as issuer (the “Company”),
      the
      Guarantor listed on the signature pages thereto and The Bank of New York, a
      New
      York banking corporation, as trustee (the “Trustee”),
      (a)
      the due and punctual payment of the principal of, premium, if any, and interest
      on the Notes, whether at maturity, by acceleration, redemption, repurchase
      or
      otherwise, the due and punctual payment of interest on overdue principal and
      premium, if any, and, to the extent permitted by law, interest and the due
      and
      punctual performance of all other obligations of the Company to the holders
      or
      the Trustee all in accordance with the terms of the Indenture and (b) in case
      of
      any extension of time of payment or renewal of any Notes or any of such other
      obligations, that the same will be promptly paid in full when due or performed
      in accordance with the terms of the extension or renewal, whether at stated
      maturity, by acceleration or otherwise. The obligations of the Guarantor to
      the
      holders of Notes and to the Trustee pursuant to the Guarantee and the Indenture
      are expressly set forth in Article 9 of the Indenture and reference is hereby
      made to the Indenture for the precise terms of the Guarantee. This Guarantee
      is
      subject to release as and to the extent set forth in Section 9.05 of the
      Indenture. Each holder of a Note, by accepting the same agrees to and shall
      be
      bound by such provisions. Capitalized terms used herein and not defined are
      used
      herein as so defined in the Indenture.

     

    
      	 	 	 
	 	
              [GUARANTOR
                NAME]

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Name:
	 	
              Title:

            

    

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    FORM
      OF CERTIFICATE OF TRANSFER

     

    American
      Dairy, Inc.

    Star
      City
      International Building

    No.
      10
      Jiuxianqiao Road, C-16th
      Floor

    Chaoyang
      District, Beijing

    People’s
      Republic of China 100016

    Attention:
      Mr. Leng You-Bin 

    

    The
      Bank
      of New York

    101
      Barclay Street

    Floor
      4E

    New
      York,
      NY 10286

    U.S.A.

    Attention:
      Global Finance Americas

    

    
      	 	
              Re:

            	
              1.0%
                GUARANTEED SENIOR SECURED CONVERTIBLE NOTES DUE
                2012

            

    

     

    Reference
      is hereby made to the Indenture, dated June 1, 2007 (the “Indenture”),
      among
      AMERICAN DAIRY, INC., as issuer (the “Company”),
      the
      Guarantor thereto and THE BANK OF NEW YORK, a New York banking corporation,
      as
      trustee. Capitalized terms used but not defined herein shall have the meanings
      given to them in the Indenture.

     

    ___________________,
      (the “Transferor”)
      owns
      and proposes to transfer the Note[s] or interest in such Note[s] in the
      principal amount of $___________ (the “Transfer”),
      to
      ___________________________ (the “Transferee”).
      In
      connection with the Transfer, the Transferor hereby certifies that:

     

    [CHECK
      ALL THAT APPLY]

     

    1. Check
      if Transferee will take delivery of a beneficial interest in the Global Note
      or
      a Definitive Note Pursuant to Rule 144A.
      The
      Transfer is being effected pursuant to and in accordance with Rule 144A under
      the United States Securities Act of 1933, as amended (the “Securities
      Act”),
      and,
      accordingly, the Transferor hereby further certifies that the beneficial
      interest or Definitive Note is being transferred to a Person that the Transferor
      reasonably believed and believes is purchasing the beneficial interest or
      Definitive Note for its own account, or for one or more accounts with respect
      to
      which such Person exercises sole investment discretion, and such Person and
      each
      such account is a “qualified institutional buyer” within the meaning of Rule
      144A in a transaction meeting the requirements of Rule 144A and such Transfer
      is
      in compliance with any applicable blue sky securities laws of any state of
      the
      United States. Upon consummation of the proposed Transfer in accordance with
      the
      terms of the Indenture, the transferred beneficial interest or Definitive Note
      will be subject to the restrictions on transfer enumerated in the legend printed
      on the Global Note and/or the Definitive Note and in the Securities
      Act.

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

     

    2. Check
      if Transferee will take delivery of a beneficial interest in the Global Note
      or
      a Definitive Note pursuant to Regulation S.
      The
      Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
      904 under the Securities Act and, accordingly, the Transferor hereby further
      certifies that (i) the Transfer is not being made to a Person in the United
      States and (A) at the time the buy order was originated, the Transferee was
      outside the United States or such Transferor and any Person acting on its behalf
      reasonably believed and believes that the Transferee was outside the United
      States or (B) the transaction was executed in, on or through the facilities
      of a
      designated offshore securities market and neither such Transferor nor any Person
      acting on its behalf knows that the transaction was prearranged with a buyer
      in
      the United States, (ii) no directed selling efforts have been made in
      contravention of the requirements of Rule 903(b) or Rule 904(a) of Regulation
      S
      under the Securities Act, (iii) the transaction is not part of a plan or scheme
      to evade the registration requirements of the Securities Act and (iv) if the
      proposed transfer is being made prior to the expiration of the Distribution
      Compliance Period (as defined in Regulation S under the Securities Act), (A)
      the
      transfer is not being made to a U.S. Person or for the account or benefit of
      a
      U.S. Person, (B) the Transferee is not a U.S. person and is not acquiring the
      Notes for the account or benefit of any U.S. person or is a U.S. person who
      purchased securities in a transaction that did not require registration under
      the Securities Act, (C) the Transferee understands that it may and agrees to
      resell the Notes only in accordance with the provisions of Regulation S,
      pursuant to registration under the Securities Act, or pursuant to an available
      exemption from registration; and understands that it may not and agrees
      not
      to
      engage
      in
      hedging
      transactions
      with regard to the Notes or the common stock issuable upon conversion unless
      in
      compliance with the Securities Act; (D) the Transferee acknowledges that the
      certificates evidencing the Notes will contain a legend to the effect that
      transfer is prohibited except in accordance with the provisions of Regulation
      S,
      pursuant to registration under the Securities Act, or pursuant to an available
      exemption from registration; and that hedging transactions involving those
      securities may not be conducted unless in compliance with the Securities Act;
      (E) the Transferee acknowledges that the Company is required to refuse to
      register any transfer of the securities not made in accordance with the
      provisions of Regulation S, pursuant to registration under the Securities Act,
      or pursuant to an available exemption from registration; provided,
      however,
      that if
      the Notes are in bearer form or foreign law prevents the Company from refusing
      to register securities transfers, other reasonable procedures (such as a legend
      described above) are implemented to prevent any transfer of the securities
      not
      made in accordance with the provisions of Regulation S. Upon consummation of
      the
      proposed transfer in accordance with the terms of the Indenture, the transferred
      beneficial interest or Definitive Note will be subject to the restrictions
      on
      Transfer enumerated in the legend printed on the Global Note and/or the
      Definitive Note and in the Securities Act. 

     

    3.
      Check
      and complete if Transferee will take delivery of a beneficial interest in the
      Global Note or a Definitive Note pursuant to any provision of the Securities
      Act
      other than Rule 144A or Regulation S.
      The
      Transfer is being effected in compliance with the transfer restrictions
      applicable to beneficial interests in Global Notes and Definitive Notes and
      pursuant to and in accordance with the Securities Act and any applicable blue
      sky securities laws of any state of the United States, and accordingly the
      Transferor hereby further certifies that:

     

    (i) 
      such
      Transfer is being effected pursuant to and in accordance with Rule 144 under
      the
      Securities Act; or

     

    
      
        
        

      

      
        C-2

        
          

        

      

      
        
        

      

    

     

    (ii) 
      such
      Transfer is being effected to the Company or a subsidiary thereof; or

     

    (iii) 
      such
      Transfer is being effected pursuant to an effective registration statement
      under
      the Securities Act.

     

    This
      certificate and the statements contained herein are made for your benefit and
      the benefit of the Company.

    
      	 	 	 
	 	
              

              [Insert
                Name of Transferor]

            
	 	 

    

     

    
      	
            	 	By: 	 
	
            	 	 	
              
                

              

              Name:

              Title:

               

            
	
            	 	Dated:	
            

    

     

    
      
        
        

      

      
        C-3

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      D

     

    FORM
      OF RESTRICTIVE LEGEND FOR
COMMON STOCK ISSUED UPON
      CONVERSION

    

    THE
      SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
      UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR
      OTHER SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE OFFERED
      OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF,
      THE HOLDER:

    

    (1) REPRESENTS
      THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
      SECURITIES ACT;

    

    (2) AGREES
      THAT IT WILL NOT WITHIN THE PERIOD SET FORTH IN RULE 144 UNDER THE SECURITIES
      ACT (CURRENTLY TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY OTHER
      THAN
      WITH RESPECT TO AFFILIATES) (A) RESELL OR OTHERWISE TRANSFER THE SECURITY
      EVIDENCED HEREBY EXCEPT (I) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (II) TO
      A
      QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
      ACT, (III) TO A NON-U.S. PERSON OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
      REGULATION S UNDER THE SECURITIES ACT, (IV) PURSUANT TO THE EXEMPTION FROM
      REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, OR
      (V)
      PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
      THE
      SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER
      OR (B)
      ENGAGE
      IN HEDGING TRANSACTIONS WITH RESPECT TO THIS SECURITY UNLESS IN COMPLIANCE
      WITH
      THE SECURITIES ACT; AND

    

    (3) AGREES
      THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
      TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(A)(V) ABOVE) A NOTICE
      SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

     

    
      
        
        

      

      
        D-1

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      E

     

    FORM
      OF SECURITY DOCUMENTS

     

    
      
        
        

      

      
        E-1

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