NOTES PURCHASE AGREEMENT

Note Purchase Agreement

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This Note Purchase Agreement involves

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC. | BANK OF NEW YORK MELLON | CHINA SAFETECH HOLDINGS LIMITED | CHINA SECURITY & SURVEILLANCE TECHNOLOGY (PRC), INC | China Security & Surveillance Technology, Inc | Citadel Equity Fund Ltd | DEPOSITARY TRUST COMPANY

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Title: NOTES PURCHASE AGREEMENT
Governing Law: New York Date: 8/21/2009
Industry: Security Systems and Services Law Firm: Pillsbury Winthrop;Simpson Thacher Sector: Services

NOTES PURCHASE AGREEMENT

by and between

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC.

as the Company

CHINA SAFETECH HOLDINGS LIMITED

CHINA SECURITY & SURVEILLANCE TECHNOLOGY (PRC), INC.

as the Material Subsidiaries

AND

CITADEL EQUITY FUND LTD.

as the Purchaser

Dated: August 18, 2009

This Notes Purchase Agreement (this " Agreement ") is dated as of August 18, 2009, by and between China Security & Surveillance Technology, Inc., a Delaware corporation (the " Company "), the Material Subsidiaries listed on the signature pages hereto, and Citadel Equity Fund Ltd. (the " Purchaser ").

WHEREAS, the Company proposes to issue, and the Purchaser proposes to purchase, the Tranche A Zero Coupon Guaranteed Senior Unsecured Convertible Notes in an aggregate principal amount of US$50,000,000 (the " Tranche A Notes ") and Tranche B Zero Coupon Guaranteed Senior Unsecured Notes in the aggregate principal amount of US$84,000,000 (the " Tranche B Notes " and, together with the Tranche A Notes, the " Notes ") on the terms of this Agreement, in exchange for the cancellation of the 1.0% Guaranteed Senior Unsecured Convertible Notes due 2012 of the Company in an aggregate principal amount of US$60,000,000 issued on February 16, 2007 (the " CSST I Notes ") and the 1.0% Guaranteed Senior Unsecured Convertible Notes due 2012 of the Company in an aggregate principal amount of US$50,000,000 issued on April 24, 2007 (the " CSST II Notes " and together with the CSST I Notes, the " Existing Notes ") and certain additional consideration as described below.

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:

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).

" Act " means the Securities Act of 1933, as amended.

" Affiliate " of any specified Person means:

(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.

" Amended Investor Rights Agreement " means the second amended and restated investor rights agreement dated the Closing Date by and among the Company, the Material Subsidiaries, and the Purchaser, a form which is attached hereto as Exhibit B .

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

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

" Business Day " has the meaning given in the Conditions.

" BVI " means the British Virgin Islands.

" 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 The Depository Trust Company.

" Closing " has the meaning given in Section 5.

" Closing Date " means the date of the Closing.

" Commission " means the Securities and Exchange Commission.

" Common Stock " means shares of common stock of the Company, par value US$0.0001 per share.

" Company " has the meaning given in the recitals.

" Company Consideration " has the meaning given in Section 5.

" Conditions " means the terms and conditions of the Notes.

" Conversion Shares " means shares of Common Stock issuable under the conversion of the Tranche A Notes.

" CSST I Indenture " means the indenture dated February 16, 2007 among the Company, the Trustee and the other parties named therein, governing the terms and conditions of the CSST I Notes, as originally executed or, if amended or supplemented as therein provided, as so amended or supplemented.

" CSST I Notes " has the meaning given in the recitals.

" CSST II Indenture " means the indenture dated April 24, 2007 among the Company, the Trustee and the other parties named therein, governing the terms and conditions of the CSST II Notes, as originally executed or, if amended or supplemented as therein provided, as so amended or supplemented.

" CSST II Notes " has the meaning given in the recitals.

" CSST PRC " means China Security & Surveillance Technology (PRC), Inc., a wholly-owned subsidiary of the Company, incorporated under the laws of PRC.

" Disclosure Schedule " has the meaning given in Section 6.

" Environmental Laws " has the meaning given in Section 6(bb).

" Exchange Act " means the Securities Exchange Act of 1934, as amended.

" Existing Notes " has the meaning given in the recitals.

" FCPA " has the meaning given in Section 6(dd).

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

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

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

" Group Companies " means the Company and its Subsidiaries.

" Guarantees " has the meaning given in Section 4.

" 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).

" Indentures " has the meaning given in Section 3.

" Intellectual Property " has the meaning given in Section 6(q)(i).

" 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(s)(ii).

" Material Adverse Effect " means a material adverse effect on:

(a)

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

(b)

the ability of the Company and the Material Subsidiaries to perform their respective 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.

" Material Subsidiaries " means Safetech and CSST PRC.

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

" Most Recent Balance Sheet " has the meaning given in Section 6(s)(iii).

" Notes " has the meaning given in the recitals.

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

" Permits " has the meaning given in Section 6(m).

" 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.

" Proceedings " has the meaning given in Section 6(l).

" Purchaser " has the meaning given in the recitals.

" Purchaser Consideration " has the meaning given in Section 5.

" Registrable Securities " has the meaning given in Section3B.

" Safetech " means China Safetech Holdings Limited, a wholly-owned subsidiary of the Company, incorporated under the laws of BVI.

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

" Securities " means, collectively, the Notes, the Stock Consideration Shares and the Conversion Shares.

" 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.

" Stock Consideration " has the meaning given in Section 3A(a).

" Stock Consideration Shares " has the meaning given in Section 3A(a).

" 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,

(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(p).

" Trading Market " has the meaning given in Section 5.

"Tranche A Indenture" has the meaning given in Section 3.

" Tranche A Notes " has the meaning given in the recitals.

"Tranche B Indenture" has the meaning given in Section 3.

" Tranche B Notes " has the meaning given in the recitals.

" Transaction Documents " means this Agreement, the Indentures, the Notes and the Amended Investor Rights Agreement, or any of them as the context may so require.

" Trustee " means The Bank of New York Mellon, a New York banking corporation, acting as trustee under the Indenture.

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

" Waiver " means a waiver dated as of the Closing Date by and between the Company and the Purchaser, in the form previously agreed by the Purchaser and the Company.

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 is to be construed as a reference to that statute or statutory provision as it may be amended from time to time.

Issuance of Notes .

Subject to the terms and conditions of this Agreement, as part of the consideration for the Purchaser's delivery of the Existing Notes for cancellation, the Company will, on the Closing Date, (i) issue and sell to the Purchaser, and the Purchaser will purchase from the Company, 500 Tranche A Notes of US$100,000 principal amount each, convertible into shares of Common Stock, at an initial conversion price of US$10.00 per share, and 840 Tranche B Notes of US$100,000 principal amount each and (ii) cause the Guarantors to issue the Guarantees. Tranche A Notes will be issued pursuant to the provisions of the Indenture dated as of the Closing Date between the Company and The Bank of New York Mellon, as trustee, a form of which is attached hereto as Exhibit A-1 (the " Tranche A Indenture "), and Tranche B Notes will be issued pursuant to the provisions of the Indenture dated as of the Closing Date between the Company and The Bank of New York Mellon, as trustee, as form of which is attached hereto as Exhibit A-2 (the " Tranche B Indenture ", and together with the Tranche A Indenture, the " Indentures ").

3A.

Issuance of the Stock Consideration Shares

(a)

Stock Consideration. Subject to the terms and conditions of this Agreement, as part of the consideration for the Purchaser's delivery of the Existing Notes for cancellation, the Company will, on the Closing Date, (i) issue and sell to the Purchaser, and the Purchaser will purchase from the Company, 2,902,758 shares of newly issued Common Stock (the " Stock Consideration ," and the shares representing the Stock Consideration, the " Stock Consideration Shares ").

(b)

No Fractional Shares. Notwithstanding the foregoing, no certificate or scrip representing fractional shares of the Stock Consideration shall be issued, and such fractional share interests shall not entitle the owner thereof to vote or to any rights as a stockholder of the Company. In lieu of any such fractional shares, each holder of the Stock Consideration Shares who would otherwise have been entitled to a fraction of such shares shall be entitled to receive a cash payment in lieu of such fractional share in an amount equal to such fraction multiplied by US$6.89, subject to paragraph (c) below.

(c)

Adjustment of the Stock Consideration. If between the date of this Agreement and the Closing Date, the outstanding shares of Common Stock shall have been changed into a different number of shares or a different class, by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination, exchange of shares or similar transaction, the Stock Consideration shall be correspondingly adjusted to reflect such stock dividend, subdivision, reclassification, recapitalization, split, combination, exchange of shares or similar transaction.

The Securities will be offered and sold to the Purchaser pursuant to Regulation S or other exemption from the registration requirements 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 Securities shall bear the legends relating to the offer and the sale of the Securities as required by (i) Regulation S under the Act or (ii) any other applicable laws or regulations relating to the issuance of the Securities.

3B.

Registration of Conversion Shares and Stock Consideration Shares.

The Company shall prepare and file with the Commission a registration statement (as amended or supplemented from time to time, the " Conversion Share Shelf Registration Statement "), no later than 15 days after the Closing, for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Act registering the resale from time to time by the Noteholders of the Conversion Shares to be issued upon conversion thereof in accordance with the terms of the Indentures and shall use its best efforts to cause the Conversion Share Shelf Registration Statement to be declared effective under the Act as soon as practical but, in any event, no later than 45 days following the Closing (provided that, in the event of a review of such registration statement by the Commission, the required effective date will be extended by 60 days). In addition, before the 105 ^th day following the Closing Date, the Company shall prepare and file with the Commission one single registration statement (as amended or supplemented from time to time, the " Stock Consideration Share Shelf Registration Statement ," and together with the Conversion Shares Shelf Registration Statement, the " Shelf Registration Statements" ), or an amendment or supplement to an existing shelf registration statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Act registering the resale from time to time by the Purchaser or any transferee therefrom of 1,451,379 shares of the Stock Consideration Shares (the " Registrable Stock Consideration Shares I ") (it being understood that in each case, such number of shares may be adjusted from time to time under Article 14 of the Tranche A Indenture), and shall use its best efforts to cause such registration statement to be declared effective under the Act as soon as practical but, in any event, no later than 135 days following the Closing (provided that, in the event of a review of such registration statement by the Commission, the required effective date will be extended by 60 days); provided, that , unless, to the Purchaser's reasonable satisfaction and based on the opinion of counsel to the Company, the entire remaining 1,451,379 shares of the Stock Consideration (the " Registrable Stock Consideration Shares II ") (it being understood that in each case, such number of shares may be adjusted from time to time under Article 14 of the Tranche A Indenture), are available for resale at the end of the six-month period following the Closing without any restriction under Rule 144 (including, for the avoidance of doubt, any restriction relating to the volume of sales), the Company shall file, no later than 15 days following the end of such six-month period, a second Stock Consideration Share Shelf Registration Statement, or an amendment or supplement to an existing shelf registration statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Act registering the resale from time to time by the Purchaser or any transferee there from of such remaining 1,451,379 shares of the Stock Consideration (the Registrable Stock Consideration Shares I, the Registrable Stock Consideration Shares II, if applicable, and the Conversion Shares, are hereinafter referred to as the " Registrable Securities ") and shall use its best efforts to cause such registration statement to be declared effective under the Act as soon as possible but, in any event, no later than 45 days following the end of such six-month period (provided that, in the event of a review of such registration statement by the Commission, the required effective date will be extended by 60 days).

The Company shall use its best efforts to cause the Shelf Registration Statement to remain effective under the Act, including, without limitation, the prompt filing of post-effective amendments and supplements, to permit the Purchaser or any transferees therefrom to dispose of Registrable Securities in such registration for a period commencing as of the Closing and ending on the earliest to occur of (i) the date on which all such Registrable Securities which have not been previously sold to the public pursuant to the Shelf Registration Statement can be sold to the public under Rule 144 under the Act, and (ii) the date on which all such Registrable Securities have been sold to the public pursuant to the Shelf Registration Statement in accordance with the intended method of distribution thereof.

All costs and expenses of any registration and qualification of the Registrable Securities pursuant to this Section 3B shall be borne by the Company, other than (i) any costs and expenses of counsel, accountants, or other advisors retained by the Purchaser and (ii) all transfer, franchise, capital or other taxes, if any, applicable to the Registrable Securities which shall be paid by the Purchaser.

Guarantees.

Pursuant to the Indenture and to the fullest extent permitted by Applicable Laws, Safetech and all of the Company's other existing and future direct and indirect Significant 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 basis, to the Purchaser and to the Trustee the payment and performance of the Company's obligations under this Agreement, the Notes and the Indenture (collectively, the " Guarantees ").

Purchase, Sale and Delivery .

The issue and sale of the Notes to be purchased by the Purchaser shall occur at the Hong Kong office of Simpson Thacher & Bartlett LLP, on or about 9 a.m., New York time, at a closing (the " Closing ") on August 31, 2009 (the " Closing Date ") or on such other time or Business Day as may be agreed upon by the Company and the Purchaser.

At or prior to the Closing, the Company shall deliver (in the case of (i) and (ii), by way of book-entry transfer or otherwise) to the Purchaser (i) one or more global certificates representing each of the Tranche A Notes and the Tranche B Notes, each registered in such names and denominations as the Purchaser may request, (ii) one or more certificates representing the Stock Consideration Shares, free and clear of any Lien, and (iii) US$5,000,000 in cash by immediately available federal bank wire transfer to such bank account or accounts as the Purchaser shall have designated to the Purchaser prior to the Closing (the " Cash Consideration " and together with the Notes and the Stock Consideration, the " Company Consideration "), against delivery by book-entry transfer or otherwise by the Purchaser to the Company of each of the CSST I Notes in an aggregate principal amount of US$60,000,000 and the CSST II Notes in an aggregate principal amount of US$50,000,000 (each such Notes representing the entire outstanding CSST I Notes and the entire outstanding CSST II Notes, respectively) for further delivery to the Trustee for cancellation in accordance with the terms of the CSST I Indenture and the CSST II Indenture, respectively (such CSST I Notes and CSST II Notes, the " Purchaser Consideration ").

The Notes will be represented by one or more global certificates in book-entry form, deposited on the 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. Upon registration with the Commission under the Act as provided herein, each of the Stock Consideration Shares and the Conversion Shares shall be approved for listing and quotation on the New York Stock Exchange (the " Trading Market ").

Representations and Warranties of the Company and the Material Subsidiaries .

Except as set forth in the Disclosure Schedule attached hereto as Exhibit C (" Disclosure Schedule ") which exceptions shall be deemed part of the representations and warranties made hereunder, each of the Company and the Material Subsidiaries, jointly and severally, represents and warrants to the Purchaser the following:

(a)

SEC Reports; Financial Statements; Shelf Registration Statement.

(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, for the 24 months preceding the date hereof (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, 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 (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 will be, in compliance with all of the listing requirements of the Trading Market.

(iii)

As of the date of its effectiveness and for so long as it remains in effect, each of the Shelf Registration Statements (including any related prospectus, preliminary prospectus or form of prospectus and amendments or supplements thereto) will comply in all material respects with the applicable requirements of the Act. The documents incorporated by reference in each of the Shelf Registration Statements (and any supplement thereto), when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable. As of the date of its effectiveness and for so long as it remains in effect, each of the Shelf Registration Statements (including any related prospectus, preliminary prospectus or form of prospectus and amendments or supplements thereto) will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein (in the case of any prospectus, preliminary prospectus or form of prospectus and amendments or supplements thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding the Purchaser furnished in writing to the Company by the Purchaser expressly for use therein, or to the extent that such information relates to the Purchaser or its proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by the Purchaser expressly for use in such Shelf Registration Statement, such prospectus, preliminary prospectus or such form of prospectus or in any amendment or supplement thereto.

(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, showing, as to each of its Subsidiaries, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its Capital Stock outstanding owned by the Company and each of its other Subsidiaries.

(ii)

All of the outstanding shares of Capital Stock of each Subsidiary of the Company 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)

No Subsidiary of the Company is a party to, or otherwise subject to any legal or regulatory restriction (other than any restrictions under the PRC laws or regulations) 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 of such Subsidiary.

(c)

Organization. Except as set forth on 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 Group Companies 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 of the Company have been validly issued, are fully paid and non-assessable, and all of the Stock Consideration Shares and the Conversion Shares will be fully paid and non-assessable, and be 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 (collectively, " Fully-Diluted "). The Conversion Shares issuable upon conversion of the Notes have been duly reserved for issuance, and will constitute 9.7% of the Company's Capital Stock on a Fully-Diluted basis. 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 or BVI 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.

(iii)

Voting and Other Agreements. 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. 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 or (y) the sale, transfer or other disposition with respect to any security of the Company.

(e)

No Registration Rights. 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 Company and the Material Subsidiaries 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 Company and the Material Subsidiaries, and (iii) each of the Transaction Document has been duly authorized and when executed and delivered by the Company and the Material Subsidiaries (to the extent they are parties thereto) shall constitute a legal, valid and binding obligation of each of the Company and the Material Subsidiaries (to the extent they are parties thereto) enforceable against the Company and the Material Subsidiaries (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 Stock Consideration. The Notes and the Stock Consideration, 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 and the Stock Consideration will be issued in compliance with applicable state and federal securities laws. The Notes and the Stock Consideration 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 and the Stock Consideration 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.

(h)

Valid Issuance of Conversion Shares. The Conversion Shares, when issued, sold and delivered in accordance with the terms of the Tranche A Notes and the Tranche A Indenture 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 (and in the case of the Conversion Shares, subject to the provisions of the Tranche A Indenture). The conversion rights attached to the Notes, when the Notes are issued on the Closing Date, will provide for the right to convert the Notes into up to 5,000,000 shares of Common Stock of the Company (subject to subdivision or consolidation thereof) as of the Closing Date (as calculated immediately following the Closing and assuming the conversion of all the Notes). The Conversion Shares have been duly and validly authorized for issuance by the Company, and when issued pursuant to the terms of the Tranche A Notes and the Tranche A 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, articles 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) in breach of or in default 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 "), other than in each of clause (i) and (ii) such violations, breaches or defaults that do not, and would not, individually or in the aggregate, have a Material Adverse Effect.

(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 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, other than in each of clause (ii) and (iii) such violations, breaches or defaults that do not, and would not, individually or in the aggregate, have a Material Adverse Effect. Immediately following consummation of the transactions contemplated in the Transaction Documents, no default will exist under the Indenture.

(k)

Governmental Filings. 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, and (ii) as may be required under the Act or state securities, rules and regulations of the New York Stock Exchange, or "blue sky" laws.

(l)

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 knowledge of the Company, 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.

(m)

Permits. 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 "), except where the failure to possess such Permits could not, individually or in the aggregate, have a Material Adverse Effect. 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.

(n)

Title to Property. 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 for Liens that do not materially interfere with the use made and proposed to be made of such property. 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, except for Liens that do not materially interfere with the use made and proposed to be made of such property.

(o)

Insurance. Each of the Group Companies maintains 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. All policies of insurance 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 knowledge, 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 at a cost that does not, and would not, individually or in the aggregate, have a Material Adverse Effect.

(p)

Taxes. Except as set forth on Schedule 6(p) of the Disclosure Schedule, 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 material 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 knowledge of the Company, 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.

(q)

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 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 knowledge, 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 knowledge, there are no facts which would form a valid basis for any such Proceeding. To the Company's knowledge, the use of such Intellectual Property any of the Group Companies will not infringe on the Intellectual Property rights of any other Person.

(ii)

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 had executed appropriate nondisclosure and confidentiality agreements and made all appropriate filings, registrations and payments of fees in connection with the foregoing. To the Company's knowledge, 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.

(iii)

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.

(r)

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.

(s)

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, 2008 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, 2008, 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 the 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, operations, 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 knowledge of the Company, 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.

(iii)

Without limiting the generality of the foregoing paragraph (ii), except as disclosed in the SEC Reports, each of the Group Companies 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, 2008 (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, 2008 (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.

(t)

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 Group Companies as of the Closing Date after giving effect to the transactions contemplated 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 Debts beyond its ability to pay such debts 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. 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. 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. 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 any Group Company.

(u)

No Stabilization. None of the Group Companies has and, to each of its 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, other than commissions payable to registered broker dealers in connection with the Company's financing transactions.

(v)

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.

(w)

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.

(x)

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.

(y)

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

(z)

Labor Matters. 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.

(aa)

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.

(bb)

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 of 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 to each of the foregoing where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals, or liability would not, individually or in the aggregate, have a Material Adverse Effect.

In the ordinary course of its business, the Company periodically reviews the effect of Environmental Laws on the business, operations and properties of the Group Companies, in the course of which it identifies, estimates and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review, the Company has reasonably concluded that such associated costs would not, individually or in the aggregate, have a Material Adverse Effect.

(cc)

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.

(dd)

Foreign Corrupt Practices Act. None of the Group Companies, nor to the knowledge of the Company, 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 ").

(ee)

Ranking of Obligations. The payment obligations of the Company under this Agreement will rank at least pari passu , without preference or priority, with all other senior unsecured and unsubordinated indebtedness of the Company.

(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 any Group Company nor, to the knowledge of the Company, any director, officer, agent, employee, Affiliate or Person acting on behalf of such Group 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.

(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, threatened.

(kk)

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 (to the extent they are parties thereto), 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.

(ll)

Material Subsidiaries. Each of the Material Subsidiaries is a Significant Subsidiary, and other than the Material Subsidiaries, the Company does not have any Subsidiary that is a Significant Subsidiary.

The Company does not make any representations or warranties with respect to the transactions contemplated in this Agreement other than those specifically set forth in this Section 6.

Covenants of the Company and the Material Subsidiaries .

Each of the Company and the Material Subsidiaries, 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 144(a)(3) or 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 the 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)

To maintain the listing and trading of the Common Stock (including, for the avoidance of doubt, the Stock Consideration Shares, and upon issuance in accordance with the terms of the Tranche A Indenture, the Conversion Shares) on the Trading Market or on an alternative trading market reasonably acceptable to the Purchaser.

(g)

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.

(h)

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, the Stock Consideration Shares and the Conversion Shares or the sale thereof to the Purchaser.

(i)

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.

(j)

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

(k)

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.

(l)

At the Closing, the Company shall have reserved and available, free from preemptive rights, the maximum aggregate number of the Stock Consideration Shares issuable upon the Closing out of its authorized but unissued Common Stock, solely for the purpose of providing for the Stock Consideration. The Company shall at all times keep reserved and available, free from preemptive rights, out of its authorized but unissued Common Stock, 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.

(m)

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.

(n)

Each of the Company and the Material Subsidiaries undertakes that (i) they will comply, and cause their Subsidiaries to 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, and cause their Subsidiaries to conduct its business in compliance with the FCPA, and (iii) they will institute and maintain, and cause their Subsidiaries to institute and maintain, policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

(o)

The Company shall, by no later than the day following the Closing Date, file a Form 8-K announcing the 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.

(p)

Promptly upon receipt of the CSST I Notes and the CSST II Notes from the Purchaser in connection with the Closing, the Company shall deliver the same to the Trustee for cancellation in accordance with the applicable provisions in the CSST I Indenture and the CSST II Indenture, respectively.

(q)

The Company will use commercially reasonable efforts to (A) permit the Notes to be eligible for clearance and settlement (directly or indirectly) through The Depository Trust Company (" DTC ") and (B) permit the Notes to be designated PORTAL securities in accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. (" NASD ") relating to trading in the PORTAL Market.

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

(a)

The Purchaser is not a "U.S. Person" (as defined in Rule 902 of Regulation S under the Act) 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 Securities in any country or jurisdiction where action for that purpose is required. The Purchaser is not acquiring the Securities 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 or unless such securities have been registered under the Act and applicable state securities laws.

(b)

The Purchaser is not acquiring the Securities 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 Securities that it will not offer, sell or otherwise transfer any of such Securities prior to (x) the expiration of the applicable holding period under Rule 144 of the Act commencing from the later of the date of the commencement of the offering and the date of original issuance (or of any predecessor of any Securities 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) 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 (d) 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 Note is transferred a notice substantially to the effect of this paragraph.

(d)

The Purchaser acknowledges that the Securities are "restricted securities" as defined in Rule 144 under the Act, and the resale of such Securities by the Purchaser must be made in accordance with Regulation S, the registration requirements under the Act or an exemption thereform.

(e)

No form of "directed selling efforts" (as defined in Rule 902 of Regulation S under the Act), 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 Securities.

(f)

The Securities 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 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 Securities.

(g)

The Purchaser will not, for a period of 90 days before the date set forth in Section 14.05(g) of each of the Indentures, engage in short selling of the Common Stock.

(h)

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

Conditions to Purchase Notes at Closing.

9.1

Conditions Precedent to the Obligations of the Purchaser to Deliver the Purchaser Consideration: The Purchaser's obligation under this Agreement to deliver the Purchaser Consideration in exchange for the Company Consideration is subject to the satisfaction or waiver of each of the following conditions:

(a)

All the representations and warranties of each of the Company and the Material Subsidiaries contained in each Transaction Document shall be true and correct in all material respects (except for any representations and warranties qualified with materiality which shall be true and correct in all respects) as of the date hereof and at the Closing Date. Each of the Company and the Material Subsidiaries shall have performed, satisfied and complied with all covenants, agreements and conditions required by the Transaction Documents, to which it is a party, 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 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 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, the Stock Consideration Shares, the Conversion Shares, or could not, individually or in the aggregate, have 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 this Agreement, 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 in all material respects (except for any representations and warranties qualified with materiality which shall be true and correct in all respects) 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, and (d) the sale of any of the Notes, the Stock Consideration Shares and the Conversion Shares has not been enjoined (temporarily or permanently);

(ii)

certificates dated the Closing Date, signed by each of the Material Subsidiaries, to the effect that (a) the representations and warranties set forth in the Transaction Documents which are given by such Material Subsidiary are true and correct with the same force and effect as though expressly made at and as of the Closing Date, and (b) such Material Subsidiary 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 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 matters as the Purchaser may reasonably require;

(iv)

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

(v)

the opinions of Pillsbury Winthrop Shaw Pittman LLP, U.S. counsel to the Company, dated the Closing Date, in the form and substance satisfactory to the Purchaser;

(vi)

the opinions of Harney Westwood & Riegels, British Virgin Islands counsel to Safetech, dated the Closing Date, in the form and substance satisfactory to the Purchaser;

(vii)

the opinions of Guangdong Guanghe Law Firm, PRC counsel to CSST PRC, dated the Closing Date, in the form and substance 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)

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

(i)

The respective board of directors of each of the Company and the Material Subsidiaries 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 the Stock Consideration Shares, (v) the issuance of the Stock Consideration Shares and the Conversion Shares and (v) all other actions necessary in connection with the transactions contemplated by the Transaction Documents and the offering of the Notes, the Stock Consideration Shares and the Conversion Shares, and shall have provided the Purchaser with a copy of such authorizations.

(j)

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

(k)

The Notes shall have been (i) designated as PORTAL eligible securities in accordance with the rules and regulations of the NASD and (ii) eligible for clearance and settlement through the DTC.

9.2

Conditions Precedent to the Obligations of the Company to Deliver the Company Consideration: The Company's obligation under this Agreement to deliver the Company Consideration in exchange for the Purchaser Consideration is subject to the satisfaction or waiver of each of the following conditions:

(a)

All the representations and warranties of the Purchaser contained in each Transaction Document shall be true and correct in all material respects (except for any representations and warranties qualified with materiality which shall be true and correct in all respects) as of the date hereof and at the Closing Date. The Purchaser shall have performed, satisfied and complied with all covenants, agreements and conditions required by the Transaction Documents, to which it is a party, to be performed, satisfied or complied with by them at or prior to the Closing

(b)

(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 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 Securities, or could not, individually or in the aggregate, have a Material Adverse Effect.

(d)

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

(e)

The Company shall have received executed original (or clearly legible facsimile copy) of the Waiver.

(f)

The Existing Notes shall have been delivered to the Company for cancellation.

(g)

The Company 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.

10.

Indemnification .

(a)

Each of the Company and the Material Subsidiaries (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), as incurred, related to or arising out of or in connection with:

(i)

any breach by any of the Company and the Material Subsidiaries or their respective Affiliates of any of the representations, warranties, covenants and agreements set forth in any Transaction Document; or

(ii)

any violation by the Company of the Act, the Exchange Act or any state securities law or any rule or regulation thereunder in connection with the performance of its obligations under this Agreement, 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.

(c)

The indemnity, expense reimbursement and contribution obligations set forth herein (i) shall be in addition to any liability that the Company and the Material Subsidiaries 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 Company and the Material Subsidiaries or their respective business and assets.

(d)

Without limiting the generality of the other paragraphs in this Section 10, each of the Company and the Material Subsidiaries will, jointly and severally, agree to indemnify, defend and hold harmless the Indemnified Parties from and against (i) any and all losses (including without limitation, losses arising from or as a result of a decrease in the value of the Company or the value of the Common Stock or the Notes) incurred by any member of the Indemnifies Parties and (ii) any and all claims, actions or causes of action, assessments, demands, damages, judgments, settlements, liabilities, costs and expenses (including, without limitation, interest, penalties and attorneys' and accounting fees and expenses) of any nature whatsoever, asserted against or imposed upon any member of the Indemnified Parties, in each case, by reason of or resulting from any breach or violation (whether such breach or violation was due to actions taken or failure to take actions, in whole or in part, prior to or after the date hereof) of laws, rules, regulations or orders of any Governmental Authority by any of the Group Companies.

(e)

If a claim for indemnification under Section 10(a) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then each Indemnifying Party (jointly and severally), in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of any losses, claims, damages, liabilities and reasonable expenses (or actions in respect thereof), in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such any losses, claims, damages, liabilities and reasonable expenses (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any losses, claims, damages, liabilities and reasonable expenses (or actions in respect thereof) shall be deemed to include, subject to the limitations set forth in Section 10(b), any reasonable attorneys' or other reasonable fees or expenses incurred by such party in connection with any action or proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 10(e) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 10(e), no Indemnified Party shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Indemnified Party from the sale of the Registrable Securities subject to any action or proceeding exceeds the amount of any damages that such Indemnified Party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

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 Effect or development involving or reasonably expected to result in a prospective Material Adverse Effect that could, in the Purchaser's reasonable 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 Company and the Material Subsidiaries 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)

trading in the Common Stock shall have been suspended 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.

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 Company and the Material Subsidiaries 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/or any Registrable Securities, 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 any of the Company and the Material Subsidiaries, to: 13/F, Shenzhen Special Zone Press Tower, Shennan Road, Futian, Shenzhen, China, Fax: (86) 755-83510815, Attention: Mr. Tu Guo Shen, with a copy to Pillsbury Winthrop Shaw Pittman LLP, 2300 N Street, N.W., Washington, DC 20001, Fax: (1-202) 663-8007, Attention: Louis A. Bevilacqua, Esq., (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 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: 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.

(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 nonexclusive 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.

[Signature page(s) to follow.]


For and on behalf of:
CHINA SECURITY & SURVEILLANCE
TECHNOLOGY, INC.


By: /s/ Tu Guo Shen
Name: Tu Guo Shen
Title: Chief Executive Officer


For and on behalf of:
CHINA SAFETECH HOLDINGS LIMITED

By: /s/ Tu Guo Shen
Name: Tu Guo Shen
Title: Chief Executive Officer


For and on behalf of:
CHINA SECURITY & SURVEILLANCE
TECHNOLOGY (PRC), INC.

By: /s/ Tu Guo Shen
Name: Tu Guo Shen
Title: Chief Executive Officer


For and on behalf of:
CITADEL EQUITY FUND LTD.

By: Citadel Advisors LLC, its Portfolio Manager


By: /s/ David Noh
Name: David Noh
Title: Authorized Signatory

Exhibit A-1

Form of the Tranche A Indenture

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC.

as the Company

CHINA SAFETECH HOLDINGS LIMITED

as the Guarantor

and

THE BANK OF NEW YORK MELLON,
a New York banking corporation
as the Trustee

__________________________

INDENTURE

Dated [●], 2009

__________________________

Tranche A Zero Coupon Guaranteed Senior Unsecured Convertible Notes

TABLE OF CONTENTS

					Page


ARTICLE 1

DEFINITIONS

Section 1.01. Definitions					1
Section 1.02. Other Definitions					28
Section 1.03. Rules of Construction.					29

ARTICLE 2

ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

Section 2.01. Designation Amount and Issue of Notes					30
Section 2.02. Form of Notes					30
Section 2.03. Date and Denomination of Notes; Payment of Interest					32
Section 2.04. Execution of Notes					32
Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on Transfer					33
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes					35
Section 2.07. Temporary Notes					36
Section 2.08. Cancellation of Notes					36
Section 2.09. Defaulted Interest					36
Section 2.10. CUSIP Numbers					37

ARTICLE 3

REDEMPTION AND REPURCHASE OF NOTES

Section 3.01. Redemption					37
Section 3.02. Offer to Purchase					38

ARTICLE 4

PARTICULAR COVENANTS OF THE COMPANY

Section 4.01. Payment of Principal					40
Section 4.02. Maintenance of Office or Agency					41
Section 4.03. Provisions as to Paying Agent					41
Section 4.04. Existence					42
Section 4.05. Maintenance of Properties					42
Section 4.06. Payment of Taxes and Other Claims					43
Section 4.07. Stay, Extension and Usury Laws					43
Section 4.08. Payments for Consent					43

Section 4.09. Incurrence of Additional Debt; Financial Covenants		44
Section 4.10. Restricted Payments		44
Section 4.11. Liens		46
Section 4.12. Asset Sales		46
Section 4.13. Restrictions on Distributions from Subsidiaries		47
Section 4.14. Affiliate Transactions		49
Section 4.15. Issuance or Sale of Capital Stock of Subsidiaries		50
Section 4.16. Maintenance of Consolidated Tangible Net Worth		50
Section 4.17. Repurchase at the Option of Holders Following a Change of Control		51
Section 4.18. Future Guarantors		51
Section 4.19. Business Activities		52
Section 4.20. Sale and Leaseback Transactions		52
Section 4.21. Reserved		52
Section 4.22. Maintenance of Insurance		52
Section 4.23. Repurchase Upon Termination of Trading		52
Section 4.24. Government Approvals and Licenses; Compliance with Law		52
Section 4.25. [RESERVED]		53
Section 4.26. Notes to Rank Senior		53
Section 4.27. Compliance Certificate		53
Section 4.28. Calculation of Original Issue Discount		53

ARTICLE 5

SUCCESSORS

Section 5.01. Merger, Consolidation and Sale of Assets		54
Section 5.02. Successor Corporation Substituted		56

ARTICLE 6

REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT

Section 6.01. Events of Default		56
Section 6.02. Payments of Notes on Default; Suit Therefor		59
Section 6.03. Application of Monies Collected by Trustee		61
Section 6.04. Proceedings by Noteholder		61
Section 6.05. Proceedings by Trustee		62
Section 6.06. Remedies Cumulative and Continuing		62
Section 6.07. Direction of Proceedings and Waiver of Defaults by Majority of Noteholders		62
Section 6.08. Notice of Default		63
Section 6.09. Undertaking to Pay Costs		63

ARTICLE 7

THE TRUSTEE

Section 7.01. Duties and Responsibilities of Trustee		64
Section 7.02. Rights of Trustee		65
Section 7.03. No Responsibility for Recitals, Etc		68
Section 7.04. Trustee, Paying Agents, Conversion Agents, Depositary or Registrar May Own Notes		68
Section 7.05. Monies to Be Held in Trust		68
Section 7.06. Compensation and Expenses of Trustee		68
Section 7.07. Eligibility of Trustee		69
Section 7.08. Resignation or Removal of Trustee		69
Section 7.09. Acceptance by Successor Trustee		71
Section 7.10. Succession by Merger		71
Section 7.11. Trustee's Application for Instructions from the Company		72
Section 7.12. Reserved		72
Section 7.13. Certain Provisions		72

ARTICLE 8

SUPPLEMENTAL INDENTURES

Section 8.01. Supplemental Indentures Without Consent of Noteholders		72
Section 8.02. Supplemental Indenture with Consent of Noteholders		74
Section 8.03. Effect of Supplemental Indenture		75
Section 8.04. Notation on Notes		75
Section 8.05. Evidence of Compliance of Supplemental Indenture to Be Furnished to Trustee		76

ARTICLE 9

GUARANTEES

Section 9.01. Guarantee		76
Section 9.02. Limitation on Guarantor Liability		78
Section 9.03. Execution and Delivery of Guarantee		78
Section 9.04. Guarantors May Consolidate, etc., on Certain Terms		79
Section 9.05. Releases Following Merger, Consolidation or Sale of Assets, Etc		79

ARTICLE 10

[RESERVED]


ARTICLE 11

SATISFACTION AND DISCHARGE OF INDENTURE

Section 11.01. Discharge of Indenture		80
Section 11.02. Deposited Monies to Be Held in Trust by Trustee		81
Section 11.03. Paying Agent to Repay Monies Held		81

iii

Section 11.04. Return of Unclaimed Monies		81
Section 11.05. Reinstatement		82

ARTICLE 12

THE NOTEHOLDERS

Section 12.01. Action by Noteholders		82
Section 12.02. Proof of Execution by Noteholders		82
Section 12.03. Who Are Deemed Absolute Owners		82
Section 12.04. Company-owned Notes Disregarded		83
Section 12.05. Revocation of Consents; Future Holders Bound		83

ARTICLE 13

MEETINGS OF NOTEHOLDERS

Section 13.01. Purpose of Meetings		84
Section 13.02. Call of Meetings by Company or Noteholders		84
Section 13.03. Qualifications for Voting		84
Section 13.04. Regulations		85
Section 13.05. Voting		85
Section 13.06. No Delay of Rights by Meeting		86

ARTICLE 14

CONVERSION OF NOTES

Section 14.01. Right to Convert		86
Section 14.02. Exercise of Conversion Right; Issuance of Common Stock on Conversion; No Adjustment for Interest or Dividends		86
Section 14.03. Cash Payments in Lieu of Fractional Shares		88
Section 14.04. Conversion Rate		88
Section 14.05. Adjustment of Conversion Rate		88
Section 14.06. Effect of Reclassification, Consolidation, Merger or Sale		97
Section 14.07. [RESERVED]		98
Section 14.08. Taxes on Shares Issued		98
Section 14.09. Reservation of Shares; Shares to Be Fully Paid; Compliance with Governmental Requirements; Listing of Common Stock		99
Section 14.10. Responsibility of Trustee		99
Section 14.11. Notice to Holders Prior to Certain Actions		100
Section 14.12. Shareholder Rights Plans		101

ARTICLE 15

MISCELLANEOUS PROVISIONS

Section 15.01. Provisions Binding on Company's Successors		101

Section 15.02. Official Acts by Successor Corporation		101
Section 15.03. Addresses for Notices, Etc		101
Section 15.04. Governing Law		102
Section 15.05. Evidence of Compliance with Conditions Precedent; Certificates to Trustee		102
Section 15.06. Legal Holidays		103
Section 15.07. Company Responsible for Making Calculations		103
Section 15.08. Benefits of Indenture		103
Section 15.09. Table of Contents, Headings, Etc.		103
Section 15.10. Authenticating Agent		104
Section 15.11. Indenture and Notes Solely Corporate Obligations		104
Section 15.12. Execution in Counterparts		105
Section 15.13. Severability		105
Section 15.14. Consent to Jurisdiction; Consent to Service of Process		105
Section 15.15. Currency Indemnity.		106
Section 15.16. U.S.A. Patriot Act.		106

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

INDENTURE

INDENTURE dated [●], 2009, between CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC, a Delaware corporation (hereinafter called the “ Company ”), the Guarantor listed on the signature pages hereto, and THE BANK OF NEW YORK MELLON, 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 Tranche A Zero Coupon Guaranteed Senior Unsecured Convertible Notes (hereinafter called the “ Notes ”), in an aggregate principal amount not to exceed $50,000,000 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 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.

“ Affiliate ” of any specified Person means:

(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.

“ Amended Investor Rights Agreement ” means the second amended and restated investor rights agreement dated the Issue Date by and among the Company, the Guarantor, the Operating Subsidiary, and Citadel Equity Fund Ltd.

“ 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 DTC 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,

(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 $5.0 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.

“ 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” or as capitalized internally developed software or comparable items reflected in 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));

(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 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

(b)

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

(c)

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

“ Clearstream ” means Clearstream Banking, S.A. (or any successor securities clearing agency).

“ 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.

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

“ 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 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 $0.0001) 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.

“ 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,

(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

(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

(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.

“ 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 Subsidiaries (including any Person who becomes a Subsidiary after the Issue Date), 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);

(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.

“ Depositary ” means with respect to the Notes issuable or issued in whole or in part in the form of one or more Global Notes, the Person designated as Depositary by the Company pursuant to the Indenture and its successors.

“ 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

on or prior to, in the case of clause (a), (b) or (c), the first anniversary of the Final Redemption Date.

“ 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 of such dividend divided 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.

“ DTC ” means The Depositary Trust Company.

“ 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.

“ Euroclear ” means Euroclear Bank S.A./N.V., as operator of the Euroclear system (or any successor securities clearing agency).

“ 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 regularly 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 but less than or equal to $5.0 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.

“ Final Redemption Date ” means [●], 2012.

“ 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,

(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:

(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 Safetech 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.

“ 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.

“ 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.

“ Issue Date ” means [●], 2009.

“ 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; provided , that,

(1) if:

(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).

“ Material Adverse Effect ” means a material adverse effect on (a) the property, business, operations, financial condition, liabilities or capitalization of the Company and its Subsidiaries taken as a whole, (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, under any of the Transaction Documents or (e) the timely payment of any principal of 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 and the Guarantees.

“ Notes Purchase Agreement ” means the Notes purchase agreement dated August 18, 2009 by and among the Company, the Guarantor, the Operating Subsidiary and Citadel Equity Fund Ltd.

“ Notes ” is defined in the preamble.

“ 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 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 Subsidiary ” means China Security & Surveillance Technology (PRC), Inc., 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.

“ 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:

(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. Tu Guo Shen, a resident of Hangzhou 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” (as defined in Rule 13d-3 under the Exchange Act), individually or collectively with any of the foregoing, at least 50% 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;

(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 and the Guarantees;

(c)

Liens securing Debt of a PRC Subsidiary under Credit Facilities, provided that any such Lien is limited to the Property of such PRC 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 from vendors and others 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;

(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 (k) 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 (g), (h) or (i) 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 (g), (h) or (i) 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

(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.

“ 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 of such dividend divided by the difference between one and the maximum statutory federal income 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.

“ 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.

“ Related Business ” means the manufacturing, distributing, installing, servicing and maintaining security, surveillance, fire and alarm products and systems, and other products or systems in the similar nature.

“ 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.

“ Repurchase Amount ” means, with respect to any Note, the aggregate Installment Redemption Amounts then remaining unpaid.

“ 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.

“ Safetech ” means China Safetech Holdings Limited, a wholly-owned subsidiary of the Company, incorporated under the laws of British Virgin Islands.

“ 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.

“ 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.

“ 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;

(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.

“ 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.

“ 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, Global Select Market or the OTC Bulletin Board, (ii) trading in the Common Stock on any such exchange or market has been suspended for thirty or more 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, the OTC Bulletin Board or any similar United States system of automated dissemination of quotations of securities prices.

“ Tranche B Indenture ” means the Indenture dated as of even date between the Company and the Trustee, governing the terms and conditions of the Tranche B Notes.

“ Tranche B Notes ” means the Tranche B Zero Coupon Guaranteed Senior Unsecured Notes issued by the Company as of even date in an aggregate principal amount not exceeding $84,000,000.

“ Transaction Documents ” means this Indenture, the Notes, the Guarantees, Notes Purchase Agreement, the Amended Investor Rights Agreement, certain Non-Competition Covenant and Agreement dated February 16, 2007 by and between Citadel Equity Fund Ltd. and Mr. Tu Guo Shen, or any of them as the context may so require.

“ Trading Day ” shall mean (x) if the applicable security is quoted on the NASDAQ National 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 United States national securities exchange, a day on which such 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 NASDAQ Global Market, the NASDAQ Global Select Market or the OTC Bulletin Board.

“ Trading Reference VWAP ” means, as of [●], 2011, the simple arithmetic average of the VWAPs as shown on Bloomberg for the forty-five Trading Days preceding such date, as proportionally adjusted for any subdivision, consolidation, reclassification or similar event of the Shares; provided that if the actual Trading Reference VWAP be less than $6.00, the Trading Reference VWAP shall be deemed to be exactly $6.00.

“ 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 per share 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); (b) if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; or (c) if the Common Stock is not then quoted for trading on the OTC Bulletin Board 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 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 .

	Defined in
Term	Section
" Adjustment Event "	14.05(m)
" Affiliate Transaction "	4.14
"Agent Members "	2.02(c)
" Allocable Excess Proceeds "	4.12
" Asset Sale Offer "	4.12
" Authentication Order "	2.04
" Benefited Party "	9.01
" Change of Control Offer "	4.17
" Conversion Date "	14.02
" Conversion Notice "	14.02
" Conversion Rate "	14.04
" Current Market Price "	14.05
" Determination Date "	14.05(m)
" Event of Default "	6.01
" Excess Proceeds "	4.12
" Expiration Time "	14.05(f)
" Future Guarantor "	9.03
" Installment Redemption Amount "	3.01(a)
" Installment Redemption Date "	3.01(a)
" 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(i)
" Redemption Date "	3.01
" Redemption Amount "	3.01
" Registrar "	4.02
" Securities "	14.05(d)
" Security Register "	4.02
" Termination of Trading Offer "	4.23
" Trading Day "	14.05(i)
" Tranche A Voluntary Redemption "	3.01(b)
" Tranche B Voluntary Redemption "	3.01(b)
" Trigger Event "	14.05(d)
" Voluntary Redemption "	3.01(b)
" Voluntary Redemption Notice "	3.01(b)

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;

(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 “Tranche A Zero Coupon Guaranteed Senior Unsecured Convertible Notes”. Notes not to exceed the aggregate principal amount of $50,000,000 (except pursuant to Sections 2.05 and 2.06 hereof) 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 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.

(c)

So long as the Notes are eligible for book-entry settlement with the 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 Depositary or the nominee of the Depositary. The transfer and exchange of beneficial interests in any such Global Note shall be effected through the Depositary in accordance with this Indenture and the applicable procedures of the 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. The Company has initially appointed DTC as the Depositary. Each Global Note initially shall be registered in the name of a nominee for the Depositary and be delivered to the Trustee, as custodian for the Depositary or its nominee. Interests in the Global Note may be held by any member of, or participants in, the Depositary, including Euroclear and Clearstream (collectively, the “ Agent Members ”). Agent Members shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary, or the Trustee as its custodian, the Paying Agent or any agent of any of them as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, the Paying Agent or any agent of any of them, from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Global Note. The Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

(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 or exchanges permitted hereby. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the 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 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 Depositary or by the Trustee as custodian for the Depositary, and the 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 Depositary or impair, as between the Depositary and its Participants, the Applicable Procedures or the operation of customary practices of the Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Note.

The Company shall exchange Global Notes for Definitive Notes if: (1) at any time DTC 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 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.

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 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 Depositary.

Section 2.03. Date and Denomination of Notes;

The Notes shall be issuable in registered form without coupons in denominations of $100,000 principal amount and integral multiples of $1,000 in excess thereof. Each Note shall be dated the date of its authentication. The Notes shall not bear any interest except for Default Interest, if any.

Default Interest, if any, 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 Default 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 Default 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 Depositary or its nominee.

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 Depositary, which shall hold such Global Note in safe custody for the account of DTC and instruct DTC 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 DTC. 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 DTC to the Registrar, but only upon delivery by DTC, 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 DTC as contemplated by the terms of this Section.

(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 DTC, 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 DTC, 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.

(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 under the Securities Act (or any successor provision), the Notes shall not be transferred and 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), pursuant to Rule 144 or other available exemptions from registration 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 DTC shall be transferable only in accordance with the rules and procedures of DTC, 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.

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.

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 any Installment Redemption Amount on the Notes, it shall pay the defaulted interest in any lawful manner 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. 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 payment date and the amount of such defaulted interest to be paid.

Section 2.10. CUSIP Numbers .

The Company in issuing the Notes may use CUSIP numbers (if then generally in use), and, if so, the Trustee shall use CUSIP numbers in 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 Note