CONVERTIBLE NOTE PURCHASE AGREEMENT among CHINA CORD BLOOD CORPORATION and KKR CHINA HEALTHCARE INVESTMENT LIMITED

Exhibit 2

Execution Version

CONVERTIBLE NOTE PURCHASE AGREEMENT

among

CHINA CORD BLOOD CORPORATION

and

KKR CHINA HEALTHCARE INVESTMENT LIMITED

Dated April 12, 2012

▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇

Solicitors and International Lawyers

12th Floor, Hong Kong Club ▇▇▇▇▇▇▇▇

▇▇ ▇▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇

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TABLE OF CONTENTS

Execution Version

CONVERTIBLE NOTE PURCHASE AGREEMENT (this “Agreement”) made on April 12, 2012

AMONG:

(1)           CHINA CORD BLOOD CORPORATION, an exempted company with limited liability incorporated in the Cayman Islands with its registered office at Codan Trust Company (Cayman) Limited, Cricket Square, ▇▇▇▇▇▇▇▇ Drive, PO Box 2681, Grand Cayman KY1-1111, Cayman Islands (the “Company”); and

(2)           KKR CHINA HEALTHCARE INVESTMENT LIMITED, an exempted company with limited liability incorporated in the Cayman Islands with its registered office at c/▇ ▇▇▇▇▇▇ Corporate Services Limited, ▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇▇, Cayman Islands (the “Investor”).

RECITALS:

(A)          The Company is listed on the New York Stock Exchange, Inc.

(B)          The Company owns all of the issued shares of China Cord Blood Services Corporation, a Cayman Islands exempted company (“CCBS”). CCBS owns all of the issued shares of China Stem Cells Holdings Limited, a Cayman Islands exempted company (“CSC Holdings”). CSC Holdings owns (i) all of the issued shares of each of China Stem Cells (East) Company Limited, a British Virgin Islands company (“East BVI”), China Stem Cells (West) Company Limited, a British Virgin Islands company (“West BVI”), China Stem Cells (North) Company Limited, a British Virgin Islands company (“North BVI”), China Stem Cells (East) Company Limited, a Hong Kong company (“East HK”), China Stem Cells (West) Company Limited, a Hong Kong company (“West HK”), China Stem Cells (North) Company Limited, a Hong Kong company (“North HK”), and China Stem Cells (South) Company Limited, a Hong Kong company (“South HK”); and (ii) ninety percent (90%) of the issued shares of China Stem Cells (South) Company Limited, a British Virgin Islands company (“South BVI”). East HK owns eighty-three percent (83%) of the issued shares of Favorable Fort Limited, a Hong Kong company (“FF HK”). FF HK owns one hundred percent (100%) equity interest in Jinan Baoman Science & Technology Development Company Limited, a wholly foreign-owned enterprise established in the PRC (as defined below), which in turn owns twenty-four percent (24%) equity interest in Shandong Qilu Stem Cells Engineering Company Limited, a PRC limited liability company.

(C)          CSC Holdings owns one hundred percent (100%) equity interest in Beijing Jiachenhong Biological Technologies Company Limited, a wholly foreign-owned enterprise established in the PRC (“Jiachenhong”). Jiachenhong owns ninety percent (90%) equity interest in Zhejiang Lukou Biotechnology Company Limited, a PRC limited liability company (“Lukou”). South BVI owns one hundred percent (100%) equity interest in Guangzhou Municipality Tianhe Nuoya Bio-engineering Company Limited, a wholly foreign-owned enterprise established in the PRC (“Nuoya”). The holding structure of the Group (as defined below) is set forth in the Structure Chart attached as Part D of Schedule 1.

(D)          Upon the terms and conditions set forth in this Agreement, the Company has authorized the issuance of senior unsecured convertible notes in the aggregate principal amount of US$65,000,000 (United States Dollars Sixty-Five Million) in the form attached hereto as Exhibit A (the “Notes”) which Notes shall be convertible into ordinary shares of US$0.0001 par value per share in the capital of the Company (the “Shares”) in accordance with the terms of the Notes.

AGREEMENT:

SECTION 1
INTERPRETATION

1.1                               Definitions. In this Agreement, unless the context otherwise requires, the following words and expressions have the following meanings:

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

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

“Affiliate” of a Person (the “Subject Person”) means (a) in the case of a Person other than a natural person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with the Subject Person and (b) in the case of a natural person, any other Person that is directly or indirectly Controlled by the Subject Person or is a Relative of the Subject Person. In the case of the Investor, the term “Affiliate” includes (v) any shareholder of the Investor, (w) any of such shareholder’s general partners or limited partners, (x) the fund manager managing such shareholder (and general partners, limited partners and officers thereof) and (y) trusts controlled by or for the benefit of any such individuals referred to in (w) or (x).

“Anti-Corruption Laws” means the FCPA, the UK ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ (and, in relation to conduct prior to 1 July 2011, the Public Bodies Corrupt Practices ▇▇▇ ▇▇▇▇ and the Prevention of Corruption ▇▇▇ ▇▇▇▇ (together with the UK ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, as amended, the “UK Corruption Laws”) and any other anti-bribery or anti-corruption laws applicable to the Company or any of its Affiliates (including such laws in the PRC). For these purposes, the offences created by the FCPA and the UK Corruption Laws shall be deemed to apply to the Affiliates of the Company in respect of acts or omissions by them which may directly or indirectly constitute a breach by the Company or the relevant Affiliates of such law, irrespective of the jurisdictional scope of those offences.

“Board” means the board of directors of the Company.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the PRC, Hong Kong or New York City are required or authorized by law or executive order to be closed.

“China” or the “PRC” means the People’s Republic of China and for the purpose of this Agreement shall exclude Hong Kong, Taiwan and the Special Administrative Region of Macau.

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“Code” means the United States Internal Revenue Code of 1986, as amended.

“Company Charter Documents” means the Memorandum and Articles of Association of the Company.

“Company Financial Statements” means, for any Financial Year, the consolidated balance sheet and the consolidated statements of income and cash flows of the Company for such Financial Year, prepared and audited by a Big 4 Accounting Firm in accordance with US GAAP.

“Completion” means the completion and closing of the purchase of the Notes.

“Completion Date” means the date and time at which Completion takes place.

“Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability shall be paid or discharged, or that any agreements relating thereto shall be complied with, or that the holders of such liability shall be protected (in whole or in part) against loss with respect thereto.

“Control” of a Person means (a) ownership of more than fifty percent (50%) of the shares in issue or other equity interests or registered capital of such Person or (b) the power to direct the management or policies of such Person, whether through ownership or voting proxy of the voting power of such Person, through the power to appoint a majority of the members of the board of directors or similar governing body of such Person, through contractual arrangements or otherwise.

“Conversion Price” means US$2.838.

“Conversion Shares” means Shares issued upon conversion of any Note.

“Disclosure Letter” means the disclosure letter delivered by the Company to the Investor on the date hereof.

“Encumbrance” means (a) any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, deed of trust, title retention, security interest or other encumbrance of any kind securing, or conferring any priority of payment in respect of, any obligation of any Person, including any right granted by a transaction which, in legal terms, is not the granting of security interest or any other encumbrance but which has an economic or financial effect similar to the granting of security interest or any other encumbrance under applicable law, (b) any lease, sub-lease, occupancy agreement, easement or covenant granting a right of use or occupancy to any Person, (c) any proxy, power of attorney, voting trust agreement, interest, option, right of first offer, negotiation or refusal or transfer restriction in favor of any Person and (d) any adverse claim as to title, possession or use.

“Equity Securities” means, with respect to any Person, such Person’s shares, capital stock, membership interests, partnership interests, registered capital, joint venture or other ownership interests or any options, warrants or other securities that are directly or indirectly convertible into, or exercisable or exchangeable for, such shares,

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membership interests, partnership interests, registered capital or joint venture or other ownership interests (whether or not such derivative securities are issued by such Person). Unless the context otherwise requires, any reference to “Equity Securities” refers to the Equity Securities of the Company.

“Exempted Issuance” means (a) any issuance of the Conversion Shares and (b) the issuance of Shares or Equity Securities convertible into Shares for up to five percent (5%) of the issued share capital of the Company as of the date of this Agreement on a non-diluted basis under the Existing Share Incentive Scheme.

“Existing Financial Statements” means (i) the Company Financial Statements for the Financial Year ended March 31, 2011 and (ii) the consolidated balance sheet and the consolidated statements of income and cash flows of the Company for the quarter ended December 31, 2011, in each case prepared in accordance with US GAAP.

“Existing Repurchase Program” means the share repurchase program approved by the Board on August 3, 2011 in the aggregate amount of US$15 million for 12 months continuing until August 2, 2012, which does not obligate the Company to acquire any particular amount of ordinary shares and may be commenced, suspended or discontinued at any time or from time to time in the Company’s discretion without prior notice.

“Existing Share Incentive Scheme” means the restricted share unit scheme approved by the shareholders at the annual general meeting on February 18, 2011, which has a mandate limit of granting rights to receive ordinary shares, not exceeding 10.0% of issued and outstanding share capital from time to time, to directors, officers, employees and or consultants of the Company and the other Group Members.

“FCPA” means the U.S. Foreign Corrupt Practices Act, as amended.

“Financial Year” means the financial year of the Company, which ends on March 31 of each calendar year.

“GM Lock-Up Agreement” means the GM Lock-Up Agreement dated as of the date hereof by and among the Investor, GM Stem Cells and Golden Meditech.

“GM Stem Cells” means Golden Meditech Stem Cell (BVI) Company Limited, a company incorporated and existing under the laws of the British Virgin Islands with its registered office at PO Box 957 Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.

“Golden Meditech” means Golden Meditech Holdings Limited, an exempted company with limited liability incorporated in the Cayman Islands with its registered office at ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ 75 Fort Street, ▇▇▇▇▇▇ Town, Grand Cayman, Cayman Islands.

“Governmental Authority” means any government or political subdivision thereof; any department, agency or instrumentality of any government or political subdivision thereof; any court or arbitral tribunal; and the governing body of any securities exchange or other self-regulatory body, whether domestic or foreign, in each case having competent jurisdiction.

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“Group” means the Company and its direct and indirect Subsidiaries, and “Group Member” means any of them.

“Group Representative” means any director, officer, agent, employee, consultant, professional advisor or other Person acting for or on behalf of any Group Member or Affiliate of any Group Member.

“Hong Kong” means the Hong Kong Special Administrative Region of the PRC.

“Indebtedness” of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services, including (without limitation) “capital leases” in accordance with generally accepted accounting principles (other than trade payables entered into in the ordinary course of business), (iii) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (vi) all monetary obligations under any leasing or similar arrangement, whether or not classified as a capital lease in accordance with generally accepted accounting principles, (vii) all indebtedness referred to in clauses (i) through (vi) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (viii) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (vii) above.

“Indemnification Priority and Information Sharing Agreement” means the agreement, in the form of Exhibit D, to be entered into by the Investor, the Company and a certain Affiliate of the Investor in relation to the allocation of indemnification amounts and advancements to the Nominee Director.

“NYSE” means the New York Stock Exchange, Inc. or any successor thereto.

“Onshore Companies” means the legal entities set forth in Schedule 1 and all other legal entities established in the PRC in which any of the foregoing legal entities directly or indirectly owns any interest.

“Party” or “Parties” means any signatory or the signatories to this Agreement and any Person that subsequently becomes a party to this Agreement as provided herein.

“Person” means any natural person, firm, company, Governmental Authority, joint venture, partnership, association or other entity (whether or not having separate legal personality).

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“PFIC Tax Rate” means the highest aggregate overall rate of tax and interest applicable to an individual investor assuming that the individual is a resident of New York City with respect to a disposition, or an excess distribution, as applicable, taking into account the provisions of Section 1291 of the Code including for avoidance of doubt the interest charge calculated pursuant to Section 1291(c)(3) of the Code.

“Principal Business” means the business of the Group, being cord blood banking and related services.

“Pro Rata Share” means the proportion that the number of the Shares held by the Investor on an as converted basis bears to the aggregate number of Shares.

“Registration Rights Agreement” means the Registration Rights Agreement, in the form of Exhibit K, to be executed at Completion by and between the Company and the Investor.

“Related Party” means (a) any Affiliate of any Group Member and (b) any director or officer of any Group Member or any Affiliate thereof.

“Relative” of a natural person means the spouse of such person and any parent, grandparent, child, grandchild, sibling, first cousin, uncle, aunt, nephew, niece or in-laws of such person or spouse.

“SEC” means the United States Securities and Exchange Commission or any successor thereto.

“Senior Management Lock-Up Agreements” means the Lock-Up Agreements dated as of the date hereof by and among the Investor and each of the Senior Managers.

“Senior Managers” means the senior managers and key employees of the Group set forth in Schedule 4.

“Subsidiary” of any Person (the “Parent”) means any Person directly or indirectly Controlled by the Parent.

“Target Completion Date” means June 10, 2012.

“Tax” means any tax, duty, deduction, withholding, impost, levy, fee, assessment or charge of any nature whatsoever (including, without limitation, income, franchise, value added, sales, use, excise, stamp, customs, documentary, transfer, withholding, property, capital, employment, payroll, ad valorem, net worth or gross receipts taxes and any social security, unemployment or other mandatory contributions) imposed, levied, collected, withheld or assessed by any local, municipal, regional, urban, governmental, state, national or other body in the PRC, the United States or elsewhere and any interest, addition to tax, penalty, surcharge or fine in connection therewith.

“Tax Authority” means any Governmental Authority which imposes any Tax in any jurisdiction.

“Tax Returns” means any and all reports, returns, declarations, disclosures, or statements supplied or required to be supplied to a Tax Authority in connection with any Tax, including any schedule, attachment or amendment thereto.

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“Trading Day” has the meaning set forth in Exhibit A.

“Transaction Documents” means this Agreement, the Notes, the Registration Rights Agreement, the Indemnification Priority and Information Sharing Agreement, the Indemnification Agreement, the GM Lock-Up Agreement and the Senior Management Lock-Up Agreements.

“US GAAP” means the generally accepted accounting principles as applied in the United States.

“US$” means United States Dollars, the lawful currency of the United States of America.

1.2                               Terms Defined Elsewhere in this Agreement. The following terms are defined in this Agreement as follows:

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1.3                               Interpretation.

(a)                                 Directly or Indirectly. The phrase “directly or indirectly” means directly, or indirectly through one or more intermediate Persons or through contractual or other arrangements, and “direct or indirect” has the correlative meaning.

(b)                                 Gender and Number. Unless the context otherwise requires, all words (whether gender-specific or gender neutral) shall be deemed to include each of the masculine, feminine and neuter genders, and words importing the singular include the plural and vice versa.

(c)                                  Headings. Headings are included for convenience only and shall not affect the construction of any provision of this Agreement.

(d)                                 Include not Limiting.  “Include,” “including,” “are inclusive of” and similar expressions are not expressions of limitation and shall be construed as if followed by the words “without limitation.”

(e)                                  Law.  References to “law” shall include all applicable laws, regulations, rules and orders of any Governmental Authority, any common or customary law, constitution, code, ordinance, statute or other legislative measure and any regulation, rule, treaty, order, decree or judgment; and “lawful” shall be construed accordingly.

(f)                                   References to Documents.  References to this Agreement include the Schedules and Exhibits, which form an integral part hereof. A reference to any Section, Schedule or Exhibit is, unless otherwise specified, to such Section of, or Schedule or Exhibit to this Agreement. The words “hereof,” “hereunder” and “hereto,” and words of like import, unless the context requires otherwise, refer to this Agreement as a whole and not to any particular Section hereof or Schedule or Exhibit hereto. A reference to any document (including this Agreement) is, unless otherwise specified, to that document as amended, restated, consolidated, supplemented, novated or replaced from time to time.

(g)                                  Share Calculations. In calculations of share numbers, references to a (i) “fully diluted basis” mean that the calculation is to be made assuming that all outstanding options, warrants and other Equity Securities convertible into or exercisable or exchangeable for Shares (whether or not by their terms then currently convertible, exercisable or exchangeable), have been so converted, exercised or exchanged; and (ii) on an “as converted basis” means that the

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calculation is to be made assuming that the Notes in question have been converted, but not assuming the exercise or conversion of any other options, warrants or other Equity Securities that are convertible into Shares. Any share calculation that makes reference to a specific date shall be appropriately adjusted to take into account any bonus share issue, share subdivision, share consolidation or combination, share split, recapitalization, reclassification or similar event affecting the Shares after such date.

(h)                                 Knowledge. Where any statement is qualified by the expression “to the best of a Person’s knowledge” or any similar expression, that statement shall, unless otherwise stated, be deemed to refer to the knowledge of a prudent Person in the position of such Person who shall be deemed to have knowledge of such matters as he would have discovered, had he made such enquiries and investigations as a prudent Person would have made to confirm the subject matter of the statement.

(i)                                     Writing. References to writing and written include any mode of reproducing words in a legible and non-transitory form including emails and faxes.

(j)                                    Language. This Agreement is drawn up in the English language.

SECTION 2
SALE AND PURCHASE OF THE NOTES

2.1                               Notes. Upon the terms and subject to the conditions of this Agreement, the Investor agrees to purchase, and the Company agrees to issue and sell to the Investor at Completion, the Notes for a total purchase price of US$65,000,000 (United States Dollars Sixty-Five Million) (the “Consideration”).

2.2                               Consideration. The Investor shall pay the Consideration at Completion in accordance with Section 4.2(b).

2.3                               Use of Proceeds. The Company shall use the proceeds from the issuance of the Notes (the “Proceeds”) to make loans to its Subsidiaries to be used for general corporate purposes, which may include funding sales and marketing, increasing working capital, business expenses and capital expenditures. The Proceeds shall be transferred by the Company to its Subsidiaries by means of inter-company loans.

SECTION 3
CONDITIONS PRECEDENT TO COMPLETION

3.1                              Conditions Precedent to Obligations of the Investor at Completion.  The obligation of the Investor to complete the purchase of the Notes at Completion is subject to the fulfillment, prior to or simultaneously with Completion, of the following conditions, any one or more of which may be waived in writing by the Investor:

(a)                                 the Company Warranties remaining true and correct in all material respects on the Completion Date as provided in Section 6.5, provided, however, that to the extent any portion of any Company Warranty is already qualified as to materiality, such portion of such Company Warranty as so qualified shall remain true and correct in all respect;

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(b)                                 the Company having performed and complied in all material respects with all of its agreements and obligations contained in the Transaction Documents to which it is a party that are required to be performed or complied with by it on or before Completion;

(c)                                  the Company, Golden Meditech and GM Stem Cells having duly attended to and carried out all corporate procedures that are required under the laws of its place of incorporation or establishment to effect its execution, delivery and performance of each Transaction Document to which it is a party and the transactions contemplated thereby, and having provided copies of all resolutions (and all attachments thereto) described below to the Investor (each certified by a duly authorized director to be true, complete and correct copies as of the Completion Date) which corporate procedures shall include:

(i)                                     approval by the Board on or prior to the date hereof, each to the extent required by applicable law and Company Charter Documents, of the following:

(1)                                 the authorization and issuance of Notes to the Investor and the authorization and issue of the Shares to the Investor upon the conversion of the Notes; and

(2)                                 the execution, delivery and performance by the Company of each Transaction Document to which it is a party and all the transactions contemplated thereby;

(ii)                                  approval by the board of directors of each of Golden Meditech and GM Stem Cells, to the extent required by applicable law or its charter documents, of the execution, delivery and performance by such entity and the Company of each Transaction Document to which it is a party and all transactions contemplated thereby;

(d)                                 all consents and approvals of, notices to and filings or registrations with any Governmental Authority or any other Person required pursuant to any applicable law of any Governmental Authority (including any anti-trust, competition or similar legal requirements in any jurisdiction), or pursuant to any contract binding on the Company or whereby its respective assets are subject or bound, to consummate the transactions contemplated under this Agreement and the other Transaction Documents (to the extent that such transactions are to be completed on or prior to the Completion Date) having been obtained or made, and copies thereof having been provided to the Investor (each certified by a duly authorized director to be true, complete and correct copies thereof as of the Completion Date);

(e)                                  there being no Governmental Authority or other Person that has:

(i)                                     instituted or threatened any legal, arbitral or administrative proceedings or inquiry against the Company or any other Group Member to restrain, prohibit, delay or otherwise challenge the transaction contemplated hereby or under any Transaction Document

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or requested any information in connection with the possible institution of any such proceedings or inquiry; or

(ii)                                  proposed or enacted any statute, regulation or policy which would prohibit, materially restrict, impact or delay implementation of the transactions contemplated under any Transaction Document or the operation of any Group Member or the operation of any Group Member after Completion as contemplated in the Transaction Documents;

(f)                                   each of the Transaction Documents having been executed by each party thereto other than the Investor and delivered to the Investor;

(g)                                  except as may be the result of the announcement of the transactions contemplated hereby, there having been since the date of this Agreement, (i) no material adverse change in, and no change in circumstances that has a material adverse impact on the business, operations, properties or financial condition or prospects of the Group, taken as a whole, and (ii) no material change in, and no event or circumstance that has occurred and could result in any material change or amendment to, any historical financial statement of any Group Member;

(h)                                 completion of all appropriate actions to elect or appoint at Completion the Nominee Director Designee to the Board and any committees thereof as selected by the Nominee Director Designee, including, if necessary, taking such appropriate actions to increase the size of the Board and such committees to effect such election or appointment;

(i)                                     the Company having delivered to the Investor a copy of the register of directors and officers of the Company as at the Completion Date and copies of all resolutions and documentation evidencing the composition of the Board and the committees thereof, certified by a duly authorized director of the Board to be true, complete and correct copies thereof, and reflecting that the Board (and the relevant committees) includes the Nominee Director Designee;

(j)                                    the Company having delivered to the Investor (i) duly executed director indemnification agreement in favor of the Nominee Director Designee, in substantially the form attached as Exhibit C hereto (“Indemnification Agreement”), (ii) duly executed Indemnification Priority and Information Sharing Agreement attached as Exhibit D hereto and (iii) evidence that directors’ and officers’ indemnity insurance has been provided in respect of the Nominee Director Designee in an amount, and from an insurer that is reasonably satisfactory to the Investor;

(k)                                 the Company having delivered evidence to the reasonable satisfaction of the Investor of the appointment of a Process Agent pursuant to Section 15.3;

(l)                                     the Company having delivered to the Investor a certificate of good standing issued by (i) the Cayman Islands Registrar of Companies in connection with the Company and each Subsidiary of the Company incorporated in the Cayman Islands, and (ii) the British Virgin Islands Registrar of Corporate

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Affairs in connection with each Subsidiary of the Company incorporated in the British Virgin Islands;

(m)                             the Company having provided a certificate of incumbency and authority in the form attached at Exhibit B;

(n)                                 there being no outstanding comments from the SEC regarding any filings by the Company;

(o)                                 the Company having delivered to the Investor (i) a certificate, dated the Completion Date and signed by an authorized signatory of the Company, certifying that the conditions set forth in paragraphs (a) through (n) of this Section 3.1 have been satisfied and (ii) such other evidence of the satisfaction of such conditions as the Investor may reasonably request;

(p)                                 the Investor having received legal opinions from: (i) ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, the Company’s Cayman Islands legal counsel, in substantially the form attached hereto as Exhibit F, (ii) Junzejun, the Company’s PRC legal counsel, in form and substance satisfactory to the Investor; (iii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the Company’s Hong Kong legal counsel, in substantially the form attached hereto as Exhibit H, and  (iv) Loeb & Loeb LLP, the Company’s New York legal counsel, in substantially the form attached hereto as Exhibit I, each dated as of the Completion Date;

(q)                                 The board, shareholder(s) and investment committee of the Investor shall have approved the execution, delivery and performance by the Investor of this Agreement and each other Transaction Document to which it is a party and all transactions contemplated hereby or thereby; and

(r)                                    NYSE having conditionally approved the listing of the Conversion Shares on NYSE, subject only to official notice of issuance.

3.2                               Conditions Precedent to Obligations of Company at Completion. With respect to the Investor, the Company’s obligation to complete the issuance of the Notes at Completion is subject to the fulfillment, prior to or simultaneously with Completion, of the following conditions, any one or more of which may be waived by the Company:

(a)                                 the Investor Warranties remaining true and correct in all material respects on the Completion Date, provided, however, that to the extent any portion of any Investor Warranty is already qualified as to materiality, such portion of such Investor Warranty as so qualified shall remain true and correct in all respect;

(b)                                 the Investor having performed and complied in all material respects with all of its agreements and obligations contained in this Agreement and the other Transaction Documents to which it is a party that are required to be performed or complied with by it on or before Completion;

(c)                                  the Investor having duly attended to and carried out all corporate procedures that are required under the laws of its place of incorporation or establishment

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to effect its execution, delivery and performance of each Transaction Document to which it is as a party and the transactions contemplated thereby;

(d)                                 all consents and approvals of, notices to and filings or registrations with any Governmental Authority or any other Person required on the part of the Investor to consummate the transactions contemplated under this Agreement and the other Transaction Documents (to the extent that such transactions are to be completed on or prior to the Completion Date), having been obtained or made and copies thereof having been provided to the Company (each certified by a duly authorized director or officer to be true, complete and correct copies thereof as of the Completion Date);

(e)                                  there being no Governmental Authority or other Person that has:

(i)                                     instituted or threatened any legal, arbitral or administrative proceedings or inquiry against the Investor to restrain, prohibit or otherwise challenge the transaction contemplated hereby or under any Transaction Document or any other matter or requested any information in connection with the possible institution of any such proceedings or inquiry; or

(ii)                                  proposed or enacted any statute, regulation or policy which would prohibit, materially restrict, impact or delay the implementation of the transactions contemplated under any Transaction Document;

(f)                                   each of the Transaction Documents having been duly executed by each party thereto other than the Company and delivered to the Company;

(g)                                  the Investor having delivered to the Company a certificate of good standing issued by the Cayman Islands Registrar of Companies in connection with the Investor;

(h)                                 the Investor having provided a certificate of incumbency and authority in the form attached as Exhibit B;

(i)                                     the Investor having delivered to the Company (i) a certificate, dated the Completion Date and signed by an authorized signatory of the Investor, certifying that the conditions set forth in paragraphs (a) through (h) of this Section 3.2 have been satisfied; and

(j)                                    NYSE having conditionally approved the listing of the Conversion Shares issuable upon conversion of the Notes on NYSE, subject only to official notice of issuance; provided that the condition set forth in this Section 3.2(j) shall be deemed waived by the Company to the extent the failure of NYSE to approve such listing has been caused solely by the Company.

SECTION 4
COMPLETION ACTIONS

4.1                               Time and Place of Completion. Completion shall take place at the Hong Kong offices of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 12th Floor, Hong ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ on or before the sixteen (16th) day after all the

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conditions precedent set forth in Sections 3.1 and 3.2 (other than those conditions precedent that by their terms cannot be fulfilled until Completion) are satisfied or waived in writing, or at such other time and place as the Parties may agree or as may be determined pursuant to Section 4.3.

4.2                               Actions at Completion. With respect to the Investor, at Completion,

(a)                                 the Company shall:

(i)                                     issue the Notes to the Investor or its nominee(s) free and clear of Encumbrances;

(ii)                                  duly register the Investor or its nominee(s) as the holder of the Notes in the Company’s register maintained for registration or transfer of the Notes and deliver a copy of such register to the Investor, certified as a true, correct and complete copy by a director of the Company; and

(iii)                               deliver to the Investor a receipt for payment of the Consideration; and

(b)                                 subject to Section 10, the Investor shall pay the Consideration, by wire transfer of immediately available funds to an account opened in the name of the Company, or if instructed by the Company, any Subsidiary of the Company outside the PRC in accordance with the written instructions provided by the Company to the Investor at least five (5) Business Days prior to the Completion Date.

4.3                               Actions if Conditions not Fulfilled.  If any condition set forth in Section 3 shall not have been fulfilled or waived in writing by the Target Completion Date,

(a)                                 the Investor, in the case of a failure of any of the conditions set forth in Section 3.1 by the Company, may, at its option, without prejudice to its rights hereunder and in accordance with applicable law:

(i)                                     defer Completion to a later date;

(ii)                                  so far as practicable, proceed to Completion; or

(iii)                               terminate this Agreement, in accordance with Section 12.2; and

(b)                                 the Company, in the case of a failure of any of the conditions set forth in Section 3.2, may, at its option, without prejudice to its rights hereunder and in accordance with applicable law:

(i)                                     defer Completion to a later date;

(ii)                                  so far as practicable, proceed to Completion; or

(iii)                               terminate this Agreement in accordance with Section 12.2.

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SECTION 5
OBLIGATIONS OF THE COMPANY BETWEEN EXECUTION AND
COMPLETION

5.1                               Notices of Breaches. From the date hereof until the Completion Date, except as disclosed in the Transaction Documents or otherwise as contemplated thereunder, the Company shall, and shall cause each other Group Member to, conduct its business in a manner consistent with its past practice in its ordinary course of business in all material respects. The Company shall give the Investor prompt notice of any event, condition or circumstance occurring prior to the Completion Date that would constitute a breach of any terms and conditions contained in this Agreement.

5.2                               Restrictions on Actions between Execution and Completion. From the date hereof until the Completion Date, other than as set forth in this Agreement or other Transaction Documents, the Company shall not, without the prior written consent of the Investor, and shall not permit any other Group Member to:

(a)                                 amend, modify or waive any provision or provisions of any Transaction Document;

(b)                                 make any distribution of profits by way of interim or final dividend, capitalization of reserves or otherwise;

(c)                                  appoint or change the accounting firm responsible for the audit of the Group, or make any material change of accounting or audit policies of any Group Member other than such change required by relevant accounting standards or the auditor of the Company or by law;

(d)                                 make any investment or any capital expenditure or incur any commitment in an aggregate amount exceeding US$5,000,000;

(e)                                  approve transactions exceeding US$1,000,000 involving the interest of any Related Party, or waive or make adjustments or modifications which has an effect of exceeding US$1,000,000 to the terms of any transactions involving the interests of any Related Party, in each case other than the transactions expressly contemplated in the Transaction Documents;

(f)                                   save for the Existing Repurchase Program, increase, reduce or cancel the authorized or issued Equity Securities of any Group Member or issue, allot, purchase or redeem any Equity Securities of any Group Member, undertake any recapitalization or similar transaction or do any act which has the effect of diluting or reducing the current and prospective shareholding of the holders of the Notes on a fully diluted basis in any Group Member; or amend, modify or waive any provision of any document related to any authorized or issued Equity Securities of any Group Member;

(g)                                  make any offers or sales of any security or solicit any offers to buy any Equity Security, under circumstances that would require registration of any of the Notes under the 1933 Act, whether through integration with prior offerings or otherwise;

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(h)                                 borrow any money or obtain any financial facilities in an aggregate amount exceeding US$1,000,000 in the aggregate, except for renewal of any existing debts of the Company;

(i)                                     except for Encumbrances which exists prior to the date hereof, create or allow to exist any Encumbrances in excess of US$1,000,000 in the aggregate of any nature securing obligations on any of the property, undertaking, assets or rights of any Group Member;

(j)                                     enter into any reorganization, consolidation, merger, joint venture or partnership, or acquire, sell, transfer or dispose any Equity Securities of any Person;

(k)                                  acquire, sell, transfer, license, or otherwise dispose in any form of any asset including any trademarks, patents or other intellectual property owned by any Group Member, other than the sales of products to customers or non-material purchases of supplies and equipment not exceeding US$1,500,000 in total costs in the ordinary course of business consistent with past practice;

(l)                                     make any alteration or amendment to the Company Charter Documents or the charter documents of any other Group Member, or change the size or composition of its board of directors or any committee thereof other than as contemplated under the Transaction Documents;

(m)                               approve any budget or business plan of any Group Member or any modification thereto, or approve the execution or termination of any Material Contract by any Group Member that is not in the ordinary course of business consistent with past practice of the Group;

(n)                                 cease to conduct or carry on business in substantially the form as now conducted, approve the development of any new line of business or materially change any part of its business activities;

(o)                                 settle, compromise or concede any litigation, legal proceedings, arbitration, mediation or any other dispute resolution procedures, except where the amount of the claim is less than US$1,500,000;

(p)                                 terminate the employment of any Senior Manager; or

(q)                                 commence any bankruptcy or insolvency related proceeding.

SECTION 6
REPRESENTATIONS AND WARRANTIES

6.1                                 Company Warranties. The Company represents and warrants to the Investor in the terms of the warranties set forth in Schedule 2 (such warranties, the “Company Warranties”) and acknowledges that the Investor in entering into this Agreement is relying on the Company Warranties.

6.2                                 Investor Warranties. The Investor represents and warrants to the Company in the terms of the warranties set forth in Schedule 3 (such warranties, the “Investor

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Warranties”) and acknowledges that the Company in entering into this Agreement is relying on the Investor Warranties.

6.3                                 Knowledge of Claims. Each of the Company Warranties is given subject to the matters fully and fairly Disclosed. No other information relating to any Group Member of which the Investor has knowledge (actual or constructive), no other information relating to the Investor of which the Company has knowledge (actual or constructive) and no investigation by or on behalf of the Investor or the Company shall prejudice any claim made by the Investor or the Company, as the case may be, under the indemnity contained in Section 11, or operate to reduce any amount recoverable thereunder. It shall not be a defense to any claim against the Company or the Investor that the Company or the Investor, as the case may be, knew or ought to have known or had constructive knowledge of any information, other than as fully and fairly disclosed as above, relating to the circumstances giving rise to such claim. The Disclosure Letter shall be deemed to take effect as at the date hereof.

6.4                                 Separate and Independent. The Company Warranties shall be separate and independent and save as expressly provided shall not be limited by reference to any other paragraph or anything in this Agreement or the Schedules.

6.5                                 Bring-Down to Completion. The Company Warranties shall be deemed to be repeated as at the Completion Date as if they were made on and as of the Completion Date and all references therein to the date of this Agreement were references to the Completion Date.

6.6                                 Survival. The Company Warranties shall survive the Completion Date.

SECTION 7
CONFIDENTIALITY; RESTRICTION ON ANNOUNCEMENTS

7.1                                 General Obligation. Each Party undertakes to the other Party that it shall not reveal, and that it shall use its commercially reasonable efforts to procure that its respective directors, equity interest holders, officers, employees, agents, counsel and advisors who are in receipt of any Confidential Information (collectively, “Representatives”) do not reveal, to any third party any Confidential Information without the prior written consent of the concerned Party or use any Confidential Information in such manner that is detrimental to the concerned Party. The term “Confidential Information” as used in this Section 7 means: (a) any non-public information concerning the organization, structure, business or financial results or condition of any Party; (b) the terms of this Agreement and the terms of any of the other Transaction Documents, and the identities of the Parties and their respective Affiliates; and (c) any other information or material prepared by a Party or its Representatives that contains or otherwise reflects, or is generated from, Confidential Information.

7.2                                 Exceptions.  The provisions of Section 7.1 shall not apply to:

(a)                                  disclosure of Confidential Information that is or becomes generally available to the public other than as a result of disclosure by or at the direction of a Party or any of its Representatives in violation of this Agreement;

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(b)                                 disclosure by a Party to a Representative or an Affiliate if such Representative or Affiliate (i) is under a similar obligation of confidentiality or (ii) is otherwise under a binding professional obligation of confidentiality;

(c)                                  disclosure, after giving prior notice to the other Parties to the extent practicable under the circumstances and subject to any practicable arrangements to protect confidentiality, to the extent required under the rules of any stock exchange on which the shares of a Party or its parent company are listed or by applicable laws or governmental regulations or judicial or regulatory process or in connection with any judicial process regarding any legal action, suit or proceeding arising out of or relating to this Agreement; provided that no prior notice to any Party shall be required to be given under this Section 7.2(c) with respect to any dispute arising out of or relating to this Agreement;

(d)                                 following notification in writing to the Company on a no name basis, disclosure by the Investor of Confidential Information to a financing source in connection with an arrangement under Section 8.11 if such financing source agrees in writing prior to any such disclosure to be subject to confidentiality obligations, substantially similar to the foregoing, of which the Company is a third party beneficiary;

(e)                                  following notification in writing to the Company on a no name basis, disclosure by the Investor to a bona fide potential purchaser of any portion or all of the Equity Securities of the Company held by the Investor to the extent necessary for such potential purchaser to evaluate such a proposed transaction or for other similar business purposes, if the recipient agrees in writing prior to any such disclosure to be subject to confidentiality obligations substantially similar to the foregoing, of which the Company is a third party beneficiary; or

(f)                                    disclosure by the Investor or its Affiliates of Confidential Information that is reasonably necessary in connection with its reporting requirements to its limited partners in the ordinary course of business.

7.3                                Publicity.  Subject to Section 8.12, except as required by law, by any Governmental Authority (including any relevant stock exchange on which the shares of a Party or its parent company are listed) or otherwise agreed by all the Parties, no publicity release or public announcement concerning the relationship or involvement of the Parties shall be made by any Party; provided that any such publicity release or public announcement shall be reviewed and agreed by the Parties hereto prior to its release.

SECTION 8
COVENANTS

8.1                                 Benefit of Covenants.

(a)                                  The covenants of the Company under this Section 8 shall be for the sole benefit of the Investor, its successors and its permitted assigns that are the Investor’s Affiliates.

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(b)                                 Sections 8.8 (Information Rights), 8.9 (Budgets and Business Plans), 8.14 (Nominee Director), 8.15 (Preemptive Right), 8.16 (No Related Party Transaction), 8.31 (No Issuances below Conversion Price) and 8.32 (Negative Covenants) shall be in full force and effect only for so long as the Investor’s Investment Value is equal to or greater than US$ 20,000,000. All other provisions in Section 8 shall be in full force and effect for so long as the Investor beneficially owns any Notes or Conversion Shares.

(c)                                  “Investment Value” at any time shall mean the total Value of the Equity Securities held by the Investor at such time. “Value of the Equity Securities” held by the Investor at a particular time shall mean (i) the outstanding principal amount of the Notes held by the Investor at such time, plus (ii) the number of Conversion Shares held by the Investor at such time multiplied by the Conversion Price at which such Conversion Shares were issued.

8.2                                 Commercially Reasonable Efforts.  Each Party shall use its commercially reasonable efforts to timely satisfy each of the covenants and conditions for Completion to be satisfied by it as provided in this Agreement.

8.3                                 Corporate Existence.  So long as the Investor beneficially owns any Notes or Conversion Shares, the Company shall maintain its corporate existence.

8.4                                 Reporting Status.  Until the earlier of (i) the date on which the Investor shall have sold all of the Notes and the Conversion Shares and (ii) the date on which the Investor may sell all of the Notes and the Conversion Shares in one transaction without restriction or limitation as to volume pursuant to Rule 144 (or any successor rule thereto) promulgated under the 1933 Act (the “Reporting Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, including any extension period under Rule 12b-25 promulgated under the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act would no longer require or otherwise permit such termination.

8.5                                Form F-3 Eligibility. The Company shall use best efforts to maintain its eligibility to register the Conversion Shares for resale by the Investor on Form F-3.

8.6                                 Listing.  The Company shall use best efforts to maintain the Shares’ authorization for listing on the NYSE. Neither the Company nor any other Group Member shall take any action which would be reasonably expected to result in the delisting or suspension from trading of the Shares on the NYSE.

8.7                                 Financial Information.  The Company agrees to send the following to the Investor during the Reporting Period unless the following are filed with or furnished to the SEC through the ▇▇▇▇▇ system and are available to the public through the ▇▇▇▇▇ system, within one (1) Business Day after the filing or furnishing thereof, as the case may be, with the SEC, (i) a copy of all quarterly and annual financial information and other reports filed with or furnished to the SEC, and any other information publicly filed with the SEC pursuant to the 1933 Act, (ii) copies of any notices and other information made available or given to the shareholders of the Company generally, substantially contemporaneously with the making available or giving thereof to the shareholders, and (iii) facsimile copies of all press releases issued by the Company or

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any of its Subsidiaries on the same day as the release thereof, except to the extent any such release is available through Bloomberg contemporaneously with such issuance.

8.8                                 Information Rights. Upon the reasonable request of the Investor, the Company shall in a timely manner provide to the Investor financial or other information (including non-public information) regarding the business and operation of the Group, including any information or statements as may be reasonably necessary for the Investor (or any of its direct or indirect owner) to file any Tax Return or other filings required by law. Upon the Investor’s request, and with reasonable prior notice to the Company, the Company shall permit representatives of the Investor, during normal office hours, to (a) visit any of the sites and premises where any business of any Group Member is conducted; (b) inspect any of the sites, facilities, plants and equipment of any Group Member; and (c) have reasonable access to those officers, employees, agents, accountants, auditors, contractors and subcontractors of any Group Member who have or may have knowledge of matters with respect to which the Investor seeks information; provided, however, that, for the avoidance of doubt, any information provided with respect to any of the foregoing shall be subject to Section 7.

8.9                                 Budgets and Business Plans. The Company shall prepare a proposed annual operating and capital budget and business plan for the Company, which shall be submitted to the Investor not less than thirty (30) days prior to the commencement of each Financial Year. The Board shall adopt a budget and business plan for the Company within one (1) month after the commencement of the relevant Financial Year, which the Board shall review at least twice annually and may revise from time to time in accordance with the needs of the Group.

8.10                           Notification to the Investor. Subject to Section 8.12(b), the Company shall promptly notify the Investor of the occurrence of any transaction or event (i) as a consequence of which (whether alone or together with any one or more transactions or events occurring before, on or after the Completion Date) any material Liability of any Group Member has arisen or may arise (including any legal proceedings that has been instituted or any material threatened legal proceedings), or (ii) which may otherwise cause a material adverse effect on the Group.

8.11                           Pledge or Charge of Securities.  The Company acknowledges and agrees that the Notes and the Conversion Shares may be pledged or charged by the Investor in connection with a bona fide margin agreement or other loan or financing arrangement. The pledge of the Notes and charge of the Conversion Shares shall not be deemed to be a transfer, sale or assignment of such securities hereunder, and upon effecting such a pledge or charge, the Investor shall provide the Company with notice thereof but shall not be required to otherwise make any delivery to the Company pursuant to this Agreement. The Company hereby agrees to execute and deliver such documentation as a pledgee or chargee may reasonably request in connection with such a pledge or charge by the Investor. If the Investor sells, transfers, assigns, disposes, pledges or charges any Notes or the Conversion Shares, 50% of the Equity Securities under each of the GM Lock-Up Agreement and Senior Management Lock-Up Agreements shall no longer be subject to the transfer restrictions in accordance with the terms thereof. Once the Investor’s Investment Value is less than US$20,000,000, all conditions and obligations under each of the GM Lock-Up Agreement and Senior Management Lock-Up Agreements shall terminate in accordance with the terms thereof.

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8.12                           Disclosure of Transactions and Other Material Information.

(a)                                  Subject to Section 7, on or before 8:30 a.m., New York City time, on the first (1st) Business Day following the date of this Agreement, the Company shall issue a press release and file a report describing the terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching the material Transaction Documents as exhibits to such filing to the extent required by the 1934 Act; provided that the Investor shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release. In the event that the Investor is not entitled to appoint the Nominee Director and its nominee no longer serves as a director of the Company, (i) the Company shall not, and shall cause each other Group member not to, provide the Investor with any material, nonpublic information regarding the Company or any other Group Member without the express written consent of the Investor prior to such disclosure; and (ii) if the Investor has, or believes it has, received during the time subsequent to the time that it is not so entitled, any such material, nonpublic information regarding the Company or any of the Group Member, it may provide the Company with written notice thereof. The Company shall, within two (2) Business Days of receipt of such notice, make public disclosure of such material, nonpublic information. In the event of a breach of the foregoing covenant by the Company or any other Group Member, in addition to any other remedy provided herein or in the Transaction Documents and notwithstanding any provision under Section 7, the Investor shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material, nonpublic information without the prior approval by the Company or any other Group Member. The Investor shall not have any liability to the Company or any other Group Member for any such disclosure.

(b)                                 The Investor may at any time in writing waive its right to receive any or certain material, nonpublic information regarding the Company or any other Group Member.

8.13                           Reservation of Shares. The Company shall at all times reserve and keep available out of its authorized and unissued share capital, solely for the purpose of issuance and delivery upon conversion of the Notes, the maximum number of Conversion Shares that may be issuable or deliverable upon such conversion. Such Conversion Shares are duly authorized and, when issued or delivered in accordance with Exhibit A, shall be validly issued, fully-paid and non-assessable. The Company shall issue such Conversion Shares in accordance with the terms of the Exhibit A, and otherwise comply with the terms hereof and thereof.

8.14                           Nominee Director. The Company shall procure that one nominee designated by the Investor shall be appointed as a non-executive director of the Company (the “Nominee Director”). At Completion, the Company shall cause ▇▇▇▇▇▇ ▇. Wolhardt (or another designee of the Investor) (the “Nominee Director Designee”) to be appointed to fill the one (1) directorship reserved for the Nominee Director on the Board and the committees thereof. Concurrently with the appointment of the Nominee Director Designee, the Company, the Investor and the Nominee Director Designee shall enter into the Indemnification Agreement for the benefit of the Nominee Director Designee as contemplated in Section 3.1(j) and such Nominee Director shall provide to the

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Company an appropriately responsive customary “D&O questionnaire” duly executed. If the Nominee Director Designee no longer remains the Nominee Director for any reason, the Company shall cause the new Nominee Director selected by the Investor to be appointed to the Board. The Company shall enter into an Indemnification Agreement with such new Nominee Director as selected by the Investor. It is understood that the appointment of the Nominee Director as a director of the Board shall be subject to legal and governance requirements regarding service as a director of the Company.

8.15                           Preemptive Right.

(a)                                  The Company shall not issue any securities (including any Equity Securities or any debt or other securities of any kind) of any type or class to any Person (the “Proposed Recipient”) unless the Company has offered the Investor in accordance with the provisions of this Section 8.15 the right to purchase a Pro Rata Share of such issuance (the “Preemptive Right”), for a per unit consideration, equal to the per unit consideration to be paid by the Proposed Recipient and otherwise on the same terms and conditions as are offered to the Proposed Recipient. The restrictions under this Section 8.15 shall not apply to any Exempted Issuance.

(b)                                 Not less than forty-five (45) days before a proposed issuance of securities other than an Exempted Issuance, the Company shall deliver to the Investor notice of such proposed issuance setting forth (i) the number, type and terms of the securities to be issued, (ii) the consideration to be received by the Company in connection with the proposed issuance and (iii) the identity of the Proposed Recipient.

(c)                                  Within thirty (30) days following receipt of the notice referred to in Section 8.15(b) (the “Issuance Notice Period”), the Investor, if it elects to exercise its rights under this Section 8.15, shall give written notice to the Company electing to exercise the Preemptive Right and the number of securities to be purchased by the Investor. Failure by the Investor to give such written notice within such thirty (30) day period shall be deemed a waiver by the Investor of its rights under this Section 8.15 with respect to such proposed issuance.

8.16                           No Related Party Transaction. From and after the Completion, without the prior written approval of the Investor, the Company shall not, and shall cause each of its Subsidiaries not to, enter into or permit any transaction (including the purchase, sale, lease or exchange of any asset, property or rendering of any service), directly or indirectly, with, through or for the benefit of any Related Party or any business that is Controlled by a Related Party, except (a) as is expressly permitted in any Transaction Document, (b) solely in relation to the payment of any salaries or other reasonable compensation to the officers or directors of the Company, or (c) in relation to the existing Related Party transactions as stated in the annual report of the Company filed on Form 20-F with the SEC for the Financial Year ended March 31, 2011; provided that in each such case, the transaction is on arm’s length basis in the ordinary course of business of the Group at the prevailing market price (including leasing of properties, borrowings or deposits).

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8.17                           Insurance. The Company shall, and shall procure that each other Group Member shall, subject to the availability of the type of insurance and the commercial reasonableness of the terms by the standards generally applied to comparable businesses, insure and keep insured with an insurer or insurers, all of the assets and business which can be insured of each of its operating Subsidiaries, against insurable losses, to the extent possible, on a reinstatement basis utilizing current full replacement values, and any other insurance required by law.

8.18                           Intellectual Property Protection.

(a)                                  The Company shall, and shall ensure that each other Group Member shall, take all steps promptly to protect their respective intellectual property rights (if any), including (i) registering all their respective trademarks, brand names, domain names and copyrights, and (ii) wherever prudent applying for patents on their respective technology.

(b)                                 The Company shall use its best efforts to transfer the trademarks held by the Onshore Companies to a Group Member incorporated in Hong Kong in accordance with applicable laws. Upon the completion of such transfer, the Group Member incorporated in Hong Kong shall enter into a trademark licensing agreement with the Onshore Companies to authorize the use of such trademarks by the Onshore Companies.

8.19                           Compliance with Law. So long as the Investor beneficially owns any Notes or Conversion Shares, the Company shall, and shall cause each other Group Member and its respective Affiliate (other than dormant companies) to comply in all material respects with all applicable laws, including the requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder that are effective with the force of law.

8.20                           Books, Records and Internal Controls.

(a)                                  The Company shall, and shall cause each other Group Member to, (i) make and keep books, records and accounts which, in reasonable detail, accurately and fairly (x) reflect their transactions and dispositions of assets, and (y) present their financial instruments and Equity Securities; and (ii) prepare its financial statements and disclosure documents accurately, in accordance with US GAAP, as applicable and ensure the completeness and timeliness of such financial statements and disclosure documents in all material respects.

(b)                                 The Company shall, and shall cause each other Group Member to, devise and maintain a system of internal accounting controls sufficient to provide reasonable assurance that:

(i)                                     transactions are executed and access to assets is permitted only in accordance with management’s general or specific authorization;

(ii)                                  transactions are recorded as necessary to permit preparation of periodic financial statements and to maintain accountability for assets;

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(iii)                               the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and

(iv)                              any transaction by and between any Group Member and any Related Party is properly monitored, recorded and disclosed.

(c)                                  The Company shall, and shall cause each other Group Members to, install and have in operation an accounting and control system, management information system and books of account and other records, which together will adequately give a fair and true view of the financial condition of the Group and the results of its operations in conformity with US GAAP, as applicable.

8.21                           Post-Completion Covenants. The Company shall, and shall procure that each other relevant Group Member shall, undertake the actions set forth in Exhibit J.

8.22                           Senior Managers. The Company shall ensure that each Senior Manager shall enter into an employment agreement with the relevant Group Member or the Company. Each such employment agreement shall contain terms which are substantially similar to employment agreements which the Senior Managers entered into on June 30, 2009.

8.23                           Legends.  The Investor understands that the certificates or other instruments representing the Notes and the Conversion Shares shall, except as set forth below, bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such securities):

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED: (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT AND OTHER APPLICABLE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT AND ANY OTHER APPLICABLE SECURITIES LAWS; OR (II) UNLESS THE SECURITIES HAVE BEEN SOLD PURSUANT TO RULE 144 UNDER THE 1933 ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE 1933 ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the Investor or its successor or assignee upon which it is stamped or issued to such holder by electronic delivery at the applicable balance account at The Depository Trust Company (“DTC”), if (i) such Notes or Conversion Shares are resold pursuant to an effective resale registration statement under the 1933

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Act, (ii) following a sale, assignment or other transfer if such holder provides the Company with an opinion of counsel, in form reasonably acceptable to the Company, to the effect that such sale, assignment or transfer of the Notes or Conversion Shares may be made without registration under the applicable requirements of the 1933 Act, or (iii) following a sale pursuant to Rule 144 under the 1933 Act, provided the Company received from the holder reasonable assurance, including reasonable representations and warranties, that such securities are being sold pursuant to Rule 144, together with written advice from counsel to the Company in support of the holder’s reliance on Rule 144 for such sale. The Company shall be responsible for the fees of its transfer agent, the costs of any legal opinions required by its transfer agent (other than those of counsel to the Investor) and all DTC fees associated with such issuance.

8.24                           U.S. Economic Sanctions. The Company agrees and covenants that the Proceeds shall not directly or indirectly be used, or lent, contributed or otherwise made available to any of its Subsidiaries, joint venture partner or other person or entity, towards any sales or operations in any Sanctioned Country (as defined in Clause 3 of Schedule 2) or for the purpose of financing the activities of any person currently the target of any U.S. Economic Sanctions (as defined in Clause 3 of Schedule 2) in a manner that would breach applicable law; and the use of the Proceeds shall be in compliance with and shall not result in the breach by any person of applicable provisions of the U.S. Economic Sanctions or any applicable embargos or sanctions regulations imposed by the United Nations; and the Company further covenants not to engage, directly or indirectly, in any other activities that would result in such breach of applicable U.S. Economic Sanctions by the Investor.

8.25                          Anti-bribery Covenant. None of the Company, the Group Members and the Group Representatives (as defined in Clause 3 of Schedule 2) shall violate the FCPA or any other applicable Anti-Corruption Law or undertake any Anti-Corruption Prohibited Activity (each as defined in Clause 3 of Schedule 2).

8.26                           Disclosure of Criminal or Regulatory Investigation. The Company and Investor shall keep the Parties promptly informed of any events, discussions, notices or changes with respect to any criminal or regulatory investigation or action involving the Investor, the Company or any Group Representative, so that the counterparty shall have the opportunity to take appropriate steps to avoid or mitigate any regulatory consequences to the counterparty that might arise from such criminal or regulatory investigation or action. The Investor, the Company and any Group Representative shall reasonably cooperate with the counterparty in an effort to avoid or mitigate any cost or regulatory consequences that might arise from such investigation or action (including, its legally permissible, by providing an opportunity review written submissions in advance, attend meetings with authorities, coordinate and provide assistance in meeting with regulators and, by making a public announcement of such matters).

8.27                           Cash Payments. Unless otherwise permitted by resolutions or specific guidelines approved by the Board, no payments by the Company shall be made in cash or by bearer instruments, other than cash advances for employee travel or other purposes approved by the Board that are below a reasonable or de minimis threshold approved by the Board and in compliance with any applicable law.

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8.28                        Use of Sales Agents, Representatives and Consultants. The Company shall not, and shall procure that no Group Members shall, use any sales agent, representative or consultant unless the agent, representative or consultant has been screened to ensure that it has a good business reputation and conducts its business in an ethical fashion and in compliance with applicable laws.

8.29                        Right Not to Take Action. Notwithstanding any other provision of this Agreement, the Investor shall not be obligated to take any action or omit to take any action under this Agreement that it believes, in good faith based on the written advice of its counsel, would cause it to be in violation of any applicable law.

8.30                        Tax Election. If the Company proposes to make an election to treat the Company as an entity other than a corporation for U.S. federal income tax purposes, the Company shall take the prior written consent of the Investor prior to the filing of any document with U.S. Tax Authorities in relation to such election.

8.31                        No Issuances below Conversion Price.

(a)                                 The Company shall not, at any time on or after the Completion Date and for so long as the Investor holds any Notes or Conversion Shares, issue or sell any Shares or other Equity Securities at a price per Share, or in the case of other Equity Securities exchangeable or convertible into Shares, at a conversion or exercise price for a Share that is less than the Conversion Price in effect as of the date of such issuance (treating the price per Share, in the case of the issuance of any Equity Securities, as equal to (x) the sum of the price for such Equity Securities plus any additional consideration payable (without regard to any anti-dilution adjustments) upon the conversion, exchange or exercise of such Equity Securities divided by (y) the number of Shares initially underlying such Equity Securities).

(b)                                 In case the consideration received by the Company from such sale or issuance is not cash, the amount of the consideration shall be the fair market value of such non-cash consideration.

8.32                        Negative Covenants. From the Completion Date, the Company shall not, and shall cause each Group Member not to, without the prior written consent of the Investor, take any of the following actions, or take or omit to take any action that would have the effect of any of the following actions:

(a)                                 change the scope of the Principal Business; approve the development of any new line of business; or enter into any business other than the Principal Business;

(b)                                 except for any amendment required by law, amend, modify or waive any provisions of the Charter Documents which may reasonably be deemed to affect the Notes or the rights of the Holders under the Notes;

(c)                                  acquire or dispose of assets other than in the ordinary course of business;

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(d)                                 enter into any joint venture or partnership with, or otherwise acquire any interest in the Equity Securities of, any Person other than a wholly-owned Subsidiary of the Company;

(e)                                  change the size or composition of the Board or the board of directors of any Subsidiary of the Company or any committee thereof;

(f)                                   approve any budget or business plan of the Company or any material Subsidiary or any modification thereto;

(g)                                  approve the employment or termination of, or compensation agreements for any Senior Officer, or determine the compensation (including without limitation cash and stock option compensation) of any Director or director of a Subsidiary or any member of a committee of the Board or the board of directors of any Subsidiary;

(h)                                 incur any Indebtedness (other than amounts payable under the Notes) such that the outstanding Indebtedness is in excess of US$ 22 million (or its equivalent in other currencies) in the aggregate for the Group;

(i)                                     change the Company’s auditors to a firm not considered one of the “Big Four” accounting firms as of the date hereof, or any successor thereto; or

(j)                                    redeem or repurchase any Equity Securities of the Company or any Subsidiary of the Company except pursuant to the Existing Repurchase Program.

8.33                        Cash Priority. For so long as the Investor holds any Notes or Conversion Shares, the Company shall exercise its commercially reasonable efforts to utilize its cash to conduct a share repurchase of its outstanding publicly traded Equity Securities instead of paying cash dividends to holders of the Shares.

8.34                        Cord Blood Banking. The Company shall maintain and keep effective all the current cord blood banking licenses (including the Blood Station Operation License) which have been issued to the Company by the Ministry of Health of the PRC. The Company shall ensure that the Licenses are renewed from time to time in accordance with the terms and conditions of the licenses and applicable laws. Each Group Member shall at all time comply with the terms and conditions of the cord blood banking license in all respects. The Company shall use its best efforts to obtain additional cord blood banking licenses in the PRC and expand its geographical coverage in this industry by applying for licenses in other regions domestically within the PRC and internationally. So long as the Investor beneficially owns any Notes or Conversion Shares, the Company shall ensure that each of Jiachenhong, Nuoya and Lukou shall use its best efforts to promote and develop the public cord blood banking and related services provided by its cord blood bank in the PRC.

SECTION 9
CONSEQUENCES OF CERTAIN MATERIAL BREACHES

9.1                               So long as the Investor holds any Notes, the occurrence of any of the following events (“Special Events”) shall give rise, as between the Company and the Investor, the right

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to the Investor to tender such Note to the Company for repurchase on the terms set forth in (but not pursuant to) section 5 of the Notes:

(a)                                 the Company breaches Sections 2.3 (Use Of Proceeds), Section 7 (Confidentiality), Section 8 (Covenants), Section 10 (Taxes, Duties, Fee and Expense), Section 11 (Indemnification), Section 14.1 (No Partnership), Section 14.7 (Transfers, Assignment) of this Agreement in any material respect, except, in the case of a breach of a covenant in Section 8 (Covenants) which is curable, only if such breach continues for a period of thirty (30) days after the Company receives written notice of such breach from the Investor;

(b)                                 the Company breaches Section 6.1 (Company Warranties) in any respect that has a material adverse impact on the Investor or the Group;

(c)                                  Golden Meditech or GM Stem Cells breach any provision of the GM Lock-Up Agreement in any material respect; or

(d)                                 any Senior Manager breaches any provision of the Senior Management Lock-Up Agreement (to which it is a party) in any material respect.

9.2                               Upon the Company becoming aware of the occurrence of any Special Event, the Company shall within two (2) Business Days deliver a written notice thereof via facsimile and overnight courier to the Investor, and the Investor shall have the right, at its discretion, to require the Company to repurchase all or any portion of the Notes held by the Investor by delivering a notice to the Company in the manner in which an Event of Default Redemption Notice is to be delivered as per section 5 of the Notes. The Company shall be obligated to repurchase the Notes at a price which is calculated and paid in the manner in which the Event of Default Redemption Price is to be calculated and paid as specified in section 5 of the Notes. Neither the occurrence of a Special Event nor the Investor’s election to require the Company to repurchase the Notes shall be deemed to be an Event of Default under the Notes.

9.3                               From and after the 30th day following the occurrence, and during the continuance, of a Special Event, the Investor shall be entitled to receive as liquidated damages hereunder (and not as a penalty), on each following Interest Payment Date (during the continuance of a Special Event), an amount in cash equal to twenty-two point five percent (22.5%) per annum on the Principal held by the Investor (calculated on the basis of a 360-day year, consisting of twelve 30-day months) for the number of days such Special Event shall have continued.

9.4                               Capitalized terms used in this Section 9 but not otherwise defined in this Agreement shall have the same meanings assigned to them in the Notes.

SECTION 10
TAXES, DUTIES, FEES AND EXPENSES

10.1                        Fees and Expenses upon Completion. Following the Completion, upon the receipt from the Investor of appropriate invoices containing reasonable detail, the Company shall within ten (10) Business Days reimburse the Investor all fees and expenses actually incurred by the Investor for engaging legal counsel and other professional advisors and agents (the “Fees and Expenses”) in connection with due diligence,

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preparation and negotiation of the Transaction Documents, performance hereunder or thereunder and consummation of the transactions contemplated hereby or referred to herein; provided that the total amount of such Fees and Expenses for the Investor shall not exceed two percent (2%) of the Consideration. At Completion, the Company shall bear all transfer taxes or duties in connection with the issuance of the Notes to the Investor.

10.2                        Fees and Expense in the Absence of Completion. If this Agreement is terminated pursuant to Section 12.2, each Party shall bear the fees and expenses incurred in connection with the transaction contemplated hereunder on a 50:50 basis.

10.3                        Tax Treatment.

(a)                                 The Company shall use its commercially reasonable efforts, and shall ensure that each other Group Member uses its best efforts, to maintain sufficient commercial substance and ensure that they are otherwise properly managed in a manner that ensures that they are treated as tax residents only in their respective countries of incorporation. In this regard, each of the Company and other Group Members shall ensure that their central management and control, and in particular, the place where the directors of each respective Group Member meet to conduct the business of that Group Members is in that entity’s jurisdiction of incorporation. Without limiting the generality of the foregoing, the Company shall ensure that each Group Member not incorporated in the PRC shall not (i) be managed and controlled from within the PRC, (ii) maintain its books and records within the PRC, or (iii) otherwise be managed in a manner that may cause any Governmental Authority in the PRC to challenge the tax residency of such Group Member or to disregard any entity under the PRC’s general anti-tax avoidance rules.

(b)                                 If requested by the Investor, the Company shall in a timely manner deliver a certificate under Section 1445 of the Code to the effect that the Company is not (and has not been) a United States real property holding corporation for U.S. federal income tax purposes.

(c)                                  Any payment by the Company to the Investor under this Agreement or any other Transaction Document shall be made free and clear of and without deduction for any taxes, except as required by applicable law. If the Company shall be required by any applicable law to deduct any taxes from or in respect of any sum payable under this Agreement or any other Transaction Document to the Investor, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 10.3(a)), the Investor receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Company shall make such deductions, (iii) the Company shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law, and (iv) as promptly as practicable after the date of such payment, the Company shall deliver to the Investor the original or a certified copy of a receipt or other appropriate documentation evidencing payment thereof. Upon request by the Company, the Investor shall use its best efforts to provide the Company with any forms or other documentation as may

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be reasonably necessary in order to claim an applicable exemption or reduction of any such taxes.

10.4                        PFIC

If the Company is or becomes a “passive foreign investment company” (“PFIC”) as that term is defined in Section 1297(a) of the Code, upon a sale or other taxable disposition under the applicable U.S. tax principles of the Notes or the Conversion Shares, or upon the receipt of any “excess distribution” within the meaning of Section 1291(b) of the Code in respect of the Notes or the Conversion Shares, by the Investor or any of its Affiliates which is a holder of the Notes or the Conversion Shares, the Company shall make a payment to such holder in the amount determined based on the following formula (the “PFIC Damage Amount”) (it being understood that if the amount of gain realized on the disposition or excess distribution received is allocable to more than one taxable year or period under the applicable tax law, the PFIC Damage Amount shall be the sum of the amount determined for each relevant taxable year or period under such formula):

“A” means the amount of the taxable gain on the disposition, or excess distribution, realized by the holder determined under the U.S. tax principles applicable to a PFIC.

“B” means, (i) with respect to a disposition, the excess of (a) the PFIC Tax Rate with respect to such disposition over (b) the highest aggregate overall rate of tax that would have been applicable to an individual investor assuming that the individual is a resident of New York City with respect to the disposition had the gain realized been treated as long-term capital gain for U.S. federal income tax purposes and not subject to the PFIC interest charge imposed under Section 1291 of the Code; and (ii) with respect to an excess distribution within the meaning of Section 1291(b) of the Code, the excess of (a) the PFIC Tax Rate with respect to such excess distribution over (b) the highest aggregate overall rate of tax that would have been applicable to an individual investor assuming that the individual is a resident of New York City with respect to qualified dividend income (as defined in Section 1(h)(11) of the Code) had such distribution been taxable under Section 301 of the Code and not subject to any PFIC interest charge imposed under Section 1291 of the Code.

The foregoing provisions of this Section 10.4 shall cease to apply if the Company has not been a PFIC for any taxable year ending on or before the end of the taxable year that includes the seventh anniversary of the Completion Date (the “Expiration Date”), provided, for the avoidance of doubt, the foregoing provisions of this Section 10.4 shall apply and the PFIC Damage Amount shall be payable with respect to any disposition or excess distribution occurring after the Expiration Date but shall be limited to the PFIC Damage Amount attributable to the Company’s status as a PFIC at any time on or before the Expiration Date as provided under the applicable tax law, including, without limitation, Section

30

1298(b)(1) of the Code, and in such case the PFIC Damage Amount shall be calculated as if (i) in the case of a disposition, the amount of gain actually realized on such disposition were realized on the Expiration Date and (ii) in the case of any other excess distribution, as if the Investor or its Affiliates, as applicable, had received an excess distribution in such amount on the Expiration Date.

SECTION 11
INDEMNIFICATION

11.1                        General Indemnity. The Company (the “Indemnifying Party”) shall (to the fullest extent permitted by applicable laws) indemnify, defend and hold harmless the Investor and its Affiliates, officers, directors, agents and employees (each an “Indemnified Party”) from and against any and all losses, damages, liabilities, claims, proceedings, Taxes, costs and expenses actually suffered or incurred by any such Indemnified Party (including the fees, disbursements and other charges of counsel reasonably incurred by the Indemnified Party in any action between the Indemnifying Party and the Indemnified Party or between the Indemnified Party and any third party, in connection with any breach as set forth below) (collectively, “Losses”) resulting from or arising out of any breach by the Indemnifying Party of any Company Warranty or any other covenant or agreement in this Agreement or any other Transaction Document or resulting from or arising out of any claims against the Company or any other Group Member relating to any Tax liability that arose on or prior to the Completion Date, except to the extent that the Loss resulting from the gross negligence or wilfull misconduct of any Indemnified Party. The amount of any payment to any such Indemnified Party shall be sufficient to make such Indemnified Party whole for any diminution in value of the Equity Securities held by it resulting from such breach. Any indemnity referred to in this Section 11 for breach of a Company Warranty shall be such as to place the Indemnified Party in the same position as it would have been in had there not been any breach of the Company Warranties under which the Indemnified Party is to be indemnified. In connection with the indemnification obligation of the Indemnifying Party as set forth above, the Indemnifying Party shall, upon presentation of appropriate invoices containing reasonable detail, reimburse each Indemnified Party for all such expenses as they are incurred by such Indemnified Party. The aggregate liability of the Indemnifying Party under this Section 11.1 in respect of any breach of the Company Warranty shall not exceed an amount equal to US$65,000,000.

SECTION 12
TERMINATION

12.1                        Effective Date; Termination. This Agreement shall become effective upon execution by all of the Parties and shall continue in force until terminated in accordance with Section 12.2.

12.2                        Events of Termination. This Agreement may be terminated prior to Completion as follows:

(a)                                 if any one or more of the conditions set forth in Section 3.1 to the obligation of the Investor to complete has not been fulfilled on or prior to the Target Completion Date, the Investor shall have the right to terminate this Agreement with respect to its purchase of the Notes;

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(b)                                 if any one or more of the conditions set forth in Section 3.2 to the obligation of the Company to complete has not been fulfilled on or prior to the Target Completion Date as a result of any failure by the Investor, the Company shall have the right to terminate this Agreement with respect to the Investor’s purchase of the Notes;

(c)                                  if the Company has breached any Company Warranty, or any other material covenant or agreement contained in this Agreement, which breach cannot be cured or, if it is capable of being cured, is not cured within thirty (30) days after the Company being notified in writing of the same, the Investor shall have the right to terminate this Agreement with respect to its purchase of the Notes;

(d)                                 if the Investor has breached any of the Investor Warranties, or any other material covenant or agreement of the Investor contained in this Agreement, which breach cannot be cured or, if capable of being cured, is not cured within thirty (30) days after the Investor being notified in writing of the same, the Company shall have the right to terminate this Agreement with respect to the Investor’s purchase of the Notes;

(e)                                  if Completion does not occur within ninety (90) Business Days after the date of this Agreement, any Party may, at its sole discretion, give written notice to the other Parties to terminate this Agreement; or

(f)                                   at any time on or prior to the Completion Date, by written consent of the Parties;

provided, that any right to terminate this Agreement pursuant to this Section 12.2 shall not be available to any Party in breach of any of its obligations hereunder.

12.3                        Survival. If this Agreement is terminated in accordance with Section 12.2, it shall become void and of no further force and effect, except for the provisions of Section 7 (Confidentiality; Restriction on Announcements), Section 10 (Taxes, Duties, Fees and Expenses), Section 11 (Indemnification), this Section 12.3 (Survival) and Section 15 (Governing Law and Jurisdiction); provided that such termination shall, unless otherwise agreed to by the Parties, be without prejudice to the rights or obligations of any Party in respect of a breach of this Agreement prior to such termination.

SECTION 13
NOTICES

13.1                        Notices. Each notice, demand or other communication given or made under this Agreement shall be in writing in English and delivered or sent to the relevant Party at its address or fax number as set out below (or such other address or fax number as the addressee has by five (5) Business Days’ prior written notice specified to the other Parties). Any notice, demand or other communication given or made by letter between countries shall be delivered by international commercial overnight delivery service or courier (such as Federal Express or DHL). Any notice, demand or other communication so addressed to the relevant Party shall be deemed to have been delivered, (a) if delivered in person or by messenger, when proof of delivery is obtained by the delivering party; (b) if sent by post within the same country, on the

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third (3rd) Business Day following posting, and if sent by post to another country, on the seventh (7th) Business Day following posting; and (c) if given or made by fax, upon dispatch and the receipt of a transmission report confirming dispatch.

13.2                        Addresses and Fax Numbers. The initial address and facsimile for each Party for the purposes of this Agreement are:

SECTION 14
MISCELLANEOUS

14.1                        No Partnership. The Parties expressly do not intend to form a partnership, either general or limited, under any jurisdiction’s partnership law. The Parties do not intend to be partners to each other, partners as to any third party, or create any fiduciary relationship among themselves, solely by virtue of transactions contemplated hereby or the Investor’s status as holder of the Notes. The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company or any other Group Member (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and the Company has not received any advice given by the Investor or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby except for the Investor Warranties set forth in Schedule 3 hereto.

14.2                        Amendment. This Agreement may not be amended, modified or supplemented except by a written instrument executed by each of the Parties.

14.3                        Waiver. No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the Party waiving such provision. No failure or delay by a Party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of the same

33

preclude any further exercise thereof or the exercise of any other right, power or remedy. Without limiting the foregoing, no waiver by a Party of any breach by any other Party of any provision hereof shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof.

14.4                        Entire Agreement. This Agreement (together with the other Transaction Documents and any other documents referred to herein or therein) constitutes the whole agreement among the Parties relating to the subject matter hereof and supersedes any prior agreements or understandings relating to such subject matter.

14.5                        Severability. Each and every obligation under this Agreement shall be treated as a separate obligation and shall be severally enforceable as such and in the event of any obligation or obligations being or becoming unenforceable in whole or in part. To the extent that any provision or provisions of this Agreement are unenforceable they shall be deemed to be deleted from this Agreement, and any such deletion shall not affect the enforceability of such provisions of this Agreement as remain not so deleted.

14.6                        Counterparts. This Agreement may be executed in one or more counterparts including counterparts transmitted by telecopier or facsimile, each of which shall be deemed an original, but all of which signed and taken together, shall constitute one document.

14.7                        Transfer; Assignment. The Company shall not assign this Agreement or any of its rights or duties hereunder to any Person. The Investor may assign this Agreement or any of its rights or obligations hereunder to any of its Affiliates; subject to compliance with applicable securities laws, and provided that (i) the Investor undertakes to promptly notify the Company in writing of any such assignment and (ii) such assignee shall not be entitled to receive a payment under Section 10.3(c) which would be greater than the payment which the Investor would have been entitled to receive under Section 10.3(c).

14.8                        Further Assurances. Each Party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other Party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby.

14.9                        Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Investor shall be entitled to specific performance under the Transaction Documents. The Parties agree that monetary damages may not be adequate compensation for any loss incurred by the Investor by reason of any breach of obligations contained in the Transaction Documents by the other Parties and the Company hereby agrees to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

SECTION 15
GOVERNING LAW AND JURISDICTION

15.1                        GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE ▇▇▇▇▇ ▇▇ ▇▇▇

▇▇

▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ APPLICABLE TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN SUCH JURISDICTION, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF ANY JURISDICTION.

15.2                        Submission to Jurisdiction.  Each of the parties hereto (i) shall submit itself to the non-exclusive jurisdiction of the United States district court for the Southern District of New York in the event any dispute arises out of this Agreement, (ii) agrees that venue will be proper as to proceedings brought in any such court with respect to such a dispute, (iii) shall not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from such court and (iv) agrees to accept service of process at its address for notices pursuant to this Agreement in any such action or proceeding brought in any such court. With respect to any such action, service of process upon any Party in the manner provided herein for the giving of notices shall be deemed, in every respect, effective service of process upon such Party. If there is no applicable jurisdiction in such federal court, each of the Parties shall submit itself to the jurisdiction of the state court for the State of New York in the borough of Manhattan.

15.3                        Service of Process. The Company hereby irrevocably designates and appoints Law Debenture Corporate Services, Inc. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Tel: (▇▇▇) ▇▇▇-▇▇▇▇ (the “Process Agent”), as the authorized agent of the Company upon whom process may be served in any such suit or proceeding, it being understood that the designation and appointment of the Process Agent as such authorized agent shall become effective immediately without any further action on the part of the Company. The Company hereby represents that it has notified the Process Agent of such designation and appointment and that the Process Agent has accepted the same in writing. The Company hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf. The Company further agrees that service of process upon the Process Agent and written notice of said service to the Company, mailed by prepaid registered first class mail or delivered to the Process Agent at its principal office, shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding. Nothing herein shall affect the right of any Party to serve process in any other manner permitted by law. The Company further agrees to take any and all actions, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of the Process Agent in full force and effect so long as the Company has any outstanding obligations under this Agreement.

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IN WITNESS WHEREOF this Agreement has been executed on the day and year first above written.

Signature page to Convertible Note Purchase Agreement

SCHEDULE 1

PART A — PARTICULARS OF THE COMPANY

Company

1-1

PART B — PARTICULARS OF OTHER OFFSHORE COMPANIES

1-2

PART B — PARTICULARS OF OTHER OFFSHORE COMPANIES

1-3

PART B — PARTICULARS OF OTHER OFFSHORE COMPANIES

1-4

PART B — PARTICULARS OF OTHER OFFSHORE COMPANIES

1-5

PART B — PARTICULARS OF OTHER OFFSHORE COMPANIES

1-6

PART B — PARTICULARS OF OTHER OFFSHORE COMPANIES

1-7

PART B — PARTICULARS OF OTHER OFFSHORE COMPANIES

1-8

PART B — PARTICULARS OF OTHER OFFSHORE COMPANIES

1-9

PART B — PARTICULARS OF OTHER OFFSHORE COMPANIES

1-10

PART B — PARTICULARS OF OTHER OFFSHORE COMPANIES

1-11

PART B — PARTICULARS OF OTHER OFFSHORE COMPANIES

1-12

PART C —

PARTICULARS OF THE OTHER ONSHORE COMPANIES

1-13

PART C —

PARTICULARS OF THE OTHER ONSHORE COMPANIES