Loan Agreement, dated March 1, 2011, by and between China Security & Surveillance Technology, Inc. and China Development Bank Corporation Hong Kong Branch

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC., a corporation incorporated under the laws of the State of Delaware with its principal place of business at 13/F, Shenzhen Special Zone Press Tower, Shennan Road, Futian District, Shenzhen, People’s Republic of China, 518034 as borrower (the “Borrower”);

CHINA DEVELOPMENT BANK CORPORATION HONG KONG BRANCH (国家开发银行股份有限公司香港分行) of Suite 3307-15, 33/F., One International Finance Centre, No. 1 Harbour View Street, Central, Hong Kong as original lender (the “Original Lender”);

CHINA DEVELOPMENT BANK CORPORATION HONG KONG BRANCH (国家开发银行股份有限公司香港分行) of Suite 3307-15, 33/F., One International Finance Centre, No. 1 Harbour View Street, Central, Hong Kong as arranger (the “Arranger”); and

CHINA DEVELOPMENT BANK CORPORATION HONG KONG BRANCH (国家开发银行股份有限公司香港分行) of Suite 3307-15, 33/F., One International Finance Centre, No. 1 Harbour View Street, Central, Hong Kong as facility agent of the Finance Parties (other than itself) (the “Facility Agent”).

DEFINITIONS AND INTERPRETATION

Definitions

In this Agreement:

“Administrative Party” means each of the Facility Agent and the Arranger.

“Authorised Person” means a person duly authorised to act on behalf of any of the Obligors, as the case may be, and any permitted attorney-in-fact or delegate of such person.

“Availability Period” means the period from and including the date of this Agreement to and including the date falling one (1) year after the date of this Agreement.

“Available Commitment” means at any time a Lender’s Commitment minus:

the aggregate amount of its participation in any outstanding Loans; and

in relation to any proposed Utilisation, the aggregate amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date.

the interest which a Lender should have received pursuant to the terms of this Agreement for the period from the date of receipt of all or any part of the principal amount of a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

the amount of interest which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the business day following receipt or recovery and ending on the last day of the current Interest Period.

in relation to the Original Lender, the amount set opposite its name under the heading “Commitment” in Schedule 1 (The Original Lender and Commitment) and the amount of any other Commitment transferred to it under this Agreement; and

in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,

this Agreement;

the Letter of Undertaking; and

any other document or agreement designated in writing as such by the Borrower and the Facility Agent,

moneys borrowed;

any amount raised by acceptance under any acceptance credit facility;

any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;

receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;

any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);

any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and

the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.

the Original Lender; and

any person which has become a Party in accordance with Clause 20 (Changes to the Parties),

the applicable Screen Rate; or

if no Screen Rate is available for US Dollars for the Interest Period of that Loan, the arithmetic mean of the rates (rounded upwards to four (4) decimal places) quoted by the Reference Banks to leading banks in the Relevant Interbank Market (as supplied to the Facility Agent at its request),

if there is any Loan then outstanding, a Lender or Lenders whose participations in the Loan(s) then outstanding aggregate more than 662/3% of such Loan(s); or

if there is no Loan then outstanding and the Available Facility is then greater than zero, a Lender or Lenders whose Available Commitments aggregate more than 662/3% of the Available Facility; or

if there is no Loan then outstanding and the Available Facility is then zero;

if the Available Facility became zero after a Loan ceased to be outstanding, a Lender or Lenders whose Available Commitments aggregated more than 662/3% of the Available Facility immediately before the Available Facility became zero; or

if a Loan ceased to be outstanding after the Available Facility became zero, a Lender or Lenders whose participations in the Loan(s) outstanding immediately before any Loan ceased to be outstanding aggregated more than 662/3% of such Loan(s).

any Security Interest arising or constituted under any retention of title or similar provision in a supplier’s or vendor’s terms and conditions of supply or sale of goods or materials acquired by the Borrower or any other Group Company in the ordinary course of business and provided no default exists in respect of the obligations which the Security Interest secures;

any Security Interest for any Taxes which are not yet due or remain payable without penalty (other than those which are currently being contested in good faith by appropriate proceedings and in respect of which the Borrower or any other Group Company has made adequate reserve (being not less than an amount which would be required to be reserved in accordance with GAAP)) provided always that no document has been filed, registered, recorded or lodged with any court, registry, office, or regional, provincial, governmental or other authority by any person for the purpose of perfecting or preserving such Security Interest or the priority thereof;

any Security Interest arising or constituted by any lease, rental, hire, conditional sale or similar agreement entered into by the Borrower or any other Group Company relating to the assets acquired by it in the ordinary course of business (and not for the primary purpose of raising finance) provided always that the entry into and performance of such arrangements does not contravene any provision of any of the Finance Documents;

any Security Interest on property acquired by the Borrower or any other Group Company after the date hereof which existed on such property at the time of its acquisition (but which was not created in anticipation thereof) provided that the terms thereof and the acquisition of such property do not contravene any provision of any of the Finance Documents and the principal amount secured thereby has not been increased in contemplation of, or since the acquisition of that property by the Borrower;

any netting or set-off arrangement entered into by the Borrower or any other Group Company in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances; and

any Security Interest on any asset of a Group Company in the PRC securing any Financial Indebtedness of a Group Company in the PRC consistent with past practice of the Group.

a mortgage, charge, pledge, lien or other encumbrance securing any obligation of any person;

any arrangement under which money or claims to, or for the benefit of, a bank or other account may be applied, set-off or made subject to a combination of accounts so as to effect payment of sums owed or payable to any person; or

any other type of preferential arrangement (including title transfer and retention arrangements) having a similar effect.

Unless a contrary indication appears, any reference in this Agreement to:

any “Administrative Party”, the “Agent”, the “Arranger”, any “Finance Party”, any “Lender”, the “Borrower”, any “Obligor” or any “Party” shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

“affiliate” of any specified person means:

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

any other person who is a director or officer of:

such specified person,

any subsidiary of such specified person,

any person described in (A) above, or

any spouse, parent, child, brother or sister of any person described in (A) or (B) above;

“applicable law or regulation” includes any law, regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

a document is in “agreed form” if it is agreed and initialled for the purpose of identification as such by the Borrower and the Facility Agent;

“assets” includes present and future properties, revenues and rights of every description;

“authorisation” means:

an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, lodgement or registration; or

in relation to anything which will be fully or partly prohibited or restricted by law if a governmental agency intervenes or acts in any way within a specified period after lodgement, filing, registration or notification, the expiry of that period without intervention or action;

“business day” means a day (other than a Saturday or Sunday) on which banks are open for general business in the City of New York, London and Hong Kong;

“contractual obligations” means, as to any person, any provision of any security issued by such person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument or arrangement (whether in writing or otherwise) to which such person is a party or by which it or any of such person’s property is bound;

“control” means the power to direct the management and policies of a body corporate, whether through the ownership of voting capital, by contract or otherwise and “controlled” shall be construed accordingly;

a “Finance Document” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated;

“governmental agency” means any government or any governmental agency, semi-governmental or judicial entity or authority (including, without limitation, any stock exchange or any self-regulatory organisation established under statute);

“holding company” means, in relation to a company or corporation, any other company or corporation in respect of which it is a subsidiary;

“including” shall be construed as “including without limitation” (and cognate expressions shall be construed similarly);

“indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

“indirect tax” means any goods and services tax, consumption tax, value added tax or any tax of a similar nature;

“material adverse effect” means a material adverse effect on:

the property, business, operations, financial condition, liabilities or capitalization of the Group , taken as a whole;

the ability of any Obligor to perform its payment obligations or any of its material obligations under any of the Finance Documents to which it is a party;

the validity or enforceability of any of the Finance Documents;

the material rights and remedies of the Finance Parties under any of the Finance Documents; or

the timely repayment of the Loan or payment of interest accrued or any other amount payable by the Borrower under this Agreement;

“month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

if the numerically corresponding day is not a business day, that period shall end on the next business day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding business day;

if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last business day in that calendar month; and

if an Interest Period begins on the last business day of a calendar month, that Interest Period shall end on the last business day in the calendar in which that Interest Period is to end;

“subsidiary” means in relation to any company or corporation, a company or corporation:

which is controlled, directly or indirectly, by the first mentioned company or corporation;

more than half the issued equity share capital of which is beneficially owned, directly or indirectly, by the first mentioned company or corporation; or

which is a subsidiary of another subsidiary of the first mentioned company or corporation,

and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;

a Lender’s “participation” in a Loan or Unpaid Sum includes an amount (in the currency of such Loan or Unpaid Sum) representing the fraction or portion (attributable to such Lender by virtue of the provisions of this Agreement) of the total amount of such Loan or Unpaid Sum and the Lender's rights under this Agreement in respect thereof;

a “person” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

a provision of law is a reference to that provision as amended or re-enacted; and

a time of day is a reference to Hong Kong time.

Clause and Schedule headings are for ease of reference only.

Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

A Potential Event of Default or an Event of Default is “continuing” if it has not been remedied or waived.

Where this Agreement specifies an amount in a given currency (the “specified currency”) “or its equivalent”, the “equivalent” is a reference to the amount of any other currency which, when converted into the specified currency utilising the Facility Agent’s spot rate of exchange for the purchase of the specified currency with that other currency at or about 11 a.m. on the relevant date, is equal to the relevant amount in the specified currency.

Currency Symbols

“USD” or “US Dollars” denote the lawful currency of the United States.

THE FACILITY

The Facility

Subject to the terms of this Agreement, the Lenders make available to the Borrower a US Dollar term loan facility in an aggregate amount equal to the Total Commitments.

Finance Parties’ rights and obligations

The obligations of the Finance Parties under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

The rights of the Finance Parties under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.

A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

PURPOSE

Purpose

The Borrower shall apply all amounts borrowed by it under the Facility for general working capital purposes.

Monitoring

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

CONDITIONS OF UTILISATION

Initial conditions precedent

The Borrower may not deliver any Utilisation Request unless all conditions precedent set out in Part A of Schedule 2 (Conditions Precedent) have been satisfied in accordance with Clause 4.3 (Satisfaction of conditions precedent). The Facility Agent shall notify the Borrower and the Lenders promptly upon being satisfied with the same.

Further conditions precedent

The Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation) in respect of a proposed Utilisation if on the date of the Utilisation Request and on the proposed Utilisation Date, all conditions precedent set out in Part B of Schedule 2 (Conditions Precedent) have been satisfied in accordance with Clause 4.3 (Satisfaction of conditions precedent).

Satisfaction of conditions precedent

The Borrower shall be deemed to have satisfied the conditions precedent in this Clause 4 if the documents and other evidence referred to in Schedule 2 (Conditions Precedent) and any documentary evidence relating to the satisfaction of the conditions precedent set out in Schedule 2 (Conditions Precedent) are delivered to Facility Agent in form and substance satisfactory to it.

Certification of documents

All copies of documents delivered to Facility Agent as required under this Clause 4 shall be certified by an Authorised Person of the relevant Obligor as being true and complete copies of the originals.

UTILISATION

Delivery of a Utilisation Request

The Borrower may utilise the Facility by delivery to the Facility Agent of a duly completed Utilisation Request not later than one month or such shorter period with prior written approval of the Facility Agent (acting on the instructions of the Majority Lenders) before the proposed Utilisation Date.

Completion of Utilisation Request

Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

the proposed Utilisation Date is a business day within the Availability Period; and

the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount).

The currency specified in a Utilisation Request must be US Dollars.

The amount of the proposed Loan must be an amount which is not more than the Available Facility and which is a minimum of USD 10,000,000 or, if less, the Available Facility.

If the conditions set out in Clause 4 (Conditions of Utilisation) and 5.1 (Delivery of a Utilisation Request) to 5.3 (Currency and amount) above have been met, each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office.

The amount of each Lender’s participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making that Loan.

The Facility Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan by 11:00 a.m. on the second business day before the Utilisation Date.

Cancellation of Available Facility

On the expiry of the Availability Period, the Available Commitment (if any) of each Lender shall be immediately and automatically reduced to zero.

REPAYMENT

Repayment of Loans

The Borrower shall repay the Loans in two instalments by repaying on each of the following dates (each, a “Repayment Date”) an amount which reduces the outstanding aggregate Loans by an amount equal to the relevant percentage of all Loans borrowed by the Borrower as at the close of business in Hong Kong on the last day of the Availability Period as set out in the table below:

Final Maturity Date

Without prejudice to Clause 6.1 (Repayment of Loans), all amounts due or to become due under this Agreement shall be paid or repaid, as the case may be, in full by the Final Maturity Date.

Reborrowing

The Borrower may not reborrow any part of the Facility which has been repaid.

PREPAYMENT AND CANCELLATION

Illegality

If, at any time, it is or will become unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan:

that Lender shall promptly notify the Facility Agent upon becoming aware of that event;

upon the Facility Agent notifying the Borrower, the Commitment of that Lender will be immediately cancelled; and

the Borrower shall repay that Lender’s participation in the Loans on the last day of the Interest Period of each Loan occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law).

Cancellation

The Facility may not be cancelled except as otherwise provided in this Agreement.

Change of Control

Upon the occurrence of a Change of Control:

the Borrower shall promptly notify the Facility Agent upon becoming aware of that event;

if the Majority Lenders so require, the Facility Agent shall, by not less than 30 days’ notice to the Borrower:

cancel the Facility and declare all outstanding Loans together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Facility will be cancelled and all such outstanding amounts will become immediately due and payable; or

require the Borrower to prepay a part of the Loans in such amount and on such date as is specified in the said notice.

For the purpose of this Clause 7.3, a “Change of Control” means the occurrence of any of the following events:

the Permitted Holders cease to be the beneficial owners, directly or indirectly, of a least 10% of the total voting power of the voting shares of the Borrower or any person or persons, acting together, other than the Permitted Holders become the beneficial owner(s) of a higher percentage of the total voting power of the voting shares of the Borrower than that of which the Permitted Holders are beneficial owners, directly or indirectly, whether as a result of the issuance of securities of the Borrower, any merger, consolidation, liquidation or dissolution of the Borrower, any direct or indirect transfer of securities by the Permitted Holders or otherwise (for this purpose, the Permitted Holders will be deemed to beneficially own any voting shares of the specified company held by a parent company so long as the Permitted Holders beneficially own, directly or indirectly, in the aggregate a majority of the total voting power of the voting shares of such parent company); or

the sale, transfer, assignment, lease, conveyance or other disposition, directly or indirectly, of all or substantially all the assets of the Borrower and its subsidiaries, considered as a whole (other than a disposition of such assets as an entirety or virtually as an entirety to a wholly-owned subsidiary or one or more Permitted Holders), shall have occurred, or the Borrower merges consolidates or amalgamates with or into any other person (other than one or person more Permitted Holders) or any other person (other than one or more Permitted Holders) merges, consolidates or amalgamates with or into the Borrower, in any such event pursuant to a transaction in which the outstanding voting shares of the Borrower is reclassified into or exchanged for cash, securities or other assets, other than such transaction where:

the outstanding voting shares of the Borrower are reclassified into or exchanged for other voting shares of the Borrower or for the voting shares of the surviving entity, and

the holders of the voting shares of the Borrower immediately prior to such transaction own, directly or indirectly, not less than a majority of the voting shares of the Borrower or the surviving entity immediately after such transaction and in substantially the same proportion as before the transaction; or

individuals who on the date of this Agreement constitute the board of directors (together with any new directors whose election or appointment by such board or whose nomination for election by the shareholders of the Borrower is approved by a vote of not less than the majority of the directors then still in office who are either directors on the date of this Agreement or whose election or nomination for election has been previously so approved) cease for any reason to constitute a majority of the board of directors then in office; or

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

The Borrower may, if it gives the Facility Agent not less than one (1) month’s (or such shorter period as the Majority Lenders may agree) prior notice, prepay on the last day of an Interest Period applicable thereto the whole or any part of any Loan (but, if in part, being an amount that is an integral multiple of USD 500,000) without any premium or penalty.

A Loan may be prepaid only after the last day of the Availability Period (or, if earlier, the day on which the Available Facility is zero).

any sum payable to any Lender by the Borrower is required to be increased under paragraph (a) of Clause 12.2 (Tax gross-up); or

any Lender claims indemnification from the Borrower under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased costs),

On receipt of a notice referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.

On the last day of the Interest Period which ends after the Borrower has given notice under paragraph (a) above (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall prepay that Lender’s participation in the relevant Loan without any premium or penalty.

Any notice of cancellation or prepayment given by any Party under this Clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

The Borrower may not reborrow any part of the Facility which has been prepaid.

The Borrower shall not repay or prepay all or any part of any Loan or reduce any Commitment except at the times and in the manner expressly provided for in this Agreement.

If any Commitment is reduced in accordance with this Agreement, the amount of such reduction may not be subsequently reinstated.

If the Facility Agent receives a notice under this Clause 7 it shall promptly forward a copy of that notice to either the Borrower or the affected Lender, as appropriate.

Any prepayment under Clause 7.3 (Change of Control) or Clause 7.4 (Voluntary Prepayment) shall be applied against the repayment instalments of Loans under Clause 6.1 (Repayment of Loans) in inverse chronological order and be applied rateably among the participations of all Lenders.

Calculation of interest

The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:

Payment of interest

The Borrower shall pay accrued interest on each Loan on the last day of each Interest Period.

Default interest

If the Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the due date to the date of actual payment (both before and after judgment) at a rate which is 2% higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted a Loan for successive Interest Periods, each of a duration selected by the Facility Agent (acting reasonably). Any interest accruing under this Clause 8.3 shall be immediately payable by the Borrower on demand by the Facility Agent.

If any Unpaid Sum consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan, the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan.

Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.

Notification of rates of interest

The Facility Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.

INTEREST PERIODS

Subject to Clause 9.2 (Non-Business Days), the period for which each Loan is outstanding shall be divided into successive Interest Periods, the duration of each shall be a period of six (6) months commencing on an Interest Payment Date and ending on the next Interest Payment Date provided that the first Interest Period for each Loan shall commence on the relevant Utilisation Date and end on the Interest Payment Date immediately falling after the relevant Utilisation Date.

An Interest Period shall not extend beyond the Final Maturity Date.

Non-Business Days

If an Interest Period would otherwise end on a day which is not a business day, that Interest Period will instead end on the next business day in that calendar month (if there is one) or the preceding business day (if there is not).

Consolidation of Loans

If the Interest Periods of two or more Loans end on the same date, those Loans will be consolidated into, and treated as, a single Loan on the last day of that Interest Period.

CHANGES TO THE CALCULATION OF INTEREST

Absence of quotations

Subject to Clause 10.2 (Market disruption), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by noon on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

Market disruption

Subject to any alternative basis agreed and consented to as contemplated by paragraphs (a) and (b) of Clause 10.3 (Alternative basis of interest or funding), if a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lender’s share of that Loan for the Interest Period shall be the rate per annum which is the sum of:

the Margin; and

the higher of (A) the rate notified to the Facility Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select and (B) in relation to a Market Disruption Event under paragraph (b)(ii) below, LIBOR.

In this Agreement “Market Disruption Event” means:

at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available or the Screen Rate is zero or negative and none or only one of the Reference Banks supplies a rate to the Facility Agent to determine LIBOR for US Dollars for the relevant Interest Period; or

before noon (Hong Kong time) on the business day immediately following the Quotation Day for the relevant Interest Period, the Facility Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 30% of that Loan) that the cost to it or them of obtaining matching deposits in the Relevant Interbank Market would be in excess of LIBOR.

If a Market Disruption Event occurs and the Facility Agent or the Borrower so requires, the Facility Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest.

Any alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

For the avoidance of doubt, in the event that no substitute basis is agreed at the end of the 30 day period, the rate of interest shall continue to be determined in accordance with the terms of this Agreement.

The Borrower shall, within three (3) business days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

Each Lender shall, as soon as reasonably practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

FEES

Upfront Fee

The Company shall pay to the Arranger an upfront fee in the amount of USD 800,000 within one (1) month of the date of this Agreement.

TAX GROSS UP AND INDEMNITIES

Tax definitions

In this Clause 12:

“Tax Credit” means a credit against, relief or remission for, or repayment of any Tax.

“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Finance Document.

“Tax Payment” means an increased payment made by the Borrower to a Finance Party under Clause 12.2 (Tax gross-up) or a payment under Clause 12.3 (Tax indemnity).

Unless a contrary indication appears, in this Clause 12 a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.

All payments to be made by the Borrower to any Finance Party under the Finance Documents shall be made free and clear of and without any Tax Deduction unless the Borrower is required to make a Tax Deduction, in which case the sum payable by the Borrower (in respect of which such Tax Deduction is required to be made) shall be increased to the extent necessary to ensure that such Finance Party receives a sum net of any deduction or withholding equal to the sum which it would have received had no such Tax Deduction been made or required to be made.

The Borrower shall promptly upon becoming aware that the Borrower must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Borrower.

If the Borrower is required to make a Tax Deduction, the Borrower shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower shall deliver to the Facility Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

any Tax imposed on and calculated by reference to the net income of the Facility Office of such Finance Party actually received or receivable by such Finance Party (but, for the avoidance of doubt, not including any sum deemed for purposes of Tax to be received or receivable by such Finance Party but not actually receivable) by the jurisdiction in which its Facility Office is located.

A Finance Party intending to make a claim under paragraph (a) shall notify the Facility Agent of the event giving rise to the claim, whereupon the Facility Agent shall notify the Borrower thereof.

A Finance Party shall, on receiving a payment from the Borrower under this Clause 12.3 , notify the Facility Agent.

a Tax Credit is attributable to that Tax Payment; and

that Finance Party has obtained, utilised and retained that Tax Credit,

that Finance Party shall pay an amount to the Borrower which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Borrower.

Stamp taxes

The Borrower shall:

pay all stamp duty, registration and other similar Taxes payable in respect of any Finance Document; and

within three (3) business days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to any stamp duty, registration or other similar Tax paid or payable in respect of any Finance Document.

All consideration expressed to be payable under a Finance Document by any Party to a Finance Party shall be deemed to be exclusive of any indirect tax. If any indirect tax is chargeable on any supply made by any Finance Party to any Party in connection with a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying the consideration) an amount equal to the amount of the indirect tax.

Where a Finance Document requires any Party to reimburse a Finance Party for any costs or expenses, that Party shall also at the same time pay and indemnify the Finance Party against all indirect tax incurred by that Finance Party in respect of the costs or expenses to the extent the Finance Party reasonably determines that it is not entitled to credit or repayment in respect of the indirect tax.

Subject to Clause 13.3 (Exceptions) the Borrower shall, within three (3) business days of a demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any applicable law or regulation made after the date of this Agreement. The term “applicable law or regulation” in this paragraph (a) shall include, without limitation, any law or regulation concerning capital adequacy, prudential limits, liquidity, reserve assets or Tax.

In this Agreement “Increased Costs” means:

a reduction in the rate of return from the Facility or on a Finance Party’s (or its affiliate’s) overall capital (including, without limitation, as a result of any reduction in the rate of return on capital brought about by more capital being required to be allocated by such Finance Party);

an additional or increased cost; or

a reduction of any amount due and payable under any Finance Document,

which is incurred or suffered by a Finance Party or any of its affiliates to the extent that it is attributable to the undertaking, funding or performance by such Finance Party of any of its obligations under any Finance Document or any participation of such Finance Party in any Loan or Unpaid Sum.

Increased cost claims

A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Borrower.

Each Finance Party shall, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Increased Costs.

Exceptions

Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is:

attributable to a Tax Deduction required by law to be made by the Borrower;

compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because the exclusion in paragraph (a) of Clause 12.3 (Tax indemnity) applied); or

attributable to the wilful breach by the relevant Finance Party or its affiliates of any applicable law or regulation.

MITIGATION BY THE LENDERS

Mitigation

Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 12 (Tax gross-up and indemnities) or Clause 13 (Increased costs), including (but not limited to):

providing such information as the Borrower may reasonably request in order to permit the Borrower to determine its entitlement to claim any exemption or other relief (whether pursuant to a double taxation treaty or otherwise) from any obligation to make a Tax Deduction; and

in relation to any circumstances which arise following the date of this Agreement, transferring its rights and obligations under the Finance Documents to another affiliate or Facility Office.

Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.

The Borrower shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 14.1 (Mitigation).

A Finance Party is not obliged to take any steps under Clause 14.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

Conduct of business by the Finance Parties

No provision of this Agreement will:

interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:

making or filing a claim or proof against that Obligor; or

obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

the Borrower shall as an independent obligation, within three (3) business days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

The Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

Other indemnities

The Borrower shall, within three (3) business days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:

the occurrence of any Event of Default;

the information produced or approved by any Obligor being or being alleged to be misleading and/or deceptive in any respect;

any enquiry, investigation, subpoena (or similar order) or litigation with respect to any Obligor or with respect to the transactions contemplated or financed under this Agreement;

a failure by an Obligor to pay any amount due under a Finance Document on its due date or in the relevant currency, including without limitation, any cost, loss or liability arising as a result of Clause 23 (Sharing among the Finance Parties);

funding, or making arrangements to fund, its participation in a Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of wilful default or gross negligence by that Finance Party alone); or

a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.

Indemnity to the Facility Agent

The Borrower shall promptly indemnify the Facility Agent against any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:

investigating any event which it reasonably believes is an Event of Default or Potential Event of Default; or

acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised.

this Agreement and any other documents referred to in this Agreement; and

any other Finance Documents executed after the date of this Agreement.

Amendment costs

If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 24.9 (Change of currency), the Borrower shall, within three (3) business days of demand, reimburse the Facility Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Facility Agent in responding to, evaluating, negotiating or complying with that request or requirement.

Enforcement costs

The Borrower shall, within three (3) business days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document.

REPRESENTATIONS AND WARRANTIES

Matters represented

The Borrower makes the representations and warranties set out in Schedule 5 (Representations and Warranties) to each Finance Party on the date of this Agreement.

Reliance

The Borrower acknowledges the reliance by each Finance Party on the representations and warranties made by the Borrower pursuant to Clause 17.1 (Matters represented) in entering into this Agreement and each other Finance Document to which it is a party.

Repetition

The Borrower shall be deemed to have repeated:

each of the representations and warranties made by it pursuant to Clause 17.1 (Matters represented) on the date of each Utilisation Request and on each Utilisation Date; and

each of the representations and warranties made by it under Clauses 2 (Execution, Delivery and Performance), 4 (Binding Obligations) and 7 (Law and Jurisdiction) of Schedule 5 (Representations and Warranties) on the first day of each Interest Period,

in each case with reference to the facts and circumstances then subsisting on each relevant date.

UNDERTAKINGS

Matters undertaken

The Borrower undertakes to each Finance Party that it shall comply with the undertakings contained in Schedule 6 (Undertakings).

Duration

The Borrower’s undertakings in Schedule 6 (Undertakings) shall, save as otherwise provided herein, remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

“Know your customer” checks

The Borrower shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) (including for any Lender on behalf of any prospective new Lender) in order for the Facility Agent, such Lender or any prospective new Lender to conduct any “know you customer” or other similar procedures under applicable laws and regulations.

Each Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself) in order for the Agent to conduct any “know your customer” or other similar procedures under applicable laws and regulations.

EVENTS OF DEFAULT

Events of Default

Each of the events set out in Schedule 7 (Events of Default) shall constitute an Event of Default (howsoever caused and resulting).

Acceleration

On and at any time after the occurrence of an Event of Default which is continuing the Facility Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrower:

without prejudice to the participations of any Lenders in any Loans then outstanding:

cancel the Commitments (and reduce them to zero), whereupon they shall immediately be cancelled (and reduced to zero); or

cancel any part of any Commitment (and reduce such Commitment accordingly), whereupon the relevant part shall immediately be cancelled (and the relevant Commitment shall be immediately reduced accordingly); and/or

declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or

declare that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Facility Agent on the instructions of the Majority Lenders.

CHANGES TO THE PARTIES

Assignments and transfers by the Lenders

Subject to this Clause 20, a Lender (the “Existing Lender”) may:

assign any of its rights; or

transfer by novation any of its rights and obligations,

under the Finance Documents to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “New Lender”).

Conditions of assignment or transfer

The consent of the Borrower is required for a transfer by a Lender of any of its obligations under the Finance Documents in respect of its Available Commitment unless (i) the transfer is to another Lender or an affiliate of a Lender, or (ii) an Event of Default has occurred which is continuing.

The consent of the Borrower to a transfer must not be unreasonably withheld or delayed. The Borrower will be deemed to have given its consent five (5) business days after the Lender has requested it unless consent is expressly refused by the Borrower within that time.

An assignment will not be effective unless:

the Facility Agent shall have received written confirmation from the New Lender (in form and substance satisfactory to the Facility Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it was the Original Lender; and

the Facility Agent shall have notified the Existing Lender and the New Lender that such assignment is effective provided that the Facility Agent is not obliged to give such notification unless it is satisfied that it has completed all “know your customer” and other similar procedures relating to any person that it is required to carry out (or deems desirable) in relation to such assignment to a New Lender.

A transfer will be effective only if the procedure set out in Clause 20.4 (Procedure for transfer) is complied with.

Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;

the financial condition of any Obligor;

the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or

the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

and any representations or warranties implied by law are excluded.

Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and

will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

Nothing in any Finance Document obliges an Existing Lender to:

accept a re-transfer from a New Lender of any of the rights and obligations assigned or transferred under this Clause 20; or

support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.

Subject to the conditions set out in Clause 20.2 (Conditions of assignment or transfer) a transfer is effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.

The Facility Agent shall not be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender unless it is satisfied that it has completed all “know your customer” and other similar procedures that it is required (or deems desirable) to conduct in relation to the transfer to such New Lender.

On the Transfer Date:

to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another shall be cancelled (being the “Discharged Rights and Obligations”);

each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;

the Facility Agent, the Arranger, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been the Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Facility Agent, the Arranger and the Existing Lender shall each be released from further obligations to each other under this Agreement; and

the New Lender shall become a Party as a “Lender”.

The procedure set out in this Clause 20.4 shall not apply to any right or obligation under any Finance Document (other than this Agreement) if and to the extent its terms, or any applicable laws or regulations applicable thereto, provide for or require a different means of assignment or transfer of such right or obligation or prohibit or restrict any assignment or transfer of such right or obligation, unless such prohibition or restriction shall not be applicable to the relevant assignment or transfer or each condition of any applicable restriction shall have been satisfied.

Copy of Transfer Certificate to Borrower

The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, send to the Borrower a copy of that Transfer Certificate.

Existing consents and waivers

A New Lender shall be bound by any consent, waiver, election or decision given or made by the relevant Existing Lender under or pursuant to any Finance Document prior to the coming into effect of the relevant assignment or transfer to such New Lender.

Exclusion of Facility Agent’s liability

In relation to any assignment or transfer pursuant to this Clause 20, each Party acknowledges and agrees that the Facility Agent shall not be obliged to enquire as to the accuracy of any representation or warranty made by a New Lender in respect of its eligibility as a Lender.

Assignments and transfers to Obligor group

A Lender may not assign or transfer to any Obligor or any affiliate of any Obligor any of such Lender’s rights or obligations under any Finance Document, except with the prior written consent of all the Lenders.

Assignments and transfers by Obligors

No Obligor may assign or transfer any of its rights or obligations under any Finance Document, except with the prior written consent of all the Lenders.

DISCLOSURE OF INFORMATION

Any Finance Party may deliver copies of the Finance Documents and/or disclose any information received by it under or pursuant to any Finance Document or any other information about any Obligor or the Finance Documents as that Finance Party shall consider appropriate (if, in relation to paragraphs (i)(i) and (i)(ii) below, the person to whom the copies and/or information are to be delivered or disclosed has undertaken to keep such information confidential on terms set out in this Clause 21) to:

any of its affiliates;

its head office and any other branch;

any other Finance Party;

any of its professional advisers and any other person providing services to it (provided that such person is under a duty of confidentiality, contractual or otherwise, to such Finance Party);

any Obligor;

any person permitted by any Obligor;

any person to the extent required for the purpose of any litigation, arbitration or regulatory proceedings or procedure;

any person to whom, and to the extent that, information is required to be disclosed by any applicable law or regulation; and

any other person:

to (or through) whom that Lender assigns or transfers (or may potentially assign or transfer) all or any of its rights and obligations under this Agreement; or

with (or through) whom that Lender enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, the Facility, this Agreement or any Obligor.

This Clause 21 supersedes any previous agreement relating to the confidentiality of such information.

ROLE OF THE ADMINISTRATIVE PARTIES

Appointment of the Facility Agent

Each of the other Finance Parties appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.

Each of the other Finance Parties authorises the Facility Agent to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

The Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party.

Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

If the Facility Agent receives notice from a Party referring to this Agreement, describing an Event of Default or a Potential Event of Default and stating that the circumstance described is an Event of Default or a Potential Event of Default, it shall promptly notify the Lenders.

If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than to any Administrative Party) under this Agreement it shall promptly notify the other Lenders.

The Facility Agent’s duties under the Finance Documents are solely mechanical and administrative in nature. The Facility Agent shall have no other duties save as expressly provided for in the Finance Documents.

Save as otherwise provided in this Agreement, nothing in this Agreement constitutes any Administrative Party as a trustee or fiduciary of any other person.

No Administrative Party shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

Business with the Group

Any Administrative Party may accept deposits from, lend money to and generally engage in any kind of banking or other business with any Group Member.

Rights and discretions of the Facility Agent

The Facility Agent may rely on:

any representation, notice or document believed by it to be genuine, correct and appropriately authorised and shall have no duty to verify any signature on any document; and

any statement purportedly made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.

The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:

no Event of Default or Potential Event of Default has occurred (unless it has actual knowledge of an Event of Default or a Potential Event of Default;

any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and

any notice or request made by the Borrower (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.

The Facility Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

The Facility Agent may act in relation to the Finance Documents through its personnel and agents.

The Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

Notwithstanding any other provision of any Finance Document to the contrary, no Administrative Party is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or a breach of a fiduciary duty or duty of confidentiality.

Unless a contrary indication appears in a Finance Document, the Facility Agent shall (i) exercise any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Facility Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders.

Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties.

The Facility Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) or under paragraph (d) below until it has received such security as it may require for any cost, loss or liability (together with any associated indirect tax) which it may incur in complying with the instructions.

In the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders) the Facility Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.

The Facility Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document.

Responsibility for documentation

No Administrative Party:

is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by any Administrative Party, an Obligor or any other person given in or in connection with any Finance Document; or

is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document.

Without limiting paragraph (b) below, the Facility Agent shall not be liable for any cost, loss or liability incurred by any Party as a consequence of:

the Facility Agent having taken or having omitted to take any action under or in connection with any Finance Document, unless directly caused by the Facility Agent’s gross negligence or wilful misconduct; or

any delay in the crediting to any account of an amount required under the Finance Documents to be paid by the Facility Agent, if the Facility Agent shall have taken all necessary steps as soon as reasonably practicable to comply with the applicable law or regulation or operating procedures of any recognised clearing or settlement system used by the Facility Agent for the purpose of such payment.

No Party (other than the Facility Agent) may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Facility Agent may rely on this Clause 22.9.

Nothing in this Agreement shall oblige any Administrative Party to conduct any “know your customer” or other procedures in relation to any person on behalf of any Lender and each Lender confirms to each Administrative Party that it is solely responsible for any such procedures it is required to conduct and that it shall not rely on any statement in relation to such procedures made by any Administrative Party.

Each Lender shall, in accordance with paragraph (b) below, indemnify the Facility Agent, within three (3) business days of demand, against any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent’s gross negligence or wilful misconduct) in acting as Facility Agent under the Finance Documents (unless the Facility Agent has been reimbursed by an Obligor pursuant to a Finance Document).

The proportion of such cost, loss or liability to be borne by each Lender shall be:

if there is any Loan then outstanding, the proportion borne by (A) the sum of its participation(s) in the Loan(s) then outstanding to (B) the aggregate amount of such Loan(s), or

if there is no Loan then outstanding and the Available Facility is then greater than zero, the proportion borne by (A) its Available Commitment to (B) the Available Facility, or

if there is no Loan then outstanding and the Available Facility is then zero:

if the Available Facility became zero after a Loan ceased to be outstanding, the proportion borne by (A) its Available Commitment to (B) the Available Facility immediately before the Available Facility became zero, or

if a Loan ceased to be outstanding after the Available Facility became zero, the proportion borne by (A) the sum of its participation(s) in the Loan(s) outstanding immediately before any Loan ceased to be outstanding to (B) the aggregate amount of such Loan(s).

The Facility Agent may resign and appoint one of its affiliates acting through an office in Hong Kong as successor by giving notice to the other Finance Parties and the Borrower.

Alternatively the Facility Agent may resign by giving notice to the other Finance Parties and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor Facility Agent.

If the Majority Lenders have not appointed a successor Facility Agent in accordance with paragraph (b) above within 30 days after notice of resignation was given, the Facility Agent (after consultation with the Borrower) may appoint a successor Facility Agent.

The retiring Facility Agent shall make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents.

The Facility Agent’s resignation notice shall take effect only upon the appointment of a successor.

Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 22. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

After consultation with the Borrower, the Majority Lenders may, by notice to the Facility Agent, require it to resign in accordance with paragraph (b) above. In such event, the Facility Agent shall resign in accordance with paragraph (b) above.

In acting as agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate legal person from any other of its branches, divisions or departments.

If information is received by another branch, division or department of the legal person which is the Facility Agent, it may be treated as confidential to that branch, division or department and the Facility Agent shall not be deemed to have notice of it.

The Facility Agent shall not be obliged to disclose to any Finance Party any information supplied to it by the Borrower or any affiliates of the Borrower on a confidential basis and for the purpose of evaluating whether any waiver or amendment is or may be required or desirable in relation to any Finance Document.

Relationship with the Lenders

Subject to Clause 24.2 (Distributions by the Facility Agent), the Facility Agent may treat each Lender as a Lender, entitled to payments under this Agreement and acting through its Facility Office unless it has received not less than five (5) business days prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

Credit appraisal by the Lenders

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to each Administrative Party that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

the financial condition, status and nature of each Obligor and each other Group Member;

the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

the adequacy, accuracy and/or completeness of the information provided by the Facility Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.

Deduction from amounts payable by the Facility Agent

If any Party owes an amount to the Facility Agent under the Finance Documents the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

SHARING AMONG THE FINANCE PARTIES

Payments to Finance Parties

If a Finance Party (a “Recovering Finance Party”) receives or recovers (whether by set-off or otherwise) any amount from the Borrower other than in accordance with Clause 24 (Payment mechanics) and applies that amount to a payment due under the Finance Documents then:

the Recovering Finance Party shall, within three (3) business days, notify details of the receipt or recovery, to the Facility Agent;

the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with Clause 24 (Payment mechanics), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and

the Recovering Finance Party shall, within three (3) business days of demand by the Facility Agent, pay to the Facility Agent an amount (the “Sharing Payment”) equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 24.5 (Partial payments).

Redistribution of payments

The Facility Agent shall treat the Sharing Payment as if it had been paid by the Borrower and distribute it between the Finance Parties (other than the Recovering Finance Party) in accordance with Clause 24.5 (Partial payments).

Recovering Finance Party’s rights

On a distribution by the Facility Agent under Clause 23.2 (Redistribution of payments), the Recovering Finance Party will be subrogated to the rights of the Finance Parties which have shared in the redistribution.

If and to the extent that the Recovering Finance Party is not able to rely on its rights under paragraph (a) above, the Borrower shall be liable to the Recovering Finance Party for a debt equal to the Sharing Payment which is immediately due and payable.

Reversal of redistribution

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

each Finance Party which has received a share of the relevant Sharing Payment pursuant to Clause 23.2 (Redistribution of payments) shall, upon request of the Facility Agent, pay to the Facility Agent for account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay); and

that Recovering Finance Party's rights of subrogation in respect of any reimbursement shall be cancelled and the Borrower will be liable to the reimbursing Finance Party for the amount so reimbursed.

This Clause 23 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause 23, have a valid and enforceable claim against the Borrower.

A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

it notified that other Finance Party of the legal or arbitration proceedings; and

that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

On each date on which the Borrower or a Lender is required to make a payment under a Finance Document, the Borrower or that Lender shall make the same available to the Facility Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Facility Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

Payment shall be made to such account in the principal financial centre of the country of that currency with such bank as the Facility Agent specifies.

Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to Clause 24.3 (Distributions to the Borrower) and Clause 24.4 (Clawback) be made available by the Facility Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five (5) business days’ notice with a bank in the principal financial centre of the country of that currency.

The Facility Agent shall distribute payments received by it in relation to all or any part of a Loan to the Lender indicated in the records of the Facility Agent as being so entitled on that date provided that the Facility Agent is authorised to distribute payments to be made on the date on which any transfer becomes effective pursuant to Clause 20 (Changes to the Parties) to the Lender so entitled immediately before such transfer took place regardless of the period to which such sums relate.

Distributions to the Borrower

The Facility Agent may (with the consent of the Borrower or in accordance with Clause 25 (Set-off)) apply any amount received by it for the Borrower in or towards payment (in the currency and funds of receipt) of any amount due from the Borrower under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

Clawback

Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

If the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.

If the Facility Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Facility Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order:

first, in or towards payment pro rata of any unpaid fees, costs and expenses of any Administrative Party under the Finance Documents;

secondly, in or towards payment pro rata of any accrued interest, fee (other than as provided in (i) above) or commission due but unpaid under this Agreement;

thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and

fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.

The Facility Agent shall, if so directed by the Majority Lenders, vary the order set out in paragraphs (a)(ii) to (iv) above.

Paragraphs (a) and (b) above will override any appropriation made by an Obligor.

No set-off by the Borrower

All payments to be made by the Borrower under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

Business Days

Any payment which is due to be made on a day that is not a business day shall be made on the next business day in the same calendar month (if there is one) or the preceding business day (if there is not).

During any extension of the due date for payment of any principal or Unpaid Sum under paragraph (a) above, interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

Subject to paragraphs (b) and (c) below, US Dollars is the currency of account and payment for any sum due from the Borrower under any Finance Document.

Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

Any amount expressed to be payable in a currency other than US Dollars shall be paid in that other currency.

Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Facility Agent (after consultation with the Borrower); and

any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent (acting reasonably).

If a change in any currency of a country occurs, this Agreement will, to the extent the Facility Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.

A Finance Party may set off any matured obligation due from the Borrower under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to the Borrower, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

NOTICES

Communications in writing

Any communication to be made under or in connection with this Agreement shall be made in writing and, unless otherwise stated, may be made by fax or letter.

Addresses

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with this Agreement is:

in the case of the Borrower, that identified with its name below;

China Security & Survellance Technology, Inc

Address: 13/F Shenzhen Special Zone Press Tower, Shennan Road, Futian District, Shenzhen, PRC, 518034
Attention: Mr. Tu Guo Shen
Fax : +86 ###-###-#### 0815

in the case of each Lender, that notified in writing to the Facility Agent on or prior to the date on which it becomes a Party; and

in the case of the Facility Agent, that identified with its name below,

China Development Bank Corporation

Facility Office: China Development Bank Corporation Hong Kong Branch
Address: Suite 3307-15, 33/F., One International Finance Centre, No. 1 Harbour View Street, Central, Hong Kong

or any substitute address, fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five (5) business days’ notice.

Delivery

Any communication or document made or delivered by one person to another under or in connection with this Agreement will be effective:

if by way of fax, only when received in legible form; or

if by way of letter, only when it has been left at the relevant address or five (5) business days after being deposited in the post postage prepaid in an envelope addressed to it at that address;

and, if a particular department or officer is specified as part of its address details provided under Clause 26.2 (Addresses), if addressed to that department or officer.

Any communication or document to be made or delivered to the Facility Agent will be effective only when actually received by the Facility Agent and then only if it is expressly marked for the attention of the department or officer identified with the Facility Agent’s signature below (or any substitute department or officer as the Facility Agent shall specify for this purpose).

All notices from or to the Borrower shall be sent through the Facility Agent.

Any notice given under or in connection with any Finance Document must be in English.

All other documents provided under or in connection with this Agreement must be:

in English; or

if not in English, and if so required by the Facility Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

Any communication to be made between the Facility Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Facility Agent and the relevant Lender:

agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

notify each other of any change to their address or any other such information supplied by them.

Any electronic communication made between the Facility Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Facility Agent only if it is addressed in such a manner as the Facility Agent shall specify for this purpose.

CALCULATIONS AND CERTIFICATES

Accounts

In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.

Certificates and determinations

Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

Day count convention

Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days.

PARTIAL INVALIDITY

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

REMEDIES AND WAIVERS

No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

AMENDMENTS AND WAIVERS

Required consents

Subject to Clause 30.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Borrower and any such amendment or waiver will be binding on all Parties.

The Facility Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 30.

An amendment or waiver that has the effect of changing or which relates to:

the definition of “Majority Lenders” in Clause 1.1 (Definitions);

an extension to the date of payment of any amount under the Finance Documents;

a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

an increase in the amount of any Commitment;

an extension of the period of availability for utilisation of any Commitment;

any provision which expressly requires the consent of all the Lenders; or

Clause 2.2 (Finance Parties’ rights and obligations), Clause 20 (Changes to the Parties) or this Clause 30

shall not be made without the prior consent of all the Lenders.

An amendment or waiver which relates to the rights or obligations of any Administrative Party may not be effected without the consent of such Administrative Party.

COUNTERPARTS

Each Finance Document and any Transfer Certificate may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document or, as the case may be, Transfer Certificate.

GOVERNING LAW

This Agreement, and all non-contractual obligations arising from or in connection with this Agreement, are governed by Hong Kong law.

ENFORCEMENT

Jurisdiction of Hong Kong courts

The courts of Hong Kong have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including any dispute relating to any non-contractual obligation arising from or in connection with this Agreement and any dispute regarding the existence, validity or termination of this Agreement) (a “Dispute”).

The Parties agree that the courts of Hong Kong are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

This Clause 33.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

Service of process

Without prejudice to any other mode of service allowed under any relevant law, the Borrower:

irrevocably appoints China Security & Surveillance Technology (HK) Limited of 1/F, Xiu Ping Commercial Building, 104 Jervois Street, Sheung Wan, Hong Kong as its agent for service of process in relation to any proceedings before the Hong Kong courts in connection with any Finance Document; and

agrees that failure by a process agent to notify the Borrower of the process will not invalidate the proceedings concerned.

Waiver of immunities

The Borrower irrevocably waives, to the extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from:

suit;

jurisdiction of any court;

relief by way of injunction or order for specific performance or recovery of property;

attachment of its assets (whether before or after judgment); and

execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any proceedings in the courts of any jurisdiction (and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any immunity in any such proceedings).

Constitutive and Registration Documents

Receipt of copies of constitutive and organisational documents and all documents evidencing the registration of the corporate Obligors with the appropriate authorities and their qualification to conduct their business as follows:

the certificate of incorporation, including restatements and amendments thereof, and the certificate on change of registered office or registered agent if applicable;

the bylaws, including amendments and supplements thereof;

other certificates, agreements of merger or consolidation, plans of reorganization, or other instruments which are filed with the Secretary of State of Delaware under the Delaware General Corporation Law with the effect of amending or supplementing the certificate of incorporation; and

the certificate of good standing.

Receipt of copies of passport or other identification documents of Mr. Tu.

Corporate Documents

Corporate approvals: Evidence (in the form of copies of resolutions in agreed forms and/or certified extracts from the commercial register) that all corporate or constitutional action required by any relevant law, regulation or constitutional document to be taken by the corporate Obligors to authorise:

the entry into the Finance Documents to which it is a party;

the execution by it of the Finance Documents to which it is a party; and

an Authorised Person to sign on behalf of it all other documents, notices and communications required to be given by or on its behalf, under or for the purposes of the Finance Documents,

has been duly taken.

Officer's certificate: A certificate from each corporate Obligor (signed by an officer) confirming that:

borrowing the Total Commitments would not cause any borrowing limit binding on it to be exceeded;

each copy document relating to it specified in this Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement; and

the specimen of the signature of each person authorised by the resolution referred to in paragraph 2.1 above.

each Finance Document; and

each document to be delivered to the Facility Agent pursuant to the Finance Documents prior to the Utilisation.

Notices: Receipt of copies of each of the notices for the time being required to be given pursuant to the terms of the Finance Documents, together with acknowledgements from each person to whom notice was given, in the form required by each such document.

Stamp duties, etc.: Evidence that all stamp, registration and similar taxes and other fees payable in connection with the Finance Documents have been paid.

Fees: Payment of all fees which, under the terms of this Agreement, are due prior to the Utilisation Date.

Legal Issues

Legal opinions: Receipt of legal opinions in agreed form from:

White & Case, Hong Kong legal counsel to the Facility Agent, relating to matters of Hong Kong law relevant to the Finance Documents; and

Pillsbury Winthrop Shaw Pitman LLP, special counsel to the Borrower relating to matters of the United States federal laws and the Delaware General Corporate Law and the Finance Documents.

Process agents: Evidence of the acceptance by the process agents named in the Finance Documents of their appointment pursuant to the provisions of the Finance Documents.

Debt Service Account: Evidence of the Debt Service Account having been opened and maintained in accordance with Clause 1 (Opening and maintenance of Debt Service Account) of Schedule 8 (Debt Service Account).

Original Financial Statements: Receipt of copies of the Original Financial Statements.

Utilisation Request

The Utilisation Request, duly completed and duly executed by an Authorised Person.

Representations and Warranties

All representations and warranties in the Finance Documents are true in all material respects on and as of the Utilisation Date, before and after giving effect to the Utilisation and to the application of the proceeds therefrom, as though made on and as of such date (save for those representations and warranties which, by their terms, are made as of a specified date, which representations and warranties shall be true in all material respects as of such specified date only and save also as otherwise provided in Clause 17.3 (Repetition)).

No Events of Default

No Event of Default or Potential Event of Default has occurred and is continuing, or would result from the Utilisation.

Material Adverse Change and change in laws

No Material Adverse Change has occurred and no change in applicable law or regulation or in the interpretation thereof shall be applicable that either restrains or prevents or imposes materially adverse conditions upon the transactions contemplated by or in connection with the Finance Documents.

We refer to Clause 20.4 (Procedure for transfer) of the Facility Agreement. This is a Transfer Certificate. Terms used in the Facility Agreement shall have the same meaning in this Transfer Certificate.

The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation in accordance with Clause 20.4 (Procedure for transfer) all or part of the Existing Lender's Commitment specified in the Schedule and/or all or part of the Existing Lender's participation(s) in any Loan(s) specified in the Schedule, in each case together with related rights and obligations.

The proposed Transfer Date is [•].

The Facility Office and address, fax number and attention particulars for notices of the New Lender for the purposes of Clause 26.2 (Addresses) are set out in the Schedule.

The New Lender expressly acknowledges:

the limitations on the Existing Lender's obligations set out in paragraphs (a) and (c) of Clause 20.3 (Limitation of responsibility of Existing Lenders); and

that it is the responsibility of the New Lender to ascertain whether any document is required or any formality or other condition requires to be satisfied to effect or perfect the transfer contemplated by this Transfer Certificate or otherwise to enable the New Lender to enjoy the full benefit of each Finance Document.

The New Lender confirms that it is a “New Lender” within the meaning of Clause 20.1 (Assignments and transfers by the Lenders).

The Existing Lender and the New Lender confirm that the New Lender is not an Obligor or an affiliate of an Obligor.

This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

This Transfer Certificate is governed by Hong Kong law.

It is the New Lender’s responsibility to ascertain whether any other document is required, or any formality or other condition is required to be satisfied, to effect or perfect the transfer contemplated in this Transfer Certificate or to give the New Lender full enjoyment of all the Finance Documents.

Each corporate Obligor is a company with limited liability incorporated under the laws of its place of incorporation with power to enter into each Finance Document to which it is a party and to exercise its rights and perform its obligations thereunder and all corporate and other action required to authorise its execution of each Finance Document to which it is a party and the performance of its obligations thereunder have been duly taken. It has the power to own its assets and carry on its business as it is being conducted.

Mr. Tu has the capacity and power to enter into each Finance Document to which he is a party and to exercise his rights and perform his obligations thereunder and all action required to authorise his execution of each Finance Document to which he is a party and the performance of his obligations thereunder have been duly taken.

Execution, Delivery and Performance

The execution, delivery and performance by each of the Obligors of the Finance Documents to which it is a party and its exercise of its rights and performance of its obligations thereunder does not and will not:

conflict with any existing agreement or other instrument to which it is a party or which is binding upon it or any of its assets;

(except in the case of Mr. Tu) conflict with its Certificate of Incorporation or constitutional documents;

conflict with any applicable law, regulation or official or judicial order currently in effect; or

result in the existence of, or oblige it to create any security interest over all or any of its present or future revenues or assets.

All authorisations and necessary approvals from any governmental or regulatory body and all material third party consents required in connection with the entry into, performance, validity, enforceability or admissibility in evidence of, and the transactions contemplated by, the Finance Documents to which the Borrower or any other Obligor is a party and to enable the Borrower or any other Obligor or any other Group Company to conduct its business and perform its obligations as contemplated in the Finance Documents, which are then required to have been obtained or effected in accordance with such Finance Documents or applicable law or regulation including the SAFE Circulars and all applicable securities laws and regulations in the United States are in full force and effect and with respect to any authorisations and necessary approvals which are not required to be obtained or effected until a later date, the Borrower has reasonable grounds to believe that such authorisations and necessary approvals will be obtained and will be in full force and effect when so required.

Binding Obligations

Subject to any general principles of law limiting their obligations which are specifically referred to in any legal opinion delivered in accordance with Schedule 2 (Conditions Precedent), the obligations expressed to be assumed by each of the Borrower and the other Obligors in each Finance Document to which it is a party are legal and valid obligations binding on it and enforceable in accordance with the terms thereof.

No Proceedings

No litigation, arbitration or administrative proceeding of or before any court, arbitral body or agency has been started or threatened against the Borrower or any other Group Company or any other Obligor or any of their respective affiliates which could reasonably be expected to have a material adverse effect or otherwise affect the legality, validity, binding effect or enforceability of any Finance Document.

No Event of Default

No Event of Default or Potential Event of Default has occurred and is continuing or would result from the making of the Utilisation.

Law and Jurisdiction

The choice of Hong Kong law as the governing law in the Finance Documents will be recognised and upheld in the jurisdictions in which the relevant Obligors are incorporated or reside. Any judgment obtained in Hong Kong in relation to a Finance Document will be recognised and enforced in the jurisdictions in which the relevant Obligors are incorporated or reside.

Deduction of Tax

Neither the Borrower nor any other Obligor is required under any applicable law to make any deduction for or on account of Tax from any payment it may make under any Finance Document, save for any withholding tax which may arise in respect of any interest payment payable by the Borrower hereunder under the applicable federal laws of the United States or the laws of the State of Delaware.

Full Disclosure

Any written information provided by the Borrower to the Finance Parties in connection with this Agreement was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated and any financial projections have been prepared on the basis of recent information and on the basis of reasonable assumptions. Nothing has occurred or been omitted and no information has been given or withheld that results in the information provided taken as a whole being untrue or misleading in any material respect.

The Original Financial Statements were prepared in accordance with GAAP consistently applied save to the extent expressly disclosed in such Original Financial Statements.

The Original Financial Statements give a true and fair view (in the case of audited financial statements) of or fairly represent (in the case of unaudited financial statements) the financial condition and operations of the Group during the relevant financial periods save to the extent expressly disclosed in such financial statements.

Claims Pari Passu

The claims of each Finance Party against each of the Borrower and the other Obligors under the Finance Documents will rank at least pari passu as to priority of payments with the claims of all its other unsecured, unsubordinated creditors save those whose claims are preferred solely by any bankruptcy, insolvency, liquidation or other similar laws of general application.

Immunity

Neither the Borrower, any other Obligor nor any of its assets are entitled to immunity from suit, execution, attachment or other legal process.

Taxes, Returns and Payments

Each of the Borrower and the other Group Companies has filed or caused to be filed all tax returns which are required to be filed by it and has paid or caused to be paid all taxes shown to be due or payable on such returns or on any assessment received by it, to the extent such taxes have become due and payable in a timely manner, except those taxes the validity, application or amount of which is being contested by it in good faith (and for the payment of which adequate reserves have been provided, being not less than an amount which would be required to be reserved in accordance with the applicable accounting standards) by appropriate proceedings being diligently pursued.

No Undisclosed Liabilities

None of the Group Companies has any liabilities (contingent or otherwise) which were not disclosed to the Finance Parties.

No Winding-up

No corporate action nor any other steps have been taken or legal proceedings have been started or (to the best of the Borrower’s knowledge and belief) threatened for the bankruptcy, winding-up, dissolution, administration or insolvent re-organisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of any Obligor or any Group Company or to any or all of its assets or revenues.

Delaware

None of the Finance Parties is or will be deemed to be resident, domiciled or carrying on business in the State of Delaware or the United States by reason only of the execution, delivery, performance or enforcement of the Finance Documents to which any of them is party. It is not necessary under the laws of the State of Delaware or the federal laws of the United States (i) in order to enable each Finance Party to enforce its rights under the Finance Documents or (ii) by reason of the execution, delivery and performance of the Finance Documents by each Finance Party that it be licensed, qualified or otherwise entitled to carry on business in the State of Delaware or the United States.

INFORMATION COVENANTS

Financial Statements

The Borrower shall:

within 90 days of the end of each of its financial years, deliver to the Facility Agent, in sufficient copies, its audited consolidated financial statements for such financial year; and

within 45 days of the end of each quarter of its financial year, deliver to the Facility Agent, in sufficient copies, its unaudited consolidated financial statements for such quarter of the financial year.

Requirements as to Financial Statements

The Borrower shall ensure that each set of financial statements delivered by it pursuant to Clause 1.1 (Financial Statements) of this Schedule 6 (Undertakings) is certified by a director of the Borrower as having been prepared in accordance with GAAP, or other applicable accounting standards with prior written approval of the Facility Agent (acting on the instructions of the Majority Lenders).

The Borrower shall deliver to the Facility Agent, within 90 days after the end of each financial year of the Borrower, a compliance certificate stating that a review of the activities of the Borrower during the preceding financial year has been made with a view to determining whether the Borrower and its subsidiaries have kept, observed, performed and fulfilled their obligations under this Agreement, and further stating, as to the person signing such certificate , that to the best of his or her knowledge the Borrower has kept, observed, performed and fulfilled each and every covenant contained in this Agreement and there is no default in the performance or observance of any of the terms, provisions and conditions of this Agreement (or, if a Potential Event of Default or Event of Default shall have occurred, (subject to Clause 1.5 (Insider Information) of this Schedule 6 (Undertakings)) describing all such Potential Event of Default or Events of Default of which he or she may have knowledge and what action the Borrower is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which repayment of the Loan(s) and payment of any interest accrued and any other amount payable under this Agreement is prohibited or if such event has occurred, a description of the event and what action the Borrower is taking or proposes to take with respect thereto.

Other Information

The Borrower shall supply to the Facility Agent (in sufficient copies):

all documents dispatched by the Borrower to its shareholders (or any class of them) or its creditors generally at the same time as they are despatched;

promptly, any announcement, notice or other document relating specifically to the Borrower posted onto any electronic website maintained by any stock exchange on which shares in or other securities of the Borrower are listed or any electronic webstie required by any such stock exchange to be maintained by or on behalf of the Borrower;

(subject to Clause 1.5 (Insider Information) of this Schedule 6 (Undertakings)) promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against the Borrower or any other Group Company, and which might, if adversely determined, have a material adverse effect;

(subject to Clause 1.5 (Insider Information) of this Schedule 6 (Undertakings)) promptly, such further information regarding the financial condition, business and operations of the Borrower or any other Group Company as any Finance Party (through the Facility Agent) may reasonably request; and

promptly, notice of any change in any Authorised Person of any corporate Obligor signed by a director or company secretary of such corporate Obligor accompanied by the specimen signature of any new Authorised Person.

Insider Information

The Borrower hereby acknowledges that none of the Finance Parties wishes to receive material non-public information with respect to the Borrower or its securities (“Insider Information”). The Borrower hereby agrees that it will use commercially reasonable efforts to omit any Insider Information from any notice, document or information required to be provided to the Facility Agent under Clauses 1.3 (Compliance Certificate), 1.4 (Other Information) and 2.1 (Notification of Default) of this Schedule 6 (Undertakings) and that by delivering such notice, document or information to the Facility Agent, the Borrower shall be deemed to have authorized the Finance Parties to treat such notice, document or information as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States federal and state securities laws. Each Finance Party hereby agrees that any omission of “Insider” information pursuant to this Clause 1.5 will not be deemed as a breach of this Agreement for any purposes.

POSITIVE UNDERTAKINGS

The Borrower shall comply with the following positive covenants:

Notification of Default

Subject to Clause 1.5 (Insider Information) of this Schedule 6 (Undertakings), the Borrower shall promptly inform the Facility Agent of the occurrence of any Event of Default or Potential Event of Default of which it becomes aware and, upon receipt of a written request to that effect from the Facility Agent, confirm to the Facility Agent that, save as previously notified to the Facility Agent or as notified in such confirmation, no Event of Default or Potential Event of Default has, to the best of its knowledge, occurred.

Corporate Existence

The Borrower shall and shall procure each Obligor and each other Group Company to maintain its corporate existence and its right to carry on operations.

Authorisations

The Borrower shall and shall procure each other Obligor and each other Group Company to obtain, maintain in full force and effect and comply with the terms of and if requested, supply certified copies to the Facility Agent of each authorisation, approval and registration required under any applicable law or regulation including the SAFE Circulars and all applicable securities laws and regulations in the United States to enable it to perform its obligations under, or for the validity, enforceability or admissibility of, any Finance Document.

Ranking

The Borrower shall ensure that at all times the claims of the Finance Parties against each of the Borrower and the other Obligors under the Finance Documents will rank at least pari passu with the claims of its other unsecured creditors other than those whose claims are preferred by any bankruptcy, insolvency, liquidation or other similar laws of general application.

Taxes

The Borrower shall and shall procure each other Group Company to file all relevant tax returns and pay all taxes promptly upon the same becoming due except to the extent taxes are being contested in good faith (and adequate reserves have been provided in relation thereto in an amount not less than that which would be required to be reserved in accordance with GAAP).

Accounting Records

The Borrower shall and shall procure that each other Group Company at all times maintain proper and accurate books and records prepared in accordance with GAAP.

Access

The Borrower shall and shall procure each other Group Company to allow the Facility Agent, its representatives or the auditors or consultants engaged by the Facility Agent to have access to any premises of the Borrower or any other Group Company so as to carry out inspection or conduct financial review or audit on them upon prior reasonable notice to the Borrower. The Borrower shall, and shall procure each other Group Company to, fully cooperate with the Facility Agent and its auditors and consultants and provide such information as requested for the purpose of the review or audit.

Application of Facility Amount

The Borrower shall utilise the proceeds of the Facility for the purposes set out in Clause 3.1 (Purpose).

Debt Service Account

The Borrower shall at all times maintain and operate the Debt Service Account strictly in accordance with the provisions in Schedule 8 (Debt Service Account) notwithstanding any other terms upon which monies have been deposited in the Debt Service Account.

NEGATIVE UNDERTAKINGS

Save as otherwise agreed by the Facility Agent, the Borrower shall comply with the following negative covenants.

Negative Pledge

The Borrower shall not and shall procure each other Group Company not to create or permit to subsist any Security Interest over all or any of its present or future revenues or assets other than Permitted Security Interests.

No Amendments

The Borrower shall not and shall procure each other Group Company not to cause or agree to the amendment, modification or variation of the terms of its memorandum and articles of association or articles of association, in any material respect and shall not terminate, amend, vary or grant any waivers under any of the Finance Documents save as otherwise specifically provided for herein.

Disposals

The Borrower shall not and shall procure each other Group Company not to sell, lease, transfer or otherwise dispose of any asset by one or more transactions or series of transactions (whether related or not) other than in the ordinary course of the Related Business. The Borrower shall not and shall procure each other Group Company not to directly or indirectly dispose of or agree to dispose of a substantial part of its assets or undertaking related to the Related Business without the consent of the Facility Agent in writing.

Merger

The Borrower shall not and shall procure each other Group Company not to merge or consolidate with any other person or enter into any merger transaction or participate in any other type of corporate reconstruction without the consent of the Facility Agent in writing.

Financial Year

The Borrower shall not and shall procure each other Group Company not to permit any change to its financial year end without the consent of the Facility Agent.

Shareholder Loan

Failure to Pay

Any Obligor fails to pay any amount payable under any Finance Document when due.

Misrepresentation

Any representation or warranty made by any Obligor in any Finance Document or in any notice or certificate delivered by it pursuant thereto or in connection therewith is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

Obligations

Any Obligor fails duly to perform or comply with any obligation expressed to be assumed by it in Clause 2.1 (Notification of Default), Clause 2.2 (Corporate Existence), Clause 2.4 (Ranking) and Clause 3.1 (Negative Pledge) of Schedule 6 (Undertakings) or any of the covenants in Schedule 8 (Debt Service Account).

Any Obligor fails duly to perform or comply with any other obligation expressed to be assumed by it in any Finance Document to which it is a party and, if capable of remedy, such failure is not remedied within fifteen (15) days after the Facility Agent has given notice to the Borrower or such Obligor or the Borrower or such Obligor becomes aware of the failure to perform or comply.

Any Financial Indebtedness of the Borrower or any other Group Company in an aggregate amount in excess of USD 10,000,000 or its equivalent is not paid when due nor within any originally applicable grace period.

Any Financial Indebtedness of the Borrower or any other Group Company in an aggregate amount in excess of USD 10,000,000 or its equivalent is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

Any commitment for any Financial Indebtedness of the Borrower or any other Group Company in an aggregate amount in excess of USD 10,000,000 or its equivalent is cancelled or suspended by a creditor of the Borrower or any other Group Company as a result of an event of default (however described).

Any creditor of the Borrower or any other Group Company becomes entitled to declare any Financial Indebtedness of the Borrower or any other Group Company in an aggregate amount in excess of USD 10,000,000 or its equivalent due and payable prior to its specified maturity as a result of an event of default (however described).

The Borrower or any other Group Company:

files a petition in bankruptcy or takes any action for its rehabilitation, liquidation, winding-up or dissolution;

commences a voluntary case or gives notice of intention to make a proposal under any Bankruptcy Law;

consents to the entry of an order for relief against it in an involuntary case or consents to its dissolution or winding up;

consents to the appointment of a receiver, interim receiver, receiver and manager, liquidator, trustee or custodian of it or for all or substantially all of its property;

makes a general assignment for the benefit of its creditors;

is unable or admits in writing its inability to pay its debts as they become due otherwise admits its insolvency; or

stops, suspends or threatens to stop or suspend payment of all or a material part of its indebtedness, by reason of actual or anticipated financial difficulties, or commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.

Any bankruptcy or insolvency proceedings or other proceedings under any Bankruptcy Law are commenced against the Borrower or any other Group Company.

A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

is for relief against the Borrower or any other Group Company;

appoints a receiver, interim receiver, receiver and manager, liquidator, trustee or custodian of the Borrower or any other Group Company; or

orders the liquidation of the Borrower or any other Group Company.

For the purpose of this Clause 5, “Bankruptcy Law” means any law in any jurisdiction relating to bankruptcy, insolvency, winding up, liquidation, reorganisation or relief of the debtors.

Judgment

Any legal proceedings, judgment or arbitration award (when aggregated with any outstanding unstayed or unsatisfied proceedings judgement or award against the Borrower or any of the subsidiaries) in excess of USD 10,000,000 or its equivalent aggregate is rendered against the Borrower or any other Group Company, and remains unstayed or unsatisfied for 30 consecutive days.

Expropriation

The confiscation, expropriation or nationalization by any governmental agency of any assets of the Borrower or any other Group Company if such confiscation, expropriation or nationalization would have a material adverse effect; or if such revocation or repudiation could reasonably be expected to have a material adverse effect, the revocation or repudiation by any governmental agency of any previously granted authorisation that is material to the operation of the Related Business; or the imposition or introduction of material and discriminatory taxes, tariffs, royalties, customs or excise duties imposed on the Borrower or other Group Company, or the material and discriminatory withdrawal or suspension of material privileges or specifically granted material rights of a fiscal nature.

Repudiation

Any Obligor repudiates any Finance Document to which it is a party or does or causes to be done any act or thing evidencing an intention to repudiate any Finance Document to which it is a party.

Illegality

At any time it is or becomes unlawful for any of the Obligors to perform or comply with any or all of its material obligations under any Finance Document to which it is a party.

At any time any of the material obligations of any of the Obligors under any Finance Document to which it is a party are not or cease to be legal, valid and binding.

Any authorisation or necessary approval referred to in Clause 2.3 (Authorisations) of Schedule 6 (Undertakings) is revoked, terminated or withdrawn and such has or is likely to have a material adverse effect.

SAFE Circulars

Failure by any Permitted Holder, the Borrower or any other Group Company to fully comply, including without limitation, with any applicable foreign exchange registration, settlement or remittance requirement therein or with the SAFE Circulars and the failure to so comply may have a material adverse effect.

Listing Status of the Borrower

The Borrower fails to maintain the trading of its common stock on the New York Stock Exchange without the prior written approval of the Facility Agent (acting on the instructions of the Majority Lenders).

Material Adverse Change

There has occurred a Material Adverse Change.

Opening and maintenance of Debt Service Account

The Borrower has opened a bank account with the Facility Agent bearing the account number of 716000691150 (the “Debt Service Account”). The Borrower shall maintain such bank account for the purpose of providing a control account for debt servicing.

Operation of Debt Service Account

The Borrower undertakes, for so long as any amount is outstanding under the Finance Documents or any Commitment is in force, not to make or authorise any withdrawals from the Debt Service Account except in accordance with the following provisions of this Clause 2 and this Schedule 8.

At any time during the period of thirty (30) days prior to any Interest Payment Date, Repayment Date or the Final Maturity Date, the Borrower shall ensure that the credit balance of the Debt Service Account is not less than the aggregate of the Loan(s), accrued interest and any other amount repayable or payable under the Finance Documents on that Interest Payment Date, Repayment Date or the Final Maturity Date, as the case may be.

The Borrower may make or authorise withdrawals and transfers from Debt Service Account only with the Facility Agent’s consent and for the purpose of repayment of the Loan(s) outstanding or any part thereof or in payment of any interest accrued and any other amounts due and payable by the Borrower under the Finance Documents.

The Facility Agent is authorised to make withdrawals and transfers from the Debt Service Account in such amount and at such time as it shall determine for the purposes set out in this Schedule 8.