**Exhibit4.16**

 

 

**20November 2003**

 

 

**CHINA UNICOM (BVI) LIMITED**

 

 

**CHINA UNICOM LIMITED**

 

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**Conditional Sale and PurchaseAgreement relating to the entireissued capital of Unicom New World (BVI) Limited**

 

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**CONTENTS**

** **
| **Clause**     |                                                                      |
|----------------|---------------------------------------------------------------------------|
|           |                                                                      |   |
| **1.**         | **Definitions and  Interpretation**                                       |   |
|           |                                                                      |   |
| **2.**         | **Sale of the Target Shares and Price**                                   |   |
|           |                                                                      |   |
| **3.**         | **Conditions Precedent**                                                  |   |
|           |                                                                      |   |
| **4.**         | **Pre-Completion Undertakings**                                           |   |
|           |                                                                      |   |
| **5.**         | **Completion**                                                            |   |
|           |                                                                      |   |
| **6.**         | **Post-Completion  Undertakings; Restrictions on Vendor Group Companies** |   |
|           |                                                                      |   |
| **7.**         | **Warranties**                                                            |   |
|           |                                                                      |   |
| **8.**         | **Limitations  on Claims**                                                |   |
|           |                                                                      |   |
| **9.**         | **Purchaser’s  Rights to Rescission**                                |   |
|           |                                                                      |   |
| **10.**        | **Withholding  Tax and Grossing Up**                                      |   |
|           |                                                                      |   |
| **11.**        | **Entire  Agreement**                                                     |   |
|           |                                                                      |   |
| **12.**        | **Variation**                                                             |   |
|           |                                                                      |   |
| **13.**        | **Assignment**                                                            |   |
|           |                                                                      |   |
| **14.**        | **Announcements**                                                         |   |
|           |                                                                      |   |
| **15.**        | **Costs**                                                                 |   |
|           |                                                                      |   |
| **16.**        | **Confidentiality**                                                       |   |
|           |                                                                      |   |
| **17.**        | **Severability**                                                          |   |
|           |                                                                      |   |
| **18.**        | **Counterparts**                                                          |   |
|           |                                                                      |   |
| **19.**        | **Waiver**                                                                |   |
|           |                                                                      |   |
| **20.**        | **Further  Assurance**                                                    |   |
|           |                                                                      |   |
| **21.**        | **Notices**                                                               |   |
|           |                                                                      |   |
| **22.**        | **Governing  Law, Jurisdiction and Service of Process**                   |   |
|           |                                                                      |   |
| **SCHEDULE 1** |                                                                      |
|           | DEFINITIONS AND INTERPRETATION                                            |   |
|           |                                                                      |   |
| **SCHEDULE 2** |                                                                      |
|           | CORPORATE STRUCTURE PRIOR TO COMPLETION                                   |   |
|           |                                                                      |   |
| **SCHEDULE 3** |                                                                      |
|           | THE WARRANTIES                                                            |   |

 

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| **APPENDIX 1**     |                                                                |
|--------------------|---------------------------------------------------------------------|
|               | Prospective Cellular Connected Transactions  of the Company         |   |
|               |                                                                |   |
| **APPENDIX 2**     |                                                                |
|               | Prospective Cellular Connected Transactions  of the A Share Company |   |
|               |                                                                |   |
| **APPENDIX 3**     |                                                                |
|               | The Restructuring Agreements                                        |   |
|               |                                                                |   |
| **SIGNATURE PAGE** |                                                                |

 

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**THIS AGREEMENT**is made on20 November 2003

** **

**BETWEEN:**

 

(1)                                  **CHINA UNICOM (BVI) LIMITED** a company incorporated underthe laws of the British Virgin Islands whose registered office is at CraigmuirChambers, P.O. Box 71, Road Town, Tortola, British Virgin Islands (the ***Vendor***);

 

(2)                                  **CHINA UNICOM LIMITED** a company incorporated underthe laws of Hong Kong whose registered office is at 75th Floor, TheCenter, 99 Queen’s Road, Central, Hong Kong (the ***Purchaser***).

 

**WHEREAS:**

 

(A)          As part of a series of restructurings,Unicom New World Telecommunications Corporation Limited (the ***Target Company***) hasacquired from Unicom Group the mobile communications networks in each of Shanxi, Hunan,Hainan, Yunnan, Gansu and Qinghai provinces and Inner Mongolia, Ningxia Hui andXizang autonomousregions (the ***Territory***).

 

(B)           Pursuant to a reorganisationagreement dated 14 November 2003, Unicom Centenarian (BVI) Limited (***UCBVI***), awholly-owned subsidiary of Unicom Group, acquired the Target Company Shares.

 

(C)           Pursuant to that reorganisationagreement, UCBVI on-sold the Target Company Shares to its wholly-ownedsubsidiary, Unicom New World (BVI) Limited (the ***Target Holding Company***).

 

(D)          Pursuant to a conditional sale and purchaseagreement dated 20 November 2003 between the Vendor, UCBVI and Unicom Group(the ***Initial AcquisitionAgreement***), the Vendor agreed to acquire from UCBVI the entireissued share capital of the Target Holding Company.

 

(E)           The Vendor is a subsidiary of the AShare Company, a limited liability company whose shares are listed on theShanghai Stock Exchange. The A Share Company is in turn a subsidiary of UnicomGroup.

 

(F)           Immediately prior to the signing ofthis Agreement, the corporate structure of the parties to this Agreement in sofar as it relates to the Target Group Companies (as defined herein) is set outin Part A of Schedule 2.

 

(G)           The Vendor has agreed to on-sell theTarget Shares to the Purchaser for the consideration and upon the terms and conditionsset out in this Agreement.

 

(H)          The Vendor has agreed to make certainrepresentations, warranties and undertakings in relation to the Target GroupCompanies.

 

**IT IS AGREED**as follows:

 

**DEFINITIONSAND** INTERPRETATION

** **

1.             Words and expressions used in thisAgreement shall have the meanings set out in Schedule 1.

 

**SALEOF THE****TARGET SHARESAND PRICE**

 

2.1           The Vendor agrees to sell as legaland beneficial owner, and the Purchaser agrees to purchase, the Target Shares.The Target Shares shall be sold free from all security interests.

 

2.2           The total price payable on Completionby the Purchaser to the Vendor for the Target Shares shall be HK$3,014,886,000(the ***Total Price***), payablein cash.

 

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**CONDITIONS**PRECEDENT

** **

3.1           Completion of the sale and purchase ofthe Target Shares shall be conditional upon the fulfilment to the reasonablesatisfaction of the Purchaser or (in the case of 3.1(b) and 3.1(c)) waiver ofthe following conditions:

 

(a)                                  the passing of resolutions bythe independent shareholders of the Purchaser at its general meeting approving(i) this Agreement and (ii) the Prospective Cellular Connected Transactions ofthe Company;

 

(b)                                 the passing of resolutions bythe independent shareholders of the A Share Company at its general meetingapproving (i) the Initial Acquisition Agreement and (ii) the ProspectiveCellular Connected Transactions of the A Share Company;

 

(c)                                  there having been no materialadverse change to the financial condition, business operations or prospects ofany of the Target Group Companies;

 

(d)                                 the delivery by or on behalfof the Vendor to the Purchaser of copies of all necessary Regulatory Approvals;and

 

(e)                                  the completion of the InitialAcquisition having taken place.

 

3.2           The Vendor undertakes to use allreasonable endeavours to ensure that the Conditions Precedent set out inclauses 3.1(b), 3.1(c), 3.1(d) and 3.1(e) are fulfilled to the satisfaction ofthe Purchaser as soon as reasonably practicable and in any event by30 June 2004.

 

3.3           The Purchaser undertakes to use allreasonable endeavours to ensure that the Condition Precedent set out inclause 3.1(a) is fulfilled as soon as reasonably practicable and in anyevent by 30 June 2004.

 

3.4           The Purchaser shall be entitled inits absolute discretion, by written notice to the Vendor, to waive any or allof the Conditions Precedent set out in clauses 3.1(c) and 3.1(d) either inwhole or in part.

 

3.5           If any of the Conditions Precedenthas not been fulfilled (or waived) on or before the date specified inclauses 3.2 and 3.3 or such other date as the parties to this Agreementmay agree in writing, this Agreement (other than clauses 1, 11 to 14, 16to 22 and Schedule 1, which shall continue to be in force) shall automaticallyterminate and no party shall have any claim of any nature whatsoever againstthe other parties under this Agreement (save in respect of its accrued rightsarising from any prior breach of this Agreement).

 

**PRE-COMPLETI**ON UNDERTAKINGS

** **

4.1           Pending Completion, the Vendor shallprocure that:

 

(a)                                  each Target Group Companyshall carry on its business in the ordinary and usual course and shall not make(or agree to make) any payment other than routine payments in the ordinary andusual course of trading;

 

(b)                                 each Target Group Companyshall take all reasonable steps to preserve and protect its assets;

 

(c)                                  the Purchaser’srepresentatives shall be allowed, upon reasonable notice and during normalbusiness hours, access to the books and records of each Target Group Company(including, without limitation, all statutory books, minute books, leases,contracts, supplier lists and customer lists) together with the right to takecopies;

 

(d)                                 no Target Group Company shalldo, allow or procure any act or omission which would constitute or give rise toa breach of any Warranty as if the Warranties were to be repeated on or at anytime before Completion by reference to the facts and circumstances thenexisting;

 

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(e)                                  prompt disclosure is made tothe Purchaser of all relevant information which comes to the notice of theVendor in relation to any fact or matter (whether existing on or before thedate of this Agreement or arising afterwards) which may constitute a breach ofany Warranty as if the Warranties were to be repeated on or at any time beforeCompletion by reference to the facts and circumstances then existing;

 

(f)                                    no dividend or otherdistribution shall be declared, paid or made by any Target Group Company;

 

(g)                                 no share or loan capital shallbe allotted or issued or agreed to be allotted or issued by any Target GroupCompany;

 

(h)                                 all transactions between eachTarget Group Company and each Vendor Group Company shall be on arm’s lengthcommercial terms and in their respective ordinary and usual course of business;

 

(i)                                     the amount of any Indebtednessowed by each Target Group Company or existing as at the date of this Agreementshall not be increased or extended and no new Indebtedness shall be enteredinto or assumed by any such company; and

 

(j)                                     no action is taken by anyTarget Group Company or any Vendor Group Company which is inconsistent with theprovisions of this Agreement or the consummation of the transactionscontemplated by this Agreement.

 

4.2           Pending Completion, the Vendor shallprocure that the Target Group Companies consult fully with the Purchaser inrelation to any matters which may have a material effect upon the Target GroupCompanies.  Without the prior writtenconsent of the Purchaser, the Target Group Companies shall not, and the Vendorshall ensure that the Target Group Companies do not:

 

(a)                                  enter into any contract orcommitment (or make a bid or offer which may lead to a contract or commitment)having a material value or involving material expenditure or which is of a longterm or unusual nature or which could involve an obligation of a materialnature or which may result in any material change in the nature or scope of theoperations of such Target Group Company;

 

(b)                                 agree to any variation ortermination of any existing contract to which that Target Group Company is aparty and which may have a material effect upon the nature or scope of theoperations of such Target Group Company;

 

(c)                                  (whether in the ordinary andusual course of business or otherwise) acquire or dispose of, or agree toacquire or dispose of, any material business or any material asset; or

 

(d)                                 enter into any agreement,contract, arrangement or transaction (whether or not legally binding) otherthan in the ordinary and usual course of business.

 

**COMPLETION**

** **

5.1           The sale and purchase of the TargetShares shall be completed at 75th Floor, The Centre, 99 Queen’s RoadCentral, Hong Kong on such date as may be agreed between the Vendor and thePurchaser following notification by the Purchaser to the Vendor of thefulfilment to the satisfaction of the Purchaser (or waiver) of all theConditions Precedent.  The eventsreferred to in the following provisions of this clause 5 shall take placeon Completion.

 

5.2           The Vendor shall deliver (or cause tobe delivered) to the Purchaser:

 

(a)                                  duly executed transfers intothe name of the Purchaser or its nominee in respect of all of the TargetShares, together with the related share certificates;

 

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(b)                                 the certificates ofincorporation, common seal, share register, share certificate book (with anyunissued share certificates), business licence, the documents evidencing theRegulatory Approvals (as the case may be) and all minute books and otherstatutory books (which shall be written-up to but not including Completion) ofeach Target Group Company;

 

(c)                                  all such other documents(including any necessary waivers of pre-emption rights or other consents) asmay be required to enable the Purchaser and/or its nominee to be registered asthe holder(s) of the Target Shares;

 

(d)                                 a counterpart of the TaxIndemnity duly executed by the Vendor;

 

(e)                                  a copy of a resolution of theboard of directors (certified by a duly appointed officer as true and correct)of:

 

(i)             the Vendor, authorising the execution of and theperformance by the Vendor of its obligations under this Agreement and each ofthe other documents to be executed by the Vendor (including the Tax Indemnity);

 

(ii)          each Vendor Group Company, authorising the executionof and the performance by the relevant company of its obligations under each ofthe Connected Transactions to which it is a party;

 

(f)                                    a copy of the sale andpurchase agreement pursuant to which the entire issued share capital of theTarget Holding Company was transferred to the Vendor;

 

(g)                                 a legal opinion from Commerce& Finance, PRC counsel, in form and substance acceptable to the Purchaser;and

 

(h)                                 a legal opinion from Conyers,Dill & Pearman, in form and substance acceptable to the Purchaser.

 

5.3           The Vendor shall procure thatresolutions of the board of directors of the Target Holding Company are passedto approve the registration of the transfers in respect of the Target Sharesreferred to in clause 5.2.

 

5.4           The Purchaser shall:

 

(a)                                  in satisfaction of itsobligations under clause 2.2, cause the sum set out in clause 2.2 tobe paid (i) by electronic funds transfer (or such other modes of payment as maybe agreed between the Vendor and the Purchaser) to the Vendor’s bank account,or if so directed by the Vendor, to its nominee’s bank account, details ofwhich shall be notified in writing to the Purchaser at least two Business Daysprior to Completion or (ii) as otherwise directed by the Vendor; and

 

(b)                                 deliver to the Vendor a copyof the minutes (certified by a duly appointed officer as true and correct) ofthe Purchaser authorising the execution and performance by the Purchaser of itsobligations under this Agreement, the Tax Indemnity and each of the ConnectedTransactions to which it is a party.

 

Any payment madein accordance with clause 5.4(a) shall constitute a good discharge by thePurchaser of its obligations under clause 2.2 and the Purchaser shall notbe concerned to see that the funds are applied in payment to the Vendor.

 

5.5           If the Vendor fails or is unable toperform any material obligation required to be performed by the Vendor pursuantto clauses 3.2, 5.2 and 5.3, respectively, by the last date on whichCompletion is required to occur, the Purchaser shall not be obliged to completethe sale and purchase of the Target Shares and may, in its absolute discretion,by written notice to the Vendor:

 

(a)                                  rescind this Agreement withoutliability on the part of the Purchaser; or

 

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(b)                                 elect to complete thisAgreement on that date, to the extent that the Vendor is ready, able andwilling to do so, and specify a later date on which the Vendor shall be obligedto complete the outstanding obligations of the Vendor; or

 

(c)                                  elect to defer the Completionby not more than 90 days to such other date as it may specify in such notice,in which event the provisions of this clause 5.5 shall apply, mutatismutandis, if the Vendor fails or is unable to perform any such obligations onsuch other date.

 

**POST-COMPLETIONUNDERTAKINGS**;RESTRICTIONS ON VENDOR GROUP COMPANIES

** **

6.1           Following Completion, the Vendorundertakes to the Purchaser to use all reasonable endeavours to obtain therelease of each Target Group Company from any Intra-Group Guarantees to whichit is a party and, pending such release, to indemnify the relevant Target GroupCompany against all amounts paid by it to any third party pursuant to any suchIntra-Group Guarantee in respect of any liability of any Vendor Group Company(and all Costs incurred in connection with such liability) whether arisingbefore or after Completion.

 

6.2           Following Completion, the Purchaserundertakes to the Vendor to use all reasonable endeavours to obtain the releaseof each Vendor Group Company from any Intra-Group Guarantees to which it is aparty and, pending such release, to indemnify the relevant Vendor Group Companyagainst all amounts paid by it to any third party pursuant to any Intra-GroupGuarantees in respect of any liability of any Target Group Company (and allCosts incurred in connection with such liability) whether arising before orafter Completion.

 

6.3 (a)                The Vendor shall not and shall cause thateach other Vendor Group Company******shall not (whether alone or jointly with another andwhether directly or indirectly) carry on or be engaged or (except as the ownerfor investment of securities dealt in on a stock exchange and not exceeding 5per cent. in nominal value of the securities of that class) be interestedeconomically or otherwise in any manner whatsoever in any Competing Businessduring the Relevant Period.

 

(b)                                 The Vendor shall not and shallcause that each other Vendor Group Company shall not during the RelevantPeriod, directly or indirectly, solicit or endeavour to entice away from theTarget Group Companies, offer employment to or employ, or offer or conclude anycontract for services with, any person who was employed in skilled ormanagerial work in the Target Company’s business at any time during the 1 yearprior to Completion.

 

(c)                                  Except so far as may berequired by law and in such circumstances only after prior consultation withthe Purchaser, the Vendor shall not (and shall cause that each other VendorGroup Companies shall not) at any time disclose to any person or use to thedetriment of the Target Company’s business any trade secret or otherconfidential information of a technical character which it holds in relation tothe Target Company’s business.

 

(d)                                 The Vendor (acting for itselfand each other Vendor Group Company) acknowledges and agrees that the duration,extent and application of the respective restrictions in clauses (a), (b)and (c) are no greater than is reasonable and necessary for the protection ofthe interests of the Purchaser but that, if any such restriction shall beadjudged by any court of competent jurisdiction to be void or unenforceable butwould be valid if part of the wording thereof was deleted and/or the periodthereof was reduced and/or the area dealt with thereby was reduced, the saidrestriction shall apply within the jurisdiction of that court with suchmodifications as may be necessary to make it valid and effective.

 

**WARRANT**IES

** **

7.1           The Vendor represents, warrants andundertakes to the Purchaser in the terms of the Warranties and acknowledgesthat the Purchaser has entered into this Agreement in reliance upon theWarranties.

 

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7.2           The Vendor undertakes (withoutlimiting any other rights of the Purchaser in any way including its rights todamages in respect of a claim for breach of any Warranty on any other basis)that it shall pay in cash to the Purchaser (or, if so directed by thePurchaser, to the Target Group Company in question) (each an ***Indemnified Person***)by way of indemnity on demand in the case of a breach of any of the Warranties,a sum equal to the aggregate of (i) the amount which, if received by theIndemnified Person, would be necessary to put that Indemnified Person into thefinancial position which would have existed had there been no breach of theWarranty in question; and (ii) all Costs suffered or incurred by theIndemnified Person, directly or indirectly, as a result of or in connectionwith such breach of Warranty.

 

7.3           The Vendor agrees to waive thebenefit of all rights (if any) which the Vendor may have against any TargetGroup Company, or any present or former officer or employee of any suchcompany, on whom the Vendor may have relied in agreeing to any term of thisAgreement and each of the Vendor undertakes not to make any claim in respect ofsuch reliance.

 

7.4           Each of the Warranties shall beconstrued as a separate Warranty and (save as expressly provided to thecontrary) shall not be limited or restricted by reference to or inference fromthe terms of any other Warranty or any other term of this Agreement.

 

7.5           The Warranties shall be deemed to berepeated immediately before Completion with reference to the facts andcircumstances then existing.

 

7.6           The Vendor undertakes to notify thePurchaser in writing promptly if it becomes aware of any circumstance arisingafter the date of this Agreement which would cause any Warranty (if theWarranties were repeated with reference to the facts and circumstances thenexisting) to become untrue or inaccurate or misleading in any respect which ismaterial to the financial or trading position of any of the Target GroupCompanies.

 

**LIMITATIONSON CL**AIMS

** **

8.1           The aggregate amount of the liabilityof the Vendor for all Claims shall not exceed the Total Price.

 

8.2           None of the limitations contained inclause 8.1 shall apply to any breach of any Warranty which (or the delayin discovery of which) is the consequence of dishonest, deliberate or recklessmis-statement, concealment or other conduct by any Vendor Group Company or anyofficer or employee, or former officer or employee, of any Vendor GroupCompany.

 

**PURCHASER’SRIGHTS TO RE**SCISSION

** **

9.             The Purchaser may by written noticegiven to the Vendor at any time prior to Completion rescind this Agreementwithout liability on the part of the Purchaser:

 

(a)                                  if any fact, matter or event(whether existing or occurring on or before the date of this Agreement orarising or occurring afterwards) comes to the notice of the Purchaser at anytime prior to Completion which:

 

(i)             constitutes a breach by the Vendor of this Agreement(including, without limitation, any breach of the pre-Completion undertakingsin clause 4); or

 

(ii)          would constitute a breach of any Warranty if theWarranties are repeated on or at any time before Completion by reference to thefacts and circumstances then existing; or

 

(iii)       affects or is likely to affect in a materially adverse manner thebusiness, financial position or prospects of the Target Group Companies takenas a whole; or

 

(b)                                 if at any time after signingof this Agreement and before Completion there is a material adverse change inthe market price of the shares of the Company and the Company is of the

 

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opinionthat it will not be in the interests of its shareholders as a whole to proceedwith the acquisition of the Target Shares.

 

**WITHHOLDINGTAX**AND GROSSING UP

** **

10.1         The Vendor shall pay all sums payableby it under clauses 6.1 and 7 free and clear of all deductions orwithholdings unless the law requires a deduction or withholding.  If a deduction or withholding is so requiredthe Vendor shall pay such additional amount as will ensure that the net amountthe payee receives equals the full amount which it would have received had thededuction or withholding not been required.

 

10.2         If any tax authority brings any sumpaid by the Vendor under or pursuant to clauses 6.1 and 7 into charge totax, then the Vendor shall pay such additional amount as will ensure that thetotal amount paid, less the tax chargeable on such amount, is equal to theamount that would otherwise be payable under clauses 6.1 and 7.

 

**ENTIREAGR**EEMENT

** **

11.           This Agreement and the Tax Indemnityconstitute the entire agreement and understanding between the parties inconnection with the sale and purchase of the Target Shares.  This Agreement and the Tax Indemnity supersedeall prior agreements or understandings in connection with the subject matterhereof which shall cease to have any further force or effect.  No party has entered into this Agreement inreliance upon any representation, warranty or undertaking which is not set outor referred to in this Agreement and the Tax Indemnity.

 

**VARIATI**ON

** **

12.1         No variation of this Agreement (or ofany of the legally binding agreements referred to in this Agreement) shall bevalid unless it is in writing and signed by or on behalf of each of the partiesto it.  The expression “variation” shallinclude any variation, supplement, deletion or replacement however effected.

 

12.2         Unless expressly agreed, no variationshall constitute a general waiver of any provisions of this Agreement, norshall it affect any rights, obligations or liabilities under or pursuant tothis Agreement which have already accrued up to the date of variation, and therights and obligations of the parties under or pursuant to this Agreement shallremain in full force and effect, except and only to the extent that they are sovaried.

 

**ASSIGNME**NT

** **

13.           The Vendor shall not assign,transfer, charge or otherwise deal with all or any of its rights under thisAgreement nor grant, declare, create or dispose of any right or interest in itwithout the prior written consent of the Purchaser. Any purported assignment incontravention of this clause 13 shall be void.

 

**ANNOUNCEME**NTS

** **

14.1         Except as required by law or by anystock exchange or governmental or other regulatory or supervisory body orauthority of competent jurisdiction to whose rules the party making theannouncement or disclosure is subject, whether or not having the force of law,no announcement or circular or disclosure in connection with the existence orsubject matter of this Agreement shall be made or issued by or on behalf of anyof the Vendor Group Companies without the prior written approval of thePurchaser (such approval not to be unreasonably withheld or delayed), or by oron behalf of the Purchaser without the prior written approval of the VendorGroup Companies (such approval not to be unreasonably withheld or delayed).

 

14.2         Where any announcement or disclosure ismade in reliance on the exception in clause 14.1, the party making theannouncement or disclosure will so far as practicable consult with the other

 

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parties in advanceas to the form, content and timing of the announcement or disclosure.

 

**COST**S

** **

15.           Each party shall bear its own Costsincurred in connection with the negotiation, preparation and completion of thisAgreement.

 

**CONFIDENTIALI**TY

** **

16.           The Vendor undertakes with thePurchaser that it shall keep confidential (and to ensure that its directors,officers, employees, agents and professional and other advisers keepconfidential) any information in its possession (whether before or after thedate of this Agreement):

 

(a)                                  in relation to thesubscribers, business, assets or affairs of the Target Group Companies(including any data held by the Target Group Companies); or

 

(b)                                 which relates to the contentsof this Agreement (or any agreement or arrangement entered into pursuant tothis Agreement),

 

provided that theundertakings contained in this clause 16 shall not apply to anyinformation which is in or has entered the public domain otherwise than as aresult of an announcement or disclosure by the Vendor Group Companies in breachof clause 14 or by their respective directors, officers, employees, agents andprofessional and other advisers.

 

The Vendor shallnot use for its own business purposes or disclose to any third party any suchinformation without the consent of the Purchaser.

 

**SEVERABILI**TY

** **

17.           If any provision of this Agreement isheld to be invalid or unenforceable, then such provision shall (so far as it isinvalid or unenforceable) be given no effect and shall be deemed not to beincluded in this Agreement but without invalidating any of the remainingprovisions of this Agreement.  Theparties shall then use all reasonable endeavours to replace the invalid orunenforceable provisions by a valid and enforceable substitute provision theeffect of which is as close as possible to the intended effect of the invalidor unenforceable provision.

 

**COUNTERPAR**TS

** **

18.           This Agreement may be executed in anynumber of counterparts and by the parties to it on separate counterparts, eachof which is an original but all of which together constitute one and the sameinstrument.

 

**WAIV**ER

** **

19.1         No failure or delay by any partieshereto in exercising any right or remedy provided by law under or pursuant tothis Agreement shall impair such right or remedy or operate or be construed asa waiver or variation of it or preclude its exercise at any subsequent time andno single or partial exercise of any such right or remedy shall preclude anyother or further exercise of it or the exercise of any other right or remedy.

 

19.2         The rights and remedies of the partieshereto under or pursuant to this Agreement are cumulative, may be exercised asoften as such party considers appropriate and are in addition to its rights andremedies under general law.

 

**FURTHERASSURA**NCE

** **

20.           The Vendor agrees to perform (orprocure the performance of) all further acts and things, and execute anddeliver (or procure the execution and delivery of) such further documents, asmay be

 

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required by law oras the Purchaser may reasonably require, whether on or after Completion, toimplement and/or give effect to this Agreement and the transaction contemplatedby it and for the purpose of vesting in the Purchaser the full benefit of the assets,rights and benefits to be transferred to the Purchaser under this Agreement.

 

**NOTIC**ES

** **

21.1         Any notice or other communication to begiven by one party to any other party under, or in connection with, thisAgreement shall be in writing and signed by or on behalf of the party givingit.  It shall be served by sending it byfax to the number set out in clause 21.2, or delivering it by hand, orsending it by pre-paid recorded delivery or registered post, to the address setout in clause 21.2 and in each case marked for the attention of therelevant party set out in clause 21.2 (or as otherwise notified from timeto time in accordance with the provisions of this clause 21).  Any notice so served by hand, fax or postshall be deemed to have been duly given:

 

(a)                                  in the case of delivery byhand, when delivered;

 

(b)                                 in the case of fax, uponconfirmation of transmission;

 

(c)                                  in the case of prepaidrecorded delivery or registered post, at 10a.m. on the fifth Business Dayfollowing the date of posting

 

provided that ineach case where delivery by hand or by fax occurs after 6p.m. on a Business Dayor on a day which is not a Business Day, service shall be deemed to occur at9a.m. on the next following Business Day.

 

References to timein this clause are to local time in the country of the addressee.

 

21.2         The addresses and fax numbers of theparties for the purpose of clause 21.1 are as follows:

 

**The Vendor:**

 
| Address:               |   | Craigmuir  Chambers,  P.O. Box 71,  Road Town,  Tortola,  British Virgin Islands |
|------------------------|--------|----------------------------------------------------------------------------------|
|                   |   |                                                                             |
| Fax:                   |   | (852) 2126 2016                                                                  |
|                   |   |                                                                             |
| For the  attention of: |   | The Directors                                                                    |

 

**The Purchaser:**

 
| Address:               |   | 75th Floor  The Center,  99 Queen’s Road Central,  Hong Kong |
|------------------------|--------|-------------------------------------------------------------------|
|                   |   |                                                              |
| Fax:                   |   | (852) 2126 2016                                                   |
|                   |   |                                                              |
| For the  attention of: |   | The Directors                                                     |

 

21.3         A party may notify any other party tothis Agreement of a change to its name, relevant addressee, address or faxnumber for the purposes of this clause 21, provided that, such noticeshall only be effective on:

 

(a)                                  the date specified in thenotice as the date on which the change is to take place; or

 

----

 

(b)                                 if no date is specified or thedate specified is less than five Business Days after the date on which noticeis given, the date following five Business Days after notice of any change hasbeen given.

 

21.4         All notices under or in connection withthis Agreement shall be in the English language.

 

**GOVERNINGLAW, JURISDICTION AND**SERVICE OF PROCESS

** **

22.1         This Agreement and the relationshipbetween the parties shall be governed by, and interpreted in accordance with,the laws of Hong Kong.

 

22.2         The parties agree that the courts ofHong Kong are to have exclusive jurisdiction to settle any disputes (includingclaims for set-off and counterclaims) which may arise in connection with thecreation, validity, effect, interpretation or performance of, or the legalrelationships established by, this Agreement or otherwise arising in connectionwith this Agreement, and for such purposes irrevocably submit to thejurisdiction of the Hong Kong courts.

 

22.3         The Vendor shall at all times maintainan agent for service of process and any other documents in proceedings in HongKong or any other proceedings in connection with this Agreement.  Such agent shall be China Unicom (Hong Kong)Group Limited currently of 75th Floor, The Centre, 99 Queen’s Road,Central, Hong Kong and any writ, judgment or other notice of legal processshall be sufficiently served on the Vendor if delivered to such agent at itsaddress for the time being.  The Vendorundertakes not to revoke the authority of the above agent and if, for anyreason, the Purchaser requests the Vendor to do so it shall promptly appointanother such agent with an address in Hong Kong and advise the Purchaser.  If, following such a request, the Vendorfails to appoint another agent, the Purchaser shall be entitled to appoint oneon behalf of the Vendor at the expense of the Vendor.

 

**AS WITNESS** this Agreement has been signed on behalfof the parties the day and year first before written.

 

----

 

##### **SCHEDULE****1**

#####  

###### **DEFINITIONSAND INTERPRETATION**

######  

1.             In this Agreement, the following expressionsshall have the following meanings:

 

***A Share Company***means China United Telecommunications CorporationLimited;

 

***Accounts*** means in relation to the Target Company:

 

(a)                                  the combined audited balancesheets of the Target Company as of the relevant Accounts Date in respect ofthat financial period; and

 

(b)                                 the combined auditedstatements of income, owner’s equity and cash flows of the Target Company forthe financial period ended on the relevant Accounts Date,

 

together with anynotes, reports or statements included in or annexed to them;

 

***Accounts Date*** means 31 December 2002 or 30 June 2003, as the casemay be;

 

***Business Day*** means a day (excluding Saturdays) on which banks inHong Kong and the PRC are generally open for the transaction of normal bankingbusiness;

 

***Claim*** means any claim for breach of a Warranty;

 

***Companies Ordinance***means the Companies Ordinance, Chapter 32 of the Lawsof Hong Kong;

 

***Competing Business*******means a business which carries on or isinvolved with the provision of any mobile telephone (voice and data) andrelated value-added services using GSM, CDMA, CDMA1x, WCDMA, 3G technology orotherwise in the Territory;

 

***Completion*** means completion of the sale and purchase of theTarget Shares under this Agreement;

 

***Conditions Precedent*** means the conditions specified in clause 3.1;

 

***Connected Transactions*** means the Prospective Cellular Connected Transactionsof the A Share Company and the Prospective Cellular Connected Transactions ofthe Company;

 

***Costs*** means liabilities, losses, damages, costs (includinglegal costs) and expenses (including taxation), in each case of any naturewhatsoever;

 

***HK$***means Hong Kong dollars, the lawful currency of HongKong;

 

***holding company*** shall be construed in accordance with section 2 ofthe Companies Ordinance;

 

***Hong Kong*** means the Hong Kong Special Administrative Region ofthe PRC;

 

***Indebtedness*** means any indebtedness in respect of all obligationsto repay borrowed money, all indebtedness evidenced by notes, bonds, loanstock, debentures or similar obligations, acceptances or documentary creditfacilities, all rental obligations under finance leases, and hire purchasecontracts, any other transaction having the commercial effect of a borrowing orraising of money, the net amount of any liability under any swap, hedging orother similar treasury instrument, and all guarantees, sureties, indemnities,counter-indemnities or letters of comfort of obligations of others of theforegoing types;

 

***Intellectual Property Rights***means patents, trade marks, servicemarks, trade names, design rights, copyright (including rights in computersoftware), rights in know-how and other intellectual property rights, in eachcase whether registered or unregistered and including applications for thegrant of any

 

----

 

such rights and allrights or forms of protection having equivalent or similar effect anywhere inthe world;

 

***Intra-Group Guarantees*** means all guarantees, indemnities,counter-indemnities and letters of comfort of any nature whatsoever (a) givento any third party by the Target Group Company in respect of a liability of anyVendor Group Company; and/or (as the context may require) (b) given to anythird party by any Vendor Group Company in respect of a liability of the TargetGroup Company;

 

***Intra-Group Loans***means all debts outstanding between any Target GroupCompany and any Vendor Group Company;

 

***Last Accounts*** means the Accounts of the Target Company in respectof the financial period ended on the Last Accounts Date;

 

***Last Accounts Date*** means 30 June 2003;

 

***Leased Properties*** means the properties currently leased by the TargetCompany as tenant;

 

***Mainland China***means the PRC excluding Hong Kong and the Macau Special Administrative Regionof the PRC;

 

***PRC*** means the People’s Republic of China;

 

***Properties*** means the properties currently owned by the TargetCompany;

 

***Prospective Cellular Connected Transactions of the Company***means those transactions effectedpursuant to the operating agreements in the agreed forms as listed in Appendix1;

 

***Prospective Cellular Connected Transactions of the A ShareCompany***means those transactions effectedpursuant to the operating agreements in the agreed forms as listed in Appendix2;

 

***Regulatory Approvals*** means the approvals, consents and authorisations fromall relevant regulatory authorities in the PRC (including the State Council,the State Development and Planning Commission, the Ministry of InformationIndustry, the Ministry of Foreign Trade and Economic Cooperation, the Ministryof Finance and the China Securities Regulatory Commission), Hong Kong(including the Telecommunications Authority) and the United States of America(including the Federal Communications Commission) being those necessary toeffect the transactions contemplated by this Agreement;

 

***Relevant Period*** means the period commencing from the date ofCompletion and ending on the date on which (i) the shares or the AmericanDepository Shares of the Purchaser cease to be listed and traded on the NewYork Stock Exchange, Hong Kong Stock Exchange and any other stock exchanges or (ii)Unicom Group ceases to be a controlling shareholder of the Purchaser or anassociate of such controlling shareholder under the Rules Governing the Listingof Securities on the Stock Exchange of Hong Kong Limited, whichever is theearlier;

 

***Reorganisation***means the acquisitions and transfers described in Recitals (A) to (C);

 

***Restructuring Agreements*** means the agreements listed in Appendix 3;

 

***RMB*** means Renminbi, the lawful currency of the PRC;

 

***Schedules*** means Schedules 1, 2 and 3 to this Agreement and ***Schedule*** shall beconstrued accordingly;

 

***security interest*** means any security interest of any nature whatsoeverincluding, without limitation, any mortgage, charge, pledge, lien, assignmentby way of security or other encumbrance, options, equities, claims or otherthird party rights (including rights of pre-emption) of any nature whatsoever,together with all rights attaching to them;

 

----

 

***subsidiary*** and ***subsidiaries*** shall be construed in accordance withsection 2 of the Companies Ordinance;

 

***Target Company Shares*** means all the issued shares in the capital of theTarget Company, details of which are set out in Part C of Schedule 2;

 

***Target Group Companies***means the Target Holding Company and/or the TargetCompany;

 

***Target Shares*** means all the issued shares in the capital of theTarget Holding Company, details of which are set out in Part B ofSchedule 2;

 

***Tax Indemnity***means the Tax Indemnity in the agreed form to beentered into by the Vendor in favour of the Purchaser;

 

***Tax Warranties*** means the warranties set out in paragraphs 1.1to 1.9 in Part B of Schedule 3;

 

***Unicom Group***means China United Telecommunications Corporation;

 

***Vendor Group Company***means Unicom Group, any subsidiary from time to timeof Unicom Group (but excluding the Purchaser, the subsidiaries of the Purchaserfrom time to time and the Target Group Companies); and

 

***Warranties*** means the representations and warranties set out inSchedule 3.

 

2.             In this Agreement, unless thecontext otherwise requires:

 

(a)                                  any references to the ***Target Company***shallinclude any predecessor entity or person carrying on the business of suchTarget Company, whether before or after the Reorganisation;

 

(b)                                 references to ***persons***shall includeindividuals, bodies corporate (wherever incorporated), unincorporated associationsand partnerships;

 

(c)                                  the ***headings***are inserted for convenience onlyand shall not affect the construction of this Agreement;

 

(d)                                 any reference to an ***enactment***orstatutory provision is a reference to it as it may have been, or may from timeto time be, amended, modified, consolidated or re-enacted;

 

(e)                                  any statement qualified by theexpression ***to the best knowledgeof the Vendor*** or ***so far as the Vendor is aware*** or any similar expressionshall be deemed to include an additional statement that it has been made afterdue and careful enquiry and shall be deemed also to include the best of theknowledge of each Vendor Group Company;

 

(f)                                    any reference to a document ***in the agreed form*** isto the form of the relevant document agreed between the parties and for thepurpose of identification initialled by each of them or on their behalf (ineach case with such amendments as may be agreed by or on behalf of the Vendorand the Purchaser);

 

(g)                                 references to any Hong Konglegal term for any action, remedy, method of judicial proceeding, legaldocument, legal status, court, official or any other legal concept shall, inrespect of any jurisdiction other than Hong Kong, be deemed to include thelegal concept which most nearly approximates in that jurisdiction to the HongKong legal term.

 

3.             The Schedules and Appendicescomprise schedules and appendices to this Agreement and form part of thisAgreement.

 

----

 

##### **SCHEDULE 2**

#####  

###### **CORPORATESTRUCTURE PRIOR TO COMPLETION**

######  

PART A

 

Corporate Structure

 

 

----

 

PART B

 

Details of the TargetHolding Company

 

**UNICOM NEW WORLD (BVI) LIMITED**

 
| **1.**  | **Name:**                    |   | Unicom New World  (BVI) Limited                                                          |
|---------|------------------------------|--------|------------------------------------------------------------------------------------------|
|    |                         |   |                                                                                     |
| **2.**  | **Date of Incorporation:**   |   | 5 November 2003                                                                          |
|    |                         |   |                                                                                     |
| **3.**  | **Place of Incorporation:**  |   | British Virgin  Islands                                                                  |
|    |                         |   |                                                                                     |
| **4.**  | **Class of Company:**        |   | International  Business Company                                                          |
|    |                         |   |                                                                                     |
| **5.**  | **Registered Number:**       |   | 566613                                                                                   |
|    |                         |   |                                                                                     |
| **6.**  | **Registered Office:**       |   | Romasco Place  Wickhams Cay 1  P.O. Box 3140  Road Town, Tortola  British Virgin Islands |
|    |                         |   |                                                                                     |
| **7.**  | **Directors:**               |   | Wang Jianzhou,  Shi Cuiming, William Lo Wing Yan and Ye Fengping                         |
|    |                         |   |                                                                                     |
| **8.**  | **Registered Shareholders:** |   | China Unicom  (BVI) Limited                                                              |
|    |                         |   |                                                                                     |
| **9.**  | **Authorised Capital:**      |   | HK$11,000  divided into 11,000 shares of HK$1.00 each                                    |
|    |                         |   |                                                                                     |
| **10.** | **Issued Capital:**          |   | 1,000 shares of  HK$1.00 each                                                            |
|    |                         |   |                                                                                     |
| **11.** | **Subsidiary:**              |   | Unicom New World  Telecommunications Corporation Limited                                 |
|    |                         |   |                                                                                     |
| **12.** | **Mortgages and Charges:**   |   | None                                                                                     |

 

----

 

PART C

Details of the TargetCompany

 

 

**UNICOM NEW WORLD PRC**

 
| **1.**  |   | **Name:**                    |   | Unicom New World  Telecommunications Corporation Limited                                                                                                            |
|---------|--------|------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |   |                         |   |                                                                                                                                                                |
| **2.**  |   | **Place of Incorporation:**  |   | Beijing, PRC                                                                                                                                                        |
|    |   |                         |   |                                                                                                                                                                |
| **3.**  |   | **Nature of Incorporation:** |   | Wholly  foreign-owned enterprise                                                                                                                                    |
|    |   |                         |   |                                                                                                                                                                |
| **4.**  |   | **Scope of Business:**       |   | Mobile  telecommunication businesses in Shanxi, Hunan, Hainan,  Yunnan, Gansu and Qinghai provinces and Inner Mongolia, Ningxia Hui and  Xizang autonomous  regions |
|    |   |                         |   |                                                                                                                                                                |
| **5.**  |   | **Registered Office:**       |   | Room 1009, 10th  Floor, Tower 1, Henderson Centre, 18 Jianguomen Nei Dajie, Beijing, PRC                                                                            |
|    |   |                         |   |                                                                                                                                                                |
| **6.**  |   | **Registered Capital:**      |   | RMB2,054,769,700                                                                                                                                                    |
|    |   |                         |   |                                                                                                                                                                |
| **7.**  |   | **Total Investment:**        |   | RMB2,054,769,700                                                                                                                                                    |
|    |   |                         |   |                                                                                                                                                                |
| **8.**  |   | **Equity Holder:**           |   | Unicom New World  (BVI) Limited                                                                                                                                     |
|    |   |                         |   |                                                                                                                                                                |
| **9.**  |   | **Tax Residence:**           |   | Beijing, PRC                                                                                                                                                        |
|    |   |                         |   |                                                                                                                                                                |
| **10.** |   | **Subsidiaries:**            |   | None                                                                                                                                                                |
|    |   |                         |   |                                                                                                                                                                |
| **11.** |   | **Mortgages and Charges:**   |   | None                                                                                                                                                                |

 

----

 

##### **SCHEDULE 3**

#####  

###### **THEWARRANTIES**

######  

Part A: General

 

**INFORMATION**

 

1.1           All information relating to theTarget Group Companies provided to the Purchaser or its representatives andadvisers for the purposes of preparation of the Accounts is true, accurate andnot misleading and does not contain an untrue statement of a material fact oromit to state a material fact required to be stated therein or necessary tomake the statements therein not misleading.

 

1.2           Save as already disclosed in writingto the Purchaser, there are no other facts or matters which might reasonably beexpected to have a material adverse effect on the financial or trading positionor prospects of any Target Group Company.

 

CORPORATE MATTERS

 

**The Target Group Companies**

 

2.1(a)                   All of the Target Shares are fully-paid orproperly credited as fully-paid and the Vendor is the sole legal and beneficialowner of them free from all security interests.

 

(b)                                 The information in respect ofthe Target Holding Company set out in Part B of Schedule 2 is true andaccurate and not misleading.

 

(c)                                  The Target Holding Company hasbeen duly incorporated and is validly existing under the laws of the BVI, withlegal right, power and authority (corporate and other) to own, use, lease andoperate its properties and conduct its business in the manner presentlyconducted, and is duly qualified to transact business in any jurisdiction inwhich it owns or leases properties or conducts any business and suchqualification is required, or is subject to no material liability or disabilityby reason of the failure to be so qualified in any such jurisdiction; theMemorandum of Association and Articles of Association of the Target HoldingCompany comply with the requirements of applicable BVI law and are in fullforce and effect.

 

2.2(a)                   The Target Holding Company is the solelegal and beneficial owner of the entire equity interests in the Target Companyfree from all security interests.

 

(b)                                 The information in respect ofeach of the Target Company set out in Part C of Schedule 2 is true andaccurate.

 

(c)                                  The Target Company iscurrently a domestic enterprise with limited liability and has been dulyorganised and is validly existing under the laws of the PRC, and its businesslicence is in full force and effect; its Articles of Association comply withthe requirements of applicable PRC law and are in full force and effect; it hasall consents, approvals, authorizations, orders, registrations, clearances andqualifications of or with any court, governmental agency or body havingjurisdiction over it or any of its properties in each jurisdiction in which theownership or lease of property by it or the conduct of its business requiressuch qualification and has the legal right and authority to own, use, lease andoperate its assets and to conduct its business in the manner presentlyconducted.

 

2.3           No Target Group Company owns or hasany interest of any nature whatsoever in any shares, debentures or othersecurities issued by any undertaking other than, in respect of the TargetHolding Company, its equity interests in the Target Company.

 

2.4           The Target Holding Company does notcarry on any business other than holding the Target Company.

 

----

 

**The Vendor**

 

2.5           The Vendor (the ***Warrantor***) is duly incorporated orestablished and is validly existing under the laws of its jurisdiction ofincorporation, with full power and authority to own, lease and operate itsproperties and assets and to execute and perform its obligations under thisAgreement.

 

2.6           The execution, delivery andperformance by the Warrantor of this Agreement has been duly authorised by itand this Agreement constitutes a legal, valid and binding obligation of suchWarrantor enforceable in accordance with its terms, subject to the laws ofbankruptcy and other similar laws affecting the rights of creditors generally.

 

2.7           All regulatory, corporate and otherapprovals (including Regulatory Approvals and shareholder approvals) andauthorisations required by the Warrantor for the execution and delivery of thisAgreement and any agreement or instrument contemplated hereby, the performanceof the terms hereof and thereof and the sale of the Target Shares have beenobtained, are unconditional and are in full force and effect.

 

2.8           The execution and delivery by theWarrantor of this Agreement, and the performance and completion of thetransactions herein contemplated: (a) will not infringe any applicablelaws or regulations; (b) will not result in any breach of the terms of, orconstitute a default under, its constitutional documents and business licence(as applicable) or any instrument, agreement or governmental, regulatory orother judgement, decree or order to which the Warrantor is a party or by whichit or its property is bound; and (c) will not conflict with any of thecertificates, licences or permits of the Warrantor that enable it to carry onthe business or operations now operated by it.

 

2.9           The Warrantor is not: (a) in breachof the terms of, or in default under, any instrument, agreement or order towhich it is a party or by which it or its property is bound to an extent whichis material in the context of the transactions herein contemplated;(b) involved in or the subject of any current or pending investigation orproceedings (whether administrative, regulatory or otherwise), whether in thePRC, Hong Kong**or elsewhere.

 

FINANCIAL MATTERS

 

**Accounts**

 

3.1(a)                   The Accounts give a true and fair view ofthe state of affairs and financial results of the Target Company for theperiods and as at the dates stated therein.

 

(b)                                 Without limiting thegenerality of paragraph (a):

 

(i)             the Accounts of the Target Company either make fullprovision for or disclose all liabilities (whether actual, contingent ordisputed and including financial lease commitments and pension liabilities),all outstanding capital commitments and all bad or doubtful debts of the TargetCompany as at the Accounts Dates, in each case in accordance with applicableaccounting principles;

 

(ii)          the Accounts of the Target Company for each of theperiods ended on the Accounts Date were prepared under the historicalconvention, complied with the requirements of all relevant laws and regulationsthen in force and with all statements of standard accounting practice (orfinancial reporting standards) and applicable accounting principles then inforce;

 

(iii)       the rate of depreciation adopted by the Target Company in its Accountsfor each of the periods ended on the Accounts Dates was sufficient for each ofthe fixed assets of the Target Company to be written down to nil by the end ofits useful life;

 

(iv)      except as stated in its Accounts, no changes in the accounting policieswere made by any of the Target Company in any of the periods ended on theAccounts Dates;

 

----

 

(v)         the results shown by the Accounts of the TargetCompany for each of the periods ended on the Accounts Dates were not (except astherein disclosed) affected by any extraordinary or exceptional item or by anyother factor rendering such results for all or any of such periods unusuallyhigh or low.

 

3.2           None of the financial informationprovided to the Purchaser or its representatives and advisers is misleading inany material respect nor materially over-state the value of the assets normaterially under-state the liabilities of the Target Company as at the dates towhich they were drawn up and do not materially over-state the profits of theTarget Company in respect of the periods to which they relate.

 

**Position since Last Accounts Date**

 

3.3(a)                   Since the Last Accounts Date and comparedto the Last Accounts, there has been no material adverse change in thefinancial or trading position or (save to the extent that the same would belikely to affect to a similar extent generally all companies carrying onsimilar businesses) in the prospects of the Target Company and no event, factor matter has occurred which is likely to give rise to any such change.

 

(b)                                 Since the Last Accounts Dateand compared to the Last Accounts:

 

(i)                       the business of the TargetCompany has been carried on in the ordinary and usual course and the TargetCompany has not made or agreed to make any payment other than routine paymentsin the ordinary and usual course of trading;

 

(ii)                    no dividend or other distribution has beendeclared, paid or made by the Target Company;

 

(iii)                 there has been no material change in thelevel of borrowing or in the working capital requirements of the Target Company(except for changes of not more than 10% arising from expenditure of a capitalnature which has been budgeted or otherwise provided for in the TargetCompany’s approved business plan);

 

(iv)                all transactions between the Target Companyand any Vendor Group Company have been on an arm’s length basis and commercialterms;

 

(v)                   save for the Restructuring Agreements andthe Connected Transactions, no contract, liability or commitment (whether inrespect of capital expenditure or otherwise) has been entered into by theTarget Company which is of a long term or unusual nature or which involved orcould involve an obligation of a material nature or magnitude;

 

(vi)                save as provided in the RestructuringAgreements, the Target Company has not (whether in the ordinary and usualcourse of business or otherwise) acquired or disposed of, or agreed to acquireor dispose of, any material business or any material asset having a value inexcess of RMB4 billion;

 

(vii)             no material debtor has been released by theTarget Company on terms that it pays less than the book value of its debt andno material debt owing to the Target Company has been deferred, subordinated orwritten off or has proved to any extent irrecoverable;

 

(viii)          no change has been made in terms ofemployment and any benefits in kind payable to employees and other employmentrelated matters by the Target Company or any Vendor Group Company (other thanthose required by law) which could materially increase the total costsattributable to employment and employee benefits of the Target Company;

 

----

 

(ix)                  there has been no material increase ordecrease in the levels of trade debtors or creditors or in the averagecollection or payment periods for the trade debtors and creditors respectively;

 

(x)                     the Target Company has not repaid anymaterial borrowing or indebtedness in advance of its stated maturity;

 

(xi)                  there has been no material reduction in thecash balances of the Target Company;

 

(xii)***              ***no resolution of the membersof the Target Company has been passed whether in general meeting or otherwise(other than resolutions relating to the routine business of annual generalmeetings); and

 

(xiii)            the business of the Target Company has notbeen affected by any abnormal factor not affecting to a similar extentgenerally all companies carrying on similar businesses.

 

**Working Capital**

 

3.4           Having regard to existing bank andother financial facilities, the Target Company has sufficient working capitalavailable to it as at the date of this Agreement to enable it to continue tocarry on its business in its present form and at its present level of turnoverand for the purpose of performing in accordance with their terms all orders,projects and other obligations and discharging all liabilities which oughtproperly to be discharged during the period of 12 months after Completion.

 

**Accounting and other Records**

 

3.5(a)                   The books of account and other records ofthe Target Company:

 

(i)                       are up-to-date and have beenmaintained in accordance with all applicable laws and generally acceptedaccounting practices on a proper and consistent basis;

 

(ii)                    comprise complete and accurate records ofall information required to be recorded therein;

 

(iii)                 are in its possession or under its controltogether with all documents of title and executed copies of all existingagreements to which the Target Company is a party.

 

(b)                                 All accounts, documents andreturns required by law to be delivered or made by the Target Company to anygovernment authority or regulatory body or any other authority have been dulyand correctly delivered or made.

 

DEBT POSITION

 

**Debts owed to the Target Company**

 

4.1(a)                   There are no debts owing to the TargetCompany other than:

 

(i)                                     the Intra-Group Loans; and

 

(ii)                                  other trade debts incurred in the ordinaryand usual course of business which do not exceed RMB600 million in aggregate forthe Target Company as a whole.

 

(b)                                 The book debts shown in theLast Accounts of the Target Company have realised, or will realise within aperiod of six months from the Last Accounts Date, their nominal amount less anyspecific provision for bad or doubtful debts included in such accounts. Thebook debts incurred by the Target Company since the Last Accounts Date andwhich are outstanding as at the date of this Agreement will realise withinthree months from such date not less than 90% of their nominal amount.

 

----

 

**Debts owed by the Target Company**

 

4.2(a)                   The Target Company does not haveoutstanding any borrowing or indebtedness in the nature of borrowing(including, without limitation, any indebtedness for moneys borrowed or raisedunder any acceptance credit, bond, note, bill of exchange or commercial paper,finance lease, hire purchase agreement, trade bills (other than those on termsnormally obtained), forward sale or purchase agreement or conditional saleagreement or other transaction having the commercial effect of a borrowing)other than:

 

(i)                       the Intra-Group Loans; and

 

(ii)                    moneys borrowed from or otherwise owed tothird parties (which do not exceed RMB22 billion in aggregate for the TargetCompany as a whole).

 

(b)                                 The Target Company has not receivedany notice to repay under any agreement relating to any borrowing orindebtedness in the nature of borrowing which is repayable on demand.

 

(c)                                  There has not occurred anyevent of default or any other event or circumstance which would entitle any personto call for early repayment under any agreement relating to any borrowing orindebtedness of the Target Company or to enforce any security given by theTarget Company (or, in either case, any event or circumstance which with thegiving of notice and/or the lapse of time and/or a relevant determination wouldconstitute such an event or circumstance).

 

REGULATORY MATTERS

 

5.1(a)                   Save as envisaged in the ConnectedTransactions, the Target Company has (or will by Completion have) obtained alllicences, permissions, authorisations and consents required for carrying on itsbusiness effectively in the places and in the manner in which such business isnow carried on.

 

(b)                                 The licences, permissions,authorisations and consents referred to in paragraph (a) are (or will byCompletion be) in full force and effect, not limited in duration or subject toany unusual or onerous conditions and have been (or will by Completion havebeen) complied with in all respects.

 

(c)                                  To the best knowledge of theVendor, there are no circumstances which indicate that any of the licences,permissions, authorisations or consents referred to in paragraph (a) willor are likely to be revoked or not renewed, in whole or in part, in theordinary course of events (whether as a result of the acquisition of the TargetShares by the Purchaser, the Restructuring or otherwise).

 

5.2(a)                   The Target Company has conducted itsbusiness and corporate affairs in accordance with its business licence and withall applicable laws and regulations (whether of the PRC, Hong Kong or any otherjurisdiction).

 

(b)                                 The Target Company is not indefault of any order, decree or judgment of any court or any governmental orregulatory authority (whether of the PRC, Hong Kong or any other jurisdiction).

 

THE REORGANISATION ANDTHE ASSETS

 

**The Reorganisation**

 

6.1(a)                   The assets injected into the Target Companypursuant to the Reorganisation comprise all the assets necessary for thecarrying on of the business carried on by the Target Company in the manner itis presently conducted and the liabilities assumed by the Target Companypursuant

 

----

 

to theReorganisation represent the only liabilities of the Target Company and arefully, fairly and accurately provided for in the Accounts.

 

6.2           The events and transactions contemplatedby the Reorganisation do not contravene any provision of applicable law, ruleor regulation and do not contravene the Articles of Association or the businesslicence of the Target Company or contravene the terms or provisions of, orconstitute a default under, any indenture, mortgage, deed of trust, loanagreement, note, lease or other agreement or instrument binding upon the TargetCompany that, singly or in the aggregate, is material to the Target Company, orany judgement, rule or regulation, order or decree of any governmental body,agency or court having jurisdiction over the Target Company and will not resultin the creation or imposition of any lien, charge, encumbrance or otherrestriction upon any assets of the Target Company.

 

6.3           Save for the conditions precedentreferred to in clauses 3.1(a) and 3.1(b), all consents, approvals,authorisations, orders, registrations and qualifications required in the PRC inconnection with the events and transactions contemplated by the Reorganisation havebeen (or will by Completion have been) made or unconditionally obtained inwriting (including, without limitation, all PRC Regulatory Approvals andshareholders’ approval), and no such consent, approval, authorisation, order,registration or qualification has been withdrawn or is subject to any conditionprecedent which has not been fulfilled or performed.

 

6.4           There are no legal or governmentproceedings pending against the Target Company in the PRC challenging theeffectiveness or validity of the events and transactions contemplated by theReorganisation and, to the best knowledge of the Vendor, no such proceedingsare threatened or contemplated by any governmental agencies in the PRC orelsewhere.

 

**Ownership**

 

6.5(a)                   For the purpose of this Warranty 6.5, ***assets*** shall notinclude the properties disclosed in the Accounts, to which the provisions ofPart B of this Schedule shall apply.

 

(b)                                 Each of the assets included inthe Last Accounts of the Target Company or acquired by it since the LastAccounts Date (other than assets disposed of in the ordinary course of businessand pursuant to the Reorganisation) is the absolute property of the TargetCompany.  Save as disclosed in the LastAccounts, those assets are not the subject of any security interest, factoringarrangement, leasing or hiring agreement, hire purchase agreement, conditionalsale or credit sale agreement, agreement for payment on deferred terms or anysimilar agreement or arrangement (or any agreement or obligation, including aconditional obligation, to create or enter into any of the foregoing).

 

**Possession and Third Party Facilities**

 

6.6(a)                   All of the assets owned by the TargetCompany, or in respect of which the Target Company has a right of use, are inthe possession or under the control of the Target Company.

 

(b)                                 Where any assets are used butnot owned by the Target Company or any facilities or services are provided tothe Target Company by any third party, there has not occurred any event ofdefault or any other event or circumstance which may entitle any third party toterminate any agreement or licence in respect of the provision of suchfacilities or services (or any event or circumstance which with the giving ofnotice and/or the lapse of time and/or a relevant determination would constitutesuch an event or circumstance).

 

**Adequacy of Assets**

 

6.7(a)                   The assets of the Target Company and thefacilities and services to which the Target Company has a contractual rightinclude all rights, properties, assets, facilities and services necessary or desirablefor the carrying on of the business of the Target Company in the manner inwhich it is currently carried on.

 

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(b)                                 The assets of the TargetCompany and the facilities and services to which the Target Company has acontractual right include all assets, facilities and services necessary toenable the Target Company to conduct its business after Completion in the samemanner in all material respects as it was conducted immediately prior to thetransfer of such business to the Target Company pursuant to the Reorganisation.

 

(c)                                  Save as otherwise provided inthe Connected Transactions, the Target Company does not depend in any materialrespect upon the use of assets owned by, or facilities or services provided by,any Vendor Group Company.

 

**Condition**

 

6.8                                 All the plant, machinery,systems, equipment and vehicles used by the Target Company:

 

(a)                                  are in a good state of repairand have been regularly and properly maintained in accordance with appropriatetechnical specifications, safety regulations and the terms and conditions ofany applicable agreement;

 

(b)                                 are capable of beingefficiently and properly used for the purposes for which they were acquired orare retained;

 

(c)                                  are not dangerous,inefficient, obsolete or in need of renewal or replacement.

 

**Insurances**

 

6.9(a)                   The business, undertakings, properties andother assets of the Target Company are adequately insured against such risks asare normally insured by persons carrying on similar businesses in the PRC asthose carried on by the Target Company and such insurances include all theinsurances which the Target Company is required under the terms of any leasesor any contracts in respect of any of its properties to undertake and suchinsurances are in full force and effect and there are no circumstances whichcould render any of such insurances void or voidable and all due premiums inrespect thereof have (if due) been paid.

 

(b)                                 No claim is outstanding by theTarget Company under any such policy of insurance and, to the best knowledge ofthe Vendor, there are no circumstances likely to give rise to such a claim.

 

INTELLECTUAL PROPERTYRIGHTS

 

**Registered Rights**

 

7.1(a)                   The Target Company is the sole legal ownerof all Intellectual Property Rights registered or sought to be registered inany jurisdiction which are held or beneficially owned by the Target Company.

 

(b)                                 No act has been done oromitted to be done and no event has occurred or is likely to occur which mayrender any of such Intellectual Property Rights subject to revocation,compulsory licence, cancellation or amendment or may prevent the grant orregistration of a valid Intellectual Property Right pursuant to a pendingapplication.

 

**Infringement**

 

7.2(a)                   None of the operations of the TargetCompany infringe, or are likely to infringe, any rights held by any third partyor involve the unauthorised use of confidential information disclosed to theTarget Company (or any Vendor Group Company) in circumstances which mightentitle a third party to make a claim against the Target Company.

 

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(b)                                 No claim has been made by anythird party which alleges any infringing act or process which would fall withinparagraph (a) above or which otherwise disputes the right of the TargetCompany to use any Intellectual Property Rights relating to its business andthe Vendor is not aware of any circumstances (including any act or omission toact) likely to give rise to such a claim.

 

(c)                                  There exists no actual orthreatened infringement by any third party of any Intellectual Property Rightsheld or used by the Target Company (including misuse of confidentialinformation) or any event likely to constitute such an infringement nor has theTarget Company (or any Vendor Group Company) acquiesced in the unauthorised useby any third party of any such Intellectual Property Rights.

 

**Intellectual Property Licences**

 

7.3           The Target Company is not in defaultunder any licence, sub-licence or assignment granted to it in respect of anyIntellectual Property Rights used by the Target Company.

 

**Loss of Rights**

 

7.4           No Intellectual Property Rights ownedor used by the Target Company and no licence of Intellectual Property Rights ofwhich the Target Company has the benefit will be lost, or rendered liable toany right of termination or cessation by any third party, by virtue of the acquisitionby the Purchaser of the Target Shares.

 

**Records and Software**

 

7.5(a)                   All the accounting records and systems(including but not limited to computerised accounting systems) of the TargetCompany are recorded, stored, maintained or operated or otherwise held by theTarget Company and are not wholly or partly dependent on any facilities orsystems which are not under the exclusive ownership or control of the TargetCompany.

 

(b)                                 The Target Company is licensedto use all software necessary to enable it to continue to use its computerisedrecords for the foreseeable future in the same manner in which they have beenused prior to the date of this Agreement and does not share any user rights inrespect of such software with any other person.

 

CONTRACTUAL MATTERS

 

**Material Contracts**

 

8.1           Save for the Restructuring Agreementsand the Connected Transactions, there is not outstanding any agreement orarrangement to which the Target Company is a party:

 

(a)                                  which, by virtue of theacquisition of the Target Shares by the Purchaser or other performance of theterms of this Agreement, will result in:

 

(i)                                     any other party being relieved of anyobligation or becoming entitled to exercise any right (including any right oftermination or any right of pre-emption or other option); or

 

(ii)                                  the Target Company being in default underany such agreement or arrangement or losing any benefit, right or licence whichit currently enjoys or in a liability or obligation of the Target Company beingcreated or increased;

 

(b)                                 to which any Vendor GroupCompany is a party or in which any Vendor Group Company or any connected person(as defined under the Rules Governing the Listing of Securities on The StockExchange of Hong Kong Limited) is interested or from which any such person takes

 

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benefit,whether directly or indirectly, except for a royalty-free TrademarkSub-Licensing Contract between the Target Company and the A Share Company;

 

(c)                                  entered into otherwise than byway of a bargain at arm’s length and on commercial terms;

 

(d)                                 which establishes anyguarantee, indemnity, suretyship, form of comfort or support (whether or notlegally binding) given by the Target Company in respect of the obligations orsolvency of any third party;

 

(e)                                  pursuant to which the TargetCompany has sold or otherwise disposed of any company or business incircumstances such that it remains subject to any liability (whether contingentor otherwise) which is not fully provided for in its Last Accounts;

 

(f)                                    which, upon completion by theTarget Company of its work or the performance of its other obligations underit, is likely to result in a loss for the Target Company which is not fullyprovided for in its Last Accounts or which either is not expected to make anormal profit margin or involves an abnormal degree of risk;

 

(g)                                 which establishes any jointventure, consortium, partnership or profit (or loss) sharing agreement orarrangement to which the Target Company is a party;

 

(h)                                 which involves any power ofattorney given by the Target Company or any other authority which would enableany person not employed by the Target Company to enter into any contract orcommitment on behalf of the Target Company;

 

(i)                                     which involves or is likely toinvolve (i) material expenditure by the Target Company or (ii) materialobligations or restrictions of the Target Company of an unusual or exceptionalnature or magnitude and not in the ordinary and usual course of business;

 

(j)                                     which is a currency and/orinterest rate swap agreement, asset swap, future rate or forward rateagreement, interest cap, collar and/or floor agreement or other exchange orrate protection transaction or combination thereof or any option with respectto any such transaction or any other similar transaction to which the TargetCompany is a party;

 

(k)                                  which is any other agreementor arrangement having or likely to have a material effect on the financial ortrading position or prospects of the Target Company;

 

(l)                                     which is a bid, tender,proposal or offer which, if accepted, would result in the Target Companybecoming a party to any agreement or arrangement of a kind described insub-paragraphs (a) to (k) above.

 

**Defaults**

 

8.2(a)                   The Target Company is not in default underany agreement to which it is a party and there are no circumstances likely togive rise to any such default.

 

(b)                                 No party with whom the TargetCompany has entered into any agreement or arrangement is in default under suchagreement or arrangement and there are no circumstances likely to give rise toany such default.

 

LITIGATION AND INVESTIGATIONS

 

**Litigation**

 

9.1(a)                   Except as plaintiff in the collection ofdebts arising in the ordinary course of business, the Target Company is not aplaintiff or defendant in or otherwise a party to any litigation, arbitrationor administrative proceedings which are in progress or threatened or pending byor against or concerning the Target Company or any of its assets.

 

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(b)                                 No governmental or officialinvestigation or inquiry concerning the Target Company is in progress orpending.

 

(c)                                  The Vendor Group are not awareof any circumstances which are likely to give rise to any such proceeding,investigation or inquiry as is referred to in paragraph (a) orparagraph (b).

 

DIRECTORS AND EMPLOYEES

 

**Employees**

 

10.1         The Target Company has not entered intoany arrangements regarding any future variation in any contract of employmentin respect of any of its directors and employees or any agreement imposing anobligation on the Target Company to increase the basis and/or rates ofremuneration and/or the provision of other benefits in kind to or on behalf ofany of its directors or employees at any future date.

 

**Compliance**

 

10.2         The Target Company has in relation toeach of its employees (and so far as relevant to each of its former employees)complied in all material respects with all statutes, regulations, codes ofconduct, collective agreements, terms and conditions of employment, orders andawards relevant to their conditions of service or to the relations between itand its employees (or former employees, as the case may be) or any recognisedtrade union.

 

**Incentive Schemes**

 

10.3         The Target Company does not have inexistence (or is proposing to introduce) any share incentive scheme, shareoption scheme or profit sharing scheme for all or any of its directors oremployees.

 

**Payments on Termination**

 

10.4         Except to the extent (if any) to whichprovision or allowance has been made in the Last Accounts of the TargetCompany:

 

(a)                                  no outstanding liability hasbeen incurred by the Target Company for breach of any contract of employment orfor services or for long service or redundancy payments, protective awards,compensation for dismissal or for any other liability accruing from thetermination of any contract of employment or for services, and no suchliability will be incurred by the Target Company as a result of theReorganisation or the acquisition of the Target Shares by the Purchaser orother performance of the terms of this Agreement and the RestructuringAgreements;

 

(b)                                 no gratuitous payment has beenmade or benefit given (or promised to be made or given) by the Target Companyin connection with the actual or proposed termination or suspension ofemployment, or variation of any contract of employment, of any present orformer director or employee of the Target Company.

 

INSOLVENCY ETC.

 

11.1         No order has been made, petitionpresented or meeting convened for the purpose of considering a resolution forthe winding up of any Target Group Company or for the appointment of anyprovisional liquidator.  No petition hasbeen presented for an administration order to be made in relation to any TargetGroup Company, and no receiver (including any administrative receiver) has beenappointed in respect of the whole or any part of any of the property, assetsand/or undertaking of any Target Group Company.

 

11.2         No composition in satisfaction of thedebts of any Target Group Company, or scheme of

 

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arrangement of itsaffairs, or compromise or arrangement between it and its creditors and/ormembers or any class of its creditors and/or members, has been proposed,sanctioned or approved.

 

11.3         No distress, distraint, charging order,garnishee order, execution or other process has been levied or applied for inrespect of the whole or any part of any of the property, assets and/or undertakingof any Target Group Company.

 

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Part B: Tax and PropertyWarranties

 

TAX

 

1.1           The Target Company has a taxregistration certificate which is in full force and effect.

 

1.2           The Target Company has complied inall material respects with all statutory provisions, rules, regulations, ordersand directions concerning profits or corporate tax, value-added tax, businesstax and stamp duty in their respective jurisdictions.

 

1.3           No tax authority has agreed tooperate any special arrangement (being an arrangement which is not based on auniform application of the relevant legislation whether expressly provided forin the relevant legislation or operated by way of extra statutory concession orotherwise) in relation to the Target Company.

 

1.4           The Target Company has duly, withinany appropriate time limits, made all returns, given all notices and suppliedall information required to be supplied to all relevant tax authorities.  All such information was when provided andremain complete and accurate and all such returns and notices were whenprovided and remain complete and accurate and were made on a proper basis.

 

1.5           The Target Company has not receivedany notice or allegation from any tax authorities that it has not complied withany relevant legal requirement relating to registration or notification fortaxation purposes and the Target Company is not involved in any dispute orinvestigation with any tax authority and there are no facts or matters which itreasonably believes will cause any such dispute or investigation or anyliability for taxation (present or future).

 

1.6           The Target Company:

 

(a)                                  has paid or accounted for alltaxation (if any) due to be paid or accounted for by it before the date of thisAgreement;

 

(b)                                 is not under any liability topay any penalty or interest in connection with any taxation referred to inparagraph (a);

 

(c)                                  has made all deductions andwithholdings in respect or on account of taxation which it is required orentitled by any relevant legislation to make from any payments made by itincluding, without limitation, interest annuities or other annual payments,royalties, rent, remuneration payable to employees or sub-contractors orpayments to a non-resident and where appropriate the Target Company hasaccounted in full to the relevant fiscal authority for any taxation so deductedor withheld; and

 

(d)                                 taken all necessary steps toobtain any repayment of or relief from taxation available to it.

 

1.7           All sums due and payable to anytaxation authority in respect of emoluments paid and benefits provided to theemployees of the Target Company at the date of this Agreement have been paidand all such deductions and retentions as are required under the applicablelaws have been made.

 

1.8           All remuneration, compensationpayments, payments on retirement or removal from an office or employment andother sums paid or payable to employees or officers or former employees orofficers of the Target Company and all interest, annuities, royalties, rent andother annual payments paid or payable by the Target Company (whether before orafter the date hereof) pursuant to any obligation in existence at the datehereof are and will (on the basis of the taxation legislation in force at thedate hereof) be deductible for incomes tax purposes either in computing theprofits of the Target Company or as a charge on the income of the TargetCompany.

 

1.9           The Target Company has made or causedto be made the returns which ought to be made by or in respect of the TargetCompany for any taxation purposes and no returns are the subject of any disputewith any tax authority.

 

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PROPERTY

 

2.1           The Properties and the LeasedProperties are in the possession and under the control of the Target Company.The Target Company has valid title to, and leasehold interests in, all of theProperties, free and clear of all security interests except for those which donot materially affect the value of such property and do not interfere with theuse made and proposed to be made of such property by the Target Company.

 

2.2           Each Leased Property held under leaseby the Target Company is held by it under valid and enforceable leases in fullforce and effect with such exceptions as are not material and do not interferewith the use made and proposed to be made of such property and buildings by theTarget Company and no material default (or event which with notice or lapse oftime, or both, would constitute such a default) by the Target Company hasoccurred and is continuing under any of such leases.

 

2.3           The Target Company does not own, operate,manage or have any other right or interest, directly or indirectly, in anyother material real property of any kind save for those reflected in the LastAccounts or other than as would not, individually or in the aggregate, have amaterial adverse effect on the combined financial position, shareholder’sequity or results of operations of the Target Company taken as a whole.

 

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##### **APPENDIX 1**

#####  

###### **ProspectiveCellular Connected Transactions of the Company**

######  

1.                                       Transfer Agreement dated 20 November 2003between the A Share Company and the Target Company regarding the transfer ofrights and obligations under a CDMA network capacity lease agreement.

 

2.                                       Transfer Agreement dated 20 November 2003between the A Share Company and the Target Company regarding the transfer ofrights and obligations under a comprehensive services agreement.

 

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##### **APPENDIX 2**

#####  

###### **ProspectiveCellular Connected Transactions of the A Share Company**

######  

1.                                       CDMA Network Capacity LeaseAgreement dated 20 November 2003 among Unicom New Horizon TelecommunicationsCompany Limited, Unicom Group and the A Share Company.

 

2.                                       Comprehensive ServicesAgreement dated 20 November 2003 between Unicom Group and the A Share Company.

 

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##### **APPENDIX 3**

#####  

###### **TheRestructuring Agreements**

######  

1.                                       Reorganisation Agreement dated4 November 2003 pursuant to which Unicom New World TelecommunicationsCorporation Limited acquired from Unicom Group its cellular business assets andoperations in the Territory.

 

2.                                       Restructuring Agreement dated14 November 2003 pursuant to which (a) Unicom Centenarian (BVI) Limitedacquired from China United Telecommunications Corporation the entire equityinterests in Unicom New World Telecommunications Corporation Limited; and (b)Unicom New World (BVI) Limited acquired from Unicom Centenarian (BVI) Limitedthe entire equity interests in Unicom New World Telecommunications CorporationLimited.

 

3.                                       Sale and Purchase Agreementdated 20 November 2003 pursuant to which China Unicom (BVI) Limited acquiredfrom Unicom Centenarian (BVI) Limited the entire issued share capital of UnicomNew World (BVI) Limited.

 

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##### **SIGNATURE PAGE**

#####  

 
| **SIGNED**by                    | /s/  Ye Fengping |   |   |
|---------------------------------|------------------|--------|--------|
| for  and on behalf of           |             |
| **CHINA UNICOM (BVI)  LIMITED** |             |
|                            |             |
|                            |             |
|                            |             |
| **SIGNED**by                    | /s/  Shi Cuiming |   |   |
| for  and on behalf of           |             |
| **CHINA UNICOM LIMITED**        |             |

 

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