Document:

PCCW Limited: Exhibit 4(dd)- Prepared by TNT Filings Inc.

EXHIBIT 4(dd)

 

PCCW-HKT CAPITAL N0.3 LIMITED 

 

US$500,000,000 5.25% GUARANTEED NOTES DUE 2015 

 

Guaranteed by 

PCCW-HKT TELEPHONE LIMITED 

 

PURCHASE AGREEMENT 

 

July 13, 2005 

 

July 13, 2005 

The Hongkong and Shanghai Banking Corporation Limited 

Level 18, HSBC Main Building 

1 Queen's Road, 

Central Hong Kong 

Ladies and Gentlemen: 

PCCW-HKT Capital No.3 Limited, a company with limited
liability organized under the laws of the British Virgin Islands (the "Issuer"),
proposes to issue and sell to The Hongkong and Shanghai Banking Corporation
Limited (the "Manager") US$500,000,000 principal amount of its 5,25%
Guaranteed Notes due 2015 (the "Notes"). The Notes will be
unconditionally guaranteed as to payment of principal, premium (if any),
interest and additional amounts by PCCW-HKT Telephone Limited, a company with
limited liability organized under the laws of Hong Kong (the "Guarantor").
The Guarantor's guarantee included in the Indenture (defined below) and noted on
the Notes is hereafter referred to as the "Guarantee". The Notes,
including the Guarantee, are hereinafter referred to as the "Securities". The
Securities will be issued pursuant to the provisions of an Indenture to be dated
as of July 20, 2005 (the "Indenture") among the Issuer, the Guarantor and
HSBC Bank USA, National Association, as Trustee (the "Trustee"), in the
form attached as Exhibit F, as modified to reflect the timing of the transaction
and pricing information. 

The Securities will be offered without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
to qualified institutional buyers (each a "QIB") in compliance with the
exemption from registration provided by Rule 144A under the Securities Act and
in offshore transactions to non-U.S, persons in reliance on Regulation S under
the Securities Act ("Regulation S"). 

In connection with the sale of the Securities, the
Issuer and the Guarantor have prepared a preliminary offering circular dated
July 13, 2005 (the "Preliminary Circular"), and have prepared a final
offering circular dated the date hereof (the "Final Circular" and, with
the Preliminary Circular, each a "Circular") for delivery to the
prospective purchasers of the Securities. 

1. 
    Representations and Warranties. 
Each of the Issuer and the Guarantor
represents and warrants to, and agrees with, you that: 

(a)     None of
the Preliminary Circular or the Final Circular in the form used by the Manager
to confirm sales, in each case as of its respective date and, in the case of the
Final Circular, on the Closing Date (as defined in Section 4), contained or will
contain any untrue statement of a material fact or omitted or will omit to state
a material fact necessary to 

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make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in any Circular based upon information relating to the
Manager furnished to either of the Issuer or the Guarantor in writing by the
Manager expressly for use therein. 

(b)
    The
Guarantor has been duly incorporated and is validly existing as a corporation
under the laws of Hong Kong, has the corporate power and authority to own its
property and to conduct such business as described in each Circular and is duly
qualified to transact such business and is in good standing in each jurisdiction
(to the extent such concept is applicable in such jurisdiction) in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or (if
applicable) be in good standing would not have a material adverse effect on the
Guarantor and the Issuer, taken as a whole. 

(c)
    The Issuer
has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the British Virgin Islands, has the corporate power
and authority to own its property and to conduct such business as described in
each Circular and is duly qualified to transact such business and is in good
standing in each jurisdiction (to the extent such concept is applicable in such
jurisdiction) in which the conduct of its business or its ownership or leasing
of property requires such qualification; for so long as the Notes are
outstanding, the Issuer will conduct no business, except relating to the
offering, sale or issuance of indebtedness and the lending of the proceeds
thereof to the Guarantor and any other activities in connection therewith. 

(d)
    All of the
issued shares in the capital of the Issuer have been duly authorized and validly
issued and are fully paid and non-assessable, are owned directly by the
Guarantor, free and clear of all liens, encumbrances, equities or claims except
for any liens, encumbrances, equities or claims that would not have a material
adverse effect on the Guarantor and the Issuer as a whole, and none of such
shares was issued in violation of any pre-emptive rights; and the Issuer has the
share capitalization as set forth in the Final Circular. 

(e)
    There are
no subsidiaries of the Guarantor other than the Issuer, PCCW-HKT Capital
Limited, PCCW-HKT Capital No.2 Limited, PCCW-HKT Capital No.4 Limited, and PCCW
IMS Limited. 

(f)
    This
Agreement has been duly authorized, executed and delivered by the Issuer and the
Guarantor. 

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(g)     The
Notes have been duly authorized by the Issuer and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Manager in accordance with the terms of this Agreement,
will be valid and binding obligations of the Issuer, enforceable in accordance
with their terms, subject to the effects of applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and general principles of
equity, and the holders thereof will be entitled to the benefits conferred
thereunder and under the Indenture. 

(h)     The
Guarantee noted on the Securities pursuant to the Indenture has been duly
authorized by the Guarantor and, when the Guarantee is executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Manager in accordance with the terms of this Agreement,
the Guarantee will be a valid and binding obligation of the Guarantor,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and general
principles of equity. 

(i)     The
Indenture has been duly authorized and, when executed and delivered by each of
the Issuer and the Guarantor, will be a valid and binding agreement of each of
the Issuer and the Guarantor, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity; and the Securities and the Indenture
will conform in all material respects to the descriptions thereof in each
Circular. 

(j)     The
execution and delivery by the Issuer of, and the performance by the Issuer of
its obligations under, this Agreement, the Indenture and the Notes will not
contravene or result in a breach of any of the terms or provisions of, or
constitute a default under, (i) any provision of applicable law or the
Memorandum and Articles of Association of the Issuer or (ii) any indenture,
mortgage, deed of trust, loan agreement or any agreement or other instrument
binding upon the Issuer or to which any of its property or assets is subject or
(iii) any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Issuer, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is required for
the performance by the Issuer of its obligations under this Agreement, the
Indenture or the Notes, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of the
Notes. 

(k)     The
execution and delivery by the Guarantor of, and the performance by the Guarantor
of its obligations under, this Agreement, the Indenture and the Guarantee will
not contravene or result in a breach of any of the terms or provisions of, or
constitute a default under, (i) any provision of applicable law or the
certificate of incorporation or by-laws 

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of the Guarantor or (ii) any indenture,
mortgage, deed of trust, loan agreement or any agreement or other instrument
binding upon the Guarantor or the Issuer, or to which any of its property or
assets is subject or (iii) any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Guarantor or any subsidiary,
except, in the case of clauses (ii) and (iii), where such contravention, breach
or default would neither have a materia! adverse effect on the Guarantor and the
Issuer, taken as a whole, nor have a material adverse effect on the power or
ability of the Guarantor or the Issuer to perform its respective obligations
under this Agreement, the Indenture, the Guarantee or the Notes or to consummate
the transactions contemplated by the Final Circular; and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency having jurisdiction over the Guarantor is required for the performance by
the Guarantor of its obligations under this Agreement, the Indenture or the
Guarantee, except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Securities. 

(l)    
There has not occurred any material adverse change, or any development involving
a prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Guarantor and the Issuer,
taken as a whole, or of the Issuer from that set forth in the Final Circular.

(m)    
There are no legal or governmental proceedings pending or to the knowledge of
the Guarantor threatened to which the Guarantor or the Issuer is a party or to
which any of the properties of the Guarantor or the Issuer is subject other than
proceedings accurately described in all material respects in each Circular and
proceedings that would not have a material adverse effect on the Guarantor and
the Issuer, taken as a whole, or on the power or ability of the Guarantor or the
Issuer to perform its respective obligations under this Agreement, the
Indenture, the Guarantee or the Notes or to consummate the transactions
contemplated by the Final Circular. 

(n)    
The Guarantor and the Issuer (i) are in compliance with any and all applicable
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (iii) are in compliance with all
terms and conditions of any such permit, license or approval, except (x) for
such noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals as are accurately described in all
material respects in the Final Circular or (y) where such noncompliance with 

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Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Guarantor and the Issuer, taken
as a whole. 

(o)     Except
as accurately described in all material respects in the Final Circular, there
are no costs or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Guarantor and the Issuer, taken as a
whole. 

(p)     Neither
the Issuer nor the Guarantor is and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Final Circular, neither will be required to register as an "investment
company" under the Investment Company Act of 1940, as amended (the 
"Investment Company Act").

(q)     None of
the Issuer, the Guarantor, any affiliate (as defined in Rule 501(b) of
Regulation D, an "Affiliate") of the Issuer or the Guarantor or any
person acting on its or their behalf (other than the Manager) has directly, or
through any agent, (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the Securities
Act) which is or will be integrated with the sale of the Securities in a manner
that would require the registration under the Securities Act of the Securities
or (ii) offered, solicited offers to buy or sold the Securities by any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act. 

(r)     None of
the Issuer, the Guarantor, any of its or their Affiliates or any person acting
on its or their behalf (other than the Manager) has engaged or will engage in
any directed selling efforts (within the meaning of Regulation S) with respect
to the Securities, and the Issuer, the Guarantor, any of its or their Affiliates
or any person acting on its or their behalf (other than the Manager) have
complied and will comply with the offering restrictions (within the meaning of
Regulation S) in connection with the offering of the Securities contemplated by
this Agreement and the Final Circular. 

(s)    
It is not necessary in connection with the offer, sale and delivery of the
Securities to the Manager in the manner contemplated by this Agreement to
register the Securities under the Securities Act or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended. 

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(t)     The
Securities satisfy the requirements set forth in Rule 144A(d)(3) under the
Securities Act. 

(u)     The
choice of New York law as the governing law of each of this Agreement, the
Indenture, the Notes and the Guarantee is a valid choice of law and will be
recognized and given effect to by each of the courts of Hong Kong and the courts
of the British Virgin Islands; and the submission by each of the Issuer and the
Guarantor to the non-exclusive jurisdiction of the New York courts contained in
this Agreement and the Indenture and the appointment by each of the Issuer and
the Guarantor of Corporation Service Company as its agent for service of process
in connection therewith are, in each case, valid and binding on it under the
laws of its jurisdiction of incorporation. 

(v)     No
consents, authorizations, approvals, orders, certificates or permits (each, a "consent")
of and from, and no declarations or filings with, any local or other
governmental authorities in Hong Kong or any courts and other tribunals in Hong
Kong are required for the Guarantor to own, lease, licence and use its Hong Kong
properties and assets and to conduct its business in the manner described in
each Circular, except (i) for the Fixed Carrier Licence issued on January 14,
2005 by the Telecommunications Authority pursuant to the Telecommunications
Ordinance (Cap. 106 of the Laws of Hong Kong) and certain other licences that
the Guarantor has obtained (each of which licence is currently in full force and
effect and filings required to be made pursuant to the terms of such licence,
all of which have been filed by the Guarantor), and (ii) to the extent that the
failure to have or obtain any such consent or make any such declaration or
filing would not singly or in the aggregate have a material adverse effect on
the Guarantor and the Issuer, taken as a whole. 

(w)     Each of
the Issuer and the Guarantor has full power, authority and legal right under the
laws of its jurisdiction of incorporation to enter into and perform its
obligations of indemnification and contribution set forth in Section 8 of this
Agreement; none of the contribution provisions nor the indemnification
provisions set forth in such Section 8 contravene the public policy or laws of
its jurisdiction of incorporation. 

(x)     The
Guarantor and its obligations under this Agreement, the Indenture and the
Guarantee are subject to commercial law and to suit in Hong Kong and neither the
Guarantor nor any of its properties, assets or revenues has any right of
immunity, on the grounds of sovereignty or otherwise, from any legal action,
suit or proceeding, from the giving of any relief in any court, from set-off or
counterclaim, from the jurisdiction of any court, from service of process,
attachment upon or prior to judgment, or attachment in aid of execution of
judgment, or from 

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execution of a judgment, or other legal process or
proceeding for the giving of any relief or for the enforcement of judgment, in
Hong Kong, with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Agreement, the Indenture or
the Guarantee. 

(y)     The
Issuer and its obligations under this Agreement, the Indenture and the Notes are
subject to commercial law and to suit in the British Virgin Islands and neither
the Issuer nor any of its properties, assets or revenues has any right of
immunity, on the grounds of sovereignty or otherwise, from any legal action,
suit or proceeding, from the giving of any relief in any court, from set-off or
counterclaim, from the jurisdiction of any court, from service of process,
attachment upon or prior to judgment, or attachment in aid of execution of
judgment, or from execution of a judgment, or other legal process or proceeding
for the giving of any relief or for the enforcement of judgment, in the British
Virgin Islands, with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Agreement, the Indenture or
the Notes. 

(z)     Each of
this Agreement, the Indenture, and the Notes and the Guarantee is in proper
legal form under the laws of the British Virgin Islands and Hong Kong, as the
case may be, and to ensure the legality, validity and admissibility into
evidence in the British Virgin Islands and Hong Kong, as the case may be, of
each of this Agreement, the Indenture, the Notes and the Guarantee, it is not
necessary that this Agreement, the Indenture, the Notes or the Guarantee or any
other document or instrument be filed or recorded with any court or other
authority in the British Virgin Islands and Hong Kong, as the case may be. 

(aa)    
Although there is no statutory enforcement in the British Virgin Islands of a
judgment obtained in any competent court of the State of New York or in a
federal court of the United States of America in New York (any such court, a
"Competent Court"), 
the courts of the British
Virgin Islands will recognize and enforce a judgment of a Competent Court
obtained against the Issuer arising out of or relating to this Agreement, the
Indenture or the Notes, based on the principle that a judgment of a competent
foreign court imposes upon the judgment debtor an obligation to pay the sum for
which judgment has been given provided such judgment is final, for a liquidated
sum, not in respect of taxes or a fine or penalty, and was not obtained in a
manner and is not of a kind the enforcement of which is contrary to the public
policy of the British Virgin Islands. A British Virgin Islands court may stay
proceedings if concurrent proceedings are being brought elsewhere. 

(bb)     A final
and conclusive judgment on the merits properly obtained against the Guarantor in
a Competent Court for a fixed sum of 

8 

money in respect of any legal suit or proceeding
arising out of or relating to this Agreement, the Indenture or the Guarantee and
which could be enforced by execution against the Guarantor in the jurisdiction
of such Competent Court and has not been stayed or satisfied in whole may be
sued on in Hong Kong as a debt due from the Guarantor if: (i) the Guarantor was,
at the time such proceeding was instituted, resident in the jurisdiction in
which such proceeding has been commenced or had submitted to the jurisdiction of
such Competent Court, (ii) that judgment was not obtained by fraud; (iii) the
enforcement of that judgment would not be contrary to public policy of Hong
Kong; (iv) that judgment had not been obtained in contravention of the
principles of natural justice; (v) the judgment of the relevant court does not
include the payment of any tax, fine or penalty; and (vi) the Guarantor either
was duly served with the process of the Competent Court or appeared before the
Competent Court. 

(cc)     Except
as disclosed in each of the Preliminary Circular and the Final Circular under
the caption "Certain Tax Considerations," no taxes, imposts or duties of any
nature (including, without limitation, stamp or other issuance or transfer taxes
or duties and capital gains, income, withholding or other taxes) are payable by
or on behalf of the Guarantor or the Issuer, and no stamp or withholding taxes,
imposts or duties axe payable on behalf of the Manager, to Hong Kong or to the
British Virgin Islands or any political subdivision or taxing authority thereof
or therein in connection with (a) the execution of this Agreement, the
Indenture, the Guarantee, the Notes, or the Intercompany Loan to be dated around
July 13, 2005 (the "Intercompany
Loan"); or (b) the
issuance or sale of the Notes to the Manager in the manner contemplated in this
Agreement. 

(dd)     Except
as disclosed in each of the Preliminary Circular and the Final Circular under
the caption "Certain Tax Considerations," to the knowledge of the Issuer and the
Guarantor, based on consultation with their counsel, (i) there currently are not
any proposed laws (or regulations or rulings) of the British Virgin Islands or
Hong Kong that would result in the imposition of withholding tax on any payments
on the Notes or the Intercompany Loan and (ii) although the People's Republic of
China currently imposes a withholding tax on interest, the People's Republic of
China's tax laws are not applicable in Hong Kong. 

(ee)     Each of
the balance sheets and profit and loss accounts and cash flow statements of the
Guarantor included in each Circular present fairly the financial position of the
Guarantor as of the dates indicated therein and the results of operations and
cash flows for the periods specified therein, and (i) such financial statements
have been prepared in accordance with accounting principles generally accepted
in Hong Kong and (ii) KPMG, which certified each of the audited financial
statements included in each Circular, are independent public accountants with
respect 

9 

to the Guarantor pursuant to the rules promulgated by
the Hong Kong Society of Accountants. 

(ff) Each of the Issuer and the
Guarantor is a "foreign issuer" as such term is defined by Regulation S. 

2.     
Agreement to Sell and Purchase. 
(a) Each of the Issuer and the
Guarantor hereby agrees to sell to the Manager, and the Manager, upon the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase from the Issuer and the
Guarantor the Securities at a purchase price of 98,742% of the principal amount
thereof (the "Purchase Price")
plus accrued interest, if any, to the Closing Date. 

(b)    
Each of the Issuer and the
Guarantor hereby agrees that it will not, during the period beginning on the
date hereof and continuing to and including the Closing Date, offer, sell,
contract to sell or otherwise dispose of any debt of the Issuer or the Guarantor
or warrants to purchase debt of the Issuer or the Guarantor substantially
similar to the Securities (other than the sale of the Securities under this
Agreement). 

(c)    
None of the Issuer, the
Guarantor or any of its or their Affiliates will sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the Securities Act) which could be integrated with the sale of the Securities in
a manner which would require the registration of the Securities under the
Securities Act. 

3. 
    Terms of Offering. 
You have advised the Issuer and the
Guarantor that the Manager will make an offering of the Securities purchased by
it hereunder on the terms to be set forth in the Final Circular, as soon as
practicable after this Agreement is entered into as in your judgment is
advisable. 

4. 
    Payment and Delivery. 
Payment for the Securities shall be
made to the Issuer in Federal or other funds immediately available in New York
City against delivery of such Securities for the account of the Manager at 9:00
a.m., New York City time, on July 20, 2005, or at such other time on the same or
such other date as shall be mutually agreed. The time and date of such payment
are hereinafter referred to as the "Closing Date." 

Payment for the Securities shall be made against
delivery, (i) with respect to Securities to be resold by the Manager, of one or
more global securities (the "Rule
144A Global Securities")
to the Trustee as custodian for Cede & Co., as nominee of The Depository Trust
Company ("DTC"),
for the account of the Manager and (ii) with respect to Securities to be resold
outside the United States to foreign purchasers of one or more global securities
(the "Regulation S Securities" and, together with the Rule 144A Global
Securities, the "Global Securities") to the Trustee as custodian for DTC,
on behalf of Euroclear Bank 

10 

S.A./N.V., as operator of the Euroclear System ("Euroclear")
and Clearstream Banking SA ("Clearstream")
for the account of the Manager, The Securities shall be delivered with any
transfer taxes payable in connection with the transfer of the Securities to the
Manager duly paid. 

5. 
    Conditions to the Manager's Obligations. 
The obligations of the Manager to
purchase and pay for the Securities on the Closing Date are subject to the
performance by the Issuer and the Guarantor of each of their respective
obligations hereunder and to the following conditions: 

(a)    
Subsequent to the execution and delivery of this Agreement and prior to the
Closing Date: 

(i)     the
Notes shall have been rated "BBB" by Standard & Poor's Ratings Service, "Baa2"
by Moody's Investors Service and "BBB+" by Fitch Ratings; 

(ii)    there shall
not have occurred any downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded
the Issuer or the Guarantor or any of the Notes or any securities of either the
Issuer or the Guarantor or in the rating outlook for either of the Issuer or the
Guarantor by any "nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act
(other than notice given by Fitch Ratings and disclosed to the Manager prior to
the date hereof), and 

(iii)    there shall
not have occurred any change, or any development involving a prospective change,
in the condition, financial or otherwise, or in the earnings, business or
operations of the Guarantor and the Issuer, taken as a whole, from that set
forth in the Final Circular that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the Securities on the
terms and in the manner contemplated in the Final Circular. 

(b)     The
Manager shall have received from each of the Issuer and the Guarantor on the
Closing Date a certificate, dated the Closing Date and signed by an executive
officer thereof, to the effect set forth in Sections 5(a)(i) and (ii) and to the
effect that its representations and warranties in this Agreement are true and
correct as of the Closing Date and that it has complied in all material respects
with all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date. 

11 

The officers signing and delivering such certificates
may rely upon the best of his or her knowledge as to proceedings threatened. 

(c)
    The Manager
shall have received on the Closing Date an opinion of Harney Westwood & Riegels,
British Virgin Islands counsel for the Issuer, dated the Closing Date, to the
effect set forth in Exhibit A. Such opinion shall be rendered to the Manager at
the request of the Issuer and shall so state therein. 

(d)
    The Manager
shall have received on the Closing Date an opinion of Davis Polk 
& 
Wardwell, U.S. counsel for the Issuer
and the Guarantor, dated the Closing Date, to the effect set forth in Exhibit B.
Such opinion shall be rendered to the Manager at the request of the Guarantor
and shall so state therein. 

(e)
    The Manager
shall have received on the Closing Date an opinion of Simmons & Simmons, Hong
Kong counsel for the Issuer and the Guarantor, dated the Closing Date, to the
effect set forth in Exhibit C. Such opinion shall be rendered to the Manager at
the request of the Guarantor and shall so state therein. 

(f)    
The Manager shall have
received on the Closing Date an opinion of Allen & Overy, U.S. counsel for the
Manager, dated the Closing Date, to the effect set forth in Exhibit D. 

(g)
    The Manager
shall have received on each of the date hereof and the Closing Date a letter,
dated the date hereof or the Closing Date, as the case may be, from KPMG,
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in each Circular substantially in the form attached hereto as Exhibit E;
provided that the letter delivered on the Closing Date shall use a "cutoff date"
not earlier than the date hereof. 

(h)    
DTC shall have approved the form of the Securities and each of DTC, the Issuer
and the Guarantor shall have executed a letter of representations with respect
to the Securities and such letter shall be in full force and effect. 

(i)      
The Indenture shall have been duly executed and delivered and shall be in full
force and effect, and true and complete copies thereof shall have been delivered
to the Manager. 

(j)      
The Securities shall have been duly executed and delivered and shall be in full
force and effect, and true and complete copies thereof shall have been delivered
to the Manager. 

12 

(k)    
On or prior to the Closing Date, the Guarantor and the Issuer shall have
furnished to each of you such further certificates and documents as you may
reasonably request. 

6.     Covenants of
the Issuer and the Guarantor. In further consideration of the agreements of
the Manager contained in this Agreement, the Issuer and the Guarantor, jointly
and severally, covenant with the Manager as follows: 

(a)     To
furnish to you in New York City, without charge, promptly after the date hereof
and during the period mentioned in Section 6(c), as many copies of the Final
Circular and any supplements and amendments thereto as you may reasonably
request. 

(b)     Before
amending or supplementing any Circular, to furnish to you a copy of each such
proposed amendment or supplement and not to use any such proposed amendment or
supplement to which you reasonably object. 

(c)     If,
during such period after the date hereof and prior to the date on which all of
the Securities shall have been sold by the Manager, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Final Circular in order to make the statements therein, in the light of the
circumstances when the Final Circular is delivered to a purchaser, not
misleading, or if, in the reasonable opinion of counsel for the Manager, it is
necessary to amend or supplement the Final Circular to comply with applicable
law, forthwith to prepare and furnish, at its own expense, to the Manager,
either amendments or supplements to the Final Circular so that the statements in
the Final Circular as so amended or supplemented will not, in the light of the
circumstances when the Final Circular is delivered to a purchaser, be misleading
or so that the Final Circular, as amended or supplemented, will comply with
applicable law. 

(d)    
To endeavor to qualify the Securities for offer and sale under the securities or
Blue Sky laws of such jurisdictions as you shall reasonably request. 

(e)     Whether
or not the transactions contemplated in this Agreement are consummated or this
Agreement is terminated, to pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including: (i) all costs
and expenses related to the establishment of the Issuer (including without
limitation the fees of the initial directors and administrator); (ii) the fees,
disbursements and expenses of the Issuer's and the Guarantor's counsel and the
Issuer's and the Guarantor's accountants in connection with the issuance and
sale of the Securities and all other fees or expenses in connection with the
preparation of each Circular and all amendments and supplements thereto, 

13 

including all printing costs associated therewith,
and the delivering of copies thereof to the Manager, in the quantities herein
above specified; (iii) all costs and expenses related to the transfer and
delivery of the Securities to the Manager, including any transfer or other
similar taxes payable thereon; (iv) the cost of printing or producing any Blue
Sky or legal investment circular in connection with the offer and sale of the
Securities under state securities laws and all expenses in connection with the
qualification of the Securities for offer and sale under state securities laws
as provided in Section 6(d) hereof, including filing fees but excluding the fees
and disbursements of counsel for the Manager in connection with such
qualification and in connection with the Blue Sky or legal investment circular;
(v) any fees charged by rating agencies for the rating of the Securities; (vi)
the fees and expenses, if any, incurred in connection with the application for
the listing and quotation of the Securities on the Singapore Exchange Securities
Trading Limited (the "SGX-ST"), including any fees or expenses of any
listing agents; (vii) the costs and charges of the Trustee (including the fees,
disbursements and expenses of the Trustee's counsel) and any transfer agent,
registrar or depositary; (viii) the cost of the preparation, issuance and
delivery of the Securities; (ix) any stamp or value added taxes payable in
connection with the transaction contemplated hereby; and (x) all other cost and
expenses incident to the performance of the obligations of the Issuer and the
Guarantor hereunder for which provision is not otherwise made in this Section.
It is understood, however, that except as provided in this Section, Section 8,
and the last paragraph of Section 10, the Manager will pay all of its costs and
expenses, transfer taxes payable on resale of any of the Securities by them and
any advertising expenses connected with any offers it may make. For the
avoidance of doubt, whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, except as set forth
in the second paragraph of Section 10, the Manager will pay all of its own costs
and expenses (including the fees, disbursements and expenses of the Manager's
counsel) incurred in connection with the transactions contemplated in this
Agreement. 

(f)    
None of the Issuer, the
Guarantor or any Affiliate will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Securities
Act) which could be integrated with the sale of the Securities in a manner which
would require the registration under the Securities Act of the Securities. 

(g)
    Not to
solicit any offer to buy or offer or sell the Securities by means of any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act. 

14 

(h)     None of
the Issuer, the Guarantor, any of its or their Affiliates or any person acting
on its or their behalf (other than the Manager) will engage in any directed
selling efforts (as that term is defined in Regulation S) with respect to the
Securities, and the Issuer, the Guarantor, any of its or their Affiliates and
each person acting on its or their behalf (other than the Manager) will comply
with the offering restrictions (within the meaning of Regulation S) in
connection with the offering of the Securities contemplated by this Agreement
and the Final Circular. 

(i)     During
the period of two years after the Closing Date, each of the Issuer and the
Guarantor will not, and will not permit any of its Affiliates (as defined in
Rule 144 under the Securities Act) to resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them, 

(j)     To use
its best efforts to have the Securities (i) accepted for settlement through each
of DTC, Euroclear and Clearstream, and each of the Issuer and the Guarantor
confirms that it has authorized the Manager to take steps necessary for that
purpose, and (ii) accepted for listing on the SGX-ST. 

(k)     To
notify you promptly of any change affecting any of its representations or
warranties, or its respective agreements and indemnities herein at any time
prior to payment being made to or for the account of the Guarantor or the Issuer
on the Closing Date. 

(1)     Neither
the Issuer nor the Guarantor will become an open-end investment company, unit
investment trust or face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company Act. 

7. 
    Offering of Securities; Restrictions on Transfer. 
(a) The Manager represents and
warrants to the Issuer and the Guarantor that the Manager is a QIB. The Manager
agrees with, and undertakes to, the Issuer and the Guarantor that (i) it will
not solicit offers for, or offer or sell, Securities by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act; and (ii) as part of the
Manager's distribution, it will solicit offers for Securities only from, and
will offer Securities only to, persons that it reasonably believes to be (A) in
the case of offers inside the United States, QIBs and (B) in the case of offers
outside the United States, to persons other than U.S. persons, as that term is
defined in Regulation S ("foreign purchasers," which term shall include dealers
or other professional fiduciaries in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate or trust)) in reliance
upon Regulation S under the Securities Act that, in each case, in purchasing
such Securities are deemed to have 

15 

represented and agreed as provided in the Final
Circular under the caption "Transfer Restrictions". 

(b)    
The Manager agrees with, and represents, warrants and undertakes to, the Issuer
and the Guarantor with respect to offers and sales outside the United States
that: 

(i)     the
Manager understands and acknowledges that no action has been or will be taken in
any jurisdiction by the Issuer or the Guarantor that would permit a public
offering of the Securities, or possession or distribution of any Circular or any
other offering or publicity material relating to the Securities, in any country
or jurisdiction where action for that purpose is required; 

(ii)     the
Manager will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Securities or has
in its possession or distributes any Circular or any such other material, in all
cases at its own expense; 

(iii)     the
Securities have not been registered under the Securities Act and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except in accordance with Rule 144A or Regulation S under the
Securities Act or pursuant to another exemption from the registration
requirements of the Securities Act; 

(iv)     the
Manager has offered the Securities and will offer and sell the Securities (A) as
part of its distribution at any time and (B) otherwise until 40 days after the
later of the commencement of the offering and the Closing Date only in
accordance with Rule 903 of Regulation S or as otherwise permitted in Section
7(a); accordingly, neither the Manager, its Affiliates nor any persons acting on
its or their behalf have engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to the Securities; 

(v)     the
Manager has not entered and will not enter into any contractual arrangement with
respect to the distribution or delivery of the Securities, except with our
affiliates or with the prior written consent of the Guarantor; 

(vi)     in
relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a "Relevant Member State"),
with effect from and including the date on which the Prospectus Directive is 

16 

implemented in that Relevant Member State (the "Relevant
Implementation Date") the Manager has not made and will not make an offer of
Securities to the public in that Relevant Member State prior to the publication
of a prospectus in relation to the Securities which has been approved by the
competent authority in that Relevant Member State or, where appropriate,
approved in another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with the Prospectus
Directive, except that it may, with effect from and including the Relevant
Implementation Date, make an offer of Securities to the public in that Relevant
Member State at any time: (A) to legal entities which are authorized or
regulated to operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in securities; (B) to any
legal entity which has two or more of (x) an average of at least 250 employees
during the last financial year; (y) a total balance sheet of more than
€43,000,000 and (z) an annual net turnover of more than €50,000,000, as shown in
its last annual or consolidated accounts; or (C) in any other circumstances
which do not require the publication by the Issuer of a prospectus pursuant to
Article 3 of the Prospectus Directive. For the purposes of this paragraph, the
expression an "offer of Securities to the public" in relation to any Securities
in any Relevant Member State means the communication in any form and by any
means of sufficient information on the terms of the offer and the Securities to
be offered so as to enable an investor to decide to purchase or subscribe the
Securities, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State and the expression
Prospectus Directive means Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State; 

(vii)    the Manager
(A) has only communicated or caused to be communicated and will only communicate
or cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial Services and Markets
Act 2000 (the "FSMA"))
received by it in connection with the issue or sale of the Securities in
circumstances in which Section 21(1) of the FSMA does not apply to the Issuer or
the Guarantor; and (B) has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation to the
Securities in, from or otherwise involving the United Kingdom; 

(viii)    The
Circular has not been registered as a prospectus with the Monetary Authority of
Singapore and the 

17 

Securities will be offered in Singapore pursuant to
exemptions invoked under Section 274 and Section 275 of the Securities and
Futures Act 2001 (the "SFA"),
Chapter 289, of Singapore; accordingly, the Manager has represented and agreed
that the Securities may not be offered or sold or be made subject of an
invitation for subscription or purchase, nor may the Circular or any other
offering document or material relating to the Securities be circulated or
distributed, directly or indirectly, to the public or any member of the public
in Singapore other than (i) to an institutional investor or other person
specified in Section 274 of the SFA, (ii) to a sophisticated investor, and in
accordance with the conditions, specified in Section 275 of the SFA or (iii)
otherwise pursuant to, and in accordance with the conditions of, any other
applicable provisions of the SFA; 

(ix)     the
Manager (A) has not offered or sold and will not offer or sell in Hong Kong by
means of any document, any Securities other than (x) to persons whose ordinary
business it is to buy or sell shares or debentures (whether as principal or
agent), (y) to "professional investors" as defined in the Securities and Futures
Ordinance (Cap. 571 of the Laws of Hong Kong) (the "SFO") and any rules made thereunder or (z) in other circumstances which do not result in the document
being a "prospectus" as defined in the Companies Ordinance (Cap. 32 of the Laws
of Hong Kong) or which do not constitute an offer to the public within the
meaning of the Companies Ordinance and (B) has not issued or had in its
possession for the purpose of issue and will not issue or have in its possession
for the purpose of issue any other document, invitation or advertisement
relating to the Securities whether in Hong Kong or elsewhere which is directed
at, or the contents of which are likely to be accessed or read by, the public in
Hong Kong (except if permitted to do so under the securities laws of Hong Kong)
other than with respect to the Securities which are or are intended to be
disposed of only to persons outside Hong Kong or only to "professional
investors" as defined in the SFO and any rules made thereunder; 

(x)     the
Manager has not made and will not make any invitation on behalf of the Issuer or
the Guarantor to the public in the British Virgin Islands to purchase the
Securities, and the Securities offered through any Circular may not be offered
or sold, directly or indirectly, in the British Virgin Islands or to any
resident of the British Virgin Islands, except as permitted by British Virgin
Islands law; 

(xi)     the
Manager has not and will not offer, sell or publicly promote or advertise the
Securities, and the Securities

18 

may not be offered or sold, in the Federal Republic
of Germany other than in compliance with the provisions of the German Securities
Prospectus Act (Wertpapierprospektgesetz,
WpPG) of June 22, 2005, as
amended, or any other laws applicable in the Federal Republic of Germany
governing the issue, offering and sale of securities; 

(xii)     the
Manager has not offered or sold and will not offer or sell, directly or
indirectly, the Securities to the public in the Republic of France 
(appel public

à  l'épargne),
 
and has not distributed or
caused to be distributed and will not distribute or cause to be distributed to
the public in the Republic of France, any offering circular or any other
offering material relating to the Securities, and that such offers, sales and
distributions have been and shall only be made in France to qualified investors
(investisseurs qualifiés) 
acting for their own account,
as defined in, and in accordance with, Article L.411-1 and L.411-2 of the 
Code Monétaire et Financier 
and their implementing 
décret;

(xiii)     the
Manager understands that the Securities have not been and will not be registered
under the Securities and Exchange Law of Japan, and represents that it has not
offered or sold, and agrees not to offer or sell, directly or indirectly, any
Securities in Japan or to, or for the account or benefit of, any resident of
Japan or to, or for the account or benefit of, any person for reoffering or
resale, directly or indirectly, in Japan or to, or for the account or benefit
of, any resident of Japan except pursuant to any exemption from the registration
requirements of the Securities and Exchange Law of Japan and otherwise in
compliance with applicable provisions of Japanese law. As used in this
paragraph, "resident of Japan" means any person residing in Japan, including any
corporation or other entity organized under the laws of Japan; and 

(xiv)     the
Manager agrees that, at or prior to confirmation of sales of the Securities, it
will have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Securities from it during
the restricted period a confirmation or notice to substantially the following
effect: 

"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933 and may not be offered and sold
within the United States or to, or for the account or benefit of, U.S. persons (i)
as part of their distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering and the final closing date, except
in either case in 

19 

accordance with Regulation S (or Rule
144A if available) under the Securities Act. Terms used above have the meaning
given to them by Regulation S." 

Terms used in Sections 7(b) (iv) and 7(b) (xiv) have
the meanings given to them by Regulation S. 

8.     
Indemnity and Contribution. 
(a) Each of the Issuer and the
Guarantor, jointly and severally, agrees to indemnify and hold harmless the
Manager and each person, if any, who controls the Manager within the meaning of
either Section 15 of the Securities Act or Section 20 of the U.S. Securities
Exchange Act of 1934, as amended (the "Exchange Act") from and against
any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Circular (as amended or supplemented if either the Issuer or the Guarantor shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to the Manager furnished to the
Issuer or the Guarantor in writing by the Manager through you expressly for use
therein. 

(b)
    The Manager
agrees to indemnify and hold harmless each of the Issuer and the Guarantor, its
directors, its officers and each person, if any, who controls the Issuer or the
Guarantor within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Issuer and the Guarantor to the Manager, but only with reference to
information relating to the Manager furnished to the Issuer or the Guarantor in
writing by the Manager through you expressly for use in any Circular or any
amendments or supplements thereto. 

(c)    
In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 8(a) or
8(b), such person (the "indemnified party") shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party")
in writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the reasonable fees
and expenses of such counsel shall be at the expense of such indemnified party

20 

unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, (ii) the
indemnifying party has failed within a reasonable time to retain counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall not,
in respect of the legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed promptly after they are incurred. Such firm shall be
designated in writing by the Manager, in the case of parties indemnified
pursuant to Section 8(a), and by the Guarantor, in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees (jointly and severally in the case where the
Issuer or the Guarantor is the indemnifying party) to indemnify the indemnified
party from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for reasonable fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees (jointly
and severally in the case where the Issuer or the Guarantor is the indemnifying
party) that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 90
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. If during any
period of time, the indemnifying party is disputing in good faith the
reasonableness of such fees and expenses of counsel, such period of time shall
not be counted in calculating such 90-day period. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding. 

(d)     To the
extent the indemnification provided for in Section 8(a) or 8(b) is unavailable
to an indemnified party or insufficient in respect 

21 

of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Issuer and the Guarantor on the
one hand and the Manager on the other hand from the offering of the Securities
or (ii) if the allocation provided by clause 8(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Issuer and the Guarantor on the one hand and of the Manager on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Issuer and the Guarantor
on the one hand and the Manager on the other hand in connection with the
offering of the Securities shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Securities (before
deducting expenses) received by the Issuer and the total discounts and
commissions received by the Manager, in each case as set forth in this
Agreement, bear to the aggregate offering price of the Securities. The relative
fault of the Issuer and the Guarantor on the one hand and of the Manager on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Guarantor or by the Manager and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.

(e)     Each of
the Issuer, the Guarantor and the Manager agrees that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 8(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 8(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, the Manager
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities resold by it in the initial placement of
such Securities were offered to investors exceeds the amount of any damages that
the Manager has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent 

22 

misrepresentation. The remedies provided for in this
Section S are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity. 

(f)     The
indemnity and contribution provisions contained in this Section 8 and the
representations, warranties and other statements of the Issuer and the Guarantor
contained in this Agreement shall remain operative and in full force and effect
in accordance with the terms of this Agreement regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of the Manager or
any person controlling the Manager or by or on behalf of the Issuer and the
Guarantor, its officers or directors or any person controlling the Issuer and
the Guarantor and (iii) acceptance of and payment for any of the Securities. 

9. 
    Termination. 
This Agreement shall be subject to
termination by notice given by you to the Guarantor, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the National Association of
Securities Dealers, Inc. or The Stock Exchange of Hong Kong Limited (the "Hong
Kong Stock Exchange"), (ii) trading of any securities of the Issuer, the
Guarantor or PCCW Limited shall have been suspended on the New York Stock
Exchange or the Hong Kong Stock Exchange, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or in Hong Kong shall have been declared
by the Hong Kong Monetary Authority, (iv) there shall have occurred any outbreak
or escalation of hostilities or any change in financial markets or any calamity
or crisis that, in your judgment, is material and adverse or (v) there shall
have occurred a change or development involving a prospective change in the
existing financial, political, economic or regulatory conditions in Hong Kong or
the British Virgin Islands (including, without limitation, a change in exchange
controls, currency exchange rates or taxation) and (b) in the case of any of the
events specified in Sections 9(a)(i) through 9(a)(v), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Securities on the terms and in the manner contemplated in the Final
Circular. 

10. 
    Effectiveness: Other Termination. 
This Agreement shall become effective
upon the execution and delivery hereof by the parties hereto, 

If this Agreement shall be terminated by the Manager
because of any failure or refusal on the part of either the Issuer or the
Guarantor to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason either the Issuer or the Guarantor shall be
unable to perform its obligations under this Agreement, each of the Issuer and
the Guarantor agrees, jointly and severally, that it will reimburse the Manager
for all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by the Manager in connection with this Agreement or
the offering contemplated hereunder. 

23 

11.
   
Counterparts. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. 

12.    
Judgment Currency. 
If for the purposes of
obtaining judgment in any court it is necessary to convert a sum due hereunder
into any currency other than United States dollars, the parties hereto agree, to
the fullest extent that they may effectively do so, that the rate of exchange
used shall be the rate at which, in accordance with normal banking procedures,
the Manager could purchase United States dollars with such other currency in New
York City on the business day preceding that on which final judgment is given.
To the fullest extent permitted by law, the obligation of either of the Issuer
or the Guarantor in respect to any sum due from it to the Manager shall,
notwithstanding any judgment in a currency other than United States dollars, not
be discharged until the first business day, following receipt by the Manager of
any sum adjudged to be so due in such other currency, on which (and only to the
extent that) the Manager may in accordance with normal banking procedures
purchase United States dollars with such other currency; if the United States
dollars so purchased are less than the sum originally due to the Manager
hereunder, the Guarantor agrees, as a separate obligation and notwithstanding
any such judgment, to indemnify the Manager against such loss. If the United
States dollars so purchased are greater than the sum originally due to such
Manager hereunder, the Manager agrees to pay to the Guarantor an amount equal to
the excess of the dollars so purchased over the sum originally due to the
Manager hereunder. 

13.     
Applicable Law; Submission to
Jurisdiction; Waiver of Immunity; Appointment of Process Agent. 
(a) This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York.

(b)    
Each of the Issuer and the Guarantor hereby irrevocably (i) agrees that any
suit, action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby may be instituted in any New York State Court
or United States District Court in either case in the Borough of Manhattan, The
City of New York, (ii) waives, to the fullest extent permitted by law, any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any such suit, action or proceeding in any such court and (iii)
submits to the non-exclusive jurisdiction of any such court in any such suit,
action or proceeding. To the extent that either of the Issuer or the Guarantor
has or hereafter may acquire any immunity (sovereign or otherwise) from any
legal action, suit or proceeding, jurisdiction of any court, set-off or from any
legal process (whether service or notice, attachment prior to judgment,
attachment in aid of execution of judgment or otherwise) with respect to itself
or its property, it irrevocably waives and agrees not to plead or claim such
immunity in respect of its obligations hereunder. Each of the Issuer and the
Guarantor agrees that final, non-appealable judgment in any such suit, action or
proceeding brought in such court shall be conclusive and 

24

binding upon the Issuer and the
Guarantor, as the case may be, and may be enforced in any court the jurisdiction
of which the Issuer or the Guarantor, as the case may be, is subject by a suit
upon such judgment. 

(c)     Each of
the Issuer and the Guarantor hereby irrevocably designates and appoints
Corporation Service Company, whose offices are currently located at 1133 Avenue
of the Americas, Suite 3100, New York, New York 10036-6710, as its authorized
agent for service of process (such agent, together with its successors, being
hereinafter referred to as the 
"Authorized Agent") on
whom process may be served in any suit, action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby; provided
that if for any reason the Authorized Agent ceases to act as Authorized Agent
hereunder, each of the Issuer and the Guarantor will appoint another person
acceptable to the Manager in the Borough of Manhattan, The City and State of New
York. Each of the Issuer and the Guarantor irrevocably agrees that the service
of process on the Authorized Agent at its address set forth above, or at such
other address in the Borough of Manhattan, The City and State of New York, as
shall be provided by notice to the Manager at the time given by the Authorized
Agent, shall be deemed in every respect effective service of process on the
Issuer or the Guarantor, as the case may be. Each of the Issuer and the
Guarantor further agrees to take any and all actions as may be necessary to
maintain the designation and appointment of the Authorized Agent as its agent
for service of process in full force and effect for as long as the Securities
are outstanding. 

14. 
    Communications. 
All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunications as follows: 

	
    If to the Manager:
	 
	
     
	 
	
    Address:
	Level 18, HSBC
    Main Building
	
     
	1 Queen's Road,
    Central Hong
	
     
	Kong
	
    Attention:
	Transaction
    Management
	
    Facsimile
	(852) 2530-1538
	
     
	 
	
     
	 
	
    If to the Issuer and/or the Guarantor:

	
    Address:
	39th Floor, PCCW
    Tower, TaiKoo
	
     
	Place, 979 King's
    Road, Quarry Bay,

25

	 	Hong Kong
	
    Attention: 
	The Company
    Secretary 
	
    Facsimile: 
	852-2962-5725
    

15. 
    Headings. 
The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement. 

 

 

 

26

  	Very truly yours,
	 
	PCCW-HKT Capital No.3
      Limited
	 
	By:
      
	        
      Name:
	        
      Title:
	 
	 
	PCCW-HKT Telephone
	Limited
	 
	By:
	        
      Name:
	        
      Title:

27PCCW Limited: Exhibit 4(ee) - Prepared by TNT Filings Inc.

EXHIBIT 4(ee)

PCCW-HKT Capital No.3 Limited 

as Issuer 

PCCW-HKT Telephone Limited 

as Guarantor 

and 

HSBC Bank USA, National Association 

as Trustee 

Indenture 

Dated as of July 20, 2005 

__________

 

US$500,000,000 5.25% Guaranteed Notes Due 2015 

 

TABLE OF CONTENTS 

	 	PAGE
	 	 
	 	 
	
    ARTICLE 1

	DEFINITIONS
	 	 
	
    
    Section 1.01.  Certain Terms Defined	
    
    1
	
    
    Section 1.02.  Acts of Holders	
    
    11
	
    
    Section 1.03.  New York Time	
    
    12
	 	 
	ARTICLE 2 
    
	ISSUE, EXECUTION,
    FORM AND REGISTRATION OF NOTES
	 	 
	
    
    Section 2.01.  Authentication and Delivery
    of Notes and Guarantee	
    
    12
	
    
    Section 2.02.  Execution of Notes and
    Guarantee	
    
    12
	
    
    Section 2.03.  Certificate of
    Authentication	
    
    13
	
    
    Section 2.04.  Form, Denomination and Date
    of Notes; Payments	
    
    13
	
    
    Section 2.05.  Registration, Transfer and
    Exchange	
    
    17
	
    
    Section 2.06.  Book-entry Provisions for
    Global Notes	
    
    18
	
    
    Section 2.07.  Special Transfer Provisions	
    
    19
	
    
    Section 2.08.  Mutilated, Defaced,
    Destroyed, Stolen and Lost Notes	
    
    23
	
    
    Section 2.09.  Further Issues	
    
    24
	
    
    Section 2.10.  Cancellation of Notes;
    Disposition Thereof	
    
    24
	
    
    Section 2.11.  CUSIP Numbers	
    
    24
	 	 
	ARTICLE 3 
    
	COVENANTS OF THE
    ISSUER AND THE GUARANTOR
	 	 
	
    
    Section 3.01.  Payment of Principal and
    Interest	
    
    25
	
    
    Section 3.02.  Offices for Payments	
    
    25
	
    
    Section 3.03.  Appointment to Fill a
    Vacancy in Office of Trustee	
    
    26
	
    
    Section 3.04.  Payments	
    
    26
	
    
    Section 3.05.  Noteholders' Lists	
    
    28
	
    
    Section 3.06. Statement as to Compliance;
    Notice of Default; Provision of Information	
    
    28
	
    
    Section 3.07.  Limitation on Liens	
    
    29
	
    
    Section 3.08.  Limitation on Issuer's
    Activities	
    
    31
	
    
    Section 3.09.  Payment Of Additional
    Amounts	
    
    31
	
    
    Section 3.10.  Payment of Stamp Duty and
    Other Taxes	
    
    33
	
    
    Section 3.11.  Waiver of Certain Covenants	
    
    34
	
    
    Section 3.12.  Substitution	
    
    34

i

	
    ARTICLE 4 
	
    REMEDIES OF THE TRUSTEE AND
    NOTEHOLDERS ON EVENT OF DEFAULT
	 	 
	
    Section 4.01.
    Event of
    Default Defined; Acceleration of Maturity; Waiver of Default	
    
    35
	
    Section 4.02.
    Acceleration of Maturity;
    Rescission	
    
    36
	
    
    Section 4.03. 
    
    Collection of Indebtedness by Trustee; Trustee May Prove Debt	
    
    37
	
    Section 4.04.
    Application of Proceeds	
    
    38
	
    Section 4.05.
    Suits for Enforcement	
    
    39
	
    Section 4.06,
    Restoration of Rights on
    Abandonment of Proceedings	
    
    39
	
    Section 4.07.
    Limitations on Suits by
    Noteholders	
    
    39
	
    Section 4.08.
    Right of Noteholders to
    Receive Principal and Interest	
    
    40
	
    
    Section 4.09. 
    
    Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default	
    
    40
	
    Section 4.10.
    Control by Noteholders	
    
    40
	
    Section 4.11.
    Waiver of Past Defaults	
    
    40
	
    Section 4.12.
    Payments after a Default	
    
    41
	
    Section 4.13.
    Waiver of Stay or
    Extension Laws	
    
    41
	
    Section 4.14.
    Trustee May Filed Proofs
    of Claim	
    
    41
	 	 
	
    ARTICLE 5 
	
    CONCERNING THE TRUSTEE
	 	 
	 	 
	
    
    Section 5.01. 
    
    Duties and Responsibilities of the Trustee during Default; Prior to Default	
    
    42
	
    Section 5.02.
    Certain Rights of the
    Trustee	
    
    43
	
    
    Section 5.03. 
    
    Trustee Not Responsible for Recitals, Disposition of Notes or Application of
    Proceeds Thereof.	
    45
	
    Section 5.04.
    Trustee and Agents May
    Hold Notes; Collections	
    
    45
	
    Section 5.05.
    Monies Held by Trustee	
    
    45
	
    
    Section 5.06. 
    
    Compensation, Reimbursement and Indemnification of Trustee and Its Prior
    Claim	
    
    45
	
    Section 5.07.
    Persons Eligible for
    Appointment as Trustee	
    
    47
	
    Section 5.08.
    Resignation and Removal;
    Appointment of Successor Trustee	
    
    47
	
    Section 5.09.
    Acceptance of Appointment
    by Successor Trustee	
    
    48
	
    
    Section 5.10. 
    
    Merger, Conversion, Consolidation or Succession to Business of Trustee	
    
    49
	
    
    Section 5.11. 
    
    Compliance with Back-up Withholding and Information Reporting	
    
    49
	
    Section 5.12.
    Other Capacities	
    
    50
	 	 
	
    ARTICLE 6 
	
    CONCERNING THE NOTEHOLDERS
	 	 
	
    Section 6.01.
    Evidence of Action Taken
    by Noteholder	
    
    50

ii

	
    Section 6.02.
    Proof of Execution of
    Instruments and of Holdings of Notes	
    
    
    50
	
    Section 6.03.
    Registered Owners to Be
    Treated as Owners	
    
    
    51
	 	 
	
    Section 6.04. 
    Notes Owned by the Issuer
    or the Guarantor Deemed Not Outstanding	
    
    
    51
	
    Section 6.05.
    Rights of Revocation of
    Action Taken	
    
    51
	 	 
	
    ARTICLE 7
	
    SUPPLEMENTAL INDENTURES
	 	 
	
    Section 7.01.
    Supplemental Indentures
    without Consent of Noteholders	
    
    
    52
	
    Section 7.02.
    Supplemental Indentures
    with Consent of Noteholders	
    
    
    53
	
    Section 7.03.
    Effect of Supplemental
    Indenture	
    
    
    54
	
    Section 7.04.
    Documents to Be Given to
    Trustee	
    
    55
	
    Section 7.05.
    Notation on Notes in
    Respect of Supplemental Indentures	
    
    
    55
	 	 
	
    ARTICLE 8
	
    DEFEASANCE AND DISCHARGE
	 	 
	
    Section 8.01.
    Discharge of Issuer's
    Obligations	
    
    
    55
	
    Section 8.02.
    Legal Defeasance	
    
    
    56
	
    Section 8.03.
    Covenant Defeasance	
    
    
    58
	
    Section 8.04.
    Application of Trust
    Money	
    
    
    58
	
    Section 8.05.
    Repayment to the Issuer	
    
    
    59
	
    Section 8.06.
    Reinstatement	
    
    
    59
	 	 
	
    ARTICLE 9
	
    GUARANTEE
	 	 
	
    Section 9.01.
    Guarantee	
    
    
    59
	
    Section 9.02.
    Subrogation	
    
    
    60
	
    Section 9.03.
    Ranking	
    
    
    60
	 	 
	
    ARTICLE 10 
	
    CONSOLIDATION, MERGER, CONVEYANCE
    OR TRANSFER; ASSUMPTION
	 	 
	
    Section 10.01. 
    Issuer or the Guarantor
    may Consolidate, Etc., Only on Certain Terms	
    
    
    61
	
    Section 10.02.
    Successor Corporation
    Substituted	
    
    
    61
	 	 
	
    ARTICLE 11
	
    MISCELLANEOUS PROVISIONS
	 	 
	
    Section 11.01.
    Ranking	
    
    
    62
	
    Section 11.02.
    Officers and Directors of
    Issuer, the Guarantor and the Trustee Exempt from Individual liability	
    
    
    62
	
    Section 11.03.
    Provisions of Indenture
    for the Sole Benefit of Parties and Noteholders	
    
    
    62
			

iii

	
    
    Section 11.04. Successors and Assigns of Issuer and the Guarantor
    Bound by Indenture	
    
    62
	
    
    Section 11.05.  Notices and Demands on
    Trustees and Noteholders	
    
    62
	
    
    Section 11.06. Officers' Certificates and Opinions of Counsel;
    Statements to be Contained Therein	
    
    64
	
    
    Section 11.07.  Payments Due on
    Non-Business Days	
    
    65
	
    
    Section 11.08. Governing Law; Consent to Jurisdiction; Waiver of
    Immunities	
    
    65
	
    
    Section 11.09.  Separability	
    
    66
	
    
    Section 11.10.  Counterparts	
    
    66
	
    
    Section 11.11.  Effect of Headings	
    
    66
	
    
    Section 11.12.  Indemnification for
    Judgment Currency Fluctuations	
    
    67
	 	 
	ARTICLE 12
	REDEMPTION OR
    REPURCHASE OF NOTES
	 	 
	
    
    Section 12.01.  Redemption for Taxation
    Reasons	
    
    67
	
    
    Section 12.02.  Notice of Tax Redemption	
    
    68
	
    
    Section 12.03.  Payment of Notes Called for
    Redemption	
    
    68
	
    
    Section 12.04.  Repurchase	
    
    69
	 	 
	
    EXHIBIT A    FORM
    OF CERTIFICATED NOTE
	
    EXHIBIT B   
    TRANSFER NOTICE
	
    EXHIBIT C    FORM
    OF RESTRICTED GLOBAL NOTE
	
    EXHIBIT D    FORM
    OF REGULATION S GLOBAL NOTE
	
    EXHIBIT E    FORM
    OF AUTHORIZATION CERTIFICATE
	
    EXHIBIT F    FORM
    OF TRANSFER
	
    EXHIBIT G    FORM
    OF PAYING AND TRANSFER AGENT APPOINTMENT LETTER
	
    EXHIBIT H   TRUSTEE,
    PAYING AND TRANSFER AGENT AND REGISTRAR  
	
    EXHIBIT I    
    FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS PURSUANT TO
    REGULATION S  
	
    EXHIBIT J    
    FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS PURSUANT TO
    REGULATION S
	
    EXHIBIT K    FORM
    OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFER TO QIBS

iv

THIS INDENTURE, dated as of July 20, 2005 among
PCCW-HKT Capital No.3 Limited (the "Issuer"), a company organized under the laws
of the British Virgin Islands, PCCW-HKT Telephone Limited (the "Guarantor"), a
limited liability company organized under the laws of Hong Kong, and HSBC Bank
USA, National Association, a national banking association, as Trustee (the
"Trustee"). 

WITNESSETH: 

WHEREAS, the Issuer has duly
authorized the execution and delivery of this Indenture to provide, among other
things, for the issuance, execution, authentication, delivery and administration
of its 5.25% Guaranteed Notes Due 2015 (the "Notes"); 

WHEREAS, the Guarantor has duly authorized the
execution and delivery of this Indenture to provide for the Guarantee of the
Notes; 

WHEREAS, all things necessary to make the Notes, when
executed and delivered by the Issuer and authenticated and delivered as provided
in this Indenture, and the Guarantee when executed and delivered by the
Guarantor, the valid, binding and legal obligations of the Issuer and the
Guarantor, respectively, and to constitute these presents a valid indenture and
agreement of the Issuer and the Guarantor according to its terms, have been
done; and 

NOW, THEREFORE: 

In consideration of the premises and the purchases of
the Notes by the holders thereof, the Issuer, the Guarantor and the Trustee
mutually covenant and agree for the equal and proportionate benefit of the
holders from time to time of the Notes as follows: 

ARTICLE 1 

DEFINITIONS 

Section 1.01.  Certain Terms Defined. The
following terms (except as otherwise expressly provided or unless the context
otherwise clearly requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective meanings specified in
this Section. All accounting terms used herein and not otherwise defined shall
have the meanings given to them under Hong Kong GAAP. The words "herein",
"hereof" and "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision. The terms defined in this Article include the plural as well as the
singular. 

"Act" has the meaning set forth in Section
1.02. 

"Additional Amounts" has the meaning set forth
in Section 3.09. 

"Additional Closing Date" means the date on
which the Additional Notes are issued pursuant to Section 2.09. 

"Additional Notes" has the meaning set forth
in Section 2.09. 

"Adjusted Consolidated Net Worth" means the
sum of (a) all amounts paid up (or credited as paid up) on all classes of the
Guarantor's issued share capital, revenue or capital reserves, capital
contribution, or any other accounts that are included as shareholders' funds
under Hong Kong GAAP and (b) the aggregate outstanding principal amount of
Subordinated Indebtedness. 

"Affiliate" means, with respect to any Person
(the "Specified Person"), 

(a)
   any Person other
than the Specified Person directly or indirectly controlling, controlled by or
under direct or indirect common control with, the Specified Person; or 

(b)
  any Person who is a
commissioner, director or executive officer of 

(i)   the Specified Person;

(ii)  any Subsidiary of such
Specified Person; or 

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

For purposes of this definition, the term "control"
when used with respect to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise. 

"Agent Members" has the meaning set forth in
Section 2.06. 

"Agreement Currency" has the meaning set forth
in Section 11.12. 

"Authorization Certificate" has the meaning
set forth in Section 2.02. 

"Authorized Officer" means, with respect to
the Issuer or the Guarantor, any one Director who, in each case, is authorized
to represent the Issuer or the Guarantor, as the case may be. 

"Board of Directors" means, with respect to
the Issuer or the Guarantor, the board of directors elected or appointed by the
shareholders of such Person to 

2

manage the business of such Person or any committee of such board duly
authorized to take the action purported to be taken by such committee. 

"Board Resolution" means, with respect to the
Issuer or the Guarantor, a copy of a resolution certified by a Director of the
Issuer or by a Director or the Secretary of the Guarantor, as the case may be,
to have been duly adopted by the applicable Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the
Trustee. 

"Business Day" means a day in The City of New
York and Hong Kong other than a Saturday, Sunday or a day on which banking
institutions in The City of New York or Hong Kong are authorized or obligated by
law or executive order to remain closed. 

"Capital Stock" means any and all shares,
interests (including joint venture interests), participations or other
equivalents (however designated) of capital stock of a corporation or any and
all equivalent ownership interests in a Person (other than a corporation). 

"Certificated Notes" means the Notes
(with the Guarantee endorsed thereon), in certificated, registered form,
executed and delivered by the Issuer (and the Guarantor) and authenticated by
the Trustee in exchange for the Global Notes, (a) in the event that the
Depositary is at any time unwilling or unable to act as depository for the
Global Notes and a successor depository is not appointed by the Issuer within 90
days after the Issuer receives such notice or becomes aware of such
ineligibility or (b) an Event of Default has occurred and is continuing with
respect to the Notes. 

"Clearstream" means Clearstream Banking, 
société anonyme, Luxembourg. 

"Closing Date" means July 20, 2005. 

"Commission" means the United States Securities and
Exchange Commission and any successor government agency. 

"Consolidated Total Assets" means the
consolidated total assets of the Guarantor and its Subsidiaries as shown on the
most recent audited consolidated balance sheet of the Guarantor. 

"Corporate Trust Office" means the office in New York
City at which the Trustee principally administers its corporate trust business
initially located at 452 Fifth Avenue, New York, New York 10018, Attention:
Corporate Trust. 

"Custodian" means HSBC Bank USA, National
Association, as custodian of the Global Notes for the Depositary under a custody
agreement or any similar successor agreement. 

3 

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

"Depositary" means, with respect to the Global
Notes, DTC, its nominees and their respective successors. 

"Director" means any member of the Board of
Directors of the Issuer or the Guarantor, as the case may be. 

"Distribution Compliance Period" means (a) in
the case of the Notes, the 40-day period after the latest to occur of (i) the
commencement of the sale of the Notes and (ii) the Closing Date and (b) in the
case of the Additional Notes, the 40-day period after the latest to occur of (i)
the commencement of the sale of the Additional Notes and (ii) the Additional
Closing Date. 

"Dividend" means with respect
to any Person any dividend or other distribution on any shares of such Person's
Capital Stock, other than any dividend on shares of Capital Stock payable solely
in shares of Capital Stock. 

"DTC" means The Depository Trust Company, a
New York corporation. 

"Euroclear" means Euroclear Bank S.A./N.V., as
operator of the Euroclear System. 

"Event of Default" has the meaning set forth
in Section 4.01. 

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

"Fair Market Value" means, with respect to any
asset, the price which could be negotiated in an arm's length free market
transaction, for cash, between a willing buyer and a willing seller, neither of
which is under pressure or compulsion to complete the transaction. 

"Further Issue" has the meaning set forth in
Section 2.09. 

"Global Notes" has the meaning set forth in
Section 2.04(c). 

"Guarantee" means the Guarantee made by the
Guarantor as set forth in Article 9 hereof and as endorsed on the Notes as
provided herein. 

"guarantee" means, with respect to any Person,
any obligation, contingent or otherwise, of such Person directly or indirectly
guaranteeing any Indebtedness or other obligation of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person: 

4 

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

(b)    
entered into for the purpose
of assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); 
provided 
that the term "guarantee"
shall not include endorsements for collection or deposit in the ordinary course
of business. 

The term "guarantee" used as a verb has a
corresponding meaning. 

"Guarantor" means PCCW-HKT Telephone Limited
and any successor corporation. 

"Holder", "holder" and "Noteholder",
in relation to a Note, means the Person in whose name a Note is registered in
the Register. 

"Hong Kong" means the Hong Kong Special
Administrative Region of the People's Republic of China, 

"Hong Kong GAAP" means, at the time of any
determination required hereunder, generally accepted accounting principles in
Hong Kong. 

"Indebtedness" of any Person means any
indebtedness for or in respect of money borrowed that has a final maturity of
one year or more from its date of incurrence or issuance and that is evidenced
by any agreement or other instrument, excluding trade payables; 
provided, 
however, that for the purposes of
determining the amount of Indebtedness of the Guarantor outstanding at any
relevant time the amount included as Indebtedness of the Guarantor in respect of
finance leases shall be the net amount from time to time properly characterized
as "obligations under finance leases" in accordance with Hong Kong GAAP, 

"Indenture" means this instrument as
originally executed and delivered or, if amended or supplemented as herein
provided, as so amended or supplemented. 

"Intercompany Loan" means the intercompany
loan provided by the Issuer to the Guarantor pursuant to an intercompany loan
agreement dated July 13, 2005. 

"Interest Payment Date" means, January 20 and
July 20 of each year, commencing on January 20, 2006, and the date of the Stated
Maturity or date of earlier redemption of the Notes. 

5

"Interest Record Date" 
has the meaning specified in the form
of Note attached hereto as Exhibit A. 

"Issuer" means PCCW-HKT Capital No.3 Limited
and any successor corporation. 

"Judgment Currency" 
has the meaning set forth in Section
11.12 hereof. 

"Lien" 
means any mortgage, charge, pledge,
lien, encumbrance, hypothecation, title retention, security interest or security
arrangement of any kind. 

"Listed Principal Subsidiary" 
means any Principal Subsidiary, the
shares of which are at the relevant time listed on The Stock Exchange of Hong
Kong Limited or any other recognized stock exchange. 

"Majority" means greater than 50%. 

"Merger"
has the meaning set forth in Section 10.01. 

"Non-U.S. Persons" 
has the meaning set forth in Section
2.07(c). 

"Note" or "Notes"
has the meaning set out in the Recitals of this Indenture and more particularly
means any Notes authenticated and delivered under this Indenture. 

"Officers' Certificate" 
means, as the context requires, a
written certificate executed and delivered on behalf of the Issuer or the
Guarantor, as the case may be, to the Trustee by any two Authorized Officers of
the Issuer or the Guarantor, as the case may be. One of the officers signing an
Officer's Certificate given pursuant to Section 3.06 shall be a principal
executive, financial or accounting officer of the Issuer or the Guarantor. 

"Opinion of Counsel" 
means an opinion in writing signed by
legal counsel of recognized standing who, unless otherwise provided herein, may
be an employee of, or counsel to, the Issuer, the Guarantor or the Trustee, as
the case may be, and who, in the case of counsel to the Issuer or the Guarantor,
shall be reasonably acceptable to the Trustee. 

"Outstanding", when used with
reference to the Notes, subject to the provisions of Section 6.04 means, as of
any particular time, all Notes authenticated and delivered by the Trustee under
this Indenture, except 

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

6

(b)    
Notes, or portions thereof,
for the payment of which monies in the necessary amount shall have been
deposited in trust with the Trustee or with any Paying and Transfer Agent; 

(c) 
Notes in substitution for which other
Notes shall have been authenticated and delivered pursuant to the terms of
Section 2.05 or Section 2.08, or which shall have been paid (unless proof
satisfactory to the Trustee is presented that any of such Notes is held by a
Person in whose hands such Note is a legal, valid and binding obligation of the
Issuer); and 

(d) 
Notes, the payment obligations of
which have been discharged pursuant to Section 8.01, 8.02 or 8.03 hereunder. 

"Paying and Transfer Agent" means any paying
and transfer agent with respect to the Notes appointed pursuant to this
Indenture or a Paying and Transfer Agent Appointment Letter in the form of
Exhibit G or in such other form reasonably acceptable to the Issuer, the
Guarantor and the Trustee. 

"Payment Date" has the meaning set forth in
Section 3.04(a). 

"PCCW" means PCCW Limited. 

"Person" means any individual, corporation,
limited liability company, partnership, joint venture, association, joint stock
company, trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity. 

"Principal Subsidiary" at any time shall mean
a Subsidiary of the Guarantor: 

(a)     as to which one or more
of the following conditions is satisfied: 

(i)    
its net profit or (in the case of a Subsidiary of the Guarantor which has
Subsidiaries) consolidated net profit attributable to the Guarantor (in each
case before taxation and exceptional items) is at least 5% of the consolidated
net profit of the Guarantor and its Subsidiaries (before taxation and
exceptional items), but in each case after deducting minority interests in
Subsidiaries; or 

(ii)     its net
assets or (in the case of a Subsidiary of the Guarantor which has Subsidiaries)
consolidated net assets attributable to the Guarantor (in each case after
deducting minority interests in Subsidiaries) are at least 5% of the
consolidated net assets (after deducting minority interests in Subsidiaries) of
the Guarantor and its Subsidiaries; 

all as calculated by reference to the then latest audited financial
statements (consolidated or, as the case may be, unconsolidated) of the
Subsidiary of the 

7 

Guarantor and the then latest audited financial statements of the Guarantor
provided 
that: (A) in the case of a Subsidiary
of the Guarantor acquired after the end of the financial period to which the
then latest relevant audited accounts relate, the reference to the then latest
audited accounts for the purposes of the calculation above shall, until audited
accounts for the financial period in which the acquisition is made are
published, be deemed to be a reference to the accounts adjusted to consolidate
the latest audited accounts of the Subsidiary in the accounts; (B) if, in the
case of a Subsidiary of the Guarantor which itself has one or more Subsidiaries,
no consolidated accounts are prepared and audited, its consolidated net assets
and consolidated net profits shall be determined on the basis of pro forma
consolidated accounts of the relevant Subsidiary and its Subsidiaries prepared
for this purpose by its auditors; (C) if the accounts of a Subsidiary of the
Guarantor (not being a Subsidiary referred to in (A) above) are not consolidated
with those of the Guarantor then the determination of whether or not the
Subsidiary of the Guarantor is a Principal Subsidiary shall, if the Guarantor
requires, be based on a pro forma consolidation of its accounts (consolidated,
if appropriate) with the consolidated accounts of the Guarantor and its
Subsidiaries; or 

(b)     to which is transferred
all or substantially all of the assets of a Subsidiary of the Guarantor which
immediately prior to the transfer was a Principal Subsidiary, 
provided 
that, with effect from such transfer,
the Subsidiary which so transfers its assets and undertakings shall cease to be
a Principal Subsidiary (but without prejudice to paragraph (a) above) and the
Subsidiary of the Guarantor to which the assets are so transferred shall become
a Principal Subsidiary. 

A certificate of the auditors of the Guarantor as to
whether or not a Subsidiary is a Principal Subsidiary shall be conclusive and
binding on all parties in the absence of manifest error. 

"QIB" has the meaning set forth in Section
2.04(c). 

"Redeemable Stock" means any class or series
of Capital Stock of any Person that by its terms or otherwise is (a) required to
be redeemed prior to the Stated Maturity of the Notes, (b) redeemable at the
option of the holder thereof at any time prior to the Stated Maturity of the
Notes or (c) convertible into or exchangeable for Capital Stock referred to in
clause (a) or (b) or Indebtedness having a scheduled maturity prior to the
Stated Maturity of the Notes. 

"Redemption Date" means, with respect to any
Note, (a) the date fixed for redemption of such Note pursuant to a notice of
redemption given by the Issuer or the Guarantor on behalf of the Issuer in
accordance with the provisions hereof or (b) the Stated Maturity of such Note if
such Note has not been redeemed, repurchased and canceled in accordance with its
terms prior to such Stated Maturity. 

8

"Register" has the meaning set forth in
Section 2.05. 

"Registrar" has the meaning set forth in
Section 2.05. 

"Regulation S" means Regulation S under the
Securities Act. 

"Regulation S Global Note" 
has the meaning set forth in Section
2.04(c). 

"Responsible Officer", 
when used with respect to the
Trustee, means any officer within the corporate trust department (or any
successor department) of the Trustee, with direct responsibility for the
administration of this Indenture, and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject. 

"Restricted Certificated Note" 
has the meaning set forth in Section
2.04(c). 

"Restricted Global Note" 
has the meaning set forth in Section 2.04(c). 

"Rule
144A" means Rule 144A
under the Securities Act. 

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

"Securities Act Legend" 
has the meaning set forth in Section
2.04(c). 

"Stated Maturity" 
means, July 20, 2015. 

"Subordinated Indebtedness" 
means the principal amount of
Indebtedness of the Guarantor (including perpetual debt, which the Guarantor is
not required to repay) which (a) has 
a 
final maturity and a weighted average
life to maturity longer than the Stated Maturity of the Notes and (b) is issued
or assumed pursuant to, or evidenced by, an indenture or other instrument
containing provisions for the subordination of such Indebtedness to the Notes
including (x) a provision that in the event of any bankruptcy, insolvency or
other similar proceeding in respect of the Guarantor, the holders of the Notes
shall be entitled to receive payment in full in cash of all principal,
Additional Amounts and interest on the Notes (including all interest arising
after the commencement of such proceeding whether or not an allowed claim in
such proceeding) before the holder or holders of any such Subordinated
Indebtedness shall be entitled to receive any payment of principal, interest or
premium thereon, (y) a provision that if an Event of Default has occurred and is
continuing hereunder, the holder or holders of any such Subordinated
Indebtedness shall not be entitled to payment of any principal, interest or
premium in respect thereof unless or until such Event of Default shall have been
cured or waived or shall have ceased to exist, and (z) a provision that the
holder or holders of such Subordinated Indebtedness may not 

9 

accelerate the maturity thereof as a result of any default relating thereto
so long as any Note is outstanding. 

"Subsidiary" 
means, as applied to any Person, any
corporation or other entity of which a majority of the outstanding Voting Shares
is, at the time, directly or indirectly, owned by such Person. 

"Successor Additional Amounts" 
has the meaning set forth in Section
10.01. 

"Successor Jurisdiction" 
has the meaning set forth in Section 3.09. 

"Taxes"
has the meaning set forth in Section 3.09. 

"Trust Indenture Act" 
means the Trust Indenture Act of
1939, as amended, and as in force at the date as of which this Indenture was
originally executed, provided however, that in the event the Trust Indenture Act
of 1939 is amended after such date, "Trust Indenture Act" means to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.

"Trustee" 
means the Person identified as 
"Trustee" 
in the first paragraph hereof and,
subject to the provisions of Article 5 shall also include any successor Trustee.

"U.S. Government Obligations" 
means securities that are (a) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (b) obligations of an agency or instrumentality
of the United States of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, and shall also include a depositary receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligation or a
specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depositary
receipt; provided 
that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depositary receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depositary
receipt. 

"U.S. Person" means a "U.S. person" as defined
in Regulation S under the Securities Act. 

"Voting Shares" 
means, with respect to any Person,
the Capital Stock having the general voting power under ordinary circumstances
to vote on the election of the members of the board of directors or other
governing body of such Person (irrespective of whether or not at the time stock
of any other class or 

10 

classes shall have or might have voting power by reason of the happening of
any contingency). 

Section 1.02.  
Acts of Holders. 
(a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such request, demand, authorization, direction,
notice, consent, waiver or other action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments (and the
request, demand, authorization, direction, notice, consent, waiver or other
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Issuer if made in the manner provided in this Section 1.02. 

(b) 
    The fact and date
of the execution by any Person of any such instrument or writing may be proved
in any reasonable manner which the Trustee deems sufficient. 

(c) 
    The holding of
Notes shall be proved by the Register. 

(d)    
If the Issuer shall solicit
from the Holders of Notes any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Issuer may, at its option, by or pursuant to a
Board Resolution, fix in advance a record date for the determination of such
Holders entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Issuer shall have no obligation to do so.
Any such record date shall be the record date specified in or pursuant to such
Board Resolution, which shall be a date not more than 30 days prior to the first
solicitation of Holders generally in connection therewith and no later than the
date such solicitation is completed. 

If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record of Notes at the
close of business on such record date shall be deemed to be Holders of Notes for
the purposes of determining whether Holders of the requisite proportion of Notes
then outstanding have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for this
purpose the Notes then outstanding shall be computed as of such record date;
provided 
that no such request, demand,
authorization, direction, notice, consent, waiver or other Act by the Holders on
such record date shall be deemed effective unless it shall become 

11

effective pursuant to the provisions of this Indenture not later than 180
days after the record date. 

(e)     Any request, demand,
authorization, direction, notice, consent, waiver or other Act by the Holder of
any Notes shall bind every future Holder of the same Notes or the Holder of
every Note issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, suffered or omitted to
be done by the Trustee, any Paying and Transfer Agent or the Issuer in reliance
thereon, whether or not notation of such action is made upon such Notes. 

Section 1.03. New York Time. 
All times referred to in this Indenture or the Notes are local time in New York
City, New York, United States of America, except as otherwise specified. 

ARTICLE 2 

ISSUE, EXECUTION, FORM AND REGISTRATION OF NOTES 

Section 2.01.  Authentication and Delivery of Notes
and Guarantee. Upon the execution and delivery of this Indenture, or from
time to time thereafter, Notes may be executed and delivered by the Issuer, with
the Guarantee endorsed thereon by the Guarantor, in an aggregate principal
amount Outstanding of not more than US$500,000,000 (other than Notes issued
pursuant to Section 2.08 and Section 2.09) to the Trustee for authentication,
accompanied by an Officers' Certificate of the Issuer directing such
authentication and specifying the amount of Notes (with the Guarantee endorsed
thereon) to be authenticated, the applicable rate at which interest will accrue
on such Notes, the date on which the original issuance of such Notes (with the
Guarantee endorsed thereon) is to be authenticated, the date from which interest
will begin to accrue, the date or dates on which interest on such Notes will be
payable and the date on which the principal of such Notes will be payable and
other terms relating to such Notes and Guarantee. The Trustee shall thereupon
authenticate and deliver said Notes (with the Guarantee endorsed thereon) to or
upon the written order of the Issuer (as set forth in such Officers'
Certificate) signed by two Authorized Officers. 

Section 2.02.  Execution of Notes and Guarantee.
(a) The Notes shall be executed by or on behalf of the Issuer by the
signature of an Authorized Officer of the Issuer. The Guarantor shall execute
the Guarantee by the signature of an Authorized Officer of the Guarantor. Such
signatures may be the manual or facsimile signature of the present or any future
Authorized Officers. With the delivery of this Indenture, each of the Issuer and
the Guarantor is furnishing, and from time to time thereafter may furnish, a
certificate substantially in the form of Exhibit E (an "Authorization
Certificate") identifying and certifying the incumbency and specimen (or
facsimile) signatures of the Authorized Officers. Until the Trustee receives a
subsequent Authorization Certificate, the Trustee 

12 

shall be entitled to conclusively rely on the last
Authorization Certificate delivered to it for purposes of determining the
Authorized Officers. Typographical and other minor errors or defects in any
signature shall not affect the validity or enforceability of any Note which has
been duly authenticated and delivered by the Trustee. 

(b)     In case Authorized
Officers who shall have signed any of the Notes or the Guarantee thereon, as
applicable, shall cease to be such Authorized Officers before the Note (with the
Guarantee endorsed thereon) shall be authenticated and delivered by the Trustee
or disposed of by or on behalf of the Issuer, such Note (with the Guarantee
endorsed thereon) nevertheless may be authenticated and delivered or disposed of
as though the Persons who signed such Note and Guarantee had not ceased to be
such Authorized Officers; and any Note may be signed on behalf of the Issuer and
the Guarantee may be signed on behalf of the Guarantor by such Persons as, at
the actual date of the execution of such Note and Guarantee, shall be Authorized
Officers, although at the date of the execution and delivery of this Indenture
any such Persons were not Authorized Officers. 

Section 2.03.  
Certificate of Authentication. 
Only such Notes (with the
Guarantee endorsed thereon) as shall bear thereon a certification of
authentication substantially as set forth in the forms of the Notes and
Guarantee in Exhibits A, C and D hereto, executed by the Trustee by manual
signature of one of its authorized signatories, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certification by the Trustee upon any Note executed by or on behalf of the
Issuer and any Guarantee executed by or on behalf of the Guarantor shall be
conclusive evidence that the Note (with the Guarantee endorsed thereon) so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture. 

Section 2.04.  
Form, Denomination and Date of
Notes; Payments. (a) The
Notes, the Guarantee and the Trustee's certificates of authentication shall be
substantially in the form set forth in Exhibits A, C and D hereof. On the
Closing Date, the Notes shall be issued in the form provided in Section 2.04(c).
The Notes shall be numbered, lettered, or otherwise distinguished in such manner
or in accordance with such plans as the officers of the Issuer executing the
same may determine with the approval of the Trustee. 

The Notes (with the Guarantee endorsed thereon) may
be issued with appropriate insertions, omissions, substitutions and variations,
and may have imprinted or otherwise reproduced thereon such legend or legends,
not inconsistent with the provisions of this Indenture, as may be required to
comply with any law or with any rules or regulations pursuant thereto, with the
rules of any securities market in which the Notes are admitted to trading, or to
conform to general usage. 

13 

(b) 
    Each Note (with
the Guarantee endorsed thereon) shall be dated the date of their authentication.
Each Note shall bear interest from the date of issuance thereof or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for and shall be payable on the dates specified on the face of the form of Note
set forth as Exhibit A hereto. Interest on the Notes shall be calculated on the
basis of a 360-day year consisting of twelve 30-day months. 

(c) 
    On the Closing
Date, an appropriate Authorized Officer will execute and deliver to the Trustee
(i) for Notes sold within the United States to "qualified institutional buyers"
as defined in and pursuant to Rule 144A under the Securities Act (each, a "QIB"),
one or more restricted global Notes (each, a "Restricted Global Note"), with the
Guarantee endorsed thereon, in definitive, fully registered form without
interest coupons, in a denomination of US$100,000 or any amount in excess
thereof which is an integral multiple of US$1,000, substantially in the form of
Exhibit C hereto; and (ii) for Notes sold outside the United States in offshore
transactions in reliance on Regulation S under the Securities Act, one or more
Regulation S global Notes (each, a "Regulation S Global Note" and, together with
the Restricted Global Note, "Global Notes"), with the Guarantee endorsed
thereon, in definitive, fully registered form without interest coupons, in a
denomination of US$100,000 or any amount in excess thereof which is an integral
multiple of US$1,000, substantially in the form of Exhibit D hereto; all such
Notes so executed and delivered to the Trustee pursuant to clauses (i) and (ii)
of this subsection (c) shall be in an aggregate principal amount that shall
equal the aggregate principal amount of the Notes that are to be issued on the
Closing Date. The aggregate principal amount of the Restricted Global Notes and
the Regulation S Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Custodian for the Depositary or its
nominee, as hereinafter provided. 

Each Restricted Global Note, each restricted
Certificated Note issued in exchange for interests in the Restricted Global Note
("Restricted Certificated Note"), and each Regulation S Global Note (and each
Certificated Note issued in exchange for interests in the Regulation S Global
Note during such period) shall bear the following legend (the "Securities Act
Legend"), unless such Note has been sold pursuant to a registration statement
that has been declared effective under the Securities Act and provided that upon
and following the expiration of the Distribution Compliance Period, such legend
included on the Regulation S Global Note (and each Certificated Note issued in
exchange therefor) shall have no effect and may be removed by the Trustee upon
direction of the Issuer, the Guarantor or a holder of any interest in the
Regulation S Global Note: 

"THIS NOTE AND THE GUARANTEE
RELATED TO THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
THIS 

14 

NOTE MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) AGREES THAT IT WILL NOT RESELL, PLEDGE OR
OTHERWISE TRANSFER THE NOTES EXCEPT (A) IF SUCH PURCHASER IS AN INITIAL
PURCHASER, (I) TO THE GUARANTOR OR THE ISSUER OR ANY SUBSIDIARY THEREOF, (II) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (III) OUTSIDE THE UNITED STATES IN A TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (B)
IF SUCH PURCHASER IS A SUBSEQUENT PURCHASER OF AN INTEREST IN THE 144A GLOBAL
NOTE, AS SET FORTH IN (A) ABOVE AND, IN ADDITION, PURSUANT TO ANY AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT (PROVIDED
THAT AS A CONDITION TO THE REGISTRATION OF TRANSFER OF ANY NOTES OTHERWISE THAN
AS DESCRIBED IN (A) ABOVE OR (C) BELOW, THE ISSUER, THE GUARANTOR OR THE TRUSTEE
MAY, IN CIRCUMSTANCES THAT ANY OF THEM DEEMS APPROPRIATE, REQUIRE EVIDENCE, IN
ADDITION TO THAT OTHERWISE REQUIRED, AS TO COMPLIANCE WITH ANY SUCH EXEMPTION)
OR (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.
THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT IT WILL NOTIFY EACH
PURCHASER OF THIS NOTE FROM IT OF THE ABOVE RESTRICTIONS AND OF THIS LEGEND."

Each Global Note (i) shall be delivered by the
Trustee to DTC acting as the Depositary or, pursuant to DTC's instructions,
shall be delivered by the Trustee on behalf of DTC to and deposited with the
Custodian, and in either case shall be registered in the name of Cede & Co., or
such other name as DTC shall specify, and (ii) shall also bear a legend
substantially to the following effect: 

"UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED 

15 

BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 

THIS SECURITY IS A GLOBAL NOTE
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE
EXCHANGEABLE IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF
THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON
OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE." 

Global Notes may be deposited with such other
Depositary that is a clearing agency registered under the Exchange Act as the
Issuer may from time to time designate in writing to the Trustee, and shall bear
such legend as may be appropriate. 

(d)    
If at any time the Depositary
notifies the Issuer that it is unwilling or unable to continue as Depositary for
such Global Notes or if at any time the Depositary shall no longer be a clearing
agency registered under the Exchange Act, the Issuer shall appoint a successor
Depositary with respect to such Global Notes. If (i) a successor Depositary for
such Global Notes is not appointed by the Issuer within 90 days after the Issuer
receives such notice or becomes aware of such ineligibility, or (ii) an Event of
Default has occurred and is continuing with respect to the Notes, the Issuer
will execute, and the Trustee, upon receipt of an Officers' Certificate of the
Issuer directing the authentication and delivery thereof, will authenticate and
deliver, Certificated Notes in any authorized denominations in an aggregate
principal amount equal to the principal amount of such Global Notes in exchange
for such Global Notes. 

(e) 
    Global Notes shall
in all respects be entitled to the same benefits under this Indenture as
Certificated Notes authenticated and delivered hereunder. 

(f)     The
Person in whose name any Note is registered at the close of business on any
Interest Record Date with respect to any Interest Payment Date shall be entitled
to receive the interest, if any, payable on such interest payment 

16 

date notwithstanding any registration of transfer or exchange of such Note
subsequent to the Interest Record Date and prior to such interest payment date.

Section 2.05.  
Registration, Transfer and Exchange.
The Notes are issuable
only in registered form. The Issuer will keep at the office or agency to be
maintained for the purpose as provided in Section 3.02 (the "Registrar"),
a register (the "Register") in which, subject to such reasonable
regulations as it may prescribe, it will register, and will register the
transfer of, Notes as in this Article provided. The name and address of the
registered holder of each Note and the amount of each Note will be recorded in
the Register. Such Register shall be in written form in the English language or
in any other form capable of being converted into such form within a reasonable
time. Such Register shall be open for inspection by the Trustee at all
reasonable times. 

Upon due presentation for registration of transfer of
any Note, the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new Note or Notes in
authorized denominations for a like aggregate principal amount. 

A Holder may register the transfer of a Note only by
written application to the Registrar stating the name of the proposed transferee
and otherwise complying with the terms of this Indenture. No such registration
of transfer shall be effected until, and such transferee shall succeed to the
rights of a Holder only upon, final acceptance and registration of the transfer
by the Registrar in the Register. Prior to the registration of any transfer by a
Holder as provided herein, the Issuer, the Trustee and any agent of any of them
shall treat the Person in whose name the Note is registered as the owner thereof
for all purposes whether or not the Note shall be overdue, and neither the
Issuer, the Trustee, nor any such agent shall be affected by notice to the
contrary. Furthermore, any Holder of a Global Note shall, by acceptance of such
Global Note, agree that transfers of beneficial interests in such Global Note
may be effected only through a book entry system maintained by the Holder of
such Global Note (or its agent) and that ownership of a beneficial interest in
the Note shall be required to be reflected in a book entry. At the option of the
Holder, Notes may be exchanged for other Notes of any authorized denomination
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged to the Registrar. When Notes are presented to the Registrar with a
request to register the transfer or to exchange them for an equal principal
amount of Notes of other authorized denominations, the Registrar shall register
the transfer or make the exchange as requested if the requirements for such
transactions set forth herein are met. To permit registrations of transfers and
exchanges, the Issuer shall execute and the Trustee shall authenticate Notes at
the Registrar's request. 

Every Note presented or surrendered for registration
of transfer or for exchange shall (if so required by the Issuer or the
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer duly executed, by the Holder

17 

thereof or his attorney duly authorized in writing in a form satisfactory to
the Issuer and the Registrar. 

The Issuer or the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any exchange or registration of transfer of Notes (other than
any such transfer taxes or other similar governmental charge payable upon
exchanges). No service charge to any Holder shall be made for any such
transaction, 

The Issuer shall not be required to
exchange or register a transfer of (a) any Notes for a period of 15 days next
preceding the first mailing of notice of redemption of Notes to be redeemed or
(b) any Notes called or being called for redemption. 

All Notes issued upon any registration of transfer or
exchange of Notes shall be valid obligations of the Issuer, evidencing the same
debt and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such transfer or exchange. 

Section 2.06.  
Book-entry Provisions for Global
Notes, (a) Each Restricted
Global Note initially shall (i) be registered in the name of a nominee of the
Depositary, (ii) be delivered to the Custodian on behalf of the Depositary and
(iii) bear the Securities Act Legend. Each Regulation S Global Note initially
shall (i) be registered in the name of a nominee for the Depositary, (ii) be
delivered to the Trustee as custodian on behalf of the Depositary and (iii) bear
the Securities Act Legend; 
provided that upon and
following the expiration of the Distribution Compliance Period, such Securities
Act Legend shall have no effect and may be removed by the Trustee upon the
direction of the Issuer, or of the Guarantor or a holder of any interest in the
Regulation S Global Note with the approval of the Issuer. Until the expiration
of the Distribution Compliance Period, interests in the Regulation S Global
Notes may only be held through Euroclear and Clearstream. Upon and following the
expiration of the Distribution Compliance Period, interests in the Regulation S
Global Notes may be held by any member of, or participants in, the Depositary,
including Euroclear and Clearstream (collectively, the "Agent Members").

Agent Members shall have no rights under this
Indenture with respect to any Global Note held on their behalf by the
Depositary, or the Trustee as its custodian, or under the Global Notes, and the
Depositary may be treated by the Issuer, the Trustee and any agent of any of
them as the absolute owner of such Global Note for all purposes whatsoever,
Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the
Trustee or any agent of any of them, from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Global Note. 

18 

(b)
    Except as
provided in Section 2.07 transfers of a Global Note shall be limited to
transfers of such Global Note in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in a
Global Note may be transferred, and transfers increasing or decreasing the
aggregate principal amount of Global Notes may be conducted only in accordance
with the rules and procedures of the Depositary and, to the extent relevant, the
provisions of Section 2.07. In addition, Certificated Notes shall be transferred
to all beneficial owners in exchange for their beneficial interests in any
Restricted Global Note or Regulation S Global Note, respectively, under the
circumstances set forth in Section 2.04(d). 

(c)
    Any
beneficial interest in one of the Global Notes that is transferred to a Person
who takes delivery in the form of an interest in the other Global Note will,
upon transfer, cease to be an interest in such Global Note and become an
interest in the other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest. 

(d)    
In connection with the
transfer of an entire Restricted Global Note or Regulation S Global Note to
beneficial owners pursuant to paragraph (b) of this Section, the Restricted
Global Note or Regulation S Global Note, as the case may be, shall be deemed to
be surrendered to the Trustee for cancellation, and the Issuer shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depositary in exchange for its beneficial interest in such
Restricted Global Note or Regulation S Global Note, as the case may be, an equal
aggregate principal amount of Certificated Notes of authorized denominations.

(e)
    Any
Certificated Note delivered in exchange for an interest in a Restricted Global
Note pursuant to paragraph (b) or (d) of this Section shall, except as otherwise
provided by paragraph (d) of Section 2.07 bear the Securities Act Legend in
accordance with Section 2.07(d). 

(f)     The
registered holder of a Global Note may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes. 

Section 2.07.
 
Special Transfer Provisions. 
Unless and until the
Securities Act Legend is removed from a Certificated Note or Global Note
pursuant to paragraph (d) below, the following additional provisions shall apply
to the proposed transfer, exchange or replacement of Certificated Notes or, to
the extent relevant to the Trustee, the Registrar or the Depositary, any
beneficial interest in a Global Note: 

19 

              
            
          
        
      
    
  

(a)     
Transfers to Qualified Institutional
Buyers. The following
provisions shall apply with respect to the registration of any proposed transfer
of a Note (or interest in a Global Note) to a QIB: 

(i)    
The Registrar shall register the transfer of any Certificated Note containing
the Securities Act Legend if (x) the requested transfer is after the time period
referred to in Rule 144(k) under the Securities Act as in effect with respect to
such transfer or (y) such transfer is being made by a proposed transferor who
has checked the box provided for on the form of Note stating, or has otherwise
advised the Issuer and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed the
transfer notice provided for on the form of Note in substantially the form of
Exhibit B, 

(ii)    
If the Note to be transferred is a Certificated Note containing the Securities
Act Legend and the proposed transferee is an Agent Member holding such interest
on behalf of a QIB, upon receipt by the Registrar of (x) the documents referred
to in paragraph (i) above (if such transfer is pursuant to clause (y) of
paragraph (i) above) and (y) instructions given in accordance with the
Depositary's and the Registrar's procedures, the Registrar shall reflect on its
books and records the date of such transfer and an increase in the principal
amount of the Restricted Global Note in an amount equal to the principal amount
of the Certificated Note to be transferred and the Trustee shall cancel the
Certificated Note so transferred. 

(iii)    
Subject to the DTC Procedures, if the proposed interest to be transferred is an
interest in the Restricted Global Note, (x) such transfer may be effected only
through the book entry system maintained by the Depositary in compliance with
the applicable provisions of the Securities Act Legend and (y) the transferee is
required to hold such interest through an Agent Member. 

(iv)    
Subject to the DTC Procedures, (x) except as set forth in paragraph (v) below,
during the Distribution Compliance Period, an interest in the Regulation S
Global Note proposed to be transferred to a QIB transferee shall be required to
be held on behalf of such transferee through Euroclear or Clearstream and (y)
upon and following the expiration of the Distribution Compliance Period,
transfers of interests in the Regulation S Global Note to such transferees shall
not be so restricted, although interests therein shall be required to be held
through Agent Members. 

(v)    
Subject to the DTC Procedures, with respect to transfers of an interest in a
Regulation S Global Note to a QIB during the Distribution Compliance Period,
upon receipt by the Registrar of (x) a certificate by the 

20 

transferee or transferor, as the case may be, in
substantially the form of Exhibit K hereto and (y) instructions given in
accordance with the Depositary's and Registrar's procedures, the Registrar shall
reflect on its books and records the date of such transfer and a decrease in the
principal amount of the Regulation S Global Note in an amount equal to the
principal amount of the beneficial interest to be transferred, and shall
increase the principal amount of the Restricted Global Note in a like amount.

(b) 
    Transfers of
Interests in a Regulation S Global Note to Other U.S. Persons. 
Subject to the DTC Procedures, (x)
during the Distribution Compliance Period, an interest in the Regulation S
Global Note proposed to be transferred to any U.S. Person (as such term is
defined in Regulation S, a "U.S. 
Person") 
transferee shall be required to be
held on behalf of such other U.S. Person transferee only through Euroclear or
Clearstream and (y) upon and following the expiration of the Distribution
Compliance Period, transfers of interests in the Regulation S Global Note shall
not be so restricted, although interests therein shall be required to be held
through Agent Members. 

(c)
    Transfers
to Non-U.S. Persons. The
following provisions shall apply with respect to registration of transfers of a
Note (or interest in a Global Note) to a person that is not a U.S. Person (a
"Non-U.S. Person"):

(i)     The
Registrar shall register the transfer of any Certificated Note containing the
Securities Act Legend to a Non-U.S. Person upon receipt by the Registrar from
the transferor of a transfer notice provided for on the form of Note in
substantially the form of Exhibit B. 

(ii)     If the
proposed transferor is an Agent Member holding a beneficial interest in the
Restricted Global Note, upon receipt by the Registrar of (x) in the case of
transfers during the Distribution Compliance Period, a certificate by the
transferor in substantially the form of Exhibit I and in the case of transfers
upon and following the expiration of the Distribution Compliance Period, a
certificate by the transferor in substantially the form of Exhibit J and (y)
instructions in accordance with the Depositary's and the Registrar's procedures,
the Registrar shall reflect on its books and records the date of such transfer
and a decrease in the principal amount of the Restricted Global Note in an
amount equal to the principal amount of the beneficial interest in the
Restricted Global Note to be transferred, and shall increase the Regulation S
Global Note in a like amount. 

(iii)     If the
proposed transferor is a holder of a Certificated Note and the proposed
transferee is an Agent Member, upon receipt by the Registrar of the documents
required by paragraph (i) above and instructions given in accordance with the
Depositary's and the Registrar's 

21 

procedures, the Registrar shall reflect on its books
and records the date of such transfer and an increase in the principal amount of
the Regulation S Global Note, as the case may be, in an amount equal to the
principal amount of the Certificated Note to be transferred, and the Trustee
shall cancel the Certificated Note so transferred. 

(iv)     Subject
to the DTC Procedures, (x) during the Distribution Compliance Period, an
interest in the Regulation S Global Note shall be required to be held on behalf
of a Non-U.S. Person transferee only through Euroclear or Clearstream and (y)
upon and following the expiration of the Distribution Compliance Period,
transfers of interests in the Regulation S Global Note shall not be so
restricted, although interests therein shall be required to be held through
Agent Members. 

(d) 
    Securities Act
Legend. Upon the
registration of transfer, exchange or replacement of Notes bearing the
Securities Act Legend, the Registrar shall deliver only Notes that bear the
Securities Act Legend unless the requested transfer, exchange or replacement (i)
is after the time period referred to in Rule 144(k) under the Securities Act as
in effect with respect to such transfer, exchange or replacement, (ii) is made
upon and following the expiration of the Distribution Compliance Period or in
connection with a transfer under sub-clause (i) of Section 2.07(c) above
occurring after the expiration of the Distribution Compliance Period or (iii)
there is delivered to the Registrar an Opinion of Counsel reasonably
satisfactory to the Issuer to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act. Upon the registration of transfer,
exchange or replacement of Notes not bearing the Securities Act Legend, the
Registrar shall deliver Notes that do not bear the Securities Act Legend. 

(e) 
    General. 
By its acceptance of any Note
bearing the Securities Act Legend, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and in the
Securities Act Legend and agrees that it will transfer such Note only as
provided in this Indenture. The Registrar shall not register a transfer of any
Note unless such transfer complies with the restrictions on transfer of such
Note set forth in this Indenture. In connection with any transfer of Notes, each
Holder agrees by its acceptance of the Notes to furnish the Registrar or the
Issuer such certifications, legal opinions or other information as either of
them may reasonably require to confirm that such transfer is being made pursuant
to an exemption from, or a transaction not subject to, the registration
requirements of the Securities Act; 
provided 
that the Registrar shall not be
required to determine (but may rely on a determination made by the Issuer with
respect to) the sufficiency of any such certifications, legal opinions or other
information. 

The Registrar shall retain copies of all letters,
notices and other written communications received pursuant to Section 2.06 or
this Section 2,07 in 

22 

accordance with its customary procedures. The Issuer shall
have the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Registrar. 

(f)     The Trustee shall have no
obligation or duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Indenture or under applicable law
with respect to any transfer of any interest in any Note (including any
transfers between or among Depositary participants or beneficial owners of
interests in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are required by, and to do
so if and when expressly required by the terms of, this Indenture, and to
examine the same to determine substantial compliance as to form with the express
requirements hereof. 

Section 2.08. 
Mutilated, Defaced, Destroyed,
Stolen and Lost Notes. (a)
The Issuer shall execute and deliver to the Trustee Certificated Notes in such
amounts and at such times as to enable the Trustee to fulfill its
responsibilities under this Indenture and the Notes. 

(b)     In case any Note shall
become mutilated, defaced or be apparently destroyed, lost or stolen, upon the
request of the registered holder thereof, the Issuer in its discretion may
execute, and, upon the written request of Authorized Officers of the Issuer, the
Trustee shall authenticate and deliver, a new Note (with the Guarantee endorsed
thereon), bearing a number not contemporaneously Outstanding, in exchange and
substitution for the mutilated or defaced Note, or in lieu of and substitution
for the Note so apparently destroyed, lost or stolen. In every case the
applicant for a substitute Note shall furnish to the Issuer, the Guarantor and
the Trustee and any agent of the Issuer, the Guarantor or the Trustee such
security or indemnity as may be required by each of them to indemnify and defend
and to save each of them harmless and, in every case of destruction, loss or
theft evidence to their satisfaction of the apparent destruction, loss or theft
of such Note and of the ownership thereof. Upon the issuance of any substitute
Note, such Noteholder, if so requested by the Issuer or the Guarantor, will pay
a sum sufficient to cover any stamp duty, tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected with the preparation and issuance of the
substitute Note. The Trustee is hereby authorized, in accordance with and
subject to the foregoing conditions in this clause (b), to authenticate and
deliver from time to time, Notes (with the Guarantee endorsed thereon) in
exchange for or in lieu of Notes (with the Guarantee endorsed thereon),
respectively, which become mutilated, defaced, destroyed, stolen or lost. Each
Note delivered in exchange for or in lieu of any Note shall carry all the rights
to interest (including rights to accrued and unpaid interest and Additional
Amounts) which were carried by such Note. 

23 

(c)    
All Notes surrendered for
payment or exchange shall be delivered to the Trustee. The Trustee shall cancel
and dispose of all such Notes surrendered for payment or exchange, in accordance
with its customary procedures, and shall, upon receipt of a written request,
deliver a certificate of disposition to the Issuer and the Guarantor. 

(d)
    In the
event any such mutilated, defaced, destroyed, lost or stolen certificate has
become or is about to become due and payable, the Issuer in its discretion may,
instead of issuing a new certificate, pay such Notes. 

Section 2.09.  
Further Issues. 
The Issuer and the Guarantor may,
from time to time, without the consent of the Holders of the Notes, create and
issue further securities ("Additional Notes") having the same terms and
conditions as the Notes in all respects (or in all respects except for issue
date, issue price, and the first payment of interest on them and, to the extent
necessary, certain temporary securities law transfer restrictions) (a 
"Further Issue"). Additional Notes issued in this manner will be
consolidated and form a single series with the previously outstanding Notes in
accordance with the requirements of the Depositary. In connection with any such
issuance of Additional Notes, the Issuer shall deliver an Officers' Certificate
to the Trustee directing the Trustee to authenticate and deliver Additional
Notes on the Additional Closing Date specified therein in an aggregate principal
amount specified therein and the Trustee, in accordance with such Officers'
Certificate, shall authenticate and deliver such Additional Notes, The
Additional Notes will be (a) represented by an increase in the aggregate
principal amount of the Global Notes or (b) issued in the form of Certificated
Notes if the Notes are no longer represented by Global Notes. 

Section 2.10. 
Cancellation of Notes; Disposition
Thereof. All Notes
surrendered for payment, redemption, registration of transfer or exchange, if
surrendered to the Issuer or any agent of the Issuer or the Trustee, shall be
delivered to the Trustee for cancellation or, if surrendered to the Trustee,
shall be canceled by it; and no Notes shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture, The Trustee
shall dispose of canceled Notes held by it in accordance with its customary
procedures, and upon receipt of a written request, deliver a certificate of
disposition to the Issuer and the Guarantor. If the Issuer shall acquire any of
the Notes, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Notes unless and until the same are
delivered to the Trustee for cancellation. 

Section 2.11.  
CUSIP Numbers. 
The Issuer in issuing the Notes may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use for the Notes "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided 
that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other 

24 

identification numbers printed on the Notes, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Issuer will promptly notify the Trustee of any change in the "CUSIP"
numbers. 

ARTICLE 3 

COVENANTS OF THE ISSUER AND THE GUARANTOR 

Section 3.01.
 
Payment of Principal and Interest.
The Issuer covenants and
agrees that it will duly and punctually pay or cause to be paid the principal
of, and interest on, each of the Notes and any other payments required to be
made by the issuer under the Notes and this Indenture, at the place or places,
at the respective times and in the manner provided in the Notes and this
Indenture. 

Section 3.02.
 
Offices for Payments. 
So long as any of the Notes remain
Outstanding, the Issuer will maintain in the Borough of Manhattan, The City of
New York and each other place where principal of, and interest on, the Notes is
payable the following; 

(a)    
an office or agency where the
Certificated Notes may be presented and surrendered for payment of principal,

(b)    
an office or agency where the
Notes may be presented for exchange, transfer and registration of transfer as
provided in this Indenture; and 

(c)     an office or agency where
notices and demands to or upon the Issuer in respect of the Notes or of this
Indenture may be served 

The Issuer hereby initially designates the Corporate
Trust Office as the office or agency for each such purpose and where the
Register will be maintained. In case the Issuer shall fail to maintain any such
office or agency or shall fail to give notice of the location or of any change
in the location thereof, presentations and demands may be made and notices may
be served at the Corporate Trust Office. 

The Issuer may from time to time designate one or
more other offices or agencies where the Notes may be presented or surrendered
for any or all such purposes and may from tune to time rescind such
designations; provided, 
however, that no such
designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain an office or agency in each place where principal of, and
interest on, any Notes are payable. The Issuer will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. 

So long as the Notes are listed on the Singapore
Exchange Securities Trading Limited (the "Singapore Exchange") and if the
Singapore Exchange so 

25 

requires, there will be a Paying and Transfer Agent in Singapore. The Issuer
will give to the Trustee written notice of the location of any such office or
agency and of any change of location thereof. The Issuer has initially appointed
the Paying and Transfer Agent and Registrar listed in Exhibit H. 

So long as any of the Notes remain Outstanding, the
Guarantor will maintain in New York City and each other place where principal
of, and interest on, any Notes is payable an office or agency where notices and
demands to or upon the Guarantor in respect of the Notes, the Guarantee or this
Indenture may be served. The Guarantor hereby initially designates the Corporate
Trust Office as the office or agency for each such purpose. In case the
Guarantor shall fail to maintain any such office or agency or shall fail to give
notice of the location or of any change in the location thereof, presentations
and demands may be made and notices may be served at the Corporate Trust Office.

Section 3.03. 
Appointment to Fill a Vacancy in
Office of Trustee. The
Issuer and the Guarantor, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 5.08 a
Trustee, so that there shall at all times be a Trustee hereunder. 

Section 3.04.  
Payments. 
(a) In order to provide for the
payment of principal of, and interest on, the Notes as the same shall become due
and payable, or any redemption or purchase price of the Notes, the Issuer hereby
agrees to pay or to cause to be paid to the account of the Trustee at the
Corporate Trust Office, on each Interest Payment Date, the principal payment
date (whether upon maturity, redemption or otherwise) or the Redemption Date
pursuant to Section 12.01 (each a "Payment Date") of the Notes, on the
Business Day prior to Payment Date, in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts, in immediately available funds, an amount
which (together with any funds then held by the Trustee and available for the
purpose) shall be sufficient to pay the aggregate amount of interest or
principal or both, as the case may be, becoming due in respect of the Notes on
such Payment Date. The Trustee shall apply such amount to the payment due on
such Payment Date, and pending such application, such amounts shall be held in
trust by the Trustee for the benefit of the Persons entitled thereto. 

(b)     At least three Business
Days prior to the first Payment Date and, if there has been any change with
respect to the matters set forth in the below-mentioned certificate, at least
three Business Days prior to each Payment Date thereafter, the Issuer shall
furnish the Trustee with an Officers' Certificate instructing the Trustee as to
any circumstances in which payments of principal of, or interest on, the Notes
due on such date shall be subject to deduction or withholding for, or on account
of, any Taxes described in Section 3,09 and the rate of any such deduction or
withholding. If any such deduction or withholding shall be required and if the
Issuer therefore becomes liable to pay Additional 

26 

Amounts, if any, pursuant to Section 3.09 then at least three Business Days
prior to each Payment Date, the Issuer will furnish the Trustee with a
certificate which specifies the amount required to be withheld on such payment
to holders of the Notes, and the Additional Amounts, if any, due to holders of
the Notes, and at least one Business Day prior to such Payment Date, will pay to
the Trustee such Additional Amounts, if any, as shall be required to be paid to
such holders. 

(c)     Whenever the Issuer shall
appoint a Paying and Transfer Agent other than the Trustee for the purpose of
paying amounts due in respect of the Notes, it will cause such Paying and
Transfer Agent to execute and deliver to the Trustee an instrument substantially
in the form of Exhibit G hereto in which such agent shall agree with the Issuer,
among other things, to be bound by and observe the provisions of this Indenture
(including the Notes). The Issuer will cause each Paying and Transfer Agent
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying and Transfer Agent shall agree with the Trustee, 

(i)     that it
will hold all sums received by it as such Paying and Transfer Agent for the
payment of the principal of, or interest on, the Notes (whether such sums have
been paid to it by or on behalf of the Issuer or by any other obligor on the
Notes or the Guarantee) in trust for the benefit of the holders of the Notes or
of the Trustee; 

(ii)     that it
will give the Trustee written notice of any failure by the Issuer (or by any
other obligor on the Notes or the Guarantee) to make any payment of the
principal, or interest on, the Notes and any other payments to be made by or on
behalf of the Issuer under this Indenture, when the same shall be due and
payable; and 

(iii)    
that it will pay any such sums so held in trust by it to the Trustee upon the
Trustee's written request at any time during the continuance of a failure
referred to in clause (ii) above. 

Payment of interest on Notes may, at the option of
the Issuer, be made by check mailed to the address of the Person entitled
thereto as it appears in the Register. 

The Trustee, in its capacity as the
principal Paying and Transfer Agent, shall arrange with all other Paying and
Transfer Agents for the payment, solely from funds furnished by the Issuer to
the Trustee or to any Paying and Transfer Agent pursuant to this Indenture, of
the principal of, or interest on, the Notes. 

Anything in this Section 3.04 to the
contrary notwithstanding, the Issuer may at any time, for the purpose of
obtaining a satisfaction and discharge of this Indenture or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust by the
Issuer or any Paying and Transfer Agent hereunder, as 

27 

required by this Section 3.04 and such sums shall be held by
the Trustee upon the trusts herein contained. If the Paying and Transfer shall
pay all sums held in trust to the Trustee as required under this Section, the
Paying and Transfer Agent shall have no further liability for the money so paid
over to the Trustee. 

Anything in this Section to the contrary
notwithstanding, the agreements to hold sums in trust as provided in this
Section are subject to the provisions of Section 8.05. 

Section 3.05.  
Noteholders' Lists. 
If and so long as the Trustee shall
not be the Registrar, the Issuer will furnish or cause to be furnished to the
Trustee a list in such form as the Trustee may reasonably require of the names
and addresses of the holders of the Notes pursuant to Section 312 of the Trust
Indenture Act at such times as the Trustee may request in writing, within thirty
days after receipt by the Issuer of any such request as of a date not more than
15 days prior to the time such information is furnished. 

Section 3.06.  
Statement as to Compliance; Notice
of Default; Provision of Information. 
(a) The Issuer and the Guarantor will
deliver to the Trustee, within 180 days after the end of each fiscal year ending
after the date hereof, an Officers' Certificate of the Issuer or the Guarantor,
as the case may be, stating whether, to such office's knowledge, the Issuer or
the Guarantor, as the case may be, is in compliance with all covenants and
conditions to be complied with by it under this Indenture. For purposes of this
Section 3.06, such compliance shall be determined without regard to any period
of grace or requirement of notice under this Indenture. 

(b) 
    The Issuer and the
Guarantor shall notify the Trustee in writing of the occurrence of any Event of
Default or any condition or event which, with the giving of notice, lapse of
time or any other condition or any combination of the foregoing, would, unless
cured or waived, become an Event of Default within thirty Business Days of its
occurrence. 

(c) 
    So long as the
Notes and the Guarantee related thereto remain outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) of the Securities Act, the
Guarantor will furnish, upon the request of any Holder or any holder of a
beneficial interest in a Note, such information as is specified in paragraph
(d)(4) of Rule 144A, to such Holder or beneficial owner or to a prospective
purchaser of the Note or interest therein who is a Q1B, in order to permit
compliance by such Holder or beneficial owner with Rule 144A in connection with
the resale of the Note or beneficial interest therein in reliance on Rule 144A
unless, at the time of such request, the Guarantor is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, or is included in the
list of foreign private issuers that claim exemption from the registration
requirements of Section 12(g) of the Exchange Act (and therefore is required to

28 

furnish the Commission certain information pursuant to Rule 12g3-2(b) under
the Exchange Act). 

(d)     For so long as such
information is not otherwise publicly available, the Guarantor will furnish to
the Trustee and to each Holder, in English, the annual audited consolidated
financial statements of the Guarantor for its most recent calendar year (or, at
its option, most recent fiscal year), commencing with the year ended December
31, 2005, not later than four months after the date upon which the financial
period ended, and its interim unaudited consolidated financial statements for
the first six months of such calendar or fiscal year, commencing with the
six-month period ended June 30, 2005, not later than three months after the end
of that six-month period. Such annual audited consolidated financial statements
or interim unaudited consolidated financial statements, as the case may be,
shall include a period-to-period comparison to the relevant period of the prior
year. 

Section 3.07.  
Limitation on Liens. 
The Guarantor will not, and will not
permit any of its Principal Subsidiaries (other than Listed Principal
Subsidiaries) to create, incur, assume or permit to exist any Lien upon any of
its property or assets, now owned or hereafter acquired, to secure any
Indebtedness of the Guarantor or such Principal Subsidiary (or any guarantee or
indemnity in respect thereof) without, in any such case, making effective
provision whereby the Guarantee will be secured either at least equally and
ratably with such Indebtedness or by such other Lien as shall have been approved
by the Holders of not less than a Majority in aggregate principal amount of the
Notes at the time Outstanding pursuant to the procedures set forth in Article 7
herein, for so long as such Indebtedness will be so secured, unless, after
giving effect thereto, the aggregate outstanding principal amount of all such
secured Indebtedness (excluding that of Listed Principal Subsidiaries and their
respective Subsidiaries) entered into after the date hereof would not exceed 50%
of the Guarantor's Adjusted Consolidated Net Worth. 

The foregoing restriction will not apply to: 

(a) 
    Liens existing on
or prior to the date hereof; 

(b)    
Liens for taxes or assessments
or other applicable governmental charges or levies; 

(c) 
    Liens created or
arising by operation of law or created in the ordinary course of business,
including, but not limited to, landlords' liens and statutory liens of carriers,
warehousemen, mechanics, materialmen, vendors and other liens securing amounts
which are not more than 60 days overdue or which are being contested in good
faith; 

29 

(d) 
    Liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts or undertakings, performance and
return of money bonds, interconnection, access or resale agreements with other
telecommunications companies or organizations, and similar obligations; 

(e)
    easements,
rights-of-way, zoning and similar restrictions and other similar charges or
encumbrances not interfering with the ordinary conduct of the business of the
Guarantor and such Principal Subsidiaries; 

(f) 
    Liens created on
any property or assets acquired, leased or developed (including improved,
constructed, altered or repaired) after the date hereof; 
provided, 
however, that (i) any such Lien shall
be confined to the property or assets acquired, leased or developed (including
improved, constructed, altered or repaired); (ii) the principal amount of the
debt encumbered by such Lien shall not exceed the cost of the acquisition or
development of such property or assets or any improvements thereto (including
any construction, repair or alteration) or thereon and (iii) any such Lien shall
be created concurrently with or within three years following the acquisition,
lease or development (including construction, improvement, repair or alteration)
of such property or assets; 

(g)    
rights of set off of a
financial institution with respect to deposits or other accounts of the
Guarantor or such Principal Subsidiary held by such financial institution in an
amount not to exceed the aggregate amount owed to such financial institution by
the Guarantor or such Principal Subsidiary, as the case may be; 

(h)     Liens on
documents and the goods they represent in connection with letters of credit,
trade finance and similar transactions entered into in the ordinary course of
business; 

(i)     Liens
arising in connection with industrial revenue, development or similar bonds or
other indebtedness or means of project financing (not to exceed the value of the
project financed and limited to the project financed); 

(j)     Liens in favor of the
Guarantor or any Principal Subsidiary; 

(k)     leases, subleases,
licenses and sublicenses granted to third parties in the ordinary course of
business; 

(1)     attachment, judgment and
other similar Liens arising in connection with court proceedings which are
effectively stayed while the underlying claims are being contested in good faith
by appropriate proceedings; 

30 

(m)     any Lien against any
property or assets of a Person existing at the time such Person becomes a
Principal Subsidiary or arising after such acquisition pursuant to contractual
commitments entered into prior to and not in contemplation of such acquisition;

(n)     any Lien existing on any
property or assets prior to the acquisition thereof, which Lien was not created
in connection with the acquisition thereof, except for Liens permitted pursuant
to clause (f) above; 

(o)     Liens on any property or
assets of the Guarantor or any such Principal Subsidiary in favor of any
government or any subdivision thereof, securing the obligations of the Guarantor
or such Principal Subsidiary under any contract or payment owed to such
governmental entity pursuant to applicable laws, rules, regulations or statutes;

(p)     Liens created in
connection with any sale and leaseback transaction; 

(q)     any renewal or extension
of any of the Liens described in the foregoing clauses which is limited to the
original property or assets covered hereby; or 

(r)     Liens in respect of
Indebtedness with respect to which the Guarantor or any Principal Subsidiary has
paid money or deposited money or securities with a fiscal agent, trustee or
depository to pay or discharge in full the obligations of the Guarantor and its
Subsidiaries in respect thereof (other than the obligations that such money or
securities so paid or deposited, and the proceeds therefrom, be sufficient to
pay or discharge such obligations in full). 

Section 3.08. 
Limitation on Issuer's Activities.
For so long as the Notes
are outstanding, the Issuer will conduct no business or any other activities
other than the offering, sale or issuance of indebtedness and the lending of the
proceeds thereof to the Guarantor and any other activities in connection
therewith; provided 
that upon any merger of the
Issuer into the Guarantor or of the Guarantor into the Issuer, this Section 3.08
shall no longer apply. 

Section 3.09. 
Payment Of Additional Amounts. 
All payments of principal and
interest made by the Issuer in respect of the Notes and made by the Guarantor in
respect of the Intercompany Loan, and all payments pursuant to the Guarantee,
shall be made free and clear of, and without withholding or deduction for, any
taxes, duties, assessments or governmental charges of whatever nature imposed,
levied, collected, withheld or assessed by or within the British Virgin Islands
or Hong Kong or any authority therein or thereof having power to tax ("Taxes"),
unless such withholding or deduction of such Taxes is required by law or by the
interpretation or administration thereof. In that event, the Issuer or the
Guarantor, as applicable, shall pay such additional amounts ("Additional
Amounts") as will result in receipt by the holders of the Notes or the Issuer in
respect of the 

31 

Intercompany Loan, as the case may be, of such amounts as
would have been payable to such holders or the Issuer, as the case may be, had
no such withholding or deduction of such Taxes been required, except that no
such Additional Amounts shall be payable: 

(a) 
    in respect of any
such Taxes that would not have been imposed, deducted or withheld but for the
existence of any connection between the holder or beneficial owner of a Note or
the Guarantee, as the case may be, and the British Virgin Islands or Hong Kong
or any political subdivision or any authority thereof or therein or any
territory or possession thereof or area subject to its jurisdiction, as the case
may be, otherwise than merely holding such Note or the Guarantee or receiving
principal or interest in respect thereof; 

(b)    
in respect of any Note or the
Guarantee presented for payment (where presentation is required) more than 30
days after the relevant date, except to the extent that the holder thereof would
have been entitled to such Additional Amounts on presenting the same for payment
on the last day of such 30-day period. For this purpose, the "relevant date" in
relation to any Note or the Guarantee means (i) the due date for payment thereof
and (ii) if the full amount payable on such due date has not been received in
The City of New York by the Trustee on or prior to such due date, the first date
on which such full amount has been so received and notice to that effect has
been given to the holders of the Notes; 

(c)    
in respect of any such Taxes
withheld or deducted from any payment under or with respect to any Note or
Guarantee: (i) where such withholding or deduction is imposed on a payment to an
individual and is required to be made pursuant to European Council Directive
2003/48/EC or any Directive implementing the conclusions of the ECOFIN Council
meeting of November 26-27, 2000 on the taxation of savings income or any law
implementing or complying with, or introduced in order to conform to, such
Directive or (ii) presented for payment by or on behalf of a holder who would
have been able to avoid such withholding or deduction by presenting the relevant
Note to another paying agent in a Member State of the European Union; 

(d)    
in respect of any such Taxes
payable otherwise than by deduction or withholding from payments under or with
respect to any Note or the Guarantee; 

(e)    
in respect of any such Taxes
that would not have been so imposed, deducted or withheld if the holder or
beneficial owner of a Note or the Guarantee or the beneficial owner of any
payment on such Note or the Guarantee had (i) made a declaration of
non-residence or any other claim or filing for exemption to which it is entitled
or (ii) complied with any certification, identification, information,
documentation or other reporting requirement concerning the nationality,
residence, identity or connection with the British Virgin Islands or Hong Kong
of such holder or beneficial owner of such Note or the Guarantee 

32 

(provided that (x) such declaration of non-residence or other claim or filing
for exemption or such compliance is required by the applicable law of the
British Virgin Islands or Hong Kong as a precondition to exemption from, or
reduction in the rate of the imposition, deduction or withholding of, such Taxes
and (y) at least 30 days prior to the first payment date with respect to which
such declaration of non-residence or other claim or filing for exemption or such
compliance is required under the applicable law of the British Virgin Islands or
Hong Kong, the holder of such Note or the Guarantee at that time has been
notified by the Issuer, the Guarantor or any other person through whom payment
may be made that a declaration of non-residence or other claim or filing for
exemption or such compliance is required to be made); 

(f)    
in respect of any payment
under or with respect to a Note or the Guarantee to any holder that is a
fiduciary or partnership or any person other than the sole beneficial owner of
such payment, Note or Guarantee, to the extent that a beneficiary or settlor
with respect to such fiduciary, a member of such a partnership or the beneficial
owner of such payment, Note or Guarantee would not have been entitled to such
Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the actual holder of such Note or Guarantee; 

(g)    
in respect of any estate,
inheritance, gift, sales, excise, transfer or personal property tax or similar
tax, assessment or governmental charge; or 

(h)     any combination of items
(a) through (g) above. 

Whenever there is mentioned, in any context, the
payment of principal or interest in respect of any Note, the Intercompany Loan
or the Guarantee, such mention shall be deemed to include the payment of
Additional Amounts provided for herein or in the Intercompany Loan, as the case
may be, to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant hereto or in the Intercompany Loan,
as the case may be. 

The foregoing provisions in this Section 3.09 shall
apply in the same manner with respect to the jurisdiction in which any successor
Person to the Issuer (including any entity substituted in place of the Issuer,
or of any previous substituted company, pursuant to Section 3.12) or the
Guarantor is organized or any authority therein or thereof having the power to
tax (a "Successor Jurisdiction"), substituting such Successor Jurisdiction for
the British Virgin Islands or Hong Kong, as the case may be. 

Section 3.10. 
Payment of Stamp Duty and Other
Taxes. Except as otherwise
provided by the terms of this Indenture, the Issuer or the Guarantor, as
applicable, will pay any present or future stamp, court or documentary taxes, or
any other excise or property taxes, charges or similar levies which arise in any
jurisdiction from the execution, delivery or registration of the Notes, the
Guarantee or any other document or instrument referred to herein, excluding any

33 

such taxes, charges or similar levies imposed by any jurisdiction outside of
the British Virgin Islands and Hong Kong. However, neither the Issuer, the
Trustee nor the Guarantor will be required to pay those taxes resulting from, or
required to be paid in connection with, the enforcement of the Notes or the
Guarantee or any other such document or instrument following the occurrence of
any Event of Default with respect to the Notes. 

Section 3.11. 
Waiver of Certain Covenants. 
The Issuer or the Guarantor
may omit in any particular instance to comply with any covenant or condition of
this Indenture with respect to Notes (other than a covenant or condition which
under Article 7 cannot be modified or amended without the consent of the Holder
of each Outstanding Note affected thereby) if, before or after the time for such
compliance, the Holders of not less than a Majority in aggregate principal
amount of the Notes at the time Outstanding shall, by an Act of such Holders,
waive such compliance in such instance with such covenant or condition with
respect to Notes. No such waiver shall extend to or affect such covenant or
condition with respect to Notes except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Issuer and the
Guarantor and the duties of the Trustee in respect of any such covenant or
condition with respect to Notes shall remain in full force and effect. 

Any such waivers will be conclusive and binding on
all holders of the Notes, whether or not they have given consent to such
waivers, and on all future holders of the Notes, whether or not notation of such
waivers is made upon the Notes. Any instrument given by or on behalf of any
holder of a Note in connection with any consent to any such waiver will be
irrevocable once given and will be conclusive and binding on all subsequent
holders of such Note, 

Section 3.12. 
Substitution. 
Subject to the amendment of this
Indenture pursuant to Section 7.01 and such other conditions as the Trustee may
require, the Trustee may agree, but without consent of the Holders of the Notes
(if the Trustee is satisfied that to do so would not be materially prejudicial
to the interests of the holders of the Notes, as evidenced by the delivery of an
Opinion of Counsel to the Trustee to that effect), to the substitution of
certain other subsidiaries of PCCW in place of the Issuer, or of any previous
substituted company, as principal debtor under this Indenture and the Notes,
provided that 
such substituting entity shall also
have delivered to the Trustee an opinion of U.S. tax counsel of recognized
standing to the effect that the beneficial owners of the Notes will not
recognize income, gain or loss for U.S. federal income tax purposes as a result
of such substitution and will be subject to U.S. federal income tax on the same
amounts and in the same manner and at the same times as would be the case as if
such substitution had not occurred. 

34 

ARTICLE 4 

REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON EVENT OF DEFAULT

Section 4.01. 
Event of Default Defined;
Acceleration of Maturity; Waiver of Default. 
"Event of Default" with
respect to Notes wherever used herein, means any one of the following events
(whatever the reason for such Event of Default and whether or not it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body): 

(a) 
    failure to pay
principal of any Note within five Business Days after the due date for such
payment; 

(b) 
    failure to pay
interest on any Note within 30 days after the due date for such payment; 

(c) 
    failure to perform
any other covenant or agreement of the Guarantor or the Issuer herein, and such
failure continues for 60 days after there has been given, by registered or
certified mail, to the Guarantor or the Issuer, as the case may be, by the
Trustee or by the holders of at least 25% in aggregate principal amount of the
Notes then outstanding (with a copy to the Trustee) a written notice specifying
such failure and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; 

(d) 
    the Guarantee
shall cease to be in full force or effect or the Guarantor shall deny or
disaffirm its obligations under the Guarantee; 

(e)    
(i) failure to pay upon final
maturity (after giving effect to the expiration of any applicable grace period
therefor) the principal of any Indebtedness of the Issuer, the Guarantor or any
Principal Subsidiary, (ii) acceleration of the maturity of any Indebtedness of
the Issuer, the Guarantor or any Principal Subsidiary following a default by the
Issuer, the Guarantor or such Principal Subsidiary, if such Indebtedness is not
discharged, or such acceleration is not annulled, within 10 days after receipt
of the written notice as provided herein, or (iii) failure to pay any amount
payable by the Issuer, the Guarantor or any Principal Subsidiary under any
guarantee or indemnity in respect of any Indebtedness of any other Person if
such obligation is not discharged or otherwise satisfied within 10 days after
receipt of written notice as provided herein; 
provided, 
however, that no such event set forth
in clause (i), (ii) or (iii) shall constitute an Event of Default unless the
aggregate outstanding Indebtedness to which all such events relate exceeds
US$30,000,000 (or its equivalent in any other currency); 

(f)     a decree
or order by a court having jurisdiction shall have been entered under any
applicable bankruptcy, insolvency, reorganization or other similar law: (i) for
relief in respect of the Issuer, the Guarantor or any Principal 

35 

Subsidiary of the Issuer or the Guarantor, as the case may be, in an
involuntary case of winding up or bankruptcy proceeding under applicable law or
(ii) adjudging the Issuer, the Guarantor or any such Principal Subsidiary of the
Issuer or the Guarantor, as the case may be, bankrupt or insolvent, or seeking
reorganization, winding up, arrangement, adjustment or composition of or in
respect of the Issuer, the Guarantor or any such Principal Subsidiary of the
Issuer or the Guarantor, as the case may be, under applicable law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Issuer, the Guarantor or any such Principal Subsidiary
of the Issuer or the Guarantor, as the case may be, or of any substantial part
of any of their properties, or ordering the winding up or liquidation of any of
their affairs, and any such decree or order remains unstayed and in effect for a
period of 60 consecutive days; or 

(g)     the Issuer, the Guarantor
or any Principal Subsidiary of the Issuer or the Guarantor, as the case may be,
institutes a voluntary case or proceeding under applicable bankruptcy,
insolvency, reorganization or similar law, or any other case or proceedings to
be adjudicated bankrupt or insolvent, or the Issuer, the Guarantor or any
Principal Subsidiary of the Issuer or the Guarantor, as the case may be, files a
petition or answer or consent seeking reorganization or relief under applicable
bankruptcy, insolvency, reorganization or similar law, or consents to the filing
of any such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of any of the Issuer, the Guarantor or any such Principal
Subsidiary of the Issuer or the Guarantor, as the case may be, or of any
substantial part of its property, or makes an assignment for the benefit of
creditors, or admits in writing its inability to pay its debts generally as they
become due or takes corporate action in furtherance of any such action. 

Section 4.02. 
Acceleration of Maturity;
Rescission. If an Event of
Default (other than an Event of Default described in clauses (f) and (g) of
Section 4.01) with respect to the Notes shall occur and be continuing, either
the Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then Outstanding by written notice to the Issuer and the Guarantor (and to
the Trustee if the notice is given by such Holders) may declare the unpaid
principal amount of the Notes and any accrued and unpaid interest thereon (and
any Additional Amounts payable in respect thereof) to be due and payable
immediately upon receipt of such notice. Notwithstanding the foregoing, in the
event of an Event of Default specified in clauses (f) and (g) of Section 4.01,
the unpaid principal amount of all the Notes then Outstanding and any accrued
and unpaid interest thereon will automatically, and without any declaration or
other act on the part of the Trustee or any Holder of Notes, become immediately
due and payable. After a declaration of acceleration but before a judgment or
decree for payment of the money due has been obtained by the Trustee, the
Holders of at least a Majority in aggregate principal amount of the Notes then
Outstanding, by written notice to the Issuer, the Guarantor and the Trustee, may
rescind and annul such declaration of 

36 

acceleration if (a) the Issuer or the Guarantor has paid or deposited with
the Trustee a sum sufficient to pay (i) ail sums paid or advanced by the Trustee
under this Indenture and the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel and any other amounts due
the Trustee under Section 5,06, (ii) all overdue interest on all Notes, (iii)
the principal of any Notes which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate borne by the Notes,
and (iv) to the extent that payment of such interest is lawful, interest upon
overdue interest at the rate borne by the Notes; and (b) all Events of Default,
other than the non-payment of principal of the Notes which have become due
solely by such declaration of acceleration, have been waived as provided in
Section 4.11 or cured. No such rescission shall affect any subsequent default or
impair any right consequent thereon. 

Section 4.03. 
Collection of Indebtedness by
Trustee; Trustee May Prove Debt. 
The Issuer and the Guarantor, jointly
and severally, covenant that in case there shall be a Default (a) in the payment
of any interest (including Additional Amounts) on any Note when such interest
shall have become due and payable, and such Default shall have continued for a
period of five Business Days or (b) in the payment of all or any part of the
principal upon the occurrence and continuance of an Event of Default of any
Notes when the same shall have become due and payable, whether upon maturity or
by declaration or otherwise, then upon demand of the Trustee, the Issuer and/or
the Guarantor will pay to the Trustee for the benefit of the Holders of the
Notes the whole amount that then shall have become due and payable on all such
Notes at the time Outstanding for principal upon the occurrence and continuance
of an Event of Default or interest (including Additional Amounts), as the case
may be, plus interest on overdue principal, overdue interest at the rate 
per
annum 
which would otherwise be borne by the
Notes at such time (to the extent permitted by law), and such further amount as
is sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and any other amounts due the Trustee hereunder. 

In case the Issuer and the Guarantor shall fail
forthwith to pay such amounts upon such demand, the Trustee, in its own name and
as trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against the
Issuer and the Guarantor upon the Notes and collect in the manner provided by
law out of the property of the Issuer and the Guarantor, wherever situated, the
monies adjudged or decreed to be payable. 

In case of any judicial proceeding
with respect to the Issuer or the Guarantor (or any other obligor upon the
Notes), its or their property or its or their creditors, the Trustee shall be
entitled and empowered, by intervention in such 

37 

proceeding or otherwise, to take any and all actions in order to have claims
of the Noteholders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, Trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Noteholder to make such payments to the Trustee. 

All rights of action and of asserting claims under
this Indenture or any of the Notes may be enforced by the Trustee without the
possession of any of the Notes or the production thereof at any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall be for the ratable benefit of the Noteholders.

In any proceedings brought by the Trustee (and also
any proceedings involving the interpretation of any provision of this
Indenture), the Trustee shall be held to represent all the Noteholders, and it
shall not be necessary to make any Noteholders parties to any such proceedings.

Section 4.04. 
Application of Proceeds. 
Any monies collected by the Trustee
with respect to the Notes pursuant to this Article shall be applied in the
following order at the date or dates fixed by the Trustee and, in case of the
distribution of such monies on account of principal or interest, upon
presentation of the several Notes and stamping (or otherwise noting) thereon the
payment, or issuing Notes in reduced principal amounts in exchange for the
presented Notes if only partially paid, or
upon surrender thereof if
fully paid: 

FIRST: To the payment of all amounts due to the
Trustee under Section 5.06 with respect to Notes; 

SECOND: In case the principal of the Notes shall not
have become due and payable, to the payment of overdue interest (including
Additional Amounts) in Default, ratably to the Persons entitled thereto; 

THIRD: In case the principal of the Notes shall have
become due and payable, to the payment of the whole amount then owing and unpaid
upon all the Notes for principal and interest, with interest upon the overdue
principal and (to the extent that such interest has been collected by the
Trustee) upon overdue installments of interest at the rate of interest specified
in the Notes; and, in case such monies shall be insufficient to pay in full the
whole amount so due and unpaid upon the Notes, then to the payment of such
principal and interest without preference or priority of principal over
interest, or of interest over principal or of any installment of interest over
any other installment of interest, or of any Note over any other Note, ratably
to the aggregate of such principal and accrued and unpaid interest of the Notes;
and 

38 

FOURTH: To the payment of the remainder, if any, to
the Issuer. 

Section 4.05. 
Suits for Enforcement. 
In case an Event of Default with
respect to Notes has occurred and has not been waived by the holders of Notes in
accordance with this Indenture and is continuing, the Trustee at the direction
of the Noteholders, and upon offer of security or indemnity reasonably
satisfactory to it from such Noteholders in accordance with Section 5.02(e),
will proceed to protect and enforce the rights vested in it by this Indenture by
such appropriate judicial proceedings as the Trustee shall deem most effectual
based upon an Opinion of Counsel to protect and enforce any of such rights,
either at law or in equity or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
applicable law. 

Section 4.06. 
Restoration of Rights on Abandonment
of Proceedings. In case
the Trustee shall have proceeded to enforce any right of Holders of Notes under
this Indenture and such proceedings shall have been discontinued or abandoned
for any reason, then and in every such case the Issuer, the Guarantor and the
Trustee, subject to such determination, shall be restored respectively to their
former positions and rights hereunder, and all rights, remedies and powers of
the Issuer, the Guarantor, the Trustee and the holders of Notes shall continue
as though no such proceedings had been taken. 

Section 4.07. 
Limitations on Suits by Noteholders.
Except as provided in
Section 4.08, no Holder of any Note shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or a Trustee, or for any other remedy
hereunder or under the Notes, unless (a) such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to
Notes; (b) the Holders of at least 25% in aggregate principal amount of the
Notes at the time Outstanding shall have made a written request to the Trustee
to institute proceedings in respect of such Event of Default in the Trustee's
own name; (c) such Holder or Holders of Notes shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against any loss, liability
or expense satisfactory to it; (d) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute any such
proceeding; and (e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a Majority in
principal amount of the Outstanding Notes; it being understood and intended, and
being expressly covenanted by every Noteholder with every other Noteholder and
the Trustee, that no one or more Noteholder shall have any right in any manner
whatever by virtue or by availing itself of any provision of this Indenture or
of the Notes to affect, disturb or prejudice the rights of any other Noteholders
or to obtain priority over or preference to any other such Noteholder, or to
enforce any right under this Indenture or under the Notes, except in the manner
herein provided and for the 

39 

equal, ratable and common benefit of all Noteholders. For the avoidance of
doubt, the limitations set forth in this Section 4.07 do not apply to a suit
instituted by a bolder of a Note for the enforcement of the right to receive
payment of the principal of or interest on such Note on or after the applicable
due date specified in such Note. 

Section 4.08. 
Right of Noteholders to Receive
Principal and Interest. 
Notwithstanding any other provision in this Indenture, each Noteholder shall
have the right to (a) receive payment of principal of, and interest on, its Note
on the stated maturity or stated maturities expressed in such Note and (b)
institute suit for the enforcement of any such payment, and such right shall not
be impaired or adversely affected without such Holder's consent. 

Section 4.09. 
Powers and Remedies Cumulative;
Delay or Omission Not Waiver of Default. 
Except as otherwise provided herein,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by applicable law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy. 

No delay or omission of the Trustee or of any
Noteholder to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 4.07 every power and remedy given
by this Indenture or by law to the Trustee or to the Noteholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Noteholders. 

Section 4.10. 
Control by Noteholders. 
Subject to Section 5.02(e), the
holders of a Majority in aggregate principal amount of the Notes at the time
Outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee by this Indenture, with respect to
Notes; provided, 
however, that such direction shall
not be otherwise than in accordance with applicable law and the provisions of
this Indenture, and provided,
further, that the Trustee
may at its discretion take any action deemed proper by the Trustee and which is
not inconsistent with such direction by Noteholders. 

Section 4.11. 
Waiver of Past Defaults, 
Subject to Section 4.02, the Holders
of not less than a Majority in principal amount of Notes at the time
Outstanding, by notice to the Trustee, may, on behalf of all Holders of Notes,
waive any existing or past Default or Event of Default and its consequences
under 

40 

this Indenture with respect to Notes, except a continuing Default or Event of
Default (a) in the payment of principal of, or interest on (or Additional Amount
payable in respect of), any Note then Outstanding or (b) in respect of a
covenant or provision hereof which may not be modified or amended without the
consent of the Holder of each Note then Outstanding affected thereby in
accordance with Section 7.02. When a Default or an Event of Default is waived,
it is deemed cured and shall cease to exist and shall be deemed not to have
occurred (for every purpose of this Indenture or otherwise) and the Issuer, the
Guarantor, the Trustee and the Holders of the Notes shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
consequent right thereon, 

Any such waivers will be conclusive and binding on
all holders of the Notes, whether or not they have given consent to such
waivers, and on all future holders of the Notes, whether or not notation of such
waivers is made upon the Notes. Any instrument given by or on behalf of any
holder of a Note in connection with any consent to any such waiver will be
irrevocable once given and will be conclusive and binding on all subsequent
holders of such Note. 

Section 4.12. 
Payments after a Default. 
Upon the occurrence and
continuance of an Event of Default and the subsequent declaration by the Trustee
that the principal of all the Notes is due and payable immediately, the Trustee
may by notice in writing (a) to the Issuer, the Guarantor and any Paying and
Transfer Agent, require each Paying and Transfer Agent to deliver all Notes and
all monies, documents and records held by them with respect to the Notes to the
Trustee or as the Trustee otherwise directs in such notice; and (b) require any
Paying and Transfer Agent to act as agent of the Trustee under this Indenture
and the Notes, and thereafter to hold all Notes and all monies, documents and
records held by it in respect of the Notes to the order of the Trustee. 

Section 4.13. 
Waiver of Stay or Extension Laws.
Each of the Issuer and the
Guarantor covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and each of the Issuer and the Guarantor (to the extent that
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted. 

Section 4.14. 
Trustee May Filed Proofs of Claim.
The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for amounts due
the Trustee under Section 5.06) and the Holders allowed in any judicial
proceeding relative to the Issuer or the Guarantor, its creditors or its 

41 

property and shall be entitled and empowered to collect and receive any
moneys, securities or other property payable or deliverable upon conversion or
exchange of Notes or upon any such claims and to distribute the same, and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payment directly to the Holders, to pay to
the Trustee any amount due to it under Section 5.06. Nothing herein contained
shall be deemed to empower the Trustee to authorize or consent to, or accept or
adopt on behalf of any Holder, any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in such proceeding. 

ARTICLE 5 

CONCERNING THE TRUSTEE 

Section 5.01. 
Duties and Responsibilities of the
Trustee during Default; Prior to Default. 
The Trustee, except during the
continuance of an Event of Default, undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture. If Event of Default
has occurred and is continuing, the Trustee shall use the same degree of care
and skill in its exercise of the rights and powers vested in it by this
Indenture, as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs. 

No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own grossly negligent action, its own
grossly negligent failure to act or its own willful misconduct. 

Except that: 

(a)     prior to the occurrence
of an Event of Default and after the curing or waiving of all such Events of
Default which may have occurred: 

(i)     
the duties and obligations of the Trustee shall be determined solely by the
express provisions of this Indenture, and the Trustee shall not be liable except
for the performance of such duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and 

(ii)     in the
absence of bad faith on the part of the Trustee, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any statements, certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in the
case of any such statements, 

42 

certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform to the
requirements of this Indenture; 

(b)    
the Trustee shall not be
liable for any error of judgement made in good faith by a responsible officer or
responsible officers of the Trustee, unless it shall be proved that the Trustee
was grossly negligent in ascertaining the pertinent facts; and 

(c)    
the Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less than a
Majority in principal amount of the Notes at the time Outstanding relating to
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture. 

None of the provisions contained in this Indenture
shall require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there shall be reasonable ground for
believing that the repayment of such funds or adequate indemnity against such
liability is not reasonably assured to it. 

Section 5.02. 
Certain Rights of the Trustee. 
Subject to Section 5.01:

(a)     the Trustee may
conclusively rely and shall be fully protected in acting or refraining from
acting upon any resolution, Officers' Certificate or any other certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon, security or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties; but in the case of any such statements, certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Indenture; 

(b) 
    before the Trustee
acts or refrains from acting, it may require an Officers' Certificate or an
Opinion of Counsel. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such Officers' Certificate or Opinion
of Counsel. In addition, in determining the compliance of the Issuer or the
Guarantor with the financial covenants set forth herein, the Trustee may rely on
the certificate delivered to the Trustee pursuant to 3.06(a); 

(c) 
    the Trustee may
consult with counsel of its selection and any advice or Opinion of Counsel shall
be full and complete authorization and protection in 

43 

respect of any action taken, suffered or omitted to be taken by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel; 

(d)    
any request, direction, order
or demand of the Issuer or the Guarantor mentioned herein shall be sufficiently
evidenced by an Officers' Certificate (unless other evidence in respect thereof
be herein specifically prescribed); and any resolution of the Board of Directors
may be evidenced to the Trustee by a copy thereof certified by the secretary or
an assistant secretary of the Issuer or the Guarantor, as the case may be; 

(e) 
    the Trustee shall
be under no obligation to exercise any of the trusts or powers vested in it by
this Indenture at the request, order or direction of any of the Noteholders
pursuant to the provisions of this Indenture, unless such Noteholders shall have
offered to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities which may be incurred therein or
thereby; 

(f)    
the Trustee shall not be
liable for any action taken, suffered, or omitted by it in good faith and
believed by it to be authorized or within the discretion, rights or powers
conferred upon it by this Indenture; 

(g)    
the Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians (including, without limitation,
one or more authenticating agents) or attorneys not regularly in its employ and
the Trustee shall not be responsible for any negligence or misconduct on the
part of any such agent, nominee, custodian or attorney appointed with due care
by it hereunder; 

(h)     prior to the occurrence
of an Event of Default hereunder and after the curing or waiving of all Events
of Default, the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper document unless requested in
writing so to do by the Holders of not less than a Majority in aggregate
principal amount of the Notes then outstanding; provided that, if the payment
within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in opinion
of the Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Indenture, the Trustee may require reasonable
indemnity against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Issuer or, if
paid by the Trustee or any predecessor trustee, shall be repaid by the Issuer
upon demand; 

(i)     none of the provisions
contained in this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur liability (financial or 

44 

otherwise) in the performance of any of its duties or in the exercise of any
of its rights or powers, if it shall have reasonable ground for believing that
the repayment of such funds or adequate indemnity reasonably satisfactory to it
against such liability is not assured to it; 

(j)     the permissive rights of
the Trustee to do things enumerated in this Indenture shall not be construed as
a duty, and the Trustee shall not be answerable for other than its negligence or
willful misconduct; and 

(k)     the Trustee shall not be
charged with knowledge of any Default or Event of Default with respect to the
Securities, unless either (i) a Responsible Officer shall have actual knowledge
of such Default or Event of Default or (ii) written notice of such Default or
Event of Default shall have been given to the Trustee by the Company or by any
Holder of the Securities. 

Section 5.03. 
Trustee Not Responsible for
Recitals, Disposition of Notes or Application of Proceeds Thereof. 
The recitals contained herein and in
the Notes and the Guarantee, except the Trustee's certificates of
authentication, shall be taken as the statements of the Issuer and the
Guarantor, and the Trustee assumes no responsibility for the correctness of the
same. The Trustee makes no representation as to the validity or sufficiency of
this Indenture or of the Notes or the Guarantee. The Trustee shall not be
accountable for the use or application by the Issuer of any of the Notes or of
the proceeds thereof. 

Section 5.04.  
Trustee and Agents May Hold Notes;
Collections. The Trustee,
Registrar, Paying and Transfer Agent or any other agent of the Issuer, the
Guarantor or the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Notes with the same rights it would have if it were not
the Trustee, Registrar, Paying and Transfer Agent or such other agent and may
otherwise deal with the Issuer or the Guarantor and receive, collect, hold and
retain collections from the Issuer or the Guarantor with the same rights it
would have if it were not the Trustee or such agent. 

Section 5.05. 
Monies Held by Trustee. 
All monies received by the Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of law. The Trustee
shall not be under any liability to any Person for interest on any monies
received by it hereunder except as it may agree in writing with the Issuer and
the Guarantor. 

Section 5.06. 
Compensation, Reimbursement and
Indemnification of Trustee and Its Prior Claim. 
Each of the Issuer and the Guarantor,
jointly and severally, covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, compensation as agreed among the
Issuer, the Guarantor and the Trustee (which shall not be limited by any
provision of law in 

45 

regard to the compensation of a Trustee of an express trust) and each of the
Issuer and the Guarantor covenants and agrees to pay or reimburse the Trustee
upon request for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by or on behalf of it in connection with the execution
and delivery of this Indenture and in accordance with any of the provisions of
this Indenture or any documents executed by the Trustee in connection herewith,
including the reasonable compensation and expenses of its counsel and of all
agents and other Persons not regularly in its employ except any such expense,
disbursement or advance as may arise from its negligence or willful misconduct.

To the extent not already covered by Section 4.03 and
the preceding paragraph, each of the Issuer and the Guarantor, jointly and
severally, also covenants to indemnify the Trustee and its officers, directors,
employees, representatives and agents and each predecessor Trustee for, and to
hold it and its officers, directors, employees, representatives and agents
harmless against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration of (a) this Indenture or the trusts hereunder or (b) its duties
hereunder or thereunder, including the reasonable costs and expenses of
defending itself against or investigating any claim of liability with respect to
the foregoing. The obligations of the Issuer and the Guarantor under this
Section to compensate and indemnify the Trustee and to pay or reimburse the
Trustee for reasonable expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the resignation or removal
of the Trustee and the satisfaction and discharge of this Indenture. Such
additional indebtedness shall be a senior claim and lien to that of the Notes
upon all property and funds held or collected by the Trustee as such, except
funds previously deposited and held in trust for the benefit of the holders of
particular Notes, and the Notes are hereby subordinated to such senior claim.

The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a Default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Notes and this Indenture. 

Without limiting the application of any other
provision herein relating to indemnification, reimbursement or exculpation, the
Issuer agrees to defend, indemnify and hold harmless the Trustee against any and
all liabilities (including removal and remedial actions), obligations, losses,
damages, penalties, claims, actions, judgements, suits, costs, expenses and
disbursements (including reasonable attorneys' and consultants' fees and
disbursements) imposed on or asserted against the Trustee directly or indirectly
incurred without negligence or willful misconduct on its part and based on, or
arising or resulting from the exercise of the Trustee's rights, duties, or
powers under any of the provisions of this Indenture regardless of when any such
matters arise. The provisions of this 

46 

Section 5.06 shall survive the resignation or removal of the Trustee, the
termination of this Indenture or any termination under any bankruptcy law or
similar law. 

If the Trustee incurs expenses or renders services
after the occurrence of an Event of Default, such expenses and the compensation
due to the Trustee are intended to constitute expenses of administration under
Chapter 11 of the U.S. Bankruptcy Code or any applicable law for the relief of
debtors. 

To secure each of the Issuer's and Guarantor's
payment obligations in this Section 5.06. the Trustee shall have a lien prior to
the Notes on alt assets or money held or collected by the Trustee, in its
capacity as Trustee, excepts assets or moneys held in trust to pay principal of
or interest on particular Notes. 

Section 5.07. 
Persons Eligible for Appointment as
Trustee. The Trustee
hereunder shall at all times be a corporation, a bank or trust company organized
and doing business under the laws of the United States, any State thereof or the
District of Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least US$50,000,000, subject
to supervision and examination by Federal or State authority and having an
established place of business in the Borough of Manhattan, The City of New York.
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, shall resign immediately in the manner and with the
effect hereinafter specified in this Article 5. 

Section 5.08. 
Resignation and Removal; Appointment
of Successor Trustee. (a)
The Trustee may at any time resign by giving not less than 60 days' written
notice of resignation to the Issuer and the Guarantor and by mailing notice
thereof by first-class mail to Noteholders at their last addresses as they shall
appear on the Register. Upon receiving such notice of resignation, the Issuer
and the Guarantor shall promptly appoint a successor Trustee by written
instrument in duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor Trustee. If no successor Trustee
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee, or
any Noteholder who has been a bona fide holder of a Note or Notes for at least
six months may, on behalf of himself and all others similarly situated, petition
any such court for the appointment of a successor Trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor Trustee. 

47 

(b)     In case at any time any
of the following shall occur: 

(i)     the
Trustee shall cease to be eligible in accordance with the provisions of Section
5.07 and shall fail to resign after written request therefor by or on behalf of
the Issuer or by any such Noteholder; or 

(ii)    the Trustee
shall become incapable of acting, or shall be adjudged a bankrupt or insolvent,
or a receiver or liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation; 

then, in any such case, the Issuer or the Guarantor may remove the Trustee
and appoint a successor Trustee by written instrument, in duplicate, executed by
order of the Board of Directors of the Issuer or the Guarantor, as the case may
be, one copy of which instrument shall be delivered to the Trustee so removed
and one copy to the successor Trustee, or, any Noteholder who has been a bona
fide holder of a Note or Notes for at least six months may on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor Trustee. 

(c) 
    The holders of a
Majority in aggregate principal amount of the Notes at the time Outstanding may
at any time remove the Trustee and appoint a successor Trustee by delivering to
the Trustee so removed, to the successor Trustee so appointed and to the Issuer
and the Guarantor the evidence provided for in Section 6.01 of the action in
that regard taken by the Noteholders. 

(d) 
    Any resignation or
removal of the Trustee and any appointment of a successor Trustee pursuant to
any of the provisions of this Section become effective upon acceptance of
appointment by the successor Trustee as provided in Section 5.09. 

Section
5.09. Acceptance of
Appointment by Successor Trustee. 
Any successor Trustee appointed as
provided in Section 5.08 shall execute and deliver to the Issuer and the
Guarantor and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become vested with all rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as Trustee herein. Upon request of any such successor
Trustee, the Issuer and the Guarantor shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
Trustee all such rights and powers. Any Trustee ceasing to act shall,
nevertheless, retain a 

48 

prior claim and Lien upon all property or funds held or collected by such
Trustee to secure any amounts then due it pursuant to the provisions of Section
5.06. 

Upon acceptance of appointment by a successor Trustee
as provided in this Section 5.09, the Issuer shall mail notice thereof by
first-class mail to the Holders of Notes at their last addresses as they shall
appear in the Register. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 5.08.
If the Issuer fails to mail such notice within 10 days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Issuer. 

Section 5.10. 
Merger, Conversion, Consolidation or
Succession to Business of Trustee. 
Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder, 
provided 
that such corporation shall be
eligible under the provisions of Section 5.07 without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. This Section 5.10 shall also apply to
any agency appointments under which the Trustee serves pursuant to the terms of
this Indenture. 

In case at the time such successor to the Trustee
shall succeed to the trusts created by this Indenture any of the Notes shall
have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Notes so authenticated; and, in case at that time any of the Notes shall
not have been authenticated, any successor to the Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor Trustee; and in all such cases such certificate shall have the full
force as provided in the Notes or in this Indenture as the certificate of the
Trustee shall have; provided
that the right to adopt
the certificate of authentication of any predecessor Trustee or to authenticate
Notes in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation. 

Section 5.11. 
Compliance with Back-up Withholding
and Information Reporting. 
The Trustee shall comply with all
U.S. federal back-up withholding and information reporting requirements
applicable to any payment under the Notes or the Guarantee (including the
collection of IRS Form W-8 ECI, IRS Form W-8 BEN, and IRS Form W-9, as the case
may be, and the filing of IRS Form 1099 and IRS Form 1096). 

49 

Section 5.12. Other Capacities. 

(a)     It is understood and
agreed by all parties that the Trustee and Affiliates of the Trustee may from
time to time extend commitments to or have loans or other obligations
outstanding to the Issuer or Affiliates of the Issuer. 

The Trustee shall have no liability merely by virtue
of the existence of any of the relationships described in paragraph (a) of this
Section, than by reason of its negligence or wilful misconduct. 

(b)     Except as otherwise
specifically provided herein, (i) all references in this Indenture to the
Trustee shall be deemed to refer to the Trustee in its capacity as Trustee and
in its capacities as Registrar, Paying and Transfer Agent and (ii) every
provision of this Indenture relating to the conduct or affecting the liability
or offering protection, immunity or indemnity to the Trustee shall be deemed to
apply with the same force and effect to the Trustee acting in its capacities as
Paying and Transfer Agent and Registrar. 

ARTICLE 6 

CONCERNING THE NOTEHOLDERS 

Section 6.01. Evidence of Action Taken by
Noteholder. Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments is or are
received by a Responsible Officer of the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Sections 5.01 and 5.02) conclusive in
favor of the Trustee, the Issuer and the Guarantor, if made in the manner
provided in this Article, 

Section 6.02. Proof of Execution of Instruments
and of Holdings of Notes. Subject to Sections 5.01 and 5.02, the execution
of any instrument by a Noteholder or his agent or proxy may be proved in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee, The
holding of Notes for purposes of this Indenture shall be proved by the Register
maintained pursuant to Section 2.05, The Issuer may set a record date for
purposes of determining the identity of holders of Notes entitled to vote or
consent to any action referred to in Section 6.0] which record date may be set
at any time or from time to time by written notice to the Trustee, for any date
or dates (in the case of any adjournment or resolicitation) not more than 60
days nor less than ten days prior to the proposed date of such vote or consent,
and thereafter, notwithstanding any other provisions 

50 

hereof, only holders of Notes of record on such record date shall be entitled
to so vote or give such consent or to withdraw such vote or consent. 

Section 6.03. 
Registered Owners to Be Treated as
Owners. The Issuer, the
Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee
shall deem and treat any Person in whose name any Note shall be registered upon
the Register as the absolute owner of such Note (whether or not such Note shall
be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and, subject to the provisions of this Indenture, interest on such Note and
for all other purposes; and none of the Issuer, the Guarantor, the Trustee or
any agent of the Issuer, the Guarantor or the Trustee shall be affected by any
notice to the contrary. All such payments so made to any such Person, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Note. 

Section 6.04. 
Notes Owned by the Issuer or the
Guarantor Deemed Not Outstanding. 
A Note does not cease to be
Outstanding because the Issuer or the Guarantor or an Affiliate thereof holds
such Note; provided, 
however, that in determining
whether the Holders of the requisite principal amount of Notes have given or
concurred in any request, demand, authorization, direction, notice, consent or
waiver hereunder, Notes owned by the Issuer or the Guarantor or any other
obligor upon the Notes or any Affiliate of the Issuer or the Guarantor or such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Notes which the Trustee actually knows to be so owned shall be so disregarded.
Notes so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's rights so to act with respect to such Notes and that the pledgee is
not the Issuer, the Guarantor or any Affiliate thereof. Subject to the forgoing,
only Notes Outstanding at the time of such determination shall be considered in
any such determination (including, without limitation, determinations pursuant
to Articles 4 and 7). 

Section 6.05. 
Rights of Revocation of Action
Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 6,01 of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Notes or of the percentage of votes cast specified in this
Indenture in connection with such action, any Holder of a Note the serial number
of which is shown by the evidence to be included among the serial numbers of the
Notes the holders of which have consented to such action may, by filing written
notice at the Corporate Trust Office and upon proof of holding as provided in
this Article, otherwise in accordance with the applicable rules of the
Depositary, revoke such action so far as concerns such Note. Except as aforesaid
any such action taken by the Holder of any Note shall be conclusive and binding
upon such 

51 

Holder and upon all future Holders and owners of such Note and of any Notes
issued in exchange or substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon any such Note, Except as otherwise set
forth herein, any action taken by the Holders of the percentage in aggregate
principal amount of the Notes or of the percentage of votes cast specified in
this Indenture in connection with such action shall be conclusively binding upon
the Issuer, the Guarantor, the Trustee and the Holders of all the Notes. 

ARTICLE 7 

SUPPLEMENTAL INDENTURES 

Section 7.01. Supplemental
Indentures without Consent of Noteholders. Without the consent of the
Holders of Notes, the Issuer, the Guarantor and the Trustee may from time to
time and at any time enter into an indenture or indentures supplemental hereto
for one or more of the following purposes: 

(i)     to cure
any ambiguity or to cure, correct or supplement any provision contained herein
or in the Notes or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in the Notes or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture, the Notes or under any supplemental
indenture in any manner necessary or desirable and which shall not materially
adversely affect the rights of the Noteholders; 

(ii)     to
evidence the succession of another Person to the Issuer or the Guarantor and the
assumption by any such successor of the covenants of the Issuer or the Guarantor
herein and in the Notes; 

(iii)    to evidence
the Merger of another Person into the Issuer or the Guarantor, or the Issuer or
the Guarantor into another Person, and to provide for the assumption by the
surviving Person in a Merger effected in accordance with Section 10.01. 

(iv)    to evidence
and provide the acceptance of the appointment of a successor Trustee hereunder;

(v)     to make
any change that does not materially adversely affect the rights of any Holder of
Notes; 

(vi)    to convey,
transfer, assign, mortgage or pledge to the Trustee as security for the Notes
any property or assets pursuant to the requirements of Sections 3.07 and
10.01(c); and 

(vii)   to issue
Additional Notes under Section 2.09; 

52 

(viii)    to add to
the covenants of the Issuer or the Guarantor further covenants, restrictions,
conditions or provisions for the protection of the Holders of the Notes, and to
make the occurrence, or the occurrence and continuance, of a Default in respect
of any such additional covenants, restrictions, conditions or provisions an
Event of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture or in the Notes as herein set forth; 
provided 
that, in respect of any additional
covenant, restriction, condition or provision, such supplemental indenture may
provide for a particular period of grace after Default (which period may be
shorter or longer than that allowed in the case of other Defaults) or may
provide for an immediate enforcement upon such an Event of Default or may limit
the remedies available to the Noteholders upon such an Event of Default or may
limit the right of the Holders of a Majority in aggregate principal amount of
the Notes at the time Outstanding to waive such Event of Default. 

The Trustee is hereby authorized to join in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property or assets
thereunder but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities hereunder or otherwise. 

Any supplemental indenture authorized by the
provisions of this Section 7.01 may be executed without the consent of the
Noteholders at the time Outstanding, notwithstanding any of the provisions of
Section 7.02. 

Section 7.02. 
Supplemental Indentures with Consent
of Noteholders. With the
consent (evidenced as provided in Article 6 of the Holders of not less than a
Majority in aggregate principal amount of the Notes at the time Outstanding, the
Issuer, the Guarantor and the Trustee may, from time to time and at any time,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture with respect to the Notes or of any supplemental
indenture or of modifying in any manner the rights of the holders of the Notes;
provided 
that no such modification or
amendment may, without the consent of the Holder of each Outstanding Note
affected thereby, 

(i)     change
the Stated Maturity of the Notes; 

(ii)    reduce the
principal amount of or payments of interest on any Notes; 

(iii)    change any
obligation of the Issuer or the Guarantor to pay Additional Amounts with respect
to Notes; 

53 

(iv)    change the
currency or place of payment of the principal of or interest on the Notes; 

(v)     impair
the right to institute suit for the enforcement of any payment due on or with
respect to the Notes; 

(vi)    reduce the
above stated percentage of outstanding Notes necessary to modify or amend this
Indenture; 

(vii)   reduce the
percentage of the aggregate principal amount of outstanding Notes necessary for
waiver of compliance with certain provisions of this Indenture or for waiver of
certain Defaults; 

(viii)  
change, in any manner adverse to the interest of holders of the Notes, the terms
and provisions of the Guarantee in respect of the due and punctual payment of
principal of and interest on the Notes; or 

(ix)     
modify any of the provisions of this Section 7.02, Section 4.11 or Section 3.11,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Note affected thereby. 

It is not necessary for Noteholders to approve the
particular form of any proposed amendment, supplement or waiver, but is
sufficient if their consent approves the substance thereof. Upon the request of
the Issuer and the Guarantor, accompanied by a copy of the supplemental
indenture and upon the filing with the Trustee of evidence of the consent of
Noteholders and other documents, if any, required by Sections 6.01 and 7.04, the
Trustee shall join with the Issuer and the Guarantor in the execution of such
supplemental indenture. 

It shall not be necessary for the consent of the
Noteholders under this Section 7.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof. 

Promptly after the execution by the Issuer, the
Guarantor and the Trustee of any supplemental indenture pursuant to the
provisions of this Section, Issuer at its expense shall mail a notice thereof by
first-class mail to the Noteholders at their address as they shall appear on the
Register, setting forth in general terms the substance of such supplemental
indenture. Any failure of the Issuer to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture. 

Section 7.03. 
Effect of Supplemental Indenture.
Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture and the
Notes, as applicable, shall be and be deemed to be modified and amended in 

54 

accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Issuer, the Guarantor and the Holders of Notes shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes. 

Section 7.04. Documents to Be Given to Trustee.
The Trustee, subject to the provisions of Sections 5.01 and 5.02, shall be
entitled to receive, in addition to the documents required by Section 11.06, one
or more Officers' Certificate or Certificates and Opinion or Opinions of Counsel
as conclusive evidence that any supplemental indenture is authorized or
permitted by this Indenture in connection with the execution and delivery of
such supplemental indenture by the Issuer and the Guarantor, that all requisite
governmental consents in Hong Kong, the British Virgin Islands and any Successor
Jurisdiction have been obtained or no such consents are required, and stating
that such supplemental indenture constitutes the legal, valid and binding
obligation of the Issuer and Guarantor, enforceable against them in accordance
with its terms except as such enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable principle
(regardless of whether the issue of enforceability is considered in a proceeding
in equity or at law). 

Section 7.05. Notation on Notes in Respect of
Supplemental Indentures. Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article bear a notation in form and manner approved by the Issuer as to any
matter provided for by such supplemental indenture. If the Issuer or the Trustee
shall so determine, new Notes so modified as to conform, in the opinion of the
Trustee, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Issuer at its expense, and, upon
written order of the Issuer, authenticated by the Trustee and delivered in
exchange for the Notes at the time Outstanding. 

ARTICLE 8 

DEFEASANCE AND DISCHARGE 

Section 8.01. Discharge of Issuer's Obligations.
(a) Subject to paragraph (b), the Issuer's obligations under the Notes and
this Indenture, and the Guarantor's obligations under the Guarantee and this
Indenture, will terminate if: 

(i) all Notes previously
authenticated and delivered (other than (A) destroyed, lost or stolen Notes that
have been replaced or (B) Notes that are paid pursuant to Section 3.01 or (C)
Notes for whose payment money or U.S. Government Obligations have been held in
trust and then 

55 

repaid to the Issuer pursuant to Section 8.05 have been delivered to the
Trustee for cancellation and the Issuer has paid all sums payable by it
hereunder; or 

(ii)   
(A)     the Notes mature within one year, or all of them are
to be called for redemption within one year under arrangements reasonably
satisfactory to the Trustee for giving the notice of redemption, 

(B)
    the Issuer
or the Guarantor irrevocably deposits in trust with the Trustee, as trust funds
solely for the benefit of the Holders, money in U.S. Dollars or U.S. Government
Obligations or a combination thereof sufficient, in the opinion of an
internationally recognized firm of independent public accountants expressed in a
written certificate delivered to the Trustee to pay principal of and interest on
the Notes to maturity or redemption, as the case may be, and to pay all other
sums payable by it hereunder, 

(C)    
no Default with respect to the
Notes has occurred and is continuing on the date of the deposit, 

(D)    
the deposit will not result in
a breach or violation of, or constitute a Default under, this Indenture or any
other agreement or instrument to which the Issuer is a party or by which it is
bound, and 

(E)     the
Issuer delivers to the Trustee an Officers' Certificate and an Opinion of
Counsel, in each case stating that all conditions precedent provided for herein
relating to the satisfaction and discharge of this Indenture have been complied
with. 

(b)     After satisfying the
conditions in clause (i), only the Issuer's and the Guarantor's obligations
under Section 5.06 will survive. After satisfying the conditions in clause (ii),
only the Issuer's and the Guarantor's obligations in Article 2 and Sections
3.01, 3,02, 5.06, 5,09, 8.05, 8.06 and 11.12 will survive. In either case, the
Trustee upon request will acknowledge in writing the discharge of the Issuer's
and the Guarantor's obligations under the Notes and this Indenture other than
the surviving obligations, 

Section 8.02. 
Legal Defeasance. 
The Issuer and the Guarantor will be
deemed to have paid and will be discharged from its obligations in respect of
the Notes and this Indenture as it applies to the Notes, other than its
obligations in Article 2 and Sections 3.01, 3.02, 5.06, 5.09, 8.05, 8.06 and
11.12, and the Guarantor's obligations under the Guarantee will terminate,
provided 
that the following conditions have
been satisfied: 

56 

(i)     The
Issuer and the Guarantor have irrevocably deposited in trust with the Trustee,
as trust funds solely for the benefit of the Holders, money in U.S. Dollars or
U.S. Government Obligations or a combination thereof sufficient, in the opinion
of an internationally recognized firm of independent public accountants
expressed in a written certificate thereof delivered to the Trustee, without
consideration of any reinvestment, to pay principal of and interest on the Notes
(and any Additional Amounts in respect thereof) to maturity or redemption, as
the case may be; provided 
that any redemption before
maturity has been irrevocably provided for under arrangements satisfactory to
the Trustee. 

(ii)     No
Default with respect to Notes has occurred and is continuing on the date of the
deposit. 

(iii)   
The deposit will not result in a breach or violation of, or constitute a Default
under, this Indenture or any other agreement or instrument to which the Issuer
is a party or by which it is bound. 

(iv)    The Issuer
has delivered to the Trustee (A) either (x) a ruling received by the Issuer or
the Guarantor, as the case may be, from the U.S. Internal Revenue Service or (y)
an opinion in writing signed by independent legal counsel of recognized standing
with respect to U.S. federal income tax matters, in each case to the effect that
the beneficial owners of the Notes will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such deposit and legal
defeasance by the Issuer or the Guarantor and will be subject to U.S. federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit, legal defeasance and discharge had not
occurred and, in the case of subclause (y) in this Section 8.02(iv), such
opinion of counsel must be based upon a ruling received by the Issuer or
Guarantor, as the case may be, from the U. S. Internal Revenue Service (a copy
of which ruling shall accompany such opinion), a ruling published by the U.S.
Internal Revenue Service or a change in applicable U.S. federal income tax taw
after the date hereof, and (B) an Opinion of Counsel to the effect that (x) the
creation of the defeasance trust does not violate the Investment Company Act of
1940 and (y) Noteholders (other than British Virgin Islands persons and Hong
Kong persons, respectively) will not recognize withholding or deduction of Taxes
under the laws of the British Virgin Islands or Hong Kong or any political
subdivision or any authority thereof or therein or any territory or possession
thereof or area subject to its jurisdiction, as the case may be, or any
Successor Jurisdiction thereto as a result of the defeasance. 

(v)    The Issuer has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, in
each case stating that all 

57 

conditions precedent provided for herein relating to
the defeasance have been complied with, 

The Trustee upon request will
acknowledge in writing the discharge of the Issuer's and the Guarantor's
obligations under the Notes and this Indenture except for the surviving
obligations specified above. 

Section 8.03.
 
Covenant Defeasance. 
The Issuer's and the Guarantor's
obligations set forth in Sections 3.07 through 3.08 inclusive and clause (c) of
Section 10.01, and the Guarantor's obligations under the Guarantee, will
terminate, and clause (c), as it applies to the Notes, and (d) of Section 4.01
will no longer constitute Events of Default, 
provided 
the following conditions have been
satisfied: 

(a) 
    The Issuer has
complied with clauses (i), (ii), (iii), (iv)(B)(x) and (y) and (v) of Section
8.02; and 

(b) 
    The Issuer has
delivered to the Trustee (i) either (x) a ruling received by the Issuer or the
Guarantor, as the case may be, from the U.S. Internal Revenue Service or (y) an
opinion in writing signed by independent legal counsel of recognized standing
with respect to U.S. federal income tax matters, in each case to the effect that
beneficial owners of the Notes will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of such deposit and covenant defeasance
by the Issuer or the Guarantor and will be subject to U.S. federal income tax on
the same amount and in the same manner and at the same times as would have been
the case if such deposit, covenant defeasance and discharge had not occurred,
and (ii) an Opinion of Counsel to the effect that Noteholders (other than
British Virgin Islands persons and Hong Kong persons, respectively) will not
recognize withholding or deduction of Taxes under the laws of the British Virgin
Islands or Hong Kong or any political subdivision or any authority thereof or
therein or any territory or possession thereof or area subject to its
jurisdiction, as the case may be, or any Successor Jurisdiction thereto as a
result of such covenant defeasance. 

Except as specifically stated above, none of the
Issuer's and the Guarantor's obligations under this Indenture will be
discharged. 

Section 8.04. 
Application of Trust Money. 
Subject to Section 8.05 the
Trustee will hold in trust the money or U.S. Government Obligations deposited
with it pursuant to Section 8.01, 8.02 or 8.03, and apply the deposited money
and the proceeds from deposited U.S. Government Obligations to the payment of
principal of and interest on the Notes in accordance with the Notes and this
Indenture. Such money and U.S. Government Obligations need not be segregated
from other funds except to the extent required by law, 

58 

Section 8.05.  Repayment to the Issuer. Subject
to Sections 5.06, 8.01, 8.02 and 8.03, the Trustee will promptly pay to the
Issuer upon request any excess money held by the Trustee at any time and
thereupon be relieved from all liability with respect to such money, The Trustee
will pay to the Issuer upon request any money held for payment with respect to
the Notes that remains unclaimed for two years, provided that before
making such payment the Trustee may at the expense of the Issuer publish once in
a newspaper of general circulation in New York City, or send to each Holder
entitled to such money, notice that the money remains unclaimed and that after a
date specified in the notice (at least 30 days after the date of the publication
or notice) any remaining unclaimed balance of money will be repaid to the
Issuer. After payment to the Issuer, Holders entitled to such money must look
solely to the Issuer for payment, unless applicable law designates another
Person, and all liability of the Trustee with respect to such money will cease.

Section 8.06.  Reinstatement. If and for so
long as the Trustee is unable to apply any money or U.S. Government Obligations
held in trust pursuant to Section 8.01, 8.02 and 8.03 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Issuer's obligations under this Indenture and the Notes will be reinstated as
though no such deposit in trust had been made. If the Issuer makes any payment
of principal of or interest on any Notes because of the reinstatement of its
obligations, it will be subrogated to the rights of the Holders of such Notes to
receive such payment from me money or U.S. Government Obligations held in trust.

ARTICLE 9 

GUARANTEE 

Section 9.01.  Guarantee. (a) The Guarantor
hereby irrevocably and unconditionally guarantees to each Noteholder and to the
Trustee on behalf of each Noteholder the due and punctual payment of the
principal of and interest on, and all other amounts payable under (including any
Additional Amounts payable in respect of), the Notes when and as the same shall
become due and payable, whether on the Stated Maturity, upon acceleration, by
call for redemption or otherwise, in accordance with the terms of such Note and
of this Indenture. The Guarantor hereby waives its right to require the Trustee
to pursue or exhaust its legal or equitable remedies against the Issuer prior to
exercising its rights under the Guarantee. The Guarantee will not be discharged
with respect to any Note except by payment in full of the principal thereof,
interest thereon and all other amounts payable thereunder (including any
Additional Amounts payable in respect thereof), if any, on, the Note guaranteed
thereby and all other amounts payable under this Indenture with respect to such
Note. If at any time any amount paid on a Note is rescinded or must otherwise be
restored, the rights of the 

59 

Holders of the Notes under the Guarantee will be reinstated with respect to
such payment as though such payment had not been made. In case of the failure of
the Issuer punctually to pay any such principal or interest the Guarantor hereby
agrees to cause any such payment to be made punctually when and as the same
shall become due and payable, whether at the Stated Maturity, by acceleration,
call for redemption or otherwise, and as if such payment were made by the
Issuer. 

(b)     The Guarantor hereby
agrees that its obligations under the Guarantee shall be as if it were principal
obligor and not merely surety, and shall be enforceable irrespective of any
invalidity, irregularity or unenforceability of the Note or this Indenture, any
failure to enforce the provisions of any Note or this Indenture, any waiver,
modification or indulgence granted to the Issuer with respect thereto by the
Noteholders or the Trustee, or any other circumstance which may otherwise
constitute a legal or equitable discharge of a surety or guarantor; 
provided 
that, notwithstanding the foregoing,
no such waiver, modification, indulgence or circumstance shall without the
written consent of the Guarantor increase the principal amount of a Note or the
interest rate thereon or change the currency of payment with respect to any
Note, or alter the Stated Maturity of any amount thereon or thereof. The
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of the Issuer, any
right to require a proceeding first against the Issuer (including, for the
avoidance of doubt, any right which the Guarantor may have to require the
seizure and sale of the assets of the Issuer to satisfy the outstanding
principal of, or interest on, or any other amounts payable under, each Note
prior to recourse against the Guarantor or its assets), protest or notice with
respect to any Note or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that the Guarantee will not be discharged with respect
to any Note except by payment in full of the principal thereof and interest
thereon and all other amounts payable thereunder (including any Additional
Amounts payable in respect thereof). If at any time any amount paid under such
Note is rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of the Issuer, the Guarantor's obligations
hereunder with respect to such payment shall be reinstated as of the date of
such rescission, restoration or return as though such payment had become due but
had not been made at such time. 

Section 9.02.  
Subrogation. 
The Guarantor shall be subrogated to
all rights of the Noteholder against the Issuer in respect of any amounts paid
to such Noteholder by the Guarantor pursuant to the provisions of the Guarantee.

Section 9.03. 
Ranking. 
The Guarantee (a) is a direct,
unconditional, unsubordinated and unsecured obligation of the Guarantor and (b)
ranks at least pari passu 
in right of payment with all
other unsecured and unsubordinated obligations of the Guarantor now or hereafter
outstanding (other than obligations preferred by applicable law) and senior in
priority of payment and in all other 

60 

respects to all other obligations of the Guarantor that are
designated as subordinate or junior in right of payment to the Guarantee. 

ARTICLE 10 

CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER; ASSUMPTION 

Section 10.01. Issuer or the
Guarantor may Consolidate, Etc., Only on Certain Terms. Neither the
Guarantor nor the Issuer may consolidate with or merge into any other Person in
a transaction in which the Guarantor or the Issuer, as the case may be, is not
the surviving entity, or convey, transfer or lease its properties and assets
substantially as an entirety to, any Person (the consummation of any such event,
a "Merger"), unless: 

(a)    
any Person formed by such consolidation or into which the Guarantor or the
Issuer, as the case may be, is merged or to whom the Guarantor or the Issuer, as
the case may be, has conveyed, transferred or leased its properties and assets
substantially as an entirety is a corporation, partnership, trust or other
entity validly existing under the laws of the jurisdiction of its organization
and such Person expressly assumes by an indenture supplemental to this Indenture
all the obligations of the Issuer or the Guarantor under this Indenture, the
Notes or the Guarantee, as the case may be; 

(b)    
immediately after giving effect to the transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing; 

(c)    
if, as a result of the transaction, property of the Guarantor or any of
its Subsidiaries would become subject to a Lien that would not be permitted
under Section 3.07 above, the Guarantor, the Issuer or such successor Person
takes such steps as shall be necessary to secure the Notes and the Guarantee at
least equally and ratably with the Indebtedness secured by such Lien or by such
other Lien as shall have been approved by holders of the Notes as provided in
Section 7.02. 

In connection with any consolidation,
merger, conveyance, transfer or lease contemplated hereby, the Issuer or the
Guarantor, as the case may be, shall deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, transfer or lease and the supplemental indenture in respect thereto
comply with the provisions described herein and that all conditions precedent
provided for in this Indenture relating to such transaction have been complied
with. 

Section 10.02. Successor Corporation
Substituted. Upon any Merger in accordance with Section 10.01 the successor
corporation formed by such Merger 

61 

shall succeed to and be substituted for, and may exercise every right and
power of, the Issuer or the Guarantor, as the case may be, including, but not
limited to Sections 3.09 and 12.01 under this Indenture, with the same effect as
if such successor corporation had been named as the Issuer or the Guarantor, as
the case may be, herein, and thereafter, the predecessor corporation shall be
relieved of all obligations and covenants under this Indenture, the Notes and
the Guarantee. 

ARTICLE 11 

MISCELLANEOUS PROVISIONS 

Section 11.01. Ranking. The Notes (a) are
direct, unconditional, unsubordinated and unsecured obligations of the Issuer
and (b) rank at least pari passu in right of payment with all other
unsecured and unsubordinated obligations of the Issuer now or hereafter
outstanding {other than obligations preferred by applicable law) and senior in
priority of payment and in all other respects to all other obligations of the
Issuer that are designated as subordinate or junior in right of payment to the
Notes. 

Section 11.02.  Officers and Directors of Issuer,
the Guarantor and the Trustee Exempt from Individual Liability. No recourse
under or upon any obligation, covenant or agreement contained in this Indenture,
or in any Note or the Guarantee, or because of any indebtedness evidenced
thereby, shall be had against any officer, director, shareholder or trustee of
the Issuer or the Guarantor or the Trustee or of any successor, either directly
or through the Issuer or the Guarantor or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Notes by the holders
thereof and as part of the consideration for the issue of the Notes. 

Section 11.03.  Provisions of Indenture for the
Sole Benefit of Parties and Noteholders. Nothing in this Indenture or in the
Notes, expressed or implied, shall give or be construed to give to any Person
other than the parties hereto and their successors and the holders of the Notes,
any legal or equitable right, remedy or claim under this Indenture or under any
covenant or provision herein contained, all such covenants and provisions being
for the sole benefit of the parties hereto and their successors and of the
holders of the Notes. 

Section 11.04. Successors and Assigns of Issuer
and the Guarantor Bound by Indenture. Ail the covenants, stipulations,
promises and agreements in this Indenture contained by or on behalf of the
Issuer or the Guarantor shall bind its successors and assigns, whether so
expressed or not. 

Section 11.05. Notices and Demands on Trustees and
Noteholders. Any notice or demand which by any provision of this Indenture
is required or 

62 

permitted to be given or served by the Trustee or by the Holders to or on the
Issuer or the Guarantor may be given or served by facsimile transmission or by
recognized international courier (except as otherwise specifically provided
herein) addressed (until another address is filed by the Issuer or the Guarantor
with the Trustee) to PCCW-HKT Telephone Limited, Attention: Company Secretary;
fax: +852-2962-5725. Any such notice or demand (a) if sent by international
courier as provided above shall be deemed to have been given, made or served 72
hours after such notice or demand is delivered to such courier addressed as
aforesaid or (b) if given by facsimile transmission, when such facsimile is
transmitted to the telephone number specified in this paragraph and telephonic
confirmation of receipt thereof is received. Any notice, direction, request or
demand by or on behalf of the Issuer or any Noteholder to or upon the Trustee
shall be deemed to have been sufficiently given or made, for all purposes, when
received at 452 Fifth Avenue, New York, New York 10018 (fax: (212) 525-1300),
attention: Corporate Trust. 

Any documents required to be provided to the Trustee
pursuant to Section 3.05 or 3.06 shall be deemed to have been mailed or
otherwise forwarded to the Trustee (i) if sent by international courier to the
Corporate Trust Office and postmarked as of a date no later than the date on
which such document is required to be provided or (ii) if given by facsimile
transmission in accordance with the immediately preceding paragraph on such
date. 

Where this Indenture provides for notice to Holders,
such notice shall be validly given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid (or, if first class mail
is unavailable, by airmail), to each Holder entitled thereto, at his last
address as it appears in the Register (or the first named of joint Holders) and
will be deemed to have been given on the fourth Business Day after the date of
mailing. In any case where notice to Noteholders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Noteholder shall affect the sufficiency of such notice with respect
to other Noteholders. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver. 

In case, by reason of the suspension of or
irregularities in regular mail service, the temporary suspension of publication
or general circulation of any newspaper or otherwise, it shall be impossible, or
in the opinion of the Trustee upon prior consultation with the Issuer
impracticable, to mail or publish notice to the Issuer and Noteholders when such
notice is required to be given pursuant to any provision of this Indenture, then
any manner of giving such notice as shall be satisfactory to the Trustee shall
be deemed to be a sufficient giving of such notice. 

63 

Section 11.06. 
Officers'
Certificates and Opinions of
Counsel; Statements to be Contained Therein. 
Upon any application or demand by or
on behalf of the Issuer or the Guarantor to the Trustee to take any action under
any of the provisions of this Indenture, the Issuer or the Guarantor, as the
case may be, shall, at the request of the Trustee, furnish to the Trustee an
Officers' Certificate stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished. 

Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (a) a
statement that each person making such certificate or opinion has read such
covenant or condition, (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based, (c) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with and (d) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.

Any certificate, statement or opinion of Authorized
Officers of the Issuer or Authorized Officers of the Guarantor may be based,
insofar as it relates to legal mailers, upon a certificate or opinion of or
representations by counsel, unless each such Person knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the" same are erroneous. Any
certificate, statement or Opinion of Counsel may be based, insofar as it relates
to factual matters, information with respect to which is in the possession of
the Issuer or the Guarantor, as the case may be, upon the certificate, statement
or opinion of or representations by Authorized Officers of the Issuer or
Authorized Officers of the Guarantor, as the case may be, unless such counsel
knows that the certificate, statement or opinion or representations with respect
to the matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous. 

Any certificate, statement or opinion of Authorized
Officers of the Issuer or Authorized Officers of the Guarantor, as the case may
be, or of counsel may be based, insofar as it relates to accounting matters,
upon a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer or the Guarantor, as the case may be,
unless such officer or counsel, as the 

64 

case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous. 

Any certificate or opinion of any independent or
registered firm of public accountants filed with the Trustee shall contain a
statement that such firm is independent. 

The Trustee shall make available to any Noteholder as
soon as practicable at its Corporate Trust Office or at the office of any Paying
and Transfer Agent, upon request and upon presentation by such Holder of such
evidence of its ownership of its Note or Notes as may be satisfactory to the
Trustee, copies of all certificates delivered to the Trustee by the Issuer and
the Guarantor pursuant to Section 3.06. 

Section 11.07. 
Payments Due on Non-Business Days.
In any case in which the
Payment Date shall not be a Business Day, then payment of principal or interest
need not be made on such date but may be made on the next succeeding Business
Day. Any payment made pursuant to this Section 11.07 on such next succeeding
Business Day shall have the same force and effect as if made on me due date, and
no interest shall accrue with respect to such payment for the period from and
after such date that is not a Business Day to the next succeeding Business Day.

Section 11.08. 
Governing Law; Consent to
Jurisdiction; Waiver of Immunities. 
(a) This Indenture and the Notes (and
the Guarantee endorsed thereon) shall be construed in accordance with and
governed by the laws of the State of New York. 

(b)     Each of the Issuer and
the Guarantor hereby irrevocably and unconditionally submits to the
non-exclusive jurisdiction of any New York State or United States Federal court
sitting in the Borough of Manhattan, New York City over any suit, action or
proceeding arising out of or relating to this Indenture or any Note or the
Guarantee. Each of the Issuer and the Guarantor irrevocably and unconditionally
waives, to the fullest extent permitted by applicable law, any objection which
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding brought in such a court and any claim that any such suit, action
or proceeding brought in such a court has been brought in an inconvenient forum.
To the extent that the Issuer or the Guarantor, as the case may be, has or
hereafter may acquire any sovereign or other immunity from jurisdiction of any
court or from any legal process with respect to itself or its property, the
Issuer or the Guarantor, as the case may be, irrevocably waives such immunity in
respect of its obligations hereunder or under any Note or the Guarantee, as
applicable. Each of the Issuer and the Guarantor agrees that final judgment in
any such suit, action or proceeding brought in such a court shall be 

65 

conclusive and binding upon the Issuer or the Guarantor, as the case may be,
and, to the extent permitted by applicable law, may be enforced in any court to
the jurisdiction of which the Issuer or the Guarantor, as the case may be, is
subject by a suit upon such judgment or in any manner provided by law, 
provided 
that service of process is effected
upon the Issuer or the Guarantor, as the case may be, in the manner specified in
the following subsection or as otherwise permitted by applicable law. 

(c)     As long as any of the
Notes remain Outstanding, each of the Issuer and the Guarantor will at all times
have an authorized agent in New York City, upon whom process may be served in
any legal action or proceeding arising out of or relating to this Indenture, any
Note or the Guarantee. Service of process upon such agent and written notice of
such service mailed or delivered to the Issuer or the Guarantor, as the case may
be, shall to the fullest extent permitted by applicable law be deemed in every
respect effective service of process upon the Issuer or the Guarantor, as the
case may be, in any such legal action or proceeding. Each of the Issuer and the
Guarantor hereby appoints Corporation Service Company as its agent for such
purpose, and covenants and agrees that service of process in any suit, action or
proceeding may be made upon it at the office of such agent at 1133 Avenue of the
Americas, Suite 3100, New York, New York 10036-6710. Notwithstanding the
foregoing, the Issuer or the Guarantor may, with prior written notice to the
Trustee, terminate the appointment of Corporation Service Company and appoint
another agent for the above purposes so that the Issuer and the Guarantor shall
at all times have an agent for the above purposes in New York City. 

(d)     Each of the Issuer and
the Guarantor hereby irrevocably waives, to the fullest extent permitted by
applicable law, any requirement or other provision of law, rule, regulation or
practice which requires or otherwise establishes as a condition to the
institution, prosecution or completion of any suit, action or proceeding
(including appeals) arising out of or relating to this Indenture or any Note or
Guarantee, the posting of any bond or the furnishing, directly or indirectly, of
any other security. 

Section 11.09. 
Separability. 
In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby. 

Section 11.10.  
Counterparts. 
This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument. 

Section 11.11. 
Effect of Headings. 
The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof. 

66 

Section 11.12.  
Indemnification for Judgment
Currency Fluctuations. To
the fullest extent permitted by applicable law, the obligations of the Guarantor
or the Issuer to any Holder of Notes hereunder or under the Notes, as the case
may be, shall, notwithstanding any judgment in a currency (the 
"Judgment Currency") 
other than U.S. dollars (the 
"Agreement Currency"), be discharged only to the extent that on the Business
Day following receipt by such Holder or the Trustee, as the case may be, of any
amount in the Judgment Currency, such Holder or the Trustee, as the case may be,
may in accordance with normal banking procedures purchase the Agreement Currency
with the Judgment Currency. If the amount of the Agreement Currency so purchased
is less than the amount originally to be paid to such Holder or the Trustee, as
the case may be, in the Agreement Currency, the Guarantor and the Issuer jointly
and severally agree, as a separate obligation and notwithstanding such judgment,
to pay the difference and if the amount of the Agreement Currency so purchased
exceeds the amount originally to be paid to such Holder or the Trustee, such
Holder or the Trustee, as the case may be, agrees to pay to or for the account
of the Guarantor or the Issuer, as the case may be, such excess, 
provided 
that such Holder shall not have any
obligation to pay any such excess as long as a Default by the Guarantor or the
Issuer in its obligations hereunder or under the Notes has occurred and is
continuing, in which case such excess may be applied by such Holder to such
obligations, 

ARTICLE 12 

REDEMPTION OR REPURCHASE OF NOTES

Section 12.01. 
Redemption for Taxation Reasons. 
The Notes may be redeemed at
any time, at the option of the Issuer, as a whole but not in part, upon notice
as set forth in Section 12.02 at a redemption price equal to 100% of the
principal amount thereof, together with accrued and unpaid interest to the date
fixed for redemption, if any, if (a) as a result of any change in, or amendment
to, the laws (or any regulations or rulings promulgated thereunder) of the
British Virgin Islands or Hong Kong, as the case may be, (or, in the case of
Additional Amounts payable by a successor Person to the Issuer or the Guarantor,
the applicable Successor Jurisdiction) or any political subdivision or taxing
authority thereof or therein having power to tax, or any change in or amendment
to, any official position regarding the application or interpretation of such
laws, regulations or rulings (including a holding by a court of competent
jurisdiction), which change, amendment, application or interpretation becomes
effective on or after the date of this Indenture (or, in the case of Additional
Amounts payable by a successor Person to the Issuer or the Guarantor, the date
on which such successor Person to the Issuer or the Guarantor, as the case may
be, became such pursuant to the applicable provisions of this Indenture), either
(x) the Issuer, the Guarantor or any such successor Person to the Issuer or the
Guarantor, as the case may be, is, or would be, obligated to pay Additional
Amounts upon the next 

67 

payment of principal or interest in respect of the Notes or the Guarantee or
(y) the Guarantor or any such successor Person to the
Guarantor is, or would be, obligated to pay Additional Amounts upon the next
payment of principal or interest in respect of the Intercompany Loan and (b)
such obligation cannot be avoided by the Issuer, the Guarantor or any such
successor Person to the Issuer or the Guarantor, as the case may be, taking
reasonable measures available to it. Prior to the giving of any notice of
redemption of the Notes pursuant to the foregoing, the Issuer or any such
successor Person to the Issuer shall deliver to the Trustee a notice of such
redemption election, an opinion in writing signed by independent legal counsel
of recognized standing to the Issuer, the Guarantor or any such successor Person
to the Issuer or the Guarantor, as the case may be, to the effect that the
Issuer, the Guarantor or any such successor Person to the Issuer or the
Guarantor, as the case may be, is, or would become, obligated to pay such
Additional Amounts as described in clause (a) as the result of such change or
amendment, and an Officers' Certificate of the Issuer, the Guarantor or any such
successor Person to the Issuer or the Guarantor, as the case may be, stating
that such amendment or change has occurred, describing the facts leading thereto
and stating that such requirement cannot be avoided by the Issuer, the Guarantor
or any such successor Person to the Issuer or the Guarantor, as the case may be,
taking reasonable measures available to it. 

Section 12.02. 
Notice of Tax Redemption. 
Notice of redemption of the
Notes as provided in Section 12.01 shall be given not less than 30 nor more than
60 days prior to the date fixed for redemption; 
provided 
that no such notice of redemption
shall be given earlier than 60 days prior to the earliest date on which the
Issuer, the Guarantor or any such successor Person to the Issuer or the
Guarantor, as the case may be, would be required to pay Additional Amounts if a
payment in respect of the Notes or in respect of the Intercompany Loan, as the
case may be, was then due. Notice having been given, the Notes shall become due
and payable on the date fixed for redemption and will be paid at the redemption
price, together with accrued and unpaid interest to the date fixed for
redemption, at the place or places of payment and in the manner as described in
Section 12.03, From and after the Redemption Date, if moneys for the redemption
of the Notes shall have been made available as provided herein for redemption on
the Redemption Date, the Notes shall cease to bear interest, and the only right
of the holders of the Notes shall be to receive payment of the redemption price
and interest accrued to the date of redemption. 

Section 12.03. 
Payment of Notes Called for
Redemption. If notice of
redemption has been given as provided in Section 12.02, Notes shall become due
and payable on the Redemption Date at the applicable redemption price and on and
after said date (unless the Issuer shall Default in the payment of such Note at
the redemption price), interest on the Notes so called for redemption shall
cease to accrue and such Notes shall cease from and after the date fixed for
redemption to be entitled to any benefit or security under this Indenture, and
the holders thereof shall have no right in respect of such Notes except the
right to receive the 

68 

redemption price thereof. On presentation and surrender of
such Notes at the Corporate Trust Office or the office of any Paying and
Transfer Agent on such date, said Notes shall be paid and redeemed by the Issuer
at the applicable redemption price. 

Notwithstanding any provision to the
contrary in this Section 12.03 if any Note surrendered for redemption shall not
be so paid upon surrender, the principal shall bear interest from the date fixed
for redemption at the rate specified in such Note until such principal shall
have been paid. 

Section 12.04. 
Repurchase. 
The Issuer, the Guarantor and any of
the Guarantor's Subsidiaries may, in accordance with all applicable laws and
regulations, at any time purchase the Notes in the open market or otherwise at
any price. If purchases are made by tender, such tender must be made available
to all holders of the Notes alike. 

 

 

 

 

 

69 

IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of July 20, 2005. 

  	PCCW-HKT CAPITAL NO.3
      LIMITED, 
	     
      as Issuer
	 
	 
	By:   
      

                                                                               
      
	      
      Name:
	      
      Title:
	 
	PCCW-HKT TELEPHONE LIMITED,
      
	     
      as Guarantor
	 
	 
	By:          
      ______________
	      
      Name:
	      
      Title:
	 
	HSBC BANK USA, NATIONAL
	     
      ASSOCIATION, as Trustee
	 
	 
	By:
      _____________________________
	      
      Name:
	      
      Title:

 

IN WITNESS
WHEREOF, the parties hereto have caused this Indenture to be duly executed as of
July 20, 2005. 

  	PCCW-HKT CAPITAL NO.3
      LIMITED, 
	     
      as Issuer
	 
	 
	By:                                                                    
      
	      
      Name:
	      
      Title:
	 
	PCCW-HKT TELEPHONE LIMITED,
      
	     
      as Guarantor
	 
	 
	By: 
      ____________________________
	      
      Name:
	      
      Title:
	 
	HSBC BANK USA, NATIONAL
	     
      ASSOCIATION, as Trustee
	 
	 
	By:
      
	      
      Name: Herawattee Alli
	      
      Title:   Assistant Vice President

 

EXHIBIT A   

FORM OF FACE OF CERTIFICATED NOTE 

PCCW-HKT CAPITAL NO.3 LIMITED 

THIS NOTE AND THE GUARANTEE RELATED TO THIS NOTE HAVE NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, THIS NOTE MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) AGREES THAT IT WILL NOT RESELL, PLEDGE
OR OTHERWISE TRANSFER THE NOTES EXCEPT (A) IF SUCH PURCHASER IS AN INITIAL
PURCHASER, (I) TO THE GUARANTOR OR THE ISSUER OR ANY SUBSIDIARY THEREOF, (II) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (III) OUTSIDE THE UNITED STATES IN A TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (B)
IF SUCH PURCHASER IS A SUBSEQUENT PURCHASER OF AN INTEREST IN THE 144A GLOBAL
NOTE, AS SET FORTH IN (A) ABOVE AND, IN ADDITION, PURSUANT TO ANY AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT (PROVIDED
THAT AS A CONDITION TO THE REGISTRATION OF TRANSFER OF ANY NOTES OTHERWISE THAN
AS DESCRIBED IN (A) ABOVE OR (C) BELOW, THE ISSUER, THE GUARANTOR OR THE TRUSTEE
MAY, IN CIRCUMSTANCES THAT ANY OF THEM DEEMS APPROPRIATE, REQUIRE EVIDENCE, IN
ADDITION TO THAT OTHERWISE REQUIRED, AS TO COMPLIANCE WITH ANY SUCH EXEMPTION)
OR (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.
THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT IT WILL NOTIFY EACH
PURCHASER OF THIS NOTE FROM IT OF THE ABOVE RESTRICTIONS AND OF THIS LEGEND. 

A-1

	 	 
	
    No.	
    U.S. $

PCCW-HKT CAPITAL N0.3 LIMITED 

5.25% GUARANTEED NOTES DUE 2015 

Certificated Note 

Unconditionally Guaranteed by 

PCCW-HKT TELEPHONE LIMITED 

PCCW-HKT Capital No.3 Limited, a
British Virgin Islands corporation (the "Issuer"), for value received, hereby
promises to pay to___________or registered assigns, upon surrender hereof the
principal sum of __________________________ UNITED STATES DOLLARS
(U.S.$___________ ) on July 20, 2015, or on such earlier date as the principal
hereof may become due in accordance with the provisions hereof, and to pay
interest in arrear on January 20 and July 20 of each year (each an "Interest
Payment Date"), commencing January 20, 2006, on said principal sum at the rate
of 5.25% per annum, subject to adjustment from time to time pursuant to the
immediately following paragraph. Interest shall accrue from and including the
most recent date to which interest has been paid or duly provided for or, if no
interest has been paid or duly provided for, from and including July 20, 2005
until payment of said principal sum has been made or duly provided for. Such
payments shall be made exclusively in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts. 

Principal of this Note will be
payable against surrender of this Note at the Corporate Trust Office of the
Trustee in New York City or, subject to applicable laws and regulations, at the
office outside of the United States of any Paying and Transfer Agent, by U.S.
dollar check drawn on, or by wire transfer in immediately available funds to a
U. S. dollar account maintained by the registered holder with, a bank in New
York City. Payment of interest on this Note will be made to the person or
persons in whose name this Note is registered at the close of business on the
preceding January 6 and July 6, respectively (the "Interest Record Date"),
whether or not such day is a Business Day, notwithstanding the cancellation of
this Note upon any transfer or exchange hereof subsequent to the Interest Record
Date and prior to such Interest Payment Date. Interest shall be calculated on
the basis of a 360-day year of twelve 30-day months each. Payment of interest on
this Note will be made (i) by U.S. dollar check drawn on a bank in New York City
mailed to the address of the Noteholder as such address shall appear in the
Register or (ii) upon application by a Noteholder of at least $1,000,000 in
aggregate principal amount of Notes to the Paying and Transfer Agent not later
than five days prior to the relevant Interest Record Date, by wire transfer in

A-2

immediately available funds to a U.S. dollar account maintained by the
Noteholder with a bank in New York City. 

In any case where the payment of principal of or
interest on the Notes is due on a date that is not a Business Day, then payment
of principal of or interest on the Notes shall be made on the next succeeding
Business Day and no interest shall accrue with respect to such payment for the
period from and after such date that is not a Business Day to such next
succeeding Business Day. 

Subject to certain exceptions as set forth in the
Indenture, all payments of principal of, or interest on, this Note shall be made
free and clear of, and without withholding or deduction for, any taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within the British Virgin Islands or Hong
Kong or any authority therein or thereof having power to tax ("Taxes"), unless
such withholding or deduction of such Taxes is required by law or by the
interpretation or administration thereof. In that event, the Issuer or the
Guarantor, as applicable, shall pay such additional amounts as will result in
receipt by the holders of the Notes of such amounts as would have been payable
to them had no such withholding or deduction of such Taxes been required. 

Reference is made to the further
provisions set forth on the reverse hereof. Such further provisions shall for
all purposes have the same effect as though fully set forth at this place. 

This Note shall not be valid or obligatory until the
certificate of authentication hereon shall have been duly signed by the Trustee
acting under the Indenture. 

 

A-3

IN WITNESS WHEREOF, the Issuer has caused this
instrument to be duly executed. 

Dated: 

  	PCCW-HKT CAPITAL NO.3
      LIMITED
	 
	By:
      ______________________________________
	      
      Name:
	      
      Title:

 

 

 

A-4

Guarantee 

PCCW-HKT Telephone Limited (the "Guarantor")
hereby unconditionally guarantees to the holder of the Note upon which this
Guarantee is endorsed and to the Trustee on behalf of each Noteholder the due
and punctual payment of the principal of, and interest on, and all other amounts
payable under, each Note provided for pursuant to the Indenture and the terms of
such Note when and as the same shall become due and payable, whether at the
Stated Maturity, upon acceleration, by call for redemption or otherwise, in
accordance with the terms of such Note and of the Indenture. The Guarantor
hereby expressly waives its right to require the Trustee to pursue or exhaust
its legal or equitable remedies against the Issuer prior to exercising its
rights under the Guarantee. The Guarantee will not be discharged with respect to
any Note except by payment in full of the principal thereof and interest
thereon. In case of the failure of the Issuer punctually to pay any such
principal, or interest, the Guarantor hereby agrees to cause any such payment to
be made punctually when and as the same shall become due and payable, whether at
the stated maturity, by acceleration, call for redemption or otherwise, and as
if such payment were made by the Issuer, 

Subject to certain exceptions as set forth in the
Indenture, the Guarantor hereby further agrees that all payments under this
Guarantee shall be made free and clear of, and without withholding or deduction
for, any taxes, duties, assessments or governmental charges of whatever nature
imposed, levied, collected, withheld or assessed by or within the British Virgin
Islands or Hong Kong or any authority therein or thereof having power to tax
("Taxes"), unless such withholding or deduction of such Taxes is required by law
or by the interpretation or administration thereof. In that event, the Guarantor
shall pay such additional amounts as will result in receipt by the holders of
the Notes of such amounts as would have been payable to them had no such
withholding or deduction of such Taxes been required. 

The obligations of the Guarantor to
the holder of this Note and to the Trustee pursuant to this Guarantee and the
Indenture are expressly set forth in Article 9 of the Indenture, and reference
is hereby made to such Article and Indenture for the precise terms of the
Guarantee. 

The Guarantee shall not be valid or
obligatory for any purpose until the certificate of authentication on the Note
upon which this Guarantee is endorsed shall have been executed by the Trustee
under the Indenture by manual signature of one of its authorized officers. 

A-5

  	 
	PCCW-HKT TELEPHONE LIMITED
	 
	By:
      ______________________________________
	      
      Name:
	      
      Title:

 

 

A-6

Certificate of Authentication 

This is one of the Certificated Notes and the
Guarantee described in the within-mentioned Indenture, 

  	
      HSBC BANK USA, NATIONAL
	      
      ASSOCIATION, as Trustee
	 	 
	By: 
      _______________________________________
	       
      Name:
	       
      Title:    Authorized Officer

 

 

A-7

FORM OF REVERSE OF CERTIFICATED NOTE 

This Note is one of a duly authorized issue of debt
securities of PCCW-HKT Capital No.3 Limited (the "Issuer"), issued under
an Indenture (the "Indenture") dated as of July 20, 2005 among the Issuer, PCCW-HKT Telephone Limited, as Guarantor (the "Guarantor"), and HSBC Bank
USA, National Association, as Trustee (the "Trustee"). The holders of the
Notes (the "Noteholders") will be entitled to the benefits of, be bound
by and be deemed to have notice of, all of the provisions of the Indenture. A
copy of the Indenture is on file and may be inspected at the Corporate Trust
Office of the Trustee in New York City and the offices of the Paying and
Transfer Agent listed at the bottom of the Reverse of this Note. This Note is
initially limited in aggregate principal amount upon Stated Maturity to
US$__________. Capitalized terms used herein and in the Guarantee endorsed
hereon but not defined have the meanings ascribed to such terms in the
Indenture. 

The Notes and the Guarantee will (i) be direct,
unconditional, unsubordinated and unsecured obligations of the Issuer and the
Guarantor, respectively, (ii) rank at least 
pari passu 
in. right of payment with all other
unsecured and unsubordinated obligations of the Issuer and the Guarantor,
respectively, and (iii) be senior in priority of payment and in all other
respects to all other obligations of the Issuer and the Guarantor, respectively,
that are designated as subordinated or junior in right of payment to the Notes
and the Guarantee, as the case may be. 

Each Note will be fully guaranteed by a direct,
unconditional and irrevocable obligation of the Guarantor to pay the principal
of, and accrued and unpaid interest and Additional Amounts, if any, on, the
Notes and all other amounts payable under the Indenture when and as the same
shall become due and payable. 

The Notes will be issued in definitive, fully
registered form without interest coupons in minimum denominations of US$100,000
and integral multiples of US$1,000 in excess thereof. The Notes will not be
issued in bearer form, The Notes, and transfers thereof and of beneficial
interests therein, shall be registered as provided in the Indenture. Any Person
in whose name a Note shall be registered may (to the fullest extent permitted by
applicable law) be treated at all times, by all persons and for all purposes as
the absolute owner of such Note, regardless of any notice of ownership, theft or
loss or of any writing thereon. 

Subject to the terms and conditions as more fully set
forth in the Indenture, the Notes may be redeemed at any time, at the option of
the Issuer, as a whole but not in part, upon notice as set forth in Section
12.02 at a redemption price equal to 100% of the principal amount thereof,
together with accrued and unpaid interest to the date fixed for redemption, if
any, if (i) as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of 

A-8

the British Virgin Islands or Hong Kong, as the case may be, (or, in the case
of Additional Amounts payable by a successor Person to the Issuer or the
Guarantor, the applicable Successor Jurisdiction) or any political subdivision
or taxing authority thereof or therein having power to tax, or any change in or
amendment to, any official position regarding the application or interpretation
of such laws, regulations or rulings (including a holding by a court of
competent jurisdiction), which change, amendment, application or interpretation
becomes effective on or after the date of the Indenture, (or, in the case of
Additional Amounts payable by a successor Person to the Issuer or the Guarantor,
the date on which such successor Person to the Issuer or the Guarantor, as the
case may be, became such pursuant to the applicable provisions of the
Indenture), either (x) the Issuer, the Guarantor or any such successor Person to
the Issuer or Guarantor, as the case may be, is or would be, obligated to pay
Additional Amounts upon the next payment of principal or interest in respect of
the Notes or the Guarantee or (y) the Guarantor or any such successor Person to
the Guarantor is, or would be, obligated to pay Additional Amounts upon the next
payment of principal or interest in respect of the Intercompany Loan and (ii)
such obligation cannot be avoided by the Issuer, the Guarantor or any such
successor Person to the Issuer or Guarantor, as the case may be, taking
reasonable measures available to it. Prior to the giving of any notice of
redemption of the Notes pursuant to the foregoing, the Issuer or any such
successor Person to the Issuer shall deliver to the Trustee a notice of such
redemption election, an opinion in writing signed by independent legal counsel
of recognized standing to the Issuer, Guarantor or any such successor Person to
the Issuer or Guarantor, as the case may be, to the effect that the Issuer, the
Guarantor or any such successor Person to the Issuer or Guarantor, as the case
may be, is, or would become, obligated to pay such Additional Amounts as
described in clause (i) as the result of such change or amendment, and an
Officers' Certificate (as defined in the Indenture) of the Issuer, Guarantor or
any such successor Person to the Issuer or Guarantor, as the case may be,
stating that such amendment or change has occurred, describing the facts leading
thereto and stating that such requirement cannot be avoided by the Issuer, the
Guarantor or any such successor Person to the Issuer or Guarantor, as the case
may be, taking reasonable measures available to it. 

Except as otherwise provided in the Indenture, in
case an Event of Default (as defined in the Indenture) with respect to Notes
shall have occurred and be continuing, the principal of all the Notes
Outstanding may be declared due and payable, in the manner and with the effect,
and subject to the conditions, provided in the Indenture. The Indenture provides
that in certain events such declaration and its consequences may be waived by
the Holders of a Majority in aggregate principal amount of the Notes then
Outstanding and that, prior to any such declaration, such Noteholders may waive
any past or existing default or Event of Default under the Indenture and its
consequences except (i) a continuing default in the payment of principal of, or
interest on, the Notes then Outstanding, or (ii) any default or Event of Default
with respect to certain covenants or provisions in 

A-9

the Indenture which may not be modified without the consent of the Holder of
each Note. Any such consent or waiver by the Holder of this Note (unless revoked
as provided in the Indenture) shall be conclusive and binding upon such Holder
and upon all future Holders and owners of this Note and any Note which may be
issued in exchange or substitution hereafter, whether or not any notation
thereof is made upon this Note or such other Notes. 

The Indenture permits the Issuer and the Trustee,
with the consent of the holders of not less than a Majority in aggregate
principal amount of the Notes at the time Outstanding, evidenced as provided in
the Indenture, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
Holders of the Notes; provided that no such modification or amendment
may, without the consent of the holder of each such Note affected thereby, (i)
change the Stated Maturity of the Notes; (ii) reduce the principal amount of or
payments of interest on any Notes; (iii) change any obligation of the Issuer or
the Guarantor to pay Additional Amounts with respect to Notes; (iv) change the
currency or place of payment of the principal of or interest on the Notes; (v)
impair the right to institute suit for the enforcement of any payment due on or
with respect to the Notes; (vi) reduce the above stated percentage of
outstanding Notes necessary to modify or amend the Indenture; (vii) reduce the
percentage of the aggregate principal amount of outstanding Notes necessary for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults; (viii) change, in any manner adverse to the interest of
holders of the Notes, the terms and provisions of the Guarantee in respect of
the due and punctual payment of principal of and interest on the Notes; or (ix)
modify such provisions with respect to modification and waiver; provided, 
that no consent of any Noteholder is required in connection with the execution
of a supplemental indenture not requiring the consent of the Noteholders
pursuant to Section 7.01 of the Indenture or in connection with a consolidation,
amalgamation, merger, conveyance or transfer under the Indenture. 

No reference herein to the Indenture
and no provision of this Note or of the Indenture shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the place, times, and rate, and in the
currency, herein prescribed. 

At the office or agency of the Issuer referred to on
the face hereof and in the manner and subject to the limitations provided in the
Indenture, Notes may be exchanged for a like aggregate principal amount of Notes
of other authorized denominations. 

Upon due presentment for registration of transfer of
this Note at the above-mentioned office or agency of the Issuer, a new Note or
Notes of authorized denominations, for a like aggregate principal amount, will
be issued to the transferee as provided in the Indenture. No service charge
shall be made for 

A-10

any such transfer, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto. 

The Issuer, the Trustee, and any authorized agent of
the Issuer or the Trustee, may (to the fullest extent permitted by applicable
law) deem and treat the registered holder hereof as the absolute owner of this
Note (whether or not this Note shall be overdue and notwithstanding any notation
of ownership or other writing hereon made by anyone other than the Issuer or the
Trustee or any authorized agent of the Issuer or the Trustee), for the purpose
of receiving payment of, or on account of, the principal hereof and, subject to
the provisions on the face hereof, interest hereon and for all other purposes,
and neither the Issuer nor the Trustee nor any authorized agent of the Issuer or
the Trustee shall be affected by any notice to the contrary. 

 

 

 

A-11

TRUSTEE, PAYING AND TRANSFER AGENT AND REGISTRAR 

Trustee 

HSBC Bank USA, National Association 

452 Fifth Avenue 

New York, New York 10018 

Attention: Corporate Trust 

 

Principal Paving and Transfer Agent and Registrar 

HSBC Bank USA, National Association 

452 Fifth Avenue 

New York, New York 10018 

Attention: Corporate Trust 

 

A-12

EXHIBIT B  

[TRANSFER NOTICE] 

FOR VALUE RECEIVED the undersigned
registered holder hereby sell(s), assign(s) and transfer(s) unto 

Insert Taxpayer Identification No. 

 

	
    Please print or typewrite name
    and address including zip code of assignee
	 
	 
	 
	
    the within Note and all rights
    thereunder, hereby irrevocably constituting and appointing
    _______________________ attorney to transfer said Note on the books of the
    Issuer with full power of substitution in the premises.

In connection with any transfer of
this Note: 

[Check One] 

  (a) this
Note is being transferred to the Issuer; or 


(b) this Note is being transferred pursuant to and in accordance with Rule 144A
under the U.S. Securities Act of 1933 (the "Securities Act") and, accordingly,
the undersigned does hereby further certify that this Note is being transferred
to a Person that the undersigned reasonably believes is purchasing this Note for
its own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in each case in
a transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States; 

 (c) this Note is
being transferred pursuant to and in accordance with Regulation S and: 

(A)   the
offer of this Note was not made to a Person in the United States; 

(B)  
either: 

(i)   at
the time the buy order was originated, the transferee was outside the United
States or the undersigned and any person acting on its behalf reasonably
believed that the transferee was outside the United States, or 

B-1

(ii)   the transaction
was executed in, on or through the facilities of a designated offshore
securities market and neither the undersigned nor any Person acting on its
behalf knows that the transaction was prearranged with a buyer in the United
States; 

(C)    no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or 904(b) of Regulation S, as applicable; and 

(D)    the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act; 

or 


(d) this Note is being transferred in a transaction permitted by Rule 144; 

  (e) the
undersigned did not purchase this Note as part of the initial distribution
thereof and the transfer is being effected pursuant to and in accordance with an
applicable exemption (other than (a) through (d) above) from the registration
requirements under the Securities Act and the undersigned has delivered to the
Trustee such additional evidence that the Issuer, the Guarantor or the Trustee
may require as to compliance with such available exemption, 

If none of the foregoing boxes are checked, the Trustee or other Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer or
registration set forth herein and in Section 2.07 of the Indenture shall have
been satisfied. 

	Date: 
    	 

NOTICE: The signature to this assignment must correspond with
the name as written upon the face of the within-mentioned instrument in every
particular, without alteration or any change whatsoever. 

TO BE COMPLETED BY PURCHASER IF (b) ABOVE IS CHECKED. 

The undersigned represents and warrants that it is
purchasing this Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Issuer as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A. 

B-2

	Dated:	 
	 	
    
    NOTICE: To be executed by an executive officer

 

 

 

 

 

B-3

EXHIBIT C  

FORM OF RESTRICTED
GLOBAL NOTE 

PCCW-HKT CAPITAL NO.3
LIMITED 

"THIS NOTE AND THE GUARANTEE RELATED TO THIS NOTE HAVE NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, THIS NOTE MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) AGREES THAT IT WILL NOT RESELL, PLEDGE
OR OTHERWISE TRANSFER THE NOTES EXCEPT (A) IF SUCH PURCHASER IS AN INITIAL
PURCHASER, (I) TO THE GUARANTOR OR THE ISSUER OR ANY SUBSIDIARY THEREOF, (II) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (III) OUTSIDE THE UNITED STATES IN A TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (B)
IF SUCH PURCHASER IS A SUBSEQUENT PURCHASER OF AN INTEREST IN THE 144A GLOBAL
NOTE, AS SET FORTH IN (A) ABOVE AND, IN ADDITION, PURSUANT TO ANY AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT (PROVIDED
THAT AS A CONDITION TO THE REGISTRATION OF TRANSFER OF ANY NOTES OTHERWISE THAN
AS DESCRIBED IN (A) ABOVE OR (C) BELOW, THE ISSUER, THE GUARANTOR OR THE TRUSTEE
MAY, IN CIRCUMSTANCES THAT ANY OF THEM DEEMS APPROPRIATE, REQUIRE EVIDENCE, IN
ADDITION TO THAT OTHERWISE REQUIRED, AS TO COMPLIANCE WITH ANY SUCH EXEMPTION)
OR (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.
THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT IT WILL NOTIFY EACH
PURCHASER OF THIS NOTE FROM IT OF THE ABOVE RESTRICTIONS AND OF THIS LEGEND."

 

C-1

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR FN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO, HAS AN INTEREST HEREIN. 

THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED FN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGEABLE IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 

 

 

C-2

	 	 
	No. ________	CUSIP No.
    ________
	 	ISIN No.
    _________

PCCW-HKT CAPITAL NO.3 LIMITED 

RESTRICTED GLOBAL NOTE 

representing up to US$__________ 

5.25% Guaranteed Notes Due 2015 

Unconditionally Guaranteed by 

PCCW-HKT TELEPHONE LIMITED 

PCCW-HKT Capital No.3 Limited, a British Virgin
Islands corporation (the "Issuer"), for value received, hereby promises to pay
to Cede & Co., or registered assigns, upon surrender hereof the principal sum
set forth in Schedule I hereto on July 20, 2015, or on such earlier date as the
principal hereof may become due in accordance with the provisions hereof, and to
pay interest in arrear on January 20 and July 20 of each year (each an "Interest
Payment Date"), commencing January 20, 2006 on said principal sum at the rate of
5.25% per annum, subject to adjustment from time to time pursuant to the
immediately following paragraph. Interest shall accrue from and including the
most recent date to which interest has been paid or duly provided for or, if no
interest has been paid or duly provided for, from and including July 20, 2005,
until payment of said principal sum has been made or duly provided for, Such
payments shall be made exclusively in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts. 

This Note is being deposited with DTC acting as
depository, and registered in the name of Cede & Co., a nominee of DTC. Cede &
Co., as holder of record of this Note, shall be entitled to receive payments of
principal and interest, other than principal and interest due at the maturity
date. Payment of interest on this Note will be made (i) by U.S. dollar check
drawn on a bank in New York City mailed to the registered holder at its
registered address or (ii) by wire transfer in immediately available funds to a
U.S. dollar account maintained by the registered holder with a bank in New York
City. 

Principal of this Note will be
payable against surrender of this Note at the Corporate Trust Office of the
Trustee in New York City or, subject to applicable laws and regulations, at the
office outside of the United States of any Paying and Transfer Agent, by U.S.
dollar check drawn on, or by wire transfer in immediately 

C-3

available funds to a U.S. dollar account maintained by the registered holder
with, a bank in New York City. Payment of interest on this Note will be made to
the person in whose name this Note is registered at the close of business on the
preceding January 6 and July 6, respectively (the "Interest Record Date"),
whether or not such day is a Business Day, except as otherwise provided in
the Indenture, notwithstanding the cancellation of this Note upon any transfer
or exchange hereof subsequent to the Interest Record Date and prior to such
Interest Payment Date. 

In any case where the payment of principal of or
interest on the Notes is due on a date that is not a Business Day, then payment
of principal of or interest on the Notes shall be made on the next succeeding
Business Day and no interest shall accrue with respect to such payment for the
period from and after such date that is not a Business Day to such next
succeeding Business Day. 

Subject to certain exceptions as set forth in the
Indenture, payments of principal of, or interest on, this Note shall be made
free and clear of, and without withholding or deduction for, any taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within the British Virgin Islands or Hong
Kong or any authority therein or thereof having power to tax ("Taxes"), unless
such withholding or deduction of such Taxes is required by law or by the
interpretation or administration thereof. In that event, the Issuer or the
Guarantor, as applicable, shall pay such additional amounts as will result in
receipt by the holders of the Notes of such amounts as would have been payable
to them had no such withholding or deduction of such Taxes been required. 

Reference is made to the further
provisions set forth on the reverse hereof. Such further provisions shall for
all purposes have the same effect as though fully set forth at this place. 

This Note shall not be valid or obligatory until the
certificate of authentication hereon shall have been duly signed by the Trustee
acting under the Indenture. 

 

C-4

IN WITNESS WHEREOF, the Issuer has caused this
instrument to be duly executed. 

	Dated:
    _________________	 
	 	 
	 	PCCW-HKT CAPITAL
    NO.3 LIMITED
	 	 
	 	
    By:____________________________
	 	     
    Name:
	 	     
    Title:

 

C-5

Guarantee 

PCCW-HKT Telephone Limited (the "Guarantor")
hereby unconditionally guarantees to the holder of the Note upon which this
Guarantee is endorsed and to the Trustee on behalf of each Noteholder the due
and punctual payment of the principal of, and interest on, and all other amounts
payable under, this Note, when and as the same shall become due and payable,
whether at the Stated Maturity date, upon acceleration, by call for redemption
or upon repurchase or otherwise, in accordance with the terms hereof and of the
Indenture, The Guarantor hereby expressly waives its right to require the
Trustee to pursue or exhaust its legal or equitable remedies against the Issuer
prior to exercising its rights under this Guarantee, This Guarantee will not be
discharged with respect to this Note except by payment in full of the principal
thereof and accrued and unpaid interest and Additional Amounts, if any, hereon.
In case of the failure of the Issuer punctually to pay any such principal or
interest, the Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable, whether at the
stated maturity, by acceleration, call for redemption or upon repurchase or
otherwise, and as if such payment were made by the Issuer. 

Subject to certain exceptions as set forth in the
Indenture, the Guarantor hereby further agrees that all payments under this
Guarantee shall be made free and clear of, and without withholding or deduction
for, any taxes, duties, assessments or governmental charges of whatever nature
imposed, levied, collected, withheld or assessed by or within the British Virgin
Islands or Hong Kong or any authority therein or thereof having power to tax
("Taxes"), unless such withholding or deduction of such Taxes is required by law
or by the interpretation or administration thereof. In that event, the Guarantor
shall pay such additional amounts as will result in receipt by the holders of
the Notes of such amounts as would have been payable to them had no such
withholding or deduction of such Taxes been required. 

The obligations of the Guarantor to
the holder of this Note and to the Trustee pursuant to this Guarantee and the
Indenture are expressly set forth in Article 9 of the Indenture, and reference
is hereby made to such Article and Indenture for the precise terms of this
Guarantee. 

This Guarantee shall not be valid or
obligatory for any purpose until the certificate of authentication on the Note
upon which this Guarantee is endorsed shall have been executed by the Trustee
under the Indenture by manual signature of one of its authorized officers. 

C-6

  	 
	PCCW-HKT TELEPHONE LIMITED
	 
	By:
      ______________________________________
	      
      Name:
	      
      Title:

 

 

 

C-7

Certificate of Authentication 

This is one of the Global Notes and the Guarantee
described in the within-mentioned Indenture. 

  	
      HSBC BANK USA, NATIONAL
	      
      ASSOCIATION, as Trustee
	 	 
	By: 
      _______________________________________
	       
      Name:
	       
      Title:    Authorized Officer

 

 

 

C-8

FORM OF REVERSE OF RESTRICTED GLOBAL NOTE 

This Note is one of a duly authorized issue of debt
securities of PCCW-HKT Capital No,3 Limited (the "Issuer"), issued under an
Indenture (the "Indenture") dated as of My 20, 2005 among the Issuer, PCCW-HKT
Telephone Limited, as Guarantor (the "Guarantor"), and HSBC Bank USA, National
Association, as Trustee (the "Trustee"). The holders of the Notes (the
"Noteholders") will be entitled to the benefits of, be bound by and be deemed to
have notice of, all of the provisions of the Indenture. A copy of the Indenture
is on file and may be inspected at the Corporate Trust Office of the Trustee in
New York City and the offices of the Paying and Transfer Agent listed at the
bottom of the reverse of this Note. This Note is initially limited in aggregate
principal amount to US$ _________. Capitalized terms used herein and in the
Guarantee endorsed hereon but not defined have the meanings ascribed to such
terms in the Indenture. 

The Notes and the Guarantee will (i) be direct,
unconditional, unsubordinated and unsecured obligations of the Issuer and the
Guarantor, respectively, (ii) rank at least pari passu in right of
payment with all other unsecured and unsubordinated obligations of the Issuer
and the Guarantor, respectively, and (iii) be senior in priority of payment and
in ail other respects to all other obligations of the Issuer and the Guarantor,
respectively, that are designated subordinated or junior in right of payment to
the Notes and the Guarantee, as the case may be. 

Each Note will be fully guaranteed by a direct,
unconditional and irrevocable obligation of the Guarantor to pay the principal
of, and accrued and unpaid interest and Additional Amounts, if any, on, the
Notes and all other amounts payable under the Indenture when and as the same
shall become due and payable. 

The Notes will be issued in definitive, fully
registered form without interest coupons in minimum denominations of US$100,000
and integral multiples of US$1,000 in excess thereof. The Notes will not be
issued in bearer form. The Notes, and transfers thereof and of beneficial
interests therein, shall be registered as provided in the Indenture. Any Person
in whose name a Note shall be registered may (to the fullest extent permitted by
applicable law) be treated at all times, by all persons and for all purposes as
the absolute owner of such Note, regardless of any notice of ownership, theft or
loss or of any writing thereon. 

Subject to the terms and conditions as more fully set
forth in the Indenture, the Notes may be redeemed at any time, at the option of
the Issuer, as a whole but not in part, upon notice as set forth in Section
12.02 at a redemption price equal to 100% of the principal amount thereof,
together with accrued and unpaid interest to the date fixed for redemption, if
any, if (i) as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of 

C-9

the British Virgin Islands or Hong Kong, as the case may be, (or, in the case
of Additional Amounts payable by a successor Person to the Issuer or the
Guarantor, the applicable Successor Jurisdiction) or any political subdivision
or taxing authority thereof or therein having power to tax, or any change in or
amendment to, any official position regarding the application or interpretation
of such laws, regulations or rulings (including a holding by a court of
competent jurisdiction), which change, amendment, application or interpretation
becomes effective on or after the date of the Indenture, (or, in the case of
Additional Amounts payable by a successor Person to the Issuer or the Guarantor,
the date on which such successor Person to the Issuer or the Guarantor, as the
case may be, became such pursuant to the applicable provisions of the
Indenture), either (x) the Issuer, the Guarantor or any such successor Person to
the Issuer or Guarantor, as the case may be, is or would be, obligated to pay
Additional Amounts upon the next payment of principal or interest in respect of
the Notes or the Guarantee or (y) the Guarantor or any such successor Person to
the Guarantor is, or would be, obligated to pay Additional Amounts upon the next
payment of principal or interest in respect of the Intercompany Loan and (ii)
such obligation cannot be avoided by the Issuer, the Guarantor or any such
successor Person to the Issuer or Guarantor, as the case may be, taking
reasonable measures available to it. Prior to the giving of any notice of
redemption of the Notes pursuant to the foregoing, the Issuer or any such
successor Person to the Issuer shall deliver to the Trustee a notice of such
redemption election, an opinion in writing signed by independent legal counsel
of recognized standing to the Issuer, Guarantor or any such successor Person to
the Issuer or Guarantor, as the case may be, to the effect that the Issuer, the
Guarantor or any such successor Person to the Issuer or Guarantor, as the case
may be, is, or would become, obligated to pay such Additional Amounts as
described in clause (i) as the result of such change or amendment, and an
Officers' Certificate (as defined in the Indenture) of the Issuer, Guarantor or
any such successor Person to the Issuer or Guarantor, as the case may be,
stating that such amendment or change has occurred, describing the facts leading
thereto and stating that such requirement cannot be avoided by the Issuer, the
Guarantor or any such successor Person to the Issuer or Guarantor, as the case
may be, taking reasonable measures available to it. 

Except as otherwise provided in the Indenture, in
case an Event of Default (as defined in the Indenture) with respect to Notes
shall have occurred and be continuing, the principal of all the Notes
Outstanding may be declared due and payable, in the manner and with the effect,
and subject to the conditions, provided in the Indenture. The Indenture provides
that in certain events such declaration and its consequences may be waived by
the Holders of a Majority in aggregate principal amount of the Notes then
Outstanding and that, prior to any such declaration, such Noteholders may waive
any past or existing default or Event of Default under the Indenture and its
consequences except (i) a continuing default in the payment of principal of, or
interest on, the Notes then Outstanding, or (ii) any default or Event of Default
with respect to certain covenants or provisions in 

C-10

the Indenture which may not be modified without the consent of the Holder of
each Note. Any such consent or waiver by the Holder of this Note (unless revoked
as provided in the Indenture) shall be conclusive and binding upon such Holder
and upon all future Holders and owners of this Note and any Note which may be
issued in exchange or substitution hereafter, whether or not any notation
thereof is made upon this Note or such other Notes. 

The Indenture permits the Issuer and the Trustee,
with the consent of the holders of not less than a Majority in aggregate
principal amount of the Notes at the time Outstanding, evidenced as provided in
the Indenture, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
Holders of the Notes; provided that no such modification or amendment
may, without the consent of the holder of each such Note affected thereby, (i)
change the Stated Maturity of the Notes; (ii) reduce the principal amount of or
payments of interest on any Notes; (iii) change any obligation of the Issuer or
the Guarantor to pay Additional Amounts with respect to Notes; (iv) change the
currency or place of payment of the principal of or interest on the Notes; (v)
impair the right to institute suit for the enforcement of any payment due on or
with respect to the Notes; (vi) reduce the above stated percentage of
outstanding Notes necessary to modify or amend the Indenture; (vii) reduce the
percentage of the aggregate principal amount of outstanding Notes necessary for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults; (viii) change, in any manner adverse to the interest of
holders of the Notes, the terms and provisions of the Guarantee in respect of
the due and punctual payment of principal of and interest on the Notes; or (ix)
modify such provisions with respect to modification and waiver; provided, 
that no consent of any Noteholder is required in connection with the execution
of a supplemental indenture not requiring the consent of the Noteholders
pursuant to Section 7.01 of the Indenture or in connection with a consolidation,
amalgamation, Merger, conveyance or transfer permitted. 

No reference herein to the Indenture
and no provision of this Note or of the Indenture shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the place, times, and rate, and in the
currency, herein prescribed. 

At the office or agency of the Issuer referred to on
the face hereof and in the manner and subject to the limitations provided in the
Indenture, Notes may be exchanged for a like aggregate principal amount of Notes
of other authorized denominations. 

Upon due presentment for registration of transfer of
this Note at the above-mentioned office or agency of the Issuer, a new Note or
Notes of authorized denominations, for a like aggregate principal amount, will
be issued to the transferee as provided in the Indenture. No service charge
shall be made for 

C-11

any such transfer, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto. 

The Issuer, the Trustee, and any authorized agent of
the Issuer or the Trustee, may (to the fullest extent permitted by applicable
law) deem and treat the registered holder hereof as the absolute owner of this
Note (whether or not this Note shall be overdue and notwithstanding any notation
of ownership or other writing hereon made by anyone other than the Issuer or the
Trustee or any authorized agent of the Issuer or the Trustee), for the purpose
of receiving payment of, or on account of, the principal hereof and, subject to
the provisions on the face hereof, interest hereon and for all other purposes,
and neither the Issuer nor the Trustee nor any authorized agent of the Issuer or
the Trustee shall be affected by any notice to the contrary. 

 

 

C-12

TRUSTEE, PAYING AND TRANSFER AGENT AND REGISTRAR 

Trustee 

HSBC Bank USA, National Association 

452 Fifth Avenue 

New York, New York 10018 

Attention: Corporate Trust 

 

Principal Paying and Transfer Agent and Registrar 

HSBC Bank USA, National Association 

452 Fifth Avenue 

New York, New York 10018 

Attention: Corporate Trust 

 

C-13

SCHEDULE 1

The following changes in the aggregate principal
amount of Notes represented by this Global Note have been made: 

	 	
    Amount of	 	 	 
	 	
    decrease in	
    Amount of	 	 
	 	
    aggregate	
    increase in	 	 
	 	
    principal	
    aggregate	 	 
	 	
    amount of	
    principal	
    Outstanding	 
	Date	
    Notes	
    amount of Notes	
    Balance	
    Signature

 

 

 

C-14

EXHIBIT D  

FORM OF REGULATION S GLOBAL NOTE 

PCCW-HKT CAPITAL NO.3 LIMITED 

This Note will bear the following legend (unless such Note has been sold
pursuant to a registration statement that has been declared effective under the
U.S. Securities Act of 1933, as amended and provided that 41 days after the
later of the commencement of the sale of the Notes and the Closing Date, the
following legend included on the Regulation S Global Note (and each Certificated
Note issued in exchange therefor) shall have no effect and may be removed by the
Trustee upon direction of the Issuer, the Guarantor or a Holder of any interest
in the Regulation S Global Note (and each Certificated Note issued in exchange
therefor)). 

THIS NOTE AND THE GUARANTEE RELATED TO THIS NOTE HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, THIS NOTE MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) AGREES THAT IT WILL NOT RESELL, PLEDGE OR OTHERWISE TRANSFER THE
NOTES EXCEPT (A) IF SUCH PURCHASER IS AN INITIAL PURCHASER, (I) TO THE GUARANTOR
OR THE ISSUER OR ANY SUBSIDIARY THEREOF, (II) TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (III) OUTSIDE THE UNITED
STATES IN A TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (B) IF SUCH PURCHASER IS A SUBSEQUENT
PURCHASER OF AN INTEREST IN THE 144A GLOBAL NOTE, AS SET FORTH IN (A) ABOVE AND,
IN ADDITION, PURSUANT TO ANY AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT (PROVIDED THAT AS A CONDITION TO THE
REGISTRATION OF TRANSFER OF ANY NOTES OTHERWISE THAN AS DESCRIBED IN (A) ABOVE
OR (C) BELOW, THE ISSUER, THE GUARANTOR OR THE TRUSTEE MAY, IN CIRCUMSTANCES
THAT ANY OF 

D-l 

THEM DEEMS APPROPRIATE, REQUIRE EVIDENCE, IN ADDITION TO THAT OTHERWISE
REQUIRED, AS TO COMPLIANCE WITH ANY SUCH EXEMPTION) OR (C) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, THE HOLDER HEREOF, BY
PURCHASING THIS NOTE, AGREES THAT IT WILL NOTIFY EACH PURCHASER OF THIS NOTE
FROM IT OF THE ABOVE RESTRICTIONS AND OF THIS LEGEND. 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 

THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGEABLE IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 

 

D-2 

	 	 
	No.________	CUSIP (CINS)
    No.________
	 	ISIN No.________

PCCW-HKT CAPITAL NO.3 LIMITED 

REGULATION S GLOBAL NOTE 

representing up to 

US$ ___________ 

5.25% Guaranteed Notes Due 2015 

Unconditionally Guaranteed by 

PCCW-HKT TELEPHONE LIMITED 

PCCW-HKT Capital No.3 Limited, a British
Virgin Islands corporation (the "Issuer"), for value received, hereby promises
to pay to Cede & Co., or registered assigns, upon surrender hereof the principal
sum set forth on Schedule I hereto on July 20, 2015, or on such earlier date as
the principal hereof may become due in accordance with the provisions hereof,
and to pay interest in arrear on January 20 and July 20 of each year (each an 
"Interest Payment Date"), commencing January 20, 2006, on said principal sum
at the rate of 5.25% per annum, subject to adjustment from time to time pursuant
to the immediately following paragraph. Interest shall accrue from and including
the most recent date to which interest has been paid or duly provided for or, if
no interest has been paid or duly provided for, from and including July 20, 2005
until payment of said principal sum has been made or duly provided for. Such
payments shall be made exclusively in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts. 

This Note is being deposited with DTC
acting as depository, and registered in the name of Cede & Co,, a nominee of
DTC, Cede & Co., as holder of record of this Note, shall be entitled to receive
payments of principal and interest, other than principal and interest due at the
maturity date. Payment of interest on this Note will be made (i) by U.S. dollar
check drawn on a bank in New York City mailed to the registered holder at its
registered address or (ii) by wire transfer in immediately available funds to a
U.S. dollar account maintained by the registered holder with a bank in New York
City. 

Principal of this Note will be payable
against surrender of this Note at the Corporate Trust Office of the Trustee in
New York City or, subject to applicable laws and regulations, at the office
outside of the United States of any Paying and 

D-3 

Transfer Agent, by U.S. dollar check drawn on, or by wire transfer in
immediately available funds to a U.S. dollar account maintained by the
registered holder with, a bank in New York City. Payment of interest on this
Note will be made to the person in whose name this Note is registered at the
close of business on the preceding January 6 and July 6, respectively (the
"Interest Record Date"), whether or not such day is a Business Day, except as
otherwise provided in the Indenture, notwithstanding the cancellation of this
Note upon any transfer or exchange hereof subsequent to the Interest Record Date
and prior to such Interest Payment Date. 

In any case where the payment of principal of or
interest on this Note is due on a date that is not a Business Day, then payment
of principal of or interest on this Note shall be made on the next succeeding
Business Day and no interest shall accrue with respect to such payment for the
period from and after such date that is not a Business Day to such next
succeeding Business Day. 

Subject to certain exceptions as set forth in the
Indenture, all payments of principal of, or interest on, this Note shall be made
free and clear of, and without withholding or deduction for, any taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within the British Virgin Islands or Hong
Kong or any authority therein or thereof having power to tax ("Taxes"), unless
such withholding or deduction of such Taxes is required by law or by the
interpretation or administration thereof. In that event, the Issuer or the
Guarantor, as applicable, shall pay such additional amounts as will result in
receipt by the holders of the Notes of such amounts as would have been payable
to them had no such withholding or deduction of such Taxes been required. 

Reference is made to the further
provisions set forth on the reverse hereof. Such further provisions shall for
all purposes have the same effect as though fully set forth at this place. 

This Note shall not be valid or obligatory until the
certificate of authentication hereon shall have been duly signed by the Trustee
acting under the Indenture. 

 

D-4 

IN WITNESS WHEREOF, the Issuer has caused this
instrument to be duly executed, 

Dated: _______________ 

  	 
	PCCW-HKT
      CAPITAL NO.3 LIMITED
	 
	
      By:____________________________
	     
      Name:
	     
      Title:

 

 

D-5 

Guarantee 

PCCW-HKT Telephone Limited (the "Guarantor")
hereby unconditionally guarantees to the holder of the Note upon which this
Guarantee is endorsed and to the Trustee on behalf of each Noteholder the due
and punctual payment of the principal of, and interest on, and all other amounts
payable under, this Note, when and as the same shall become due and payable,
whether at the Stated Maturity, upon acceleration, by call for redemption or
upon repurchase or otherwise, in accordance with the terms hereof and of the
Indenture. The Guarantor hereby expressly waives its right to require the
Trustee to pursue or exhaust its legal or equitable remedies against the Issuer
prior to exercising its rights under this Guarantee. This Guarantee will not be
discharged with respect to this Note except by payment in full of the principal
thereof and accrued and unpaid interest and Additional Amounts, if any, hereon,
In case of the failure of the Issuer punctually to pay any such principal or
interest, the Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable, whether at the
stated maturity, by acceleration, call for redemption or upon repurchase or
otherwise, and as if such payment were made by the Issuer. 

Subject to certain exceptions as set forth in the
Indenture, the Guarantor hereby further agrees that all payments under this
Guarantee shall be made free and clear of, and without withholding or deduction
for, any taxes, duties, assessments or governmental charges of whatever nature
imposed, levied, collected, withheld or assessed by or within the British Virgin
Islands or Hong Kong or any authority therein or thereof having power to tax
("Taxes"), unless such withholding or deduction of such Taxes is required by law
or the interpretation or administration thereof. In that event, the Guarantor
shall pay such additional amounts as will result in receipt by the holders of
the Notes of such amounts as would have been payable to them had no such
withholding or deduction of such Taxes been required. 

The obligations of the Guarantor to
the holder of this Note and to the Trustee pursuant to this Guarantee and the
Indenture are expressly set forth in Article 9 of the Indenture, and reference
is hereby made to such Article and Indenture for the precise terms of the
Guarantee. 

This Guarantee shall not be valid or
obligatory for any purpose until the certificate of authentication on the Note
upon which this Guarantee is endorsed shall have been executed by the Trustee
under the Indenture by manual signature of one of its authorized officers. 

D-6 

  	 
	PCCW-HKT TELEPHONE LIMITED
	 
	By:
      ______________________________________
	      
      Name:
	      
      Title:

 

 

 

D-7 

Certificate of Authentication 

This is one of the Global Notes and the Guarantee
described in the within-mentioned Indenture. 

  	
      HSBC BANK USA, NATIONAL
	      
      ASSOCIATION, as Trustee
	 	 
	By: 
      _______________________________________
	       
      Name:
	       
      Title:    Authorized Officer

 

D-8 

FORM OF REVERSE OF REGULATION S GLOBAL NOTE 

This Note is one of a duly authorized issue of debt
securities of PCCW-HKT Capital No.3 Limited (the "Issuer"), issued under
an Indenture (the "Indenture") dated as of July 20, 2005 among the
Issuer, PCCW-HKT Telephone Limited, as Guarantor (the "Guarantor"), and
HSBC Bank USA, National Association, as Trustee (the "Trustee"). The
holders of the Notes (the "Noteholders") will be entitled to the benefits
of, be bound by and be deemed to have notice of, all of the provisions of the
Indenture. A copy of the Indenture is on file and may be inspected at the
Corporate Trust Office of the Trustee in New York City and the offices of the
Paying and Transfer Agent listed at the bottom of the reverse of this Note. This
Note is initially limited in aggregate principal amount upon Stated Maturity to
US$__________. Capitalized terms used herein and in the Guarantee endorsed
hereon but not defined have the meanings ascribed to such terms in the
Indenture. 

The Notes and the Guarantee will (i)
be direct, unconditional, unsubordinated and unsecured obligations of the Issuer
and the Guarantor, respectively, (ii) rank at least pari passu in right
of payment with all other unsecured and unsubordinated obligations of the Issuer
and the Guarantor, respectively, and (iii) be senior in priority of payment and
in all other respects to all other obligations of the Issuer and the Guarantor,
respectively, that are designated subordinated or junior in right of payment to
the Notes and the Guarantee, as the case may be. 

Each Note will be fully guaranteed by a direct,
unconditional and irrevocable obligation of the Guarantor to pay the principal
of, and accrued and unpaid interest and Additional Amounts, if any, on, the
Notes and all other amounts payable under the Indenture when and as the same
shall become due and payable. 

The Notes will be issued in definitive, fully
registered form without interest coupons in minimum denominations of US$100,000
and integral multiples of US$1,000 in excess thereof. The Notes will not be
issued in bearer form. The Notes, and transfers thereof and of beneficial
interests therein, shall be registered as provided in the Indenture. Any Person
in whose name a Note shall be registered may (to the fullest extent permitted by
applicable law) be treated at all times, by all persons and for all purposes as
the absolute owner of such Note, regardless of any notice of ownership, theft or
loss or of any writing thereon. 

Subject to the terms and conditions as more fully set
forth in the Indenture, the Notes may be redeemed at any time, at the option of
the Issuer, as a whole but not in part, upon notice as set forth in Section
12.02, at a redemption price equal to 100% of the principal amount thereof,
together with accrued and unpaid interest to the date fixed for redemption, if
any, if (i) as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) 

D-9 

of the British Virgin Islands or Hong Kong, as the case may be, (or, in the
case of Additional Amounts payable by a successor Person to the Issuer or the
Guarantor, the applicable Successor Jurisdiction) or any political subdivision
or taxing authority thereof or therein having power to tax, or any change in or
amendment to, any official position regarding the application or interpretation
of such laws, regulations or rulings (including a holding by a court of
competent jurisdiction), which change, amendment, application or interpretation
becomes effective on or after the date of the Indenture, (or, in the case of
Additional Amounts payable by a successor Person to the Issuer or the Guarantor,
the date on which such successor Person to the Issuer or the Guarantor, as the
case may be, became such pursuant to the applicable provisions of the
Indenture), either (x) the Issuer, the Guarantor or any such successor Person to
the Issuer or Guarantor, as the case may be, is or would be, obligated to pay
Additional Amounts upon the next payment of principal or interest in respect of
the Notes or the Guarantee or (y) the Guarantor or any such successor Person to
the Guarantor is, or would be, obligated to pay Additional Amounts upon the next
payment of principal or interest in respect of the Intercompany Loan and (ii)
such obligation cannot be avoided by the Issuer, the Guarantor or any such
successor Person to the Issuer or Guarantor, as the case may be, taking
reasonable measures available to it. Prior to the giving of any notice of
redemption of the Notes pursuant to the foregoing, the Issuer or any such
successor Person to the Issuer shall deliver to the Trustee a notice of such
redemption election, an opinion in writing signed by independent legal counsel
of recognized standing to the Issuer, Guarantor or any such successor Person to
the Issuer or Guarantor, as the case may be, to the effect that the Issuer, the
Guarantor or any such successor Person to the Issuer or Guarantor, as the case
may be, is, or would become, obligated to pay such Additional Amounts as
described in clause (i) as the result of such change or amendment, and an
Officers' Certificate (as defined in the Indenture) of the Issuer, Guarantor or
any such successor Person to the Issuer or Guarantor, as the case may be,
stating that such amendment or change has occurred, describing the facts leading
thereto and stating that such requirement cannot be avoided by the Issuer, the
Guarantor or any such successor Person to the Issuer or Guarantor, as the case
may be, taking reasonable measures available to it. 

Except as otherwise provided in the Indenture, in
case an Event of Default (as defined in the Indenture) with respect to Notes
shall have occurred and be continuing, the principal of all the Notes
Outstanding may be declared due and payable, in the manner and with the effect,
and subject to the conditions, provided in the Indenture. The Indenture provides
that in certain events such declaration and its consequences may be waived by
the Holders of a Majority in aggregate principal amount of the Notes then
Outstanding and that, prior to any such declaration, such Noteholders may waive
any past or existing default or Event of Default under the Indenture and its
consequences except (i) a continuing default in the payment of principal of, or
interest on, the Notes then Outstanding, or (ii) any default or Event of Default
with respect to certain covenants or provisions in 

D-10 

the Indenture which may not be modified without the consent of the Holder of
each Note. Any such consent or waiver by the Holder of this Note (unless revoked
as provided in the Indenture) shall be conclusive and binding upon such Holder
and upon all future Holders and owners of this Note and any Note which may be
issued in exchange or substitution hereafter, whether or not any notation
thereof is made upon this Note or such other Notes, 

The Indenture permits the Issuer and the Trustee,
with the consent of the holders of not less than a Majority in aggregate
principal amount of the Notes at the time Outstanding, evidenced as provided in
the Indenture, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
Holders of the Notes; provided that no such modification or amendment
may, without the consent of the holder of each such Note affected thereby, (i)
change the Stated Maturity of the Notes; (ii) reduce the principal amount of or
payments of interest on any Notes; (iii) change any obligation of the Issuer or
the Guarantor to pay Additional Amounts with respect to Notes; (iv) change the
currency or place of payment of the principal of or interest on the Notes; (v)
impair the right to institute suit for the enforcement of any payment due on or
with respect to the Notes; (vi) reduce the above stated percentage of
outstanding Notes necessary to modify or amend the Indenture; (vii) reduce the
percentage of the aggregate principal amount of outstanding Notes necessary for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults; (viii) change, in any manner adverse to the interest of
holders of the Notes, the terms and provisions of the Guarantee in respect of
the due and punctual payment of principal of and interest on the Notes; or (ix)
modify such provisions with respect to modification and waiver; provided, 
that no consent of any Noteholder is required in connection with the execution
of a supplemental indenture not requiring the consent of the Noteholders
pursuant to Section 7.01 of the Indenture or in connection with a consolidation,
amalgamation, Merger, conveyance or transfer permitted. 

No reference herein to the Indenture
and no provision of this Note or of the Indenture shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the place, times, and rate, and in the
currency, herein prescribed. 

At the office or agency of the Issuer referred to on
the face hereof and in the manner and subject to the limitations provided in the
Indenture, Notes may be exchanged for a like aggregate principal amount of Notes
of other authorized denominations. 

Upon due presentment for registration of transfer of
this Note at the above-mentioned office or agency of the Issuer, a new Note or
Notes of authorized denominations, for a like aggregate principal amount, will
be issued to the transferee as provided in the Indenture. No service charge
shall be made for 

D-11 

any such transfer, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto. 

The Issuer, the Trustee, and any authorized agent of
the Issuer or the Trustee, may (to the fullest extent permitted by applicable
law) deem and treat the registered holder hereof as the absolute owner of this
Note (whether or not this Note shall be overdue and notwithstanding any notation
of ownership or other writing hereon made by anyone other than the Issuer or the
Trustee or any authorized agent of the Issuer or the Trustee), for the purpose
of receiving payment of, or on account of, the principal hereof and, subject to
the provisions on the face hereof, interest hereon and for all other purposes,
and neither the Issuer nor the Trustee nor any authorized agent of the Issuer or
the Trustee shall be affected by any notice to the contrary. 

 

 

D-12 

TRUSTEE, PAYING AND TRANSFER AGENT AND REGISTRAR 

Trustee 

HSBC Bank USA, National Association 

452 Fifth Avenue 

New York, New York 10018 

Attention: Corporate Trust 

 

Principal Paying and Transfer Agent and Registrar 

HSBC Bank USA, National Association 

452 Fifth Avenue 

New York, New York 10018 

Attention: Corporate Trust 

 

 

D-13 

SCHEDULE I 

The following changes in the aggregate principal
amount of Notes represented by this Global Note have been made: 

	 	
    Amount of	 	 	 
	 	
    decrease in	
    Amount of	 	 
	 	
    aggregate	
    increase in	 	 
	 	
    principal	
    aggregate	 	 
	 	
    amount of	
    principal	
    Outstanding	 
	Date	
    Notes	
    amount of Notes	
    Balance	
    Signature

 

 

 

D-14 

EXHIBIT E-l  

FORM OF AUTHORIZATION CERTIFICATE 

I, [Name], [Title], acting on behalf of PCCW-HKT
Telephone Limited (the "Guarantor"), hereby certify that: 

(A) the persons listed below are (i) Authorized
Officers for purposes of the Indenture dated as of July 20, 2005 among PCCW-HKT
Capital No.3 Limited (the "Issuer"), the Guarantor and HSBC Bank USA, National
Association, as Trustee, (ii) duly elected or appointed, qualified and acting as
the holder of the respective office or offices set forth opposite his name and
(iii) the duly authorized person who executed or will execute the Guarantee
endorsed on the Notes by his manual or facsimile signature and was at the time
of such execution, duly elected or appointed, qualified and acting as the holder
of the office set forth opposite his name; 

(B) each signature appearing below is the person's
genuine signature; and 

(C) attached hereto as Schedule 1 is a true, correct
and complete specimen of the certificates representing the Notes. 

Authorized Officers:

	
    Name	 	
    Title	 	
    Signature
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

E-1 

IN WITNESS WHEREOF, I have hereunto
signed my name. 

Dated:___________

  	 
	PCCW-HKT TELEPHONE LIMITED
	 
	By:
      ______________________________________
	      
      Name:
	      
      Title:

 

E-1-2 

EXHIBIT E-2 

FORM OF AUTHORIZATION CERTIFICATE 

I, [Name], [Title], acting on behalf of PCCW-HKT
Capital No.3 Limited (the "Issuer"), hereby certify that: 

(A) the persons listed below are (i) Authorized
Officers for purposes of the Indenture dated as of July 20, 2005 among the
Issuer, PCCW-HKT Telephone Limited, as Guarantor (the "Guarantor"), and
HSBC Bank USA, National Association, as Trustee, (ii) duly elected or appointed,
qualified and acting as the holder of the respective office or offices set forth
opposite his name and (iii) the duly authorized person who executed or will
execute the Notes by his manual or facsimile signature and was at the time of
such execution, duly elected or appointed, qualified and acting as the holder of
the office set forth opposite his name; 

(B) each signature appearing below is the person's
genuine signature; and 

(C) attached hereto as Schedule 1 is a true, correct
and complete specimen of the certificates representing the Notes. 

Authorized Officers: 

    	
    Name	 	
    Title	 	
    Signature

    	 	 	 	 	 

    	 	 	 	 	 

    	 	 	 	 	 

 

E-2-1 

IN WITNESS WHEREOF, I have hereunto signed my name.

Dated: ____________ 

  	 
	PCCW-HKT
      CAPITAL NO.3 LIMITED
	 
	
      By:____________________________
	     
      Name:
	     
      Title:

 

E-2-2 

EXHIBIT F

FORM OF TRANSFER

FOR VALUE RECEIVED,
the undersigned hereby transfers to

	 
	 
	 

(PRINT NAME AND ADDRESS OF TRANSFEREE) 

U.S. $_ _________ principal amount of this Note, and all rights with respect
thereto, and irrevocably constitutes and appoints ___________________________as
attorney to transfer this Note on the books kept for registration thereof, with
full power of substitution. 

Dated ___________________________________________ 

                               
Certifying Signature 

Signed ______________________ 

Note: 

(i) The signature on this transfer form must
correspond to the name as it appears on the face of this Note in every
particular. 

(ii) A representative of the Noteholder should state
the capacity in which he or she signs 
(e.g., 
executor). 

(iii) The signature of the person effecting the
transfer shall conform to any list of duly authorized specimen signatures
supplied by the registered holder or shall be certified by a bank which is a
member of the Medallion Program or in such other manner as the Paying and
Transfer Agent, acting in its capacity as transfer agent or the Trustee, acting
in its capacity as registrar, may require. 

F-1 

EXHIBIT G  

FORM OF PAYING AND TRANSFER AGENT APPOINTMENT LETTER 

[Date] 

[Paying Agent] 

Re:       5.25%
Guaranteed Notes due 2015 

            of
PCCW-HKT Capital No.3 Limited 

Reference is hereby made to the Indenture dated as of
July 20, 2005 (the "Indenture") among PCCW-HKT Capital No.3 Limited (the "Issuer"),
PCCW-HKT Telephone Limited, as Guarantor (the "Guarantor"), and HSBC Bank
USA, National Association, as Trustee, (the "Trustee"). Terms used herein
are used as defined in the Indenture. 

The Issuer hereby appoints _________ as the paying
agent and transfer agent (the "Paying and Transfer Agent") with respect
to the Notes and the Paying and Transfer Agent hereby accepts such appointment.
By accepting such appointment, the Paying and Transfer Agent agrees to be bound
by and to perform the services with respect to itself set forth in the terms and
conditions set forth in the Indenture and the Notes, as well as the following
terms and conditions to all of which the Issuer agrees and to all of which the
rights of the holders from time to time of the Notes shall be subject: 

(a) 
The Paying and Transfer Agent shall
be entitled to the compensation to be agreed upon with the Issuer and Guarantor,
jointly and severally, for all services rendered by it under the Indenture, and
subject to Section 3.04 of the Indenture, the Issuer agrees promptly to pay such
compensation and to reimburse the Paying and Transfer Agent for its reasonable
out-of-pocket expenses (including fees and expenses of counsel) incurred by it
in connection with the services rendered by it under the Indenture. Each of the
Issuer and Guarantor jointly and severally hereby agrees to indemnify the Paying
and Transfer Agent and its officers, directors, agents, employees and
representatives for, and to hold it harmless against, any loss, liability or
expense (including reasonable fees and expenses of counsel) incurred without
negligence or bad faith on its part arising out of or in connection with its
acting as Paying and Transfer Agent hereunder. The obligations of the Issuer
under this paragraph (a) shall survive the payment of the Notes and the
resignation or removal of the Paying and Transfer Agent. 

(b) 
In acting under the Indenture and in
connection with the Notes, the Paying and Transfer Agent is acting solely as
agent of the Issuer and does not assume any obligation towards or relationship
of agency or trust for or with any of the owners or holders of the Notes, except
that all funds held by the Paying and Transfer Agent for the payment of
principal of, or interest (including Additional 

G-l 

Amounts) on, the Notes shall, subject to the provisions of the Indenture, be
held in trust by the Paying and Transfer Agent and applied as set forth in the
Indenture and in the Notes, but need not be segregated from other funds held by
the Paying and Transfer Agent, except as required by law. 

(c) 
The Paying and Transfer Agent may
consult with counsel satisfactory to it and any advice or written opinion of
such counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it under the Indenture
in good faith and in accordance with such advice or opinion. 

(d) 
The Paying and Transfer Agent shall
be fully protected and shall incur no liability for or in respect of any action
taken or omitted to be taken or thing suffered by it in reliance upon any Note,
notice, direction, consent, certificate, affidavit, statement or other paper or
document reasonably believed by it to be genuine and to have been presented or
signed by the proper party or parties. 

(e) 
The Paying and Transfer Agent, in its
individual capacity or any other capacity, may become the owner of, or acquire
any interest in, any Notes or other obligations of the Issuer with the same
rights that it would have if it were not the Paying and Transfer Agent, and may
engage or be interested in any financial or other transaction with the Issuer,
and may act on, or as depository, Trustee or agent for, any committee or body of
holders of Notes or other obligations of the Issuer, as freely as if it were not
the Paying and Transfer Agent. 

(f)
The Paying and Transfer Agent
shall not be under any liability for interest on any monies received by it
pursuant to any of the provisions of the Indenture or the Notes. 

(g) 
The Paying and Transfer Agent shall
be obligated to perform such duties and only such duties as are in the Indenture
and the Notes specifically set forth, and no implied duties or obligation shall
be read into the Indenture or the Notes against the Paying and Transfer Agent.
The Paying and Transfer Agent shall not be under any obligation to take any
action under the Indenture which may tend to involve it in any expense or
liability, the payment of which within a reasonable time is not, in its
reasonable opinion, assured to it. 

(h) The Paying and Transfer Agent may at any time
resign by giving written notice of its resignation to the Issuer and the Trustee
and specifying the date on which its resignation shall become effective; 
provided 
that such date shall be at least 90
days after the date on which such notice is given unless the Issuer agrees to
accept shorter notice. Upon receiving such notice of resignation, if required by
the Indenture the Issuer shall promptly appoint a successor paying agent by
written instrument substantially in the form hereof in triplicate signed on
behalf of the Issuer, one copy of which shall be delivered to the resigning
Paying 

G-2 

and Transfer Agent, one copy to the successor paying agent and one copy to
the Trustee. 

Such resignation shall become effective upon the
earlier of (i) the effective date of such resignation and (ii) the acceptance of
appointment by the successor paying agent, as provided below. The Issuer may, at
any time and for any reason, remove the Paying and Transfer Agent and appoint a
successor paying agent, by written instrument in triplicate signed on behalf of
the Issuer, one copy of which shall be delivered to the Paying and Transfer
Agent being removed, one copy to the successor paying agent and one copy to the
Trustee. Any removal of the Paying and Transfer Agent and any appointment of a
successor paying agent shall become effective upon acceptance of appointment by
the successor paying agent as provided below. Upon its resignation or removal,
the Paying and Transfer Agent shall be entitled to the payment by the Issuer of
its compensation for the services rendered hereunder and to the reimbursement of
all reasonable out-of-pocket expenses incurred in connection with the services
rendered by it hereunder. 

The Issuer shall remove the Paying and Transfer Agent
and appoint a successor paying agent if the Paying and Transfer Agent (i) shall
become incapable of acting, (ii) shall be adjudged bankrupt or insolvent, (iii)
shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a Trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, (iv) shall
consent to, or shall have had entered against it a court order for, any such
relief or to the appointment of or taking possession by any such official in any
involuntary case or other proceedings commenced against it, (v) shall make a
general assignment for the benefit of creditors or (vi) shall fail generally to
pay its debts as they become due. 

Any successor paying agent appointed as provided
herein shall execute and deliver to its predecessor and to the Issuer and the
Trustee an instrument accepting such appointment (which may be in the form of an
acceptance signature to the letter of the Issuer appointing such agent) and
thereupon such successor paying agent, without any further act, deed or
conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Paying and Transfer Agent and such predecessor shall pay over to such
successor agent all monies or other property at the time held by it hereunder.

(i) Each Paying and Transfer Agent shall at all times
be a responsible financial institution which is authorized by law to exercise
its respective powers and duties hereunder and under the Indenture and the
Notes. 

G-3 

(j) Each Paying and Transfer Agent shall
comply with all applicable withholding, information reporting and backup
withholding tax requirements under the U.S. Internal Revenue Code of 1986, as
amended, and the Treasury regulations issued thereunder in respect of any
payment on, or in respect of, a Note or under the Guarantee (including the
collection of IRS Form W-8 ECI, IRS Form W-8 BEN and IRS Form W-9, as the case
may be, and the filing of IRS Form 1099 and IRS Form 1096). 

Any corporation into which the Paying
and Transfer Agent may be merged or converted or any corporation with which the
Paying and Transfer Agent may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Paying and Transfer Agent
shall be a party or any corporation succeeding to the business of the Paying and
Transfer Agent shall be the successor to such Paying and Transfer Agent
hereunder (provided that such corporation shall be qualified as aforesaid)
without the execution or filing of any document or any further act on the part
of any of the parties hereto. 

 

 

G-4 

The agreement set forth in this letter shall be
construed in accordance with and governed by the laws of the State of New York.

  	 
	PCCW-HKT
      CAPITAL NO.3 LIMITED
	 
	
      By:____________________________
	     
      Name:
	     
      Title:

	
    Agreed and accepted:
	
    ____________________________
	as
    Paying and Transfer Agent
	 	 
	By:   
    ____________________________
	         
    Name:
	         
    Title:
	 	 
	cc:	HSBC Bank USA,
    National Association,
	 	     
    as Trustee 
	 	PCCW-HKT
    Telephone Limited,
	 	     
    as Guarantor

 

G-5 

EXHIBIT H  

TRUSTEE, PAYING AND TRANSFER AGENT AND REGISTRAR 

Trustee 

HSBC Bank USA, National Association 

452 Fifth Avenue 

New York, New York l0018 

Attention: Corporate Trust 

 

Principal Paying and Transfer Agent and Registrar 

HSBC Bank USA, National Association 

452 Fifth Avenue 

New York, New York 10018 

Attention: Corporate Trust 

 

H-1 

EXHIBIT I  

FORM OF CERTIFICATE TO BE DELIVERED 

IN CONNECTION WITH TRANSFERS 

PURSUANT TO REGULATION S 

DURING THE DISTRIBUTION COMPLIANCE PERIOD 

[Date] 

HSBC Bank USA, National Association, 

    as Registrar 

Re:        PCCW-HKT Capital
No.3 Limited (the "Issuer") 

                          
and PCCW-HKT Telephone Limited (the "Guarantor") 

               
5.25% Guaranteed Notes Due 2015 (the "Notes") 

Dear Sirs: 

Reference is hereby made to the
Indenture, dated as of July 20, 2005 (the "Indenture"), among the Issuer,
the Guarantor and HSBC Bank USA, National Association, as Trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture. 

This letter relates to US$_____________ principal
amount of Notes which are evidenced by one or more Restricted Global Notes
(CUSIP No. _____) and held with the Depositary in the name of [insert name of
transferor] (the "Transferor"), The Transferor has requested a transfer of such
beneficial interest in the Notes to a Person who will take delivery thereof in
the form of an equal principal amount of Notes evidenced by one or more
Regulation S Global Notes (CUSIP No. ____ ), which amount, immediately after
such transfer, is to be held with the Depositary through Euroclear or
Clearstream or both (Common Code______). 

In connection with our proposed sale of US$ _________
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Rule 903 or Rule 904 of Regulation S
under the Securities Act of 1933, as amended, and, accordingly, we represent
that: 

(1)    the offer of
the Notes was not made to a person in the United States; 

(2)    either: 

(A)   at the time the buy order was
originated, the transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee was outside the
United States; or 

I-1 

(B)   the transaction was executed in, on
or through the facilities of a designated offshore securities market and neither
we nor any person acting on our behalf knows that the transaction was
prearranged with a buyer in the United States; 

(3)    no directed
selling efforts have been made by us in the United States in contravention of
the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable;

(4)    the
transaction is not part of a plan or scheme to evade the registration
requirements of the U.S. Securities Act of 1933; 

(5)   
upon completion of the transaction, the beneficial interest being transferred as
described above is to be held with the Depositary through Euroclear or
Clearstream or both (Common Code). 

 

 

 

I-2 

You, the Issuer and the Guarantor are
entitled to rely upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S. 

  	Very truly yours, 
      
	 
	[Name of Transferor]
	 
	 
	 
	By:
      __________________________
	      
      Authorized Signature

 

I-3 

EXHIBIT J  

FORM OF CERTIFICATE TO BE DELIVERED 

IN CONNECTION WITH TRANSFERS 

PURSUANT TO REGULATION S 

UPON AND FOLLOWING EXPIRATION OF THE 

DISTRIBUTION COMPLIANCE PERIOD 

[Date] 

HSBC Bank USA, National Association, 

      as Registrar 

Re:      PCCW-HKT Capital No,3
Limited (the "Issuer") 

                       
and PCCW-HKT Telephone Limited (the "Guarantor") 

            5.25%
Guaranteed Notes Due 2015 (the "Notes") 

Dear Sirs: 

Reference is hereby made to the
Indenture, dated as of July 20, 2005 (the "Indenture"), among the Issuer,
the Guarantor and HSBC Bank USA, National Association, as Trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture. 

This letter relates to US$ ____________ principal
amount of Notes which are evidenced by one or more Restricted Global Notes
(CUSIP No. ______) and held with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest in the Notes to a Person who will take delivery thereof in
the form of an equal principal amount of Notes evidenced by one or more
Regulation S Global Notes (CUSIP No. _____). 

In connection with such request and in respect of
such Securities, the Transferor does hereby certify that such transfer has been
effected pursuant to and in accordance with either (i) Rule 903, Rule 904 or
Rule 144 under the United States Securities Act of 1933, as amended (the
"Securities Act"), and accordingly the Transferor does hereby further certify
that: 

(1)     if the
transfer has been effected pursuant to Rule 903 or Rule 904: 

(A)   the offer of the Notes was not made
to a Person in the United States; 

(B)    either: 

(i)    at the time the buy order was
originated, the transferee was outside the United States or the Transferor and
any Person acting on its 

J-1 

behalf reasonably believed that the transferee was
outside the Untied States, or 

(ii)    the transaction was executed
in, on or through the facilities of a designated offshore securities market and
neither the Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States; 

(C)     no directed selling
efforts have been made in contravention of the requirements of Rule 903(b) or
904(b) of Regulation S, as applicable; and 

(D)     the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act; or 

(2)     if the
transfer has been effected pursuant to Rule 144, the Securities have been
transferred in a transaction permitted by Rule 144, 

 

J-2 

You, the Issuer and the Guarantor are
entitled to rely upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S. 

  	Very truly yours, 
      
	 
	[Name of Transferor]
	 
	 
	 
	By:
      __________________________
	      
      Authorized Signature

 

 

J-3 

EXHIBIT K  

FORM OF CERTIFICATE TO BE DELIVERED 

IN CONNECTION WITH TRANSFERS TO QIBs 

[Date] 

HSBC Bank USA, National Association, 

     as Registrar 

PCCW-HKT Capital No.3 Limited,

      as Issuer 

PCCW-HKT Telephone Limited,

      as Guarantor 

Re:       PCCW-HKT Capital No.3
Limited (the "Issuer") and 

          PCCW-HKT Telephone
Limited (the "Guarantor") 

      5.25% Guaranteed Notes Due 2015 (the "Notes")

Dear Sirs: 

Reference is hereby made to the
Indenture, dated as of July 20, 2005 (the "Indenture"), among the Issuer, the
Guarantor and HSBC Bank USA, National Association, as Trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture. 

This letter relates to US$ ________ principal amount
of Notes which are evidenced by one or more Regulation S Global Notes (CUSIP
No.__________) and held with the Depositary through [Euroclear] [Clearstream]
(Common Code ________) in the name of [insert name of transferor] (the
"Transferor")- The Transferor has requested that a transfer of such beneficial
interest in the Notes to a Person who will take delivery thereof (the
"Transferee") in the form of an equal principal amount of Securities evidenced
by one or more Restricted Global Notes (CUSIP No._________ ). 

(CHECK ONE) 

    
In connection with such request and in respect of such Notes, the Transferee
does hereby certify that (i) it is a "qualified institutional buyers" ("QIBs")
as defined in and pursuant to Rule 144A ("Rule 144A") under the U.S.
Securities Act of 1933, as amended, purchasing the Notes for its own account (or
for the account of one or more QIBs over which account it exercises sole
investment discretion) and (ii) the transfer was made in a transaction meeting
the requirements of Rule 144A. 

K-1 

    
The Transferor did not purchase such Notes as part of the initial distribution
thereof and the transfer is being effected pursuant to and in accordance with an
applicable exemption from the registration requirements of the Securities Act
and the Transferor has delivered to the Trustee such additional evidence that
the Issuer, the Guarantor or the Trustee may require as to compliance with such
available exemption, 

You are entitled to rely on this
letter and you are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby. 

  	Very truly yours, 
      
	 
	[Name of Transferor or
      Transferor]
	 
	 
	 
	By:
      __________________________
	      
      Authorized Signature

 

K-2

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