Document:

EXHIBIT 4(jj)

CONFORMED COPY
DATED: 22 December 2003

Facility Agreement

between

PCCW-HKT Telephone Limited
as Borrower

Industrial and Commercial Bank of China (Asia) Limited
as Co-ordinating Arranger

The Financial Institution listed herein
as Original Lender

and

Industrial and Commercial Bank of China (Asia) Limited
as Agent

relating to

HK$2,000,000,000 REVOLVING LOAN FACILITY

Simmons&Simmons

35th Floor Cheung Kong Center 2 Queen's Road Central Hong Kong
T (852) 2868 1131   F (852) 2810 5040   DX 009121 Central 1
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                                    CONTENTS

1. DEFINITIONS AND INTERPRETATION                                              1

2. THE FACILITY                                                               13

3. PURPOSE                                                                    14

4. CONDITIONS OF ADVANCE                                                      14

5. REPAYMENT                                                                  15

6. CANCELLATION AND PREPAYMENT                                                16

7. INTEREST                                                                   17

8. INTEREST PERIODS                                                           18

9. CHANGES TO THE CALCULATION OF INTEREST AND BREAK COSTS                     19

10. FEES                                                                      20

11. TAX GROSS UP AND CREDIT                                                   20

12. INCREASED COSTS                                                           22

13. INDEMNITIES                                                               24

14. ILLEGALITY AND MITIGATION                                                 25

15. COSTS AND EXPENSES                                                        26

16. REPRESENTATIONS AND WARRANTIES                                            26

17. INFORMATION UNDERTAKINGS                                                  30

18. FINANCIAL COVENANTS                                                       32

19. GENERAL UNDERTAKINGS                                                      34

20. EVENTS OF DEFAULT                                                         36

21. CHANGES TO THE LENDERS                                                    40

22. CHANGES TO THE BORROWER                                                   44

23. AGENT                                                                     44

24. AMENDMENTS AND DECISIONS                                                  50

25. RETIREMENT OF AGENT                                                       53

26. SHARING AMONG LENDERS                                                     53

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27. PAYMENT MECHANICS                                                        55

28. PAYMENT OF TAXES AND RECOVERIES                                           56

29. SET-OFF                                                                   57

30. CONDUCT OF BUSINESS BY THE FINANCE PARTIES                                57

31. NOTICES                                                                   57

32. CALCULATIONS AND CERTIFICATES                                             58

33. PARTIAL INVALIDITY                                                        58

34. REMEDIES AND WAIVERS                                                      58

35. COUNTERPARTS                                                              59

36. GOVERNING LAW                                                             59

37. ENFORCEMENT                                                               59

SCHEDULE 1: THE ORIGINAL LENDER                                               60

SCHEDULE 2: CONDITIONS PRECEDENT                                              61

SCHEDULE 3: DRAWDOWN NOTICE                                                   63

SCHEDULE 4: FORM OF TRANSFER CERTIFICATE                                      64

SCHEDULE 5: FORM OF ASSIGNEE'S UNDERTAKING                                    66

SCHEDULE 6: FORM OF CONFIDENTIALITY UNDERTAKING                               69

SCHEDULE 7: FORM OF COMPLIANCE CERTIFICATE                                    71

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THIS AGREEMENT is made on the 22nd day of December 2003

BETWEEN:

(1)    PCCW-HKT TELEPHONE LIMITED, a company incorporated in Hong Kong with
       company number 676 (the "Borrower");

(2)    INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED as co-ordinating
       arranger (the "Co-ordinating Arranger");

(3)    The financial institution listed in Schedule 1 as original lender (the
       "Original Lender"); and

(4)    INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED as agent (the
       "Agent").

IT IS AGREED as follows:

                             PART 1: INTERPRETATION

1.     DEFINITIONS AND INTERPRETATION

1.1    Definitions

       In this Agreement (including the Schedules):

       "Adjusted Consolidated Net Worth" means, in relation to the Borrower,
       the sum of:

       (A)    all amounts paid up (or credited as paid up) on all classes of its
              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 its Subordinated
              Indebtedness.

       "Affiliate" means, in relation to any person, a Subsidiary of that
       person or a Holding Company of that person or any other Subsidiary of
       that Holding Company.

       "Agent-Related Persons" means the Agent, the Co-ordinating Arranger and
       any successor Agent arising under clause 25 (Retirement of Agent)
       together with their respective Affiliates and the officers, directors,
       employees, agents and attorneys-in-fact of such persons and Affiliates.

       "Agreed Terms" means, in relation to any document, the form of that
       document initialled by or on behalf of the Agent and the Borrower or if
       no such form has been agreed, in such form as the Agent may require.

       "Authorisation" means any governmental or regulatory authorisation,
       consent, approval, licence, exemption, filing or registration.

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       "Available Commitment" means, in respect of any Lender, such Lender's
       Commitment minus:

       (A)    the amount of its participation in any outstanding Loans (other
              than, in relation to any proposed Loan, that Lender's
              participation in any Loans that are due to be repaid or prepaid on
              or before the relevant proposed Drawdown Date); and

       (B)    in relation to any proposed Loan, the amount of its participation
              in any Loans that are due to be made on or before the proposed
              Drawdown Date.

       "Available Facility" means the aggregate for the time being of each
       Lender's Available Commitment.

       "Availability Period" means the period from and including the date of
       this Agreement to and including the date falling 1 Month before the
       Final Repayment Date.

       "Borrowed Money" means any indebtedness (other than Subordinated
       Indebtedness) for or in respect of (but without double counting) all or
       any of the following:

       (A)    any moneys borrowed;

       (B)    any amount raised by acceptance under any acceptance credit
              facility;

       (C)    any amount raised pursuant to any note purchase facility or
              the issue of bonds (including, for the avoidance of doubt,
              convertible bonds to the extent not converted into equity),
              notes, debentures, loan stock or any similar instrument;

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

       (E)    the amount of any liability in respect of any advance or
              deferred purchase agreement if the primary reasons for
              entering into such agreement is to raise finance;

       (F)    receivables sold or discounted (other than on a non-recourse
              basis);

       (G)    any agreement or option to re-acquire an asset if one of the
              primary reasons for entering into such agreement or option is
              to raise finance;

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

       (I)    the amount of any liability in respect of any guarantee or
              indemnity for any of the items referred to in paragraphs (A)
              to (H) above; and

       (J)    counter-indemnity obligations in respect of letters of credit,
              guarantees or similar instruments issued by banks or financial
              institutions to support indebtedness for Borrowed Money of any
              other person.

       "Borrower Group" means the Borrower and each of its Subsidiaries from
       time to time and "Borrower Group Company" means each or any of them as
       the context may require.

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       "Break Costs" means the amount (if any) by which:

       (A)    the interest which a Lender should have received for the
              period from the date of receipt of all or any part of its
              participation in a Loan or an Unpaid Sum to the last day of
              the current Interest Period in respect of such Loan or Unpaid
              Sum, had the principal amount of such Loan or Unpaid Sum
              received been paid on the last day of that Interest Period;

       exceeds:

       (B)    the amount which that Lender would be able to obtain by
              placing an amount equal to the principal amount of its
              participation in such Loan or Unpaid Sum received by it on
              deposit with a leading bank in the Hong Kong interbank market
              for Hong Kong Dollar deposits for a period starting on the
              Business Day following receipt or recovery of such amount and
              ending on the last day of the current Interest Period.

       "Business Day" means a day (other than a Saturday or Sunday) on which
       banks are open for general business in Hong Kong.

       "Commitment" means in relation to a Lender (subject to clause 21
       (Changes to the Lenders)), the amount set opposite its name under the
       heading "Commitment" in Schedule 1 (The Original Lender) and/or (as the
       case may be) the amount of any other Commitment transferred to it under
       this Agreement (in either case, regardless of whether a Loan has been
       advanced), as the same may be reduced, varied or cancelled in
       accordance with the terms of this Agreement.

       "Companies Ordinance" means the Companies Ordinance (Chapter 32 of the
       Laws of Hong Kong).

       "Compliance Certificate" means a certificate duly signed and completed
       by the Borrower and, where such certificate is delivered together with
       audited financial statements, by the auditors of the Borrower
       substantially in the form of Schedule 7 (Form of Compliance
       Certificate).

       "Continuing", in the context of a Default, means:

       (A)    where the underlying circumstances which caused that Default
              are incapable of remedy when viewed objectively, that Default
              is continuing, unless and until it has been expressly waived
              in writing by the Agent and any conditions of such waiver have
              all been fulfilled to the satisfaction of the Agent; or

       (B)    in any other case, that Default is continuing unless and until
              either:

              (1)    it has been expressly waived in writing by the Agent
                     and any conditions of such waiver have all been
                     fulfilled to the reasonable satisfaction of the Agent;
                     or

              (2)    the underlying circumstances which caused that Default
                     have been remedied to the reasonable satisfaction of
                     the Agent and the resulting position is what it would
                     have been if such Default had not occurred (so that,
                     for example, in the case of the late delivery of a
                     document which is subsequently satisfactorily
                     delivered, or the withdrawal or settlement of a

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                     claim the existence or pursuance of which constituted a
                     Default, that Default is not continuing once the underlying
                     circumstances no longer apply); or

              (3)    in the case of a Potential Event of Default it is no
                     longer possible for the relevant circumstances to
                     constitute or bring about an Event of Default.

       "Core Business" means the local telephony services (consisting of local
       telephone services, value-added services, and wholesale interconnection
       services provided to other carriers and service providers), the local
       data services (consisting of local wholesale and retail leased
       circuits, data services and wholesale broadband access lines, utilising
       Borrower's broadband network) and the international telecommunications
       services (consisting of retail international direct dial services,
       retail international private leased circuits, international
       interconnection services and international data services), in each
       case, operated and carried on by the Borrower Group, provided that
       Cascade Limited and the business carried on by it shall not form part
       of the Core Business.

       "Default" means an Event of Default or a Potential Event of Default.

       "Drawdown Date" means the date on which monies are to be or, as the
       context may require, have been advanced by the Lenders to the Borrower
       pursuant to a Drawdown Notice.

       "Drawdown Notice" means a notice substantially in the form set out in
       Schedule 3 (Drawdown Notice).

       "Encumbrance" means any mortgage, charge, pledge, lien, encumbrance,
       hypothecation, title retention, security interest or security
       arrangement of any kind but excluding any rights of set-off or
       combination of accounts arising under applicable common law, equity,
       statute or regulations.

       "Event of Default" means any event or circumstance specified as such in
       clause 20.1 (Events of Default).

       "Facility" means the revolving loan facility made available under this
       Agreement as described in clause 2 (The Facility), as the same may be
       reduced, varied or cancelled in accordance with the terms of this
       Agreement.

       "Facility Office" means the office notified by a Lender to the Agent in
       writing on or before the date it becomes a Lender by execution of this
       Agreement (in the case of a Lender listed in Schedule 1 (The Original
       Lender)) or in the case of any other Lender, in the relevant Transfer
       Certificate (or, thereafter, by not less than five Business Days'
       written notice to the Agent) as the office through which it will
       perform its obligations under this Agreement.

       "Fallback Period" means, in respect of the Borrower's selection of an
       Interest Period of 6 Months or longer, the shorter fallback Interest
       Period of 1, 2 or 3 Months as selected by the Borrower in a Drawdown
       Notice which is to apply if not all the Lenders consent to an Interest
       Period of 6 Months or longer.

       "Fee Letter" means the letter between the Co-ordinating Arranger and
       the Borrower dated on or about the date of this Agreement setting out
       the relevant fees referred to in clause 10 (Fees).

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       "Final Repayment Date" means the date falling 72 Months after the date
       of this Agreement.

       "Finance Documents" means this Agreement, the Fee Letter, any
       subordination deed or inter-creditor agreement entered into by or on
       behalf of the Lenders in respect of any Subordinated Indebtedness and
       any other document designated as such by the Agent and the Borrower and
       "Finance Document" means each or any of them as the context may
       require.

       "Finance Parties" means the Agent, the Co-ordinating Arranger and the
       Lenders.

       "Financial Statements" means the Original Financial Statements and the
       financial statements provided by the Borrower to the Agent pursuant to
       clause 17.1 (Financial Statements) and "Financial Statement" means any
       of the same.

       "Financial Year" means the twelve month period ending on 31 March in
       each year or such other date as the Borrower may designate at its
       discretion and notify to the Agent by not less than three Months prior
       written notice or such shorter period as the Majority Lenders may
       agree.

       "FTNS Licence" means the fixed telecommunications network services
       licence issued by the Telecommunications Authority to the Borrower on
       29 June 1995 (and amended on 31 March 1998 to include the Borrower,
       Reach Networks Hong Kong Limited (formerly known as PCCW-HKT
       International Limited) ("Reach") and PCCW-HKT CAS Limited as joint and
       several licensees and as further amended effective on 31 January 2001
       such that the Borrower and Reach are no longer joint licensees but
       rather are individual licensees in relation to FTNS licence held by
       each of them and PCCW-HKT CAS Limited has surrendered its rights under
       the joint and several licence) or any replacement or amendment thereof.

       "Group" means the Parent and each of its Subsidiaries from time to time
       and "Group Company" means each or any of them as the context may
       require.

       "Group Subordination Deed" means each deed of subordination executed by
       the Borrower, the relevant Borrower Group Company (as borrower of the
       relevant Inter-Group Borrowing) and the relevant Group Company (as
       lender of the relevant Inter-Group Borrowing) in the Agreed Terms in
       respect of such Inter-Group Borrowing.

       "HIBOR" means, in relation to a Loan or any Unpaid Sum:

       (A)    the Screen Rate; or

       (B)    (if no Screen Rate is available for Hong Kong Dollars or for a
              period comparable to the relevant Interest Period for that
              Loan or Unpaid Sum) the arithmetic mean of the rates (rounded
              upwards to 1/16%) as supplied to the Agent at its request
              quoted by the Reference Banks to leading banks in the Hong
              Kong interbank market,

       as at 11:00 a.m. on the Quotation Day for the offering of deposits in
       Hong Kong Dollars for a period comparable to that Interest Period for
       such Loan or Unpaid Sum.

       "Holding Company" means, in relation to a company or corporation, any
       company or corporation of which the first-mentioned company or
       corporation is a Subsidiary.

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

       "Hong Kong Dollars" or "HK$" means the lawful currency for the time
       being of Hong Kong.

       "Hong Kong GAAP" means generally accepted accounting principles in Hong
       Kong.

       "Indebtedness" of any person means any indebtedness for or in respect
       of Borrowed Money 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 purpose of determining the amount of Indebtedness
       of any Borrower Group Company outstanding at any relevant time, the
       amount included as Indebtedness of such Borrower Group Company in
       respect of finance leases shall be the net amount from time to time
       properly characterised as "obligations under finance leases" in
       accordance with Hong Kong GAAP.

       "Inter-Group Borrowing" means any Indebtedness of any Borrower Group
       Company owed to any other Group Company other than any Indebtedness
       owing by any Borrower Group Company to another Borrower Group Company.

       "Interest Payment Date" means the last day of an Interest Period.

       "Interest Period" means, in relation to a Loan, each period determined
       in accordance with clause 8 (Interest Periods) and, in relation to an
       Unpaid Sum, each period determined in accordance with clause 7.3
       (Default interest rate).

       "Lender" means:

       (A)    any Lender listed in Schedule 1 (The Original Lender); and

       (B)    any bank or financial institution which has become a party in
              accordance with clause 21 (Changes to the Lenders),

       which in each case has not ceased to be a party in accordance with the
       terms of this Agreement.

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

       "Loan" means a loan made or to be made under the Facility or the
       principal amount outstanding for the time being of that loan.

       "Majority Lenders" means:

       (A)    if there is no Loan then outstanding, a Lender or Lenders
              whose Commitment(s) amount in aggregate to 66 2/3 % or more of
              the Total Commitments (or, if the Total Commitments have been
              reduced to zero, amounted in aggregate to 66 2/3 % or more of
              the Total Commitments immediately prior to the reduction); or

       (B)    at any other time, a Lender or Lenders whose participations in
              the Loans amount in aggregate to 66 2/3 % or more of all
              Loans.

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       "Margin" means 0.325% per annum.

       "Material Adverse Change" means an event or circumstance which
       constitutes an adverse change in the business, assets, financial
       condition or trading position of the Borrower Group of such
       significance that, in the reasonable opinion of the Majority Lenders,
       it would reasonably be expected to affect the ability of the Borrower
       to perform fully and punctually its payment obligations under this
       Agreement.

       "Material Adverse Effect" means any change in the financial condition
       of the Borrower Group which, in the reasonable opinion of the Majority
       Lenders will, or could reasonably be expected to, have a material and
       adverse effect on the business, assets or financial condition of the
       Borrower Group or which will have a material adverse effect on the
       ability of the Borrower to perform fully and punctually its payment
       obligations under this Agreement.

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

       (A)    if the numerically corresponding day is not a Business Day,
              that period shall end on the next Business Day in that
              calendar month in which that period is to end if there is one,
              or if there is not, on the immediately preceding Business Day;
              and

       (B)    if there is no numerically corresponding day in the calendar
              month in which that period is to end, that period shall end on
              the last Business Day in that calendar month.

       "Original Financial Statements" means the audited consolidated
       financial statements of the Borrower Group for the Financial Year ended
       31 March 2003.

       "Original Lender" means the Lender whose details are set out in
       Schedule 1 (The Original Lender) to this Agreement.

       "Parent" means PCCW Limited, a company incorporated in Hong Kong with
       company number 69030.

       "Permitted Encumbrances" means:

       (A)    Encumbrances existing on or prior to the date of this Agreement
              details of which have been disclosed to the Agent pursuant to
              paragraph 3(D) of Schedule 2 (Conditions Precedent);

       (B)    Encumbrances for Taxes or assessments or other applicable
              governmental charges or levies;

       (C)    Encumbrances 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;

       (D)    Encumbrances incurred on 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,

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              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 organisations 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 Borrower or any of its
              Principal Subsidiaries;

       (F)    Encumbrances created on any property or assets acquired, leased or
              developed (including improved, constructed, altered or repaired)
              after the date of this Agreement; provided that (1) any such
              Encumbrance shall be confined to the property or assets acquired,
              leased or developed (including improved, constructed, altered or
              repaired); (2) the principal amount of the debt encumbered by such
              Encumbrance 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
              (3) any such Encumbrance 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 Borrower or any of its Principal
              Subsidiaries held by such financial institution in an amount not
              to exceed the aggregate amount owed to such financial institution
              by the Borrower or such Principal Subsidiary, as the case may be;

       (H)    Encumbrances 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)    Encumbrances 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)    Encumbrances in favour of the Borrower or any of its Principal
              Subsidiaries;

       (K)    leases, subleases, licences and sublicences granted to third
              parties in the ordinary course of business;

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

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

       (N)    any Encumbrance existing on any property or assets prior to the
              acquisition thereof, which Encumbrance was not created in
              connection with the acquisition thereof, except for Encumbrances
              permitted pursuant to paragraph (F) above;

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       (O)    Encumbrances on any property or assets of the Borrower or any of
              its Principal Subsidiaries in favour of any government or any
              subdivision thereof, securing the obligations of the Borrower or
              such Principal Subsidiary under any contract or payment owed to
              such governmental entity pursuant to applicable laws, rules,
              regulations or statutes;

       (P)    Encumbrances created in connection with any sale/leaseback
              transaction;

       (Q)    any renewal or extension of any of the Encumbrances described in
              the foregoing paragraphs which is limited to the original property
              or assets covered thereby; or

       (R)    Encumbrances in respect of indebtedness with respect to which the
              Borrower or its Principal Subsidiaries 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 Borrower and its
              respective 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).

       "Potential Event of Default" means any event or circumstance which
       would (with the expiry of a grace period, the giving of notice or the
       making of any determination under the Finance Documents or any
       combination of any of the foregoing) be or constitute an Event of
       Default.

       "Principal Subsidiary" means a Subsidiary of the Borrower:

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

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

              (2)    its net assets or (in the case of a Subsidiary of the
                     Borrower which has Subsidiaries) consolidated net
                     assets attributable to the Borrower (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
                     Borrower 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 Borrower and the then
              latest audited financial statements of the Borrower provided
              that:

              (a)    in the case of a Subsidiary of the Borrower 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;

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              (b)    if, in the case of a Subsidiary of the Borrower 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 Borrower (not being
                     a Subsidiary referred to in paragraph (a) above) are not
                     consolidated with those of the Borrower then the
                     determination of whether or not the Subsidiary of the
                     Borrower is a Principal Subsidiary shall, if the Borrower
                     requires, be based on a pro forma consolidation of its
                     accounts (consolidated, if appropriate) with the
                     consolidated accounts of the Borrower and its respective
                     Subsidiaries; or

       (B)    to which is transferred all or substantially all of the assets of
              a Subsidiary of the Borrower 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 Borrower (as the case may be) to which the assets are so
              transferred shall become a Principal Subsidiary.

       A certificate of the auditors of the Borrower 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.

       "Quotation Day" means, in relation to any Interest Period in respect of
       a Loan or any Unpaid Sum, the first day of that Interest Period.

       "Reference Banks" means, subject to clause 21.6 (Reference Banks), the
       principal Hong Kong offices of Industrial and Commercial Bank of China
       (Asia) Limited and such other banks as may be appointed by the Agent in
       consultation with the Borrower.

       "Relevant Percentage" means, at any time in relation to any Lender and
       any amount to be advanced to the Borrower under the Facility, the
       percentage borne by that Lender's Commitment to the Total Commitments.

       "Reservations" means:

       (A)    the principle that equitable remedies are remedies which may
              be granted or refused at the discretion of the court;

       (B)    the limitation of enforcement by laws relating to bankruptcy,
              insolvency, liquidation, reorganisation, court schemes,
              moratoria, administration and other laws generally affecting
              the rights of creditors;

       (C)    the time barring of claims under statutes, imposed limitations
              on the periods for bringing such claims;

       (D)    defences of set-off or counterclaim and similar principles,
              rights and defences under the laws of any jurisdictions in
              which relevant obligations may have to be performed.

       "Rollover Loan" means a Loan:

                                       10
<PAGE>

       (A)    made or to be made on the same day that one or more maturing
              Loans are due to be repaid; and

       (B)    the amount of which is equal to or less than the aggregate
              amount of such maturing Loans.

       "Screen Rate" means the percentage rate per annum equal to the rate for
       deposits in Hong Kong Dollars which is displayed on the Moneyline
       Telerate Page 9898, provided that if the relevant page is replaced or
       service ceases to be available, the Agent may specify another page or
       service displaying the appropriate rate after consultation with the
       Borrower and all of the Lenders.

       "Subordinated Indebtedness" means the indebtedness of any Borrower Group
       Company which is subordinated to the Borrower's indebtedness under this
       Agreement pursuant to a Group Subordination Deed or a Third Party
       Subordination Deed.

       "Subsidiary" means, in relation to any company, any company or other
       business entity of which the first-named company owns or controls
       (either directly or through one or more other Subsidiaries) more than
       50% of the issued share capital, or other ownership interest, giving
       ordinary voting power to elect directors, managers or trustees of such
       company or other business entity, or any company or other business
       entity which at any time has its accounts consolidated with those of
       the first-named company or which, under Hong Kong law or regulations
       and under Hong Kong GAAP from time to time, should have its accounts
       consolidated with those of the first-named company.

       "Tax" means any tax, levy, impost, duty or other charge or withholding
       of a similar nature (including any penalty or interest payable in
       connection with any failure to pay or any delay in paying any of the
       same).

       "Telecommunications Authorisation" means the licences (including the
       FTNS Licence) and statutory authorisations under the Telecommunications
       Regulations and other consents, approvals, intellectual property, trade
       names, franchises and contracts of a regulatory nature which are
       material and necessary for the conduct by the Borrower Group of the
       Core Business.

       "Telecommunications Authority" means the Telecommunications Authority of
       Hong Kong.

       "Telecommunications Ordinance" means the Telecommunications Ordinance
       (Chapter 106 of the Laws of Hong Kong).

       "Telecommunications Regulations" the Telecommunications Ordinance, all
       licences issued to the Borrower Group pursuant to the
       Telecommunications Ordinance (including the FTNS Licence) and any
       determinations or directions issued to the Borrower Group which
       continue to have full force and effect as against the Borrower Group
       and are not otherwise waived or revoked by the Telecommunications
       Authority.

       "Termination Date" means the last day of the Availability Period.

       "Third Party Borrowing" means any Indebtedness of any Borrower Group
       Company owed to any party which is not a Group Company.

       "Third Party Subordination Deed" means each deed of subordination
       executed by the Borrower, the relevant Borrower Group Company (as
       borrower of the relevant Third Party

                                       11
<PAGE>

       Borrowing) and any lender (or any agent on behalf of a syndicate of
       lenders) of such Third Party Borrowing in the Agreed Terms in respect of
       such Third Party Borrowing.

       "Total Commitments" means the aggregate for the time being of the
       Commitments, being, at the date of this Agreement, HK$2,000,000,000.

       "Transfer Certificate" means a certificate substantially in the form
       set out in Schedule 4 (Form of Transfer Certificate).

       "Transfer Date" means, in relation to a transfer, the later of:

       (A)    the proposed Transfer Date specified in the Transfer Certificate;
              and

       (B)    the date on which the Agent executes the Transfer Certificate.

       "Unpaid Sum" means any sum due and payable but unpaid by the Borrower
       under the Finance Documents.

       "US$" means the lawful currency for the time being of the United States
       of America.

1.2    Construction

       (A)    Any reference in this Agreement to:

              (1)    "assets" of any person shall be construed as a reference to
                     the whole or any part of its business, undertaking,
                     property, shareholdings, assets and revenues (including any
                     right to receive revenues and uncalled capital), whether
                     owned as at the date of this Agreement or acquired or owned
                     thereafter;

              (2)    a "Finance Document" or any other agreement or instrument
                     is a reference to that Finance Document or other agreement
                     or instrument as amended supplemented, varied, replaced,
                     restated or novated from time to time;

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

              (4)    a "person" means any individual, corporation, partnership,
                     joint venture, association, joint stock company, trust,
                     unincorporated organisation, government or any agency or
                     political sub-division thereof or any other entity;

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

              (6)    a provision of law is a reference to that provision as
                     amended or re-enacted;

              (7)    unless a contrary indication appears, a time of day is a
                     reference to Hong Kong time;

              (8)    one gender shall include all genders, and references to the
                     singular shall

                                       12
<PAGE>

                     include the plural and vice versa;

              (9)    "arm's length terms" means, in relation to transactions
                     entered into by a Borrower Group Company, that the terms
                     thereof are no less favourable to that Borrower Group
                     Company than could reasonably be expected to be obtained in
                     a comparable transaction with a person which is not an
                     Affiliate of such Borrower Group Company;

              (10)   subject to clause 21 (Changes to the Lenders), references
                     to any "party" shall, where relevant, be deemed to be
                     references to or to include, as appropriate, their
                     respective lawful successors, assigns or transferees;

              (11)   "advance" means the making of a Loan pursuant to a Drawdown
                     Notice;

              (12)   a Lender includes a New Lender, but excludes a Lender if no
                     amount is or may be owed to or by that Lender under this
                     Agreement and its Commitment has been cancelled or reduced
                     to nil; and

              (13)   the "equivalent" means in respect of any sum on any given
                     date, in a specified currency (the "first currency") of an
                     amount denominated in another currency (the "other
                     currency") and unless otherwise stated, reference to the
                     amount of the first currency which could be purchased with
                     the second currency at the rate of exchange quoted by the
                     Agent at or about 11:00 a.m. on such date for the purchase
                     of the first currency with the other currency.

       (B)    Section, clause and Schedule headings are for ease of reference
              only.

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

                             PART 2: THE FACILITY

2.     THE FACILITY

2.1    The Facility

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

2.2    Finance Party's rights and obligations

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

       (B)    The rights of each Finance Party under or in connection with
              the Finance Documents are separate and independent rights and
              any debt arising under the

                                       13
<PAGE>

              Finance Documents to a Finance Party from the Borrower shall be a
              separate and independent debt.

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

3.     PURPOSE

3.1    Purpose

       The Borrower shall apply all amounts borrowed by it under the Facility
       towards the general corporate purposes of the Borrower Group.

3.2    Monitoring

       Without prejudice to the obligations of the Borrower under clause 3.1
       (Purpose), no Finance Party is bound to monitor or verify the
       application of any amount borrowed pursuant to this Agreement.

4.     CONDITIONS OF ADVANCE

4.1    Initial conditions precedent

       The Borrower may not deliver a Drawdown Notice unless the Agent has
       received all of the documents appearing to conform on their face to
       those listed in Schedule 2 (Conditions Precedent). The Agent shall
       notify the Borrower and the Lenders promptly upon such receipt.

4.2    Further conditions precedent

       The Lenders will make an advance to the Borrower if:

       (A)    Drawdown Notice: the Agent shall have received a Drawdown
              Notice, not later than 10:00 a.m. (or such later time on the
              same day as the Agent may agree) not less than 3 Business Days
              before the proposed Drawdown Date and the proposed Drawdown
              Date is a Business Day which is or precedes the Termination
              Date;

       (B)    Amount: the amount of the proposed Loan shall be:

              (1)    equal to the Available Facility; or

              (2)    less than the Available Facility and a minimum of
                     HK$100,000,000 and a multiple of HK$10,000,000;

       (C)    Representations, etc, true: the representations and warranties
              referred to and deemed to be repeated in accordance with
              clause 16.18 (Repetition) are true and accurate in all
              material respects on the proposed Drawdown Date with reference
              to the facts and circumstances then existing;

       (D)    No Default: in the case of a Rollover Loan, no Event of
              Default is Continuing or would result from the proposed
              advance and, in the case of any other Loan, no Default is
              Continuing or would result from the proposed advance;

                                       14
<PAGE>

       (E)    No market disruption: in the case of a Loan other than a
              Rollover Loan, none of the events described in clause 9.2
              (Market disruption and alternative interest rates) has
              occurred and is continuing;

       (F)    No Material Adverse Change: in the case of a Loan other than a
              Rollover Loan, no Material Adverse Change has occurred since
              the date of this Agreement or, if later, the date of the
              latest Financial Statements delivered to the Agent under
              clause 17.1 (Financial Statements); and

       (G)    Interest Period: the proposed Interest Period is determined
              pursuant to clause 8.1 (Selection of Interest Periods).

4.3    Drawdown Notice irrevocable

       Each Drawdown Notice shall be irrevocable and the Borrower shall be
       bound, to the extent that the other provisions of this Agreement
       permit, to draw down in accordance with such Drawdown Notice.

4.4    Notification of Drawdown Notice

       Upon receipt of a Drawdown Notice in accordance with this clause 4
       (Conditions of Advance), the Agent shall promptly notify each Lender of
       the proposed Drawdown Date and the amount of each Lender's Relevant
       Percentage and subject to and in accordance with the provisions of this
       Agreement, each Lender shall make available through its Facility Office
       its Relevant Percentage of the proposed Loan on the proposed Drawdown
       Date in accordance with clause 4.5 (Payment of loan proceeds).

4.5    Payment of loan proceeds

       All amounts to be made available by the Lenders under clause 4.4
       (Notification of Drawdown Notice) shall be made available not later
       than 11:00 a.m. on the proposed Drawdown Date in Hong Kong Dollars in
       immediately available and freely transferable cleared funds by
       remittance to such account specified by the Agent under clause 27.1
       (Payments to the Agent).

                PART 3: REPAYMENT, CANCELLATION AND PREPAYMENT

5.     REPAYMENT

       (A)    Subject to paragraph (C) below, the Borrower shall repay each
              Loan on the last day of its Interest Period.

       (B)    Subject to the terms of this Agreement, any amount repaid
              pursuant to paragraph (A) above may be reborrowed.

       (C)    If all or part of a Loan is to be repaid from the proceeds of
              all or part of a Rollover Loan, then as between each Lender
              and the Borrower, the amount to be repaid by the Borrower
              shall be set-off against the amount of such Rollover Loan and
              the party to whom the smaller amount is to be paid shall pay
              to the other party (through the Agent in accordance with
              clause 27.1 (Payments to the Agent)) a sum equal to the
              difference between the two amounts.

                                       15
<PAGE>

       (D)    Any amount which remains outstanding under the Facility on the
              Final Repayment Date shall be repaid in full on such date.

6.     CANCELLATION AND PREPAYMENT

6.1    Mandatory cancellation

       Any part of the Facility which remains undrawn at the end of the
       Availability Period shall be automatically and immediately cancelled
       and each Lender's undrawn Commitment shall at that time be reduced to
       zero.

6.2    Voluntary cancellation

       The Borrower may cancel the whole or any part of the Available Facility
       without any penalty if:

       (A)    it has given to the Agent not less than 5 days' (or such shorter
              period as the Majority Lenders may agree) prior written notice of
              the date and the amount of the cancellation; and

       (B)    in the case of cancellation of part of the Available Facility, the
              amount cancelled shall be a minimum of HK$100,000,000 and
              thereafter in integral multiples of HK$10,000,000.

6.3    Right of prepayment and cancellation in relation to a single Lender

       (A)    If:

              (1)    any sum payable to any Lender by the Borrower is required
                     to be increased under paragraph (C) of clause 11.2 (Tax
                     gross-up); or

              (2)    any Lender claims indemnification from the Borrower under
                     clause 11.3 (Indemnity) or clause 12.1 (Increased Costs),

              the Borrower may, whilst the circumstance giving rise to the
              requirement or indemnification continues, give the Agent notice of
              cancellation of the Commitment of that Lender and its intention to
              procure the prepayment of that Lender's participation in all the
              Loans.

       (B)    On receipt of a notice from the Borrower by the Agent referred to
              in paragraph (A) above, the Commitment of that Lender shall
              immediately be reduced to zero.

       (C)    On the last day of each Interest Period which ends after the
              Borrower has given notice under paragraph (A) above (or, if
              earlier, the date specified by the Borrower in that notice), the
              Borrower shall prepay that Lender's participation in all the Loans
              to which such Interest Period relates.

6.4    Restrictions

       (A)    Any notice of cancellation or prepayment given by the Borrower
              under this clause 6 shall be irrevocable and, unless a contrary
              indication appears in this Agreement, shall specify the date or
              dates upon which the relevant cancellation or prepayment is to be
              made and the amount of that cancellation or prepayment. Any
              cancellation

                                       16
<PAGE>

              or prepayment under this clause 6 (other than clause 6.3, where
              only the Commitment of the relevant Lender shall be reduced) in
              part shall reduce the Commitment of each Lender under the Facility
              rateably.

       (B)    Any part of the Facility which is prepaid may be reborrowed in
              accordance with the terms of this Agreement.

       (C)    The Borrower shall not prepay all or any part of the Loans or
              cancel all or any part of the Commitments except at the times and
              in the manner expressly provided for in this Agreement.

       (D)    No Commitment cancelled (in whole or in part) under this Agreement
              may be subsequently reinstated.

       (E)    If the Agent receives a notice under this clause 6, it shall
              promptly forward a copy of that notice to the Borrower or the
              affected Lender, as appropriate.

                            PART 4: COSTS OF ADVANCE

7.     INTEREST

7.1    Calculation of interest

       (A)    Subject as provided in clauses 7.3 (Default interest rate) and 9.2
              (Market disruption and alternative interest rates), the rate of
              interest applicable to each Loan for each Interest Period relating
              to it is the percentage rate per annum which is the aggregate of
              the applicable (1) HIBOR and (2) the Margin.

       (B)    Interest in respect of any Loan shall accrue from day to day and
              shall be calculated on the basis of the actual number of days
              elapsed and a year of 365 days from and including the first day of
              the relevant Interest Period to and excluding the last day of such
              Interest Period.

7.2    Payment of interest

       The Borrower shall pay accrued interest on each Loan on the Interest
       Payment Date relating to it (and, if the Interest Period is longer than
       six Months, on the dates falling at six Monthly intervals after the
       first day of such Interest Period).

7.3    Default interest rate

       (A)    If the Borrower fails to pay any amount payable by it under a
              Finance Document on its due date, interest shall accrue on the
              Unpaid Sum from the due date up to the date of actual payment
              (both before and after judgment) at a rate 1% per annum higher
              than the rate which would have been payable if the Unpaid Sum had,
              during the period of non-payment, constituted a Loan for
              successive Interest Periods, each of a duration selected by the
              Agent (acting in good faith and reasonably). Any interest accruing
              under this clause 7.3 shall be immediately payable by the Borrower
              on demand by the Agent.

       (B)    Default interest (if unpaid) arising on an Unpaid Sum will be
              compounded with the

                                       17
<PAGE>

              Unpaid Sum at the end of each Interest Period applicable to that
              Unpaid Sum but will remain immediately due and payable.

7.4    Notification of rates of interest

       The Agent shall promptly (and in any event no later than 5:00 p.m. on
       the Quotation Day for any Interest Period) notify the Lenders and the
       Borrower of the determination of a rate of interest under this
       Agreement for such Interest Period.

8.     INTEREST PERIODS

8.1    Selection of Interest Periods

       (A)    The Borrower may select the Interest Period for a Loan in the
              Drawdown Notice for such Loan.

       (B)    Each Drawdown Notice must be delivered to the Agent by the
              Borrower not later than 10:00 a.m. on or before the day falling 3
              Business Days before the first day of the relevant Interest
              Period. Where the Borrower selects an Interest Period of 6 Months
              or longer (if available):

              (1)    the Borrower shall specify a Fallback Period;

              (2)    the Agent shall request in its notice of the receipt of the
                     Drawdown Notice to the Lenders, that each Lender notify the
                     Agent by no later than 11:00 a.m. on the first Business Day
                     immediately following the date of such notice from the
                     Agent of its consent to the Borrower's selection of such 6
                     Month or longer period; and

              (3)    if the Agent does not receive the consent of the Lenders by
                     the designated time, the Lenders shall be deemed to have
                     rejected such 6 Month or longer Interest Period selected by
                     the Borrower but accepted the Fallback Period which shall
                     be deemed to have been selected by the Borrower. The Agent
                     shall inform the Borrower and the Lenders promptly after
                     the designated time whether the Fallback Period is deemed
                     to have been selected or not (as the case may be).

       (C)    If the Borrower fails to specify a Fallback Period to the Agent in
              accordance with paragraph (B) above, the relevant Fallback Period
              will (in the absence of any contrary agreement) be 1 Month.

       (D)    Subject to this clause 8, the Borrower may select an Interest
              Period of 1, 2, 3 or (if available) 6 Months or any other period
              agreed between the Borrower and the Agent (acting on the
              instructions of all the Lenders).

       (E)    Any Interest Period for a Loan which would otherwise extend beyond
              the Final Repayment Date shall be of such duration that it shall
              end on the Final Repayment Date.

       (F)    Each Interest Period shall start on the relevant Drawdown Date.

       (G)    A Loan has one Interest Period only.

                                       18
<PAGE>

9.     CHANGES TO THE CALCULATION OF INTEREST AND BREAK COSTS

9.1    Absence of quotations

       Subject to clause 9.2 (Market disruption and alternative interest
       rates), if HIBOR is to be determined by reference to the Reference
       Banks but a Reference Bank does not supply a quotation by 12:00 noon on
       the Quotation Day, HIBOR shall be determined on the basis of the
       quotations of the remaining Reference Banks (if more than one).

9.2    Market disruption and alternative interest rates

       (A)    If a Market Disruption Event (as defined below) occurs in relation
              to a Loan for its Interest Period, then:

              (1)    the Agent shall promptly notify the Borrower and the
                     Lenders accordingly giving full details of the
                     circumstances relevant to such notification;

              (2)    the Agent (on behalf of the Lenders) and after consultation
                     with the Lenders shall, within five Business Days of such
                     notice, commence negotiations with the Borrower with a view
                     to agreeing a mutually acceptable substitute basis on which
                     such Loan or Unpaid Sum may be maintained;

              (3)    any substitute basis agreed in writing by the Agent (on
                     behalf of and with the consent of all of the Lenders) and
                     the Borrower within 30 days of such notice shall take
                     effect in accordance with its terms and interest shall be
                     calculated as if the substitute basis had come into effect
                     from the beginning of the relevant Interest Period;

              (4)    if no agreement is reached within 30 days, each Lender's
                     participation in such Loan shall during that Interest
                     Period bear interest at the annual rate equal to the cost
                     to that Lender (as certified by it to the Borrower within
                     10 days of the end of that 30 day period and expressed as a
                     percentage rate per annum) of funding its portion of such
                     Loan, during that Interest Period by whatever means that
                     Lender reasonably determines to be most appropriate
                     (provided that each Lender shall use its reasonable
                     endeavours to obtain the cheapest source of funding
                     reasonably available to it) plus the prevailing Margin

              (5)    any substitute basis determined in accordance with this
                     clause 9.2 shall take effect until such time as the Agent
                     notifies the Borrower and the Lenders that none of the
                     circumstances previously notified to the Borrower and the
                     Lenders continue to exist whereupon the normal interest
                     rate fixing provisions of clause 7.1 (Calculation of
                     interest) shall apply as from the Quotation Day for the
                     next Interest Period.

       (B)    In this Agreement "Market Disruption Event" means:

              (1)    at or about 12:00 noon on the Quotation Day for the
                     relevant Interest Period the applicable Screen Rate is not
                     available and none or only one of the Reference Banks
                     supplies a rate to the Agent to determine HIBOR for the
                     relevant period; or

                                       19
<PAGE>

              (2)    at or before 4:00 p.m. on the Quotation Day for the
                     relevant Interest Period, the Agent receives notifications
                     from a Lender or Lenders (whose participations in the Loans
                     exceed 35% of the aggregate outstanding) that the cost to
                     it or them of obtaining matching deposits in the Hong Kong
                     interbank market would be in excess of HIBOR; or

              (3)    at or about 12:00 noon on the Quotation Day for the
                     relevant Interest Period the Agent reasonably determines
                     that, by reason of circumstances affecting the Hong Kong
                     interbank market, adequate and fair means do not or will
                     not exist for determining the rate of interest applicable
                     to such Interest Period.

9.3    Break Costs

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

       (B)      Each Lender shall, as soon as reasonably practicable after a
                demand by the Agent or the Borrower, provide a letter to the
                Agent and the Borrower certifying the amount of its Break
                Costs for any Interest Period in which they accrue.

10.    FEES

10.1   Facility fee

       The Borrower shall pay to the Agent (for the account of each Lender in
       respect of its Commitment) a facility fee at the rate of 0.275 per
       cent. per annum and calculated on the amount of the Total Commitments
       from time to time, such fee to be payable (1) quarterly in arrears,
       with the first payment being made on the day falling 3 months after the
       date of this Agreement and (2) on the day on which all Loans have been
       repaid in full and the Available Facility is cancelled and reduced to
       zero.

10.2   Front-end fee

       The Borrower shall pay to the Co-ordinating Arranger a front-end fee in
       the amount and at the time agreed in the Fee Letter.

                    PART 5: ADDITIONAL PAYMENT OBLIGATIONS

11.    TAX GROSS UP AND CREDIT

11.1   Definitions

       (A)    In this clause 11:

              "Protected Party" means a Finance Party which is or will be,
              for or on account of Tax, subject to any liability or required
              to make any payment in relation to a sum received or
              receivable (or any sum deemed for the purposes of Tax to be
              received or receivable) under a Finance Document.

                                       20
<PAGE>

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

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

              "Tax Payment" means an increased payment made by the Borrower
              to a Finance Party under clause 11.2 (Tax gross-up).

       (B)    In this clause 11, a reference to "determines" or "determined"
              means a determination made in the discretion of the person
              making the determination (acting reasonably).

11.2   Tax gross-up

(A)           The Borrower shall make all payments to be made by it without
              any Tax Deduction, unless a Tax Deduction is required by law.

(B)           The Borrower or a Lender shall promptly upon becoming aware
              that the Borrower must make a Tax Deduction (or that there is
              any change in the rate or the basis of a Tax Deduction) notify
              the Agent accordingly. If the Agent receives such notification
              from a Lender it shall notify the Borrower.

(C)           If a Tax Deduction is required by law to be made by the
              Borrower, the amount of the payment due from the Borrower
              shall be increased to an amount which (after making any Tax
              Deduction) leaves an amount equal to the payment which would
              have been due if no Tax Deduction had been required.

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

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

11.3   Indemnity

       (A)    The Borrower shall (within 3 Business Days of demand by the Agent)
              pay to a Protected Party an amount equal to the loss, liability or
              cost which that Protected Party determines will be or has been
              (directly or indirectly) suffered for or on account of Tax by that
              Protected Party in relation to a sum received or receivable (or
              any sum deemed for the purposes of Tax to be received or
              receivable) under a Finance Document provided that such loss,
              liability or cost is not due to any delay or non-compliance by
              that Protected Party.

       (B)    Paragraph (A) above shall not apply with respect to any Tax
              assessed on a Finance Party:

                                       21
<PAGE>

              (1)    under the law of the jurisdiction in which that Finance
                     Party is incorporated or, if different, the jurisdiction
                     (or jurisdictions) in which that Finance Party is treated
                     as resident for tax purposes or carries on a business for
                     tax purposes; or

              (2)    under the law of the jurisdiction in which that Finance
                     Party's Facility Office is located in respect of amounts
                     received or receivable in that jurisdiction,

              if that Tax is imposed on or calculated by reference to the
              net income received or receivable (but not any sum deemed to
              be received or receivable) by that Finance Party;

       (C)    A Protected Party making, or intending to make a claim
              pursuant to paragraph (A) above shall promptly notify the
              Agent of the event which will give, or has given, rise to the
              claim, following which the Agent shall notify the Borrower.

       (D)    A Protected Party shall, on receiving a payment from the
              Borrower under this clause 11.3, notify the Agent.

11.4   Tax Credit

       If the Borrower makes a Tax Payment and the relevant Finance Party
       determines in good faith that:

       (A)    a Tax Credit is attributable to that Tax Payment; and

       (B)    that Finance Party has obtained, utilised and retained that Tax
              Credit,

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

       Nothing in this clause 11.4 shall interfere with the right of a Finance
       Party to arrange its Tax affairs in whatever manner it thinks fit. No
       Finance Party shall be obliged to disclose any information relating to
       its Tax affairs or any computations in respect thereof.

11.5   Stamp taxes

       The Borrower shall pay and, within five Business Days of demand,
       indemnify each Finance Party against any cost, loss or liability that
       Finance Party incurs in relation to all stamp duty, registration and
       other similar Taxes payable in respect of any Finance Document or any
       judgment given in connection with them against the Borrower and shall
       indemnify each of the Finance Parties against any and all liabilities,
       including penalties, with respect to or resulting from its delay or
       omission to pay promptly following a request from a Finance Party any
       such stamp, registration and similar taxes or charges.

12.    INCREASED COSTS

12.1   Increased Costs

       (A)    Subject to clause 12.3 (Exceptions) the Borrower shall, within
              five Business Days of a demand by the Agent, pay for the
              account of a Finance Party the amount of

                                       22
<PAGE>

              any Increased Costs (as defined below) incurred by that Finance
              Party or any of its Affiliates as a result of (1) the introduction
              of or any change in (or in the interpretation or application of)
              any law or regulation or (2) compliance with any applicable law or
              regulation made after the date of this Agreement.

       (B)    In this Agreement, "Increased Costs" means:

              (1)    a reduction in the rate of return from the Facility or
                     on a Finance Party's (or its Affiliate's) overall
                     capital;

              (2)    an additional or increased cost; or

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

              which is incurred or suffered by a Finance Party or any of its
              Affiliates to the extent that it is attributable to that
              Finance Party having entered into its Commitment or funding or
              performing its obligations under any Finance Document.

12.2   Increased Costs claims

       (A)    A Finance Party intending to make a claim pursuant to clause
              12.1 (Increased Costs) shall notify the Agent of the event
              giving rise to the claim, following which the Agent shall
              promptly notify the Borrower.

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

12.3   Exceptions

       (A)    Clause 12.1 (Increased Costs) does not apply to the extent any
              Increased Cost is:

              (1)    attributable to a Tax Deduction required by law to be
                     made by the Borrower; or

              (2)    attributable to the wilful breach by the relevant
                     Finance Party or its Affiliates of any law or
                     regulation; or

              (3)    compensated for in full by the operation of clause
                     11.3 (Indemnity) or any other provision of this
                     Agreement; or

              (4)    attributable to any change in the rate of any Tax
                     referred to in clause 11.3(B); or

              (5)    attributable to the implementation by the applicable
                     authorities having jurisdiction over such Lender of
                     any increase in capital adequacy requirements which is
                     pursuant to and in accordance with any timetable
                     relating to the implementation of capital adequacy
                     requirements where the Lender is aware of such
                     timetable as at the date of this Agreement.

       (B)    In this clause 12.3, a reference to a "Tax Deduction" has the
              same meaning given to the term in clause 11.1 (Definitions).

                                       23
<PAGE>

13.    INDEMNITIES

13.1   Currency indemnity

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

              (1)    making or filing a claim or proof against the Borrower; or

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

              the Borrower shall, as an independent obligation, within five
              Business Days of demand, indemnify each Finance Party to whom
              that Sum is due against any cost, loss or liability arising
              out of or as a result of the conversion including any
              discrepancy between (1) the rate of exchange used to convert
              that Sum from the First Currency into the Second Currency and
              (2) the rate or rates of exchange available to that person at
              the time of its receipt of that Sum.

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

13.2   Other indemnities

       The Borrower shall, within five Business Days of demand, indemnify each
       Finance Party against any cost, loss or liability properly incurred by
       that Finance Party as a result of:

       (A)    the occurrence of any Default;

       (B)    a failure by the Borrower to pay any amount due under a
              Finance Document on its due date including, without
              limitation, any cost, loss or liabilities arising as a result
              of clause 26.2 (Redistribution of payments);

       (C)    funding, or making arrangements to fund, its participation in
              a Loan requested by the Borrower in the relevant Drawdown
              Notice but not made by reason of the operation of any one or
              more of the provisions of this Agreement (other than by reason
              of default or negligence by that Lender alone); or

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

13.3   Indemnity to the Agent

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

       (A)    investigating any event which it reasonably believes is a
              Default; or

       (B)    acting or relying on any notice, request or instruction which
              it reasonably believes

                                       24
<PAGE>

              to be genuine, correct and appropriately authorised.

14.    ILLEGALITY AND MITIGATION

14.1   Illegality

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

       (A)    that Lender shall promptly notify the Agent upon becoming aware of
              that event;

       (B)    upon the Agent notifying the Borrower, the relevant Commitment of
              that Lender will be immediately cancelled. If a Lender's
              Commitment is cancelled in accordance with the terms of this
              Agreement after the Agent has received a Drawdown Notice, then the
              amount to be advanced thereunder shall be reduced accordingly; and

       (C)    the Borrower shall repay that Lender's participation in each Loan
              together with accrued interest to the date of actual payment and
              all other sums due or which may become due to such Lender
              including any additional amount payable under clause 13.2 (Other
              indemnities) on the last day of the Interest Period for such Loan
              occurring after the Agent has notified the Borrower or, if
              earlier, the date specified by the Lender in the notice delivered
              to the Agent (being no earlier than the last day of any applicable
              grace period permitted by law).

14.2   Mitigation

       Notwithstanding the provisions of Clauses 11 (Tax gross up and credit),
       12 (Increased Costs) and 14.1 (Illegality), if in relation to a Lender
       or (as the case may be) the Agent circumstances arise which would
       result in:

       (A)    any deduction, withholding or payment of the nature referred
              to in clause 11 (Tax gross up and credit);

       (B)    any increased cost of the nature referred to in clause 12
              (Increased Costs); or

       (C)    a notification pursuant to clause 14.1 (Illegality),

       then without in any way limiting, reducing or otherwise qualifying the
       rights of such Lender or the Agent, as the case may be, under any of
       those clauses, and without prejudice to the Borrower's obligations
       under those clauses, such Lender or the Agent, as the case may be,
       shall promptly upon becoming aware of the same notify the Agent thereof
       (whereupon the Agent shall promptly notify the Borrower) and such
       Lender or the Agent, as the case may be, shall enter into negotiations
       in good faith with the Agent and the Borrower for a period not
       exceeding thirty days (or such lesser period, as the parties may agree)
       with a view to mitigating or removing such circumstances by means of
       the transfer of its participation in the Facility and its rights and
       obligations hereunder and under the Finance Documents to another
       financial institution or Facility Office not affected by the
       circumstances having the results set out in (A), (B) or (C) above and
       shall otherwise take such reasonable steps as may be open to it to
       mitigate the effects of such circumstances provided that such Lender or
       the Agent, as the case may be, shall not be under any obligation to
       take any such action if, in its opinion, to do so would or might have a
       material adverse effect upon its business, operation or financial
       condition or the management of its

                                       25
<PAGE>

       Tax affairs or be contrary to its policies or would involve it in any
       unlawful activity or any activity that is contrary to any request,
       guidance or directive of any competent authority applicable to such
       Lender or the Agent (whether or not having the force of law but if not
       having the force of law being on which it is the general practice of
       persons to whom it is intended to apply to comply with) or (unless
       indemnified to its satisfaction) would involve it in any significant
       expense or tax disadvantage.

14.3   The Borrower shall indemnify each Finance Party for all costs and
       expenses reasonably incurred by that Finance Party as a result of steps
       taken by it under clause 14.2 (Mitigation).

15.    COSTS AND EXPENSES

15.1   Transaction expenses

       The Borrower shall, within five Business Days of demand, pay the Agent
       and the Co-ordinating Arranger the amount of all costs and expenses
       (including legal fees) reasonably incurred by any of them (on a full
       indemnity basis and whether or not the Facility is drawndown or
       utilised) in connection with the negotiation, preparation, printing,
       execution and syndication of:

       (A)    this Agreement and any other documents referred to in this
              Agreement; and

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

15.2   Amendment costs

       If the Borrower requests an amendment, waiver or consent, the Borrower
       shall, within five Business Days of demand, reimburse the Agent for the
       amount of all costs and expenses (including legal fees) reasonably
       incurred by the Agent in responding to, evaluating, negotiating or
       complying with that request or requirement.

15.3   Enforcement costs

       The Borrower shall, within five Business Days of demand, pay to each
       Finance Party the amount of all costs and expenses (including legal
       fees, valuation, accountancy and consultancy fees, administrative time
       costs and communication out of pocket expenses) properly incurred by
       that Finance Party in connection with the enforcement of, or the
       preservation of any rights under, any Finance Document.

          PART 6: REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

16.    REPRESENTATIONS AND WARRANTIES

       Subject to clause 16.18 (Repetition), the Borrower makes the
       representations and warranties set out in this clause 16 to each
       Finance Party on the date of this Agreement.

                                       26
<PAGE>

16.1   Status

       (A)    The Borrower is a limited company, duly incorporated and
              validly existing under the laws of Hong Kong.

       (B)    Each of the Borrower and each other Borrower Group Company has
              the power and all necessary governmental and other consents,
              approvals, licences and authorities under any applicable
              jurisdiction to own its assets and carry on its business as it
              is being conducted.

16.2   Binding obligations

       The obligations expressed to be assumed by the Borrower in each
       relevant Finance Document are, subject to the Reservations, its legal,
       valid, binding and enforceable obligations.

16.3   Non-conflict with other obligations

       The entry into and performance by the Borrower of, and the transactions
       contemplated by, the Finance Documents do not conflict in any material
       way with:

       (A)    any law or regulation applicable to it;

       (B)    its constitutional documents; or

       (C)    any agreement or instrument binding upon it or any other
              Borrower Group Company or any of its or any such company's
              assets.

16.4   Power and authority

       (A)    The Borrower has the power to enter into, perform and deliver, and
              has taken all necessary action to authorise its entry into,
              performance and delivery of, the Finance Documents to which it is
              a party and the transactions contemplated by those Finance
              Documents.

       (B)    No limits on the Borrower's powers will be exceeded as a result of
              the borrowings and grant of security or the taking of any other
              action contemplated by any relevant Finance Document.

       (C)    (1)    All actions, conditions and things required to be
                     taken, fulfilled and done (including the obtaining of any
                     necessary consents and approvals) in order to enable the
                     Borrower lawfully to enter into, exercise its rights and
                     perform and comply with its obligations contained in each
                     relevant Finance Document and to ensure that those
                     obligations are (subject to the Reservations) legally
                     valid, binding and enforceable have been taken, fulfilled
                     and done; and

              (2)    The requisite resolutions of the Borrower's board of
                     directors have been duly and properly passed to authorise
                     its execution and performance of the Finance Documents to
                     which it is a party and such resolutions are in full force
                     and effect and have not been varied or rescinded.

                                       27
<PAGE>

16.5   Validity and admissibility in evidence

       Subject to the Reservations, all Authorisations required or desirable:

       (A)    to enable the Borrower lawfully to enter into, exercise its
              rights and comply with its obligations in each relevant
              Finance Document; and

       (B)    to make each relevant Finance Document admissible in evidence
              in its jurisdiction of incorporation,

       have been obtained or effected and are in full force and effect.

16.6   No Event of Default

       No Event of Default has occurred which is Continuing.

16.7   Financial Statements

       Its Financial Statements, together with the notes thereto, fairly
       represent its and, in case of the consolidated Financial Statement, the
       Borrower Group's financial condition during the relevant period in
       respect of which the same were prepared.

16.8   No litigation

       No litigation, arbitration or administrative or other proceedings
       (together "proceedings") of or before any court have (to the best of
       the Borrower's knowledge and belief) been started or threatened against
       the Borrower or any other Borrower Group Company where, if such
       proceedings were adversely determined against the Borrower or such
       other Borrower Group Company they would (whether individually or in
       aggregate) be likely to result in a liability in excess of
       US$30,000,000 (or its equivalent) or result in a Material Adverse
       Effect.

16.9   No Material Adverse Change

       There has been no Material Adverse Change (to the best of the
       Borrower's knowledge and belief) since the date of this Agreement or,
       if later, the date of the latest Financial Statements delivered to the
       Agent under clause 17.1 (Financial Statements).

16.10  Material business and consents

       All licences and all material contracts, consents and authorisations
       (including Telecommunications Authorisations) necessary for the
       carrying on of the Borrower Group's Core Business have been obtained
       and are in full force and effect and (to the best of the Borrower's
       knowledge and belief) are not likely to be revoked or terminated (and
       not be reinstated, renewed or replaced by a similar licence within 30
       days after such revocation or termination) or be made subject to unduly
       onerous conditions, and no notice has been received by the Borrower or,
       so far as the Borrower is aware, by any other Borrower Group Company of
       an intention to so revoke or terminate or impose such conditions.

                                       28
<PAGE>

16.11  Telecommunications compliance

       Neither the Borrower nor, so far as the Borrower is aware, any other
       Borrower Group Company has received notification of any breach or
       alleged breach of the Telecommunications Regulations and the Borrower
       has no reason to believe that any such notice is pending or threatened
       and no circumstances exist which are known to the Borrower and which
       may be expected to prevent or interfere with the Borrower or any other
       Borrower Group Company being in compliance with any such
       Telecommunications Regulations or result in any material liability
       under them.

16.12  Governing law and enforcement

       The choice of Hong Kong law as the governing law of the relevant
       Finance Documents will, subject to the Reservations, be recognised and
       enforced in its jurisdiction of incorporation.

16.13  Deduction of Tax

       It is not required under the law of its jurisdiction of incorporation
       to make any deduction for or on account of Tax from any payment it may
       make under any Finance Document.

16.14  No filing or stamp taxes

       Under the laws of Hong Kong it is not necessary that the Finance
       Documents be filed, recorded or enrolled with any court or other
       authority in that jurisdiction or that any stamp, registration or
       similar tax be paid on or in relation to the Finance Documents or the
       transactions contemplated by the Finance Documents.

16.15  Pari passu ranking

       The Borrower's payment obligations under the Finance Documents rank at
       least pari passu with the claims of all its other unsecured and
       unsubordinated creditors, except for obligations mandatorily preferred
       by law applying to companies generally.

16.16  Share capital interests

       As at the date of this Agreement, the Borrower is an indirect wholly
       owned subsidiary of the Parent.

16.17  No Encumbrances

       There are no Encumbrances affecting any assets of the Borrower or any
       of its Principal Subsidiaries (other than the Listed Principal
       Subsidiaries and their Subsidiaries) except as permitted under clause
       19.3 (Negative pledge).

16.18  Repetition

       There shall be deemed to be repeated on the first day of each Interest
       Period each of the representations and warranties contained in clauses
       16.1 (Status), 16.2 (Binding obligations), 16.3 (Non-conflict with
       other obligations), 16.4 (Power and authority), 16.5 (Validity and
       admissibility in evidence), 16.6 (No Event of Default), 16.7 (Financial
       Statements), 16.8 (No litigation), 16.9 (No Material Adverse Change),
       16.10 (Material business and consents) 16.11 (Telecommunications
       compliance), 16.12 (Governing law

                                       29
<PAGE>

       and enforcement) and 16.15 (Pari passu ranking), by reference to the
       facts and circumstances existing as at such date; except in the case of
       the representation and warranty set out in clauses 16.7 (Financial
       Statements) and 16.9 (No Material Adverse Change) which shall be deemed
       to be repeated by reference to the most recent Financial Statements
       delivered to the Agent under clause 17.1 (Financial Statements).

17.    INFORMATION UNDERTAKINGS

       The undertakings in this clause 17 shall remain in force from the date
       of this Agreement for so long as any amount is outstanding or prior to
       which, any Commitment is in force, under the Finance Documents.

17.1   Financial Statements

       The Borrower will deliver to the Agent, in sufficient copies for all
       the Lenders:

       (A)    as soon as available and in any event within 120 days after the
              end of each of its Financial Years (beginning with the Financial
              Year ending on 31 March 2004), its annual audited financial
              statements both on a consolidated and non-consolidated basis as at
              the end of and for that Financial Year;

       (B)    as soon as available and in any event within 90 days after the end
              of the first six months of each of its Financial Years (beginning
              with the six months ending on 30 September 2003), its semi-annual
              unaudited financial statements both on a consolidated and
              non-consolidated basis and as at the end of and for the relevant
              six month period; and

       (C)    for so long as any securities issued by the Parent are listed on
              The Stock Exchange of Hong Kong Limited or any recognised stock
              exchange, its quarterly unaudited financial statements for the
              quarters ending 30 June and 31 December in each Financial Year
              both on a consolidated and non-consolidated basis as soon as the
              same become available, but in any event not later than the date
              falling 60 days after the end of each such quarter of each of its
              Financial Years or, if later, one week after the date of the
              announcement of the results of the Parent for the six months or,
              as the case may be, twelve months ended at the end of such quarter
              Provided that if a copy of such unaudited financial statements has
              been delivered by the Borrower prior to the date of such
              announcement to any third party not being a Group Company and
              which is not bound by an obligation of confidentiality to the
              Parent, then such unaudited financial statements shall be
              delivered not later than the date falling one week after the date
              on which such unaudited financial statements were delivered to
              such third party. In the event that all the securities issued by
              the Parent cease to be so listed, the Borrower shall deliver such
              quarterly unaudited financial statements as soon as the same
              become available, but in any event within 60 days after the end of
              such quarter.

17.2   Requirements as to Financial Statements

       (A)    Each set of Financial Statements delivered by the Borrower
              pursuant to clause 17.1 (Financial Statements) shall be certified
              by a director of the Borrower as fairly representing the financial
              condition of the Borrower Group or, as the case may be, of the
              Borrower as at the date as at which those Financial Statements
              were drawn up and shall be accompanied by a written confirmation
              from the Borrower to the Agent certifying the aggregate amount of
              all Indebtedness secured by all

                                       30
<PAGE>

              Encumbrances referred to in paragraph (B) of clause 19.3 (Negative
              pledge) as at such date.

       (B)    The Borrower shall procure that each set of Financial Statements
              delivered pursuant to clause 17.1 (Financial Statements) is
              prepared using Hong Kong GAAP and accounting practices consistent
              with those applied in the preparation of the Original Financial
              Statements unless, in relation to any set of Financial Statements,
              it notifies the Agent that there has been a change in Hong Kong
              GAAP, the accounting practices or reference periods and its
              auditors deliver to the Agent:

              (1)    a description of any change necessary for those Financial
                     Statements to reflect Hong Kong GAAP, accounting practices
                     and reference periods upon which its Original Financial
                     Statements were prepared; and

              (2)    in the case of the Financial Statements delivered pursuant
                     to paragraphs (A) and (B) of clause 17.1 (Financial
                     Statements) sufficient information, in form and substance
                     as may be reasonably required by the Agent, to enable the
                     Lenders to determine whether clause 18 (Financial
                     covenants) has been complied with and make an accurate
                     comparison between the financial position indicated in
                     those Financial Statements and the Original Financial
                     Statements.

              Any reference in this Agreement to those Financial Statements
              shall be construed as a reference to those Financial Statements as
              adjusted to reflect the basis upon which the Original Financial
              Statements were prepared.

       (C)    The Borrower shall only appoint and retain as its auditors KPMG or
              any other internationally recognised firm of accountants.

       (D)    The Borrower shall, at the same time as it delivers its annual or
              semi-annual Financial Statements, deliver to the Agent a
              Compliance Certificate.

17.3   Information: miscellaneous

       The Borrower shall supply, or shall procure that there is supplied, to
       the Agent (in sufficient copies for all the Lenders):

       (A)    as soon as reasonably practicable upon becoming aware of them,
              details of any litigation, arbitration or administrative
              proceedings which are current against the Borrower or any other
              Borrower Group Company and which might, if adversely determined,
              have a Material Adverse Effect and detailing to what extent such
              liability or diminution is covered by insurance;

       (B)    as soon as reasonably practicable, such further information
              regarding the financial condition, business and operations of the
              Borrower or any other Borrower Group Company, taken as a whole, as
              any Finance Party (through the Agent) may reasonably request;

       (C)    all documents dispatched by the Borrower or by any other Borrower
              Group Company to its creditors generally, and following the
              initial public offering of shares in any Borrower Group Company,
              its public shareholders, at the same time as they are dispatched;
              and

                                       31
<PAGE>

       (D)    as soon as reasonably practicable after the Borrower becomes aware
              of the same, any statement, direction, notice, determination,
              guideline, code of practice issued by any Telecommunications
              Authority which amends, revokes, limits or suspends any of the
              Telecommunications Authorisations granted to any Borrower Group
              Company or which imposes any condition or obligation on any
              Borrower Group Company (in addition to those to which it is
              already subject as at the date of this Agreement) which may have a
              Material Adverse Effect.

18.    FINANCIAL COVENANTS

18.1   Definitions

       In this clause 18:

       "EBITDA" means, in respect of any Relevant Period, the total operating
       profit (loss) for continuing operations before interest, tax,
       depreciation of tangible assets and amortisation of goodwill and other
       intangible assets of the Borrower Group as determined on a consolidated
       basis in accordance with Hong Kong GAAP and excluding in respect of the
       Borrower Group any share of results of associates, jointly controlled
       and unconsolidated companies, any exceptional profits or losses on the
       sale of or termination of an operation, exceptional costs of a
       reorganisation or restructuring, any extraordinary losses or expenses
       such as goodwill write-off, asset and investment impairment losses and
       provisions for investments and properties and any exceptional profits
       or losses on the disposals of assets and extraordinary items and
       minority interests.

       "Interest" means, in relation to any Relevant Period, interest
       (including the interest element of any payments made under finance
       leases or hire purchase agreements), commission, fees, discounts and
       other finance expenses or charges payable by the Borrower Group during
       the Relevant Period (but excluding any interest payable to any Borrower
       Group Company) as determined on a consolidated basis in accordance with
       Hong Kong GAAP.

       "Relevant Period" means each period of twelve months ending on the last
       day of the Borrower's Financial Year and each period of twelve months
       ending on the last day of the first half of the Borrower's Financial
       Year.

       "Test Dates" means 1 February 2004 and 1 August 2004 and thereafter
       each 1 February and 1 August (or, to the extent the Borrower's
       Financial Year is amended, the first day of the fifth month following
       the end of each Relevant Period) and "Test Date" means any of the
       foregoing. Each "Test Date" will be in respect of the most recently
       completed Relevant Period.

       "Total Debt" of any person means, at any date, the aggregate
       outstanding principal or capital amount of (without duplication) (A)
       all Indebtedness of such person, (B) any other indebtedness for
       Borrowed Money with a final maturity of less than one year from its
       date of incurrence owed to any commercial bank or other credit
       institution by such person, (C) all amounts outstanding under any
       commercial paper programme of such person and (D) any guarantees,
       indemnities or other assurances against financial loss given by such
       person in respect of the Total Debt of any other person, in each case
       as determined on a consolidated basis in accordance with Hong Kong
       GAAP, provided that the following liabilities shall be excluded when
       calculating the Total Debt of any person (1) any currency hedging in
       relation to non-Hong Kong Dollar indebtedness by the Borrower or any of
       its Subsidiaries from time to time, (2) any issue of securities which
       are mandatorily

                                       32
<PAGE>

       convertible into shares, (3) its Subordinated Indebtedness and (4) trade
       payables and vendor financing.

18.2   Financial undertakings

       The Borrower shall comply with the following for so long as any amount
       remains outstanding under any Finance Document:

       (A)    The ratio of EBITDA to Interest in respect of any Relevant
              Period shall not be less than 2.0 to 1.

       (B)    The ratio of Total Debt of the Borrower Group to EBITDA in
              respect of any Relevant Period shall not exceed 5.0 to 1.

       Compliance with and calculation of the ratios referred to in this
       clause 18.2 shall be required as at the last day of each Relevant
       Period only. Testing shall be carried out on each of the Test Dates the
       first of which shall fall on 1 February 2004 by reference to the most
       recent annual audited and/or semi-annual unaudited accounts prepared on
       a consolidated basis in respect of the Borrower Group delivered by the
       Borrower in respect of the Relevant Period.

       Any Indebtedness owing by, or interest payable by, a Borrower Group
       Company to another Borrower Group Company shall be ignored for the
       purposes of this clause 18.2.

18.3   Terms of subordination

       For the purpose of calculating the financial covenants under this
       clause 18, the Borrower may procure any Inter-Group Borrowing or any
       Third Party Borrowing be deemed and treated as Subordinated
       Indebtedness pursuant to a Group Subordination Deed or, as the case may
       be, a Third Party Subordination Deed. In either case, the Borrower may
       subsequently at its option de-subordinate any such Subordinated
       Indebtedness in accordance with the terms of the Group Subordination
       Deed or, as the case may be, the Third Party Subordination Deed
       relating thereto provided that such de-subordination applies to all but
       not part only of such Subordinated Indebtedness and provided further
       that the following conditions have been satisfied:

       (A)    the Borrower has given to the Agent not less than 30 Business
              Days' (or such shorter period as the Majority Lenders may agree)
              prior written notice of the date on which such de-subordination is
              to become effective (the "Release Date");

       (B)    together with the notice referred to above, the Borrower has
              delivered a confirmation in writing to the Agent certifying that
              it is in compliance with the financial covenants contained in and
              calculated in accordance with this clause 18 and would remain in
              compliance notwithstanding the proposed de-subordination and
              confirming that no Default has occurred and is Continuing or would
              result from the proposed de-subordination. For the avoidance of
              doubt, the relevant amount of the Subordinated Indebtedness to be
              de-subordinated on the Release Date shall, as from and as at such
              date, be treated as and included in the calculation of Total Debt
              or, as the case may be, Interest for the purposes of this clause
              18; and

       (C)    no Default is Continuing on the Release Date.

                                       33
<PAGE>

       The Borrower shall not be entitled to de-subordinate any Subordinated
       Indebtedness except as provided for in this clause 18.3.

19.    GENERAL UNDERTAKINGS

       The undertakings in this clause 19 shall remain in force for so long as
       any amount is outstanding or prior to which, any Commitment is in
       force, under the Finance Documents.

19.1   Authorisations

       The Borrower shall, and shall procure that each other Borrower Group
       Company shall, promptly obtain, comply with and do all that is
       necessary to maintain in full force and effect any Authorisation
       required under any applicable law to ensure the legality, validity,
       enforceability or admissibility in evidence of any relevant Finance
       Document in any relevant jurisdiction to enable each such company to
       perform its payment obligations under such Finance Document and to
       ensure the legality, validity, enforceability or admissibility in
       evidence of such Finance Document in any relevant jurisdiction.

19.2   Compliance with laws

       The Borrower shall, and shall procure that each other Borrower Group
       Company shall, comply in all material respects with all laws to which
       it may be subject, save where failure to so comply would not have a
       Material Adverse Effect.

19.3   Negative pledge

       The Borrower shall not, and shall procure that no Principal Subsidiary
       (other than Listed Principal Subsidiaries and their Subsidiaries)
       shall, create, incur, assume or permit to subsist any Encumbrance over
       any of its assets to secure the Indebtedness of such company except
       for:

       (A)    Permitted Encumbrances;

       (B)    the creation of Encumbrances (other than Permitted Encumbrances)
              to secure Indebtedness incurred after the date of this Agreement
              where the aggregate outstanding principal amount of such secured
              Indebtedness (excluding secured Indebtedness of Listed Principal
              Subsidiaries and their respective Subsidiaries and indebtedness
              secured by Permitted Encumbrances) is less than or equal to 50% of
              the Borrower's Adjusted Consolidated Net Worth as determined by
              reference to the most recent Financial Statements delivered
              pursuant to clause 17.1 (Financial Statements) provided that not
              less than 10 Business Days after the creation of any such
              Encumbrances in respect of Indebtedness of greater than
              US$30,000,000 (or its equivalent), the Borrower has provided a
              confirmation in writing to the Agent certifying compliance with
              the foregoing requirement and setting out details of all
              Indebtedness secured and to be secured and the Borrower's Adjusted
              Consolidated Net Worth; or

       (C)    Encumbrances created, incurred, assumed or permitted to subsist on
              terms satisfactory to the Agent (acting on the instructions of the
              Majority Lenders) including effective provisions being made
              whereby the Facility will be secured either at least equally and
              rateably with such Indebtedness or by such other Encumbrances as
              shall have been approved by the Majority Lenders for so long as
              such Indebtedness will be so secured.

                                       34
<PAGE>

19.4   Pari passu

       The obligations of the Borrower under the Finance Documents shall at
       all times rank at least pari passu with all its other present and
       future unsecured and unsubordinated indebtedness except for obligations
       mandatorily preferred by law.

19.5   Maintenance of licences

       The Borrower shall take all necessary action to protect and maintain
       (and take no action which could foreseeably imperil the continuation
       of) the Telecommunications Authorisations and shall procure that all
       material conditions attaching to such Telecommunications Authorisations
       are at all times complied with and that the business is carried on
       within the limits specified in such Telecommunications Authorisations.

19.6   Notification of Events of Default

       (A)    The Borrower shall notify the Agent of any Default (and the steps,
              if any, being taken to remedy it) promptly upon becoming aware of
              its occurrence.

       (B)    Promptly upon a request by the Agent, the Borrower shall supply to
              the Agent a certificate signed by one of its directors or a senior
              officer on its behalf certifying that no Default is Continuing (or
              if a Default is Continuing, specifying the Default and the steps,
              if any, being taken to remedy it).

19.7   Consents and filings

       The Borrower shall, and shall procure that each other Borrower Group
       Company shall, ensure that there shall be:

       (A)    obtained, complied with and promptly renewed and maintained all
              consents, licences, approvals and authorisations of;

       (B)    made all filings, recordings, registrations or enrolments with;
              and

       (C)    paid any stamp, registration or similar tax to be paid to,

       any governmental authorities or agencies or courts (if any) required
       under any applicable law or regulation to enable the Borrower to
       perform its material obligations under the Finance Documents or to
       ensure the legality, validity and enforceability of the Finance
       Documents.

19.8   Access

       If an Event of Default is Continuing, upon reasonable notice being
       given to the Borrower by the Agent (except in the case of emergency)
       the Borrower shall, and shall procure that each other Borrower Group
       Company shall, permit any one or more representatives of the Agent or
       its advisers to have access to the property, assets, books and records
       of the Borrower and the other Borrower Group Companies to inspect the
       same during normal business hours.

                                       35
<PAGE>

19.9   No mergers

       The Borrower shall not merge or consolidate with any other person,
       enter into any demerger transaction or participate in any other type of
       corporate reconstruction unless a continuing entity is the Borrower and
       no breach of any other provision hereunder would result from such
       merger.

19.10  Arm's length transactions

       The Borrower shall not, and shall procure that no other Borrower Group
       Company shall, enter into any transaction with any Affiliate outside
       the Borrower Group otherwise than on arm's length terms.

19.11  Future borrowings

       In relation to any future borrowing by any Borrower Group Company, the
       Borrower shall, and shall procure each relevant party to such future
       borrowing to, only agree to and enter into any subordination
       arrangements contained in or contemplated by or entered into in respect
       of such future borrowing which are on the same basis and subject to the
       same terms and conditions as those contained in or contemplated by or
       entered into in respect of the relevant Finance Documents.

20.    EVENTS OF DEFAULT

20.1   Each of the events or circumstances set out in this clause 20.1 is an
       Event of Default.

       (A)    Non-payment

              The Borrower does not pay on the due date any amount payable
              pursuant to any relevant Finance Document at the place at and in
              the currency in which it is expressed to be payable under this
              Agreement unless:

              (1)    the failure to pay is caused by administrative or technical
                     error beyond the Borrower's control; and

              (2)    payment is subsequently made within 3 Business Days of its
                     due date.

       (B)    Financial covenants

              The Borrower fails to comply with clause 18.2 (Financial
              undertakings) in the manner contemplated thereunder.

       (C)    Breach of specific covenants

              The Borrower fails to comply with clause 19.3 (Negative pledge)
              and/or clause 19.9 (No mergers).

       (D)    Other obligations

              Without prejudice to paragraph (C) of clause 20.1 (Breach of
              specific covenants), the Borrower fails to comply with clause 17
              (Information undertakings) or clause 19 (General undertakings)
              unless such failure is (in the reasonable opinion of the Majority
              Lenders) capable of being remedied and is so remedied within 20

                                       36
<PAGE>

              Business Days of the Agent giving written notice to the Borrower
              requiring it to remedy, or if earlier, within 20 Business Days of
              the date on which the Borrower first became aware of such breach.

       (E)    Misrepresentation

              Any representation or statement made or deemed to be made by the
              Borrower under clause 16 (Representations and warranties) is or
              proves to have been incorrect or misleading in any material
              respect when made or deemed to be made, unless the underlying
              circumstances (if in the Majority Lenders' reasonable opinion
              capable of remedy) are remedied within 20 Business Days of the
              Agent giving written notice to the Borrower requiring it to remedy
              or, if earlier, within 20 Business Days of the date on which the
              Borrower first became aware of such breach, and its effect is such
              as to be reasonably likely (in the opinion of the Agent acting on
              the instructions of the Majority Lenders) to give rise to a
              Material Adverse Effect.

       (F)    Insolvency

              The Borrower or any Principal Subsidiary:

              (1)    ceases or suspends generally payment of its debts (or
                     announces an intention to do so) or is unable to pay its
                     debts or is deemed unable to pay its debts within the
                     meaning of Section 178 of the Companies Ordinance or any
                     other similar law of any applicable jurisdiction; or

              (2)    commences, or announces an intention to commence,
                     negotiations with all or any class of its creditors with a
                     view to the general readjustment or rescheduling of all or
                     any class of its indebtedness for Borrowed Money; or

              (3)    enters into any composition or other arrangement for the
                     benefit of its creditors generally or any class of
                     creditors; or

              (4)    is the subject of any voluntary or involuntary proceedings
                     under any law, regulation or procedure relating to
                     reconstruction or readjustment of its debts; or

              (5)    files a moratorium or has a moratorium declared in respect
                     of all or any class of its indebtedness for Borrowed Money.

       (G)    Insolvency proceedings

              (1)    Winding up:

                     (a)    a meeting is convened; or

                     (b)    a petition is presented (unless it is demonstrated
                            to the reasonable satisfaction of the Agent that the
                            petition is frivolous or vexatious and such petition
                            is set aside before the petition is advertised and
                            in any event within 14 days of presentation); or

                     (c)    an order is made; or

                     (d)    a resolution is passed

                                       37
<PAGE>

                     for the dissolution, winding-up or bankruptcy of the
                     Borrower or any Principal Subsidiary (except for the
                     purposes of a reconstruction or amalgamation whilst
                     solvent on terms previously approved in writing by the
                     Agent); or

              (2)    Administration: a bona fide petition is presented for the
                     appointment of an administrator or provisional supervisor
                     or similar officer (if applicable) in relation to the
                     Borrower or any Principal Subsidiary (unless it is
                     demonstrated to the reasonable satisfaction of the Agent
                     that the petition is frivolous or vexatious and such
                     petition is set aside before the petition is advertised and
                     in any event within 14 days of presentation); or

              (3)    Request by directors or members: the directors or a member
                     of the Borrower or any Principal Subsidiary request the
                     appointment of a liquidator, receiver, receiver and
                     manager, administrative receiver, administrator, trustee,
                     provisional supervisor or similar official to the whole or
                     any substantial part of the assets of the Borrower or such
                     Principal Subsidiary.

       (H)    Creditors' process and distress

              (1)    an encumbrancer takes possession of the whole or any
                     substantial part of the assets or undertaking of the
                     Borrower or any Principal Subsidiary;

              (2)    a liquidator, receiver, receiver and manager,
                     administrative receiver, administrator, trustee or similar
                     official is appointed, of the whole or any substantial part
                     of the assets or undertaking of the Borrower or any
                     Principal Subsidiary;

              (3)    a distress, execution or other legal process is levied
                     against any of the assets of the Borrower or any Principal
                     Subsidiary to recover assets with a book value in excess of
                     US$30,000,000 (or its equivalent) in aggregate, and is not
                     discharged or paid out within 10 Business Days.

       (I)    Expropriation

              The expropriation of all or a substantial part of the Borrower's
              or any Principal Subsidiary's assets by any governmental or other
              competent authority.

       (J)    Auditors' report

              The auditors qualify their report to any audited Financial
              Statements (other than qualifications of a technical nature which
              are not material to the financial position of the Borrower)
              (delivered under clause 17.1 (Financial statements)) so as to cast
              doubt on their accuracy in any material respect or on the ability
              of the Borrower or any Principal Subsidiary to continue as a going
              concern.

       (K)    Rescission

              Any party to the Finance Documents (other than a Finance Party)
              rescinds or purports to rescind any of them in whole or in part
              where to do so would have a Material Adverse Effect.

                                       38
<PAGE>

       (L)    Revocation of Telecommunications Authorisation

              The FTNS Licence is revoked or is suspended (and not reinstated,
              renewed or replaced by a similar licence within 30 days after such
              suspension or revocation) or is made subject to such conditions as
              would have a Material Adverse Effect.

       (M)    Unlawfulness

              It is or becomes unlawful for the Borrower to perform any of its
              material obligations under the Finance Documents and such
              non-performance has a Material Adverse Effect.

       (N)    Other Indebtedness

              Any Indebtedness of the Borrower or any Principal Subsidiary which
              in aggregate exceeds US$30,000,000 (or its equivalent) at any
              time:

              (i)    is not paid on its due date (after the expiry of any
                     original grace period applicable thereto);

              (ii)   is declared due and payable before its stated maturity or
                     is placed on demand, in each case, by reason of an event of
                     default (howsoever described) or any circumstances arise as
                     a result of which any such Indebtedness could be so
                     declared due and payable before its stated maturity date;
                     or

              (iii)  which is repayable on demand is not repaid on demand being
                     made.

       (O)    Material Adverse Change

              There occurs a Material Adverse Change.

20.2   Acceleration

       Upon the occurrence of an Event of Default and so long as it is
       Continuing the Agent may, and shall if so directed by the Majority
       Lenders, by notice to the Borrower:

       (A)    cancel the Total Commitments whereupon they shall immediately be
              cancelled;

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

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

20.3   Certain Events of Default regarding Principal Subsidiaries

       For the purposes of paragraphs (F), (G), (H), (I) and (N) of clause
       20.1, "Principal Subsidiaries" shall be deemed to include any Borrower
       Group Company which has incurred any Third Party Borrowings in respect
       of which the Borrower has issued any guarantee or indemnity or other
       form of credit support.

                                       39
<PAGE>

                           PART 7: CHANGES TO PARTIES

21.    CHANGES TO THE LENDERS

21.1   Assignments and transfers by the Lenders

       Subject to this clause 21, a Lender (the "Existing Lender") may:

       (A)    assign any of its rights; or

       (B)    transfer by novation any of its rights and obligations,

       under the Finance Documents to another bank or financial institution
       or, with the prior written consent of the Borrower, to any other entity
       (the "New Lender") provided that such transfer or assignment is in a
       minimum amount of HK$10,000,000.

21.2   Conditions of assignment or transfer

       (A)    If a Lender assigns any rights under the Finance Documents in
              accordance with clause 21.1 (Assignments and transfers by the
              Lenders) then, subject to the assignee delivering to the Agent at
              least 7 Business Days' (or such shorter period agreed by the
              Agent) prior to the proposed Assignment Date specified in such
              undertaking an undertaking substantially in the form of Schedule 5
              (Form of Assignee's Undertaking) in the Agreed Terms that it will
              be bound by the terms of the Finance Documents as a Lender, and
              paying the assignment fee referred to in clause 21.3 (Assignment
              or transfer fee), the assignee shall be substituted for the
              assignor and have the same rights against the Borrower as it would
              have had if it had been an original party to this Agreement as a
              Lender with the rights assigned to it. Such undertaking shall
              contain the assignee's notice details for the purpose of clause
              31.2 (Addresses).

       (B)    A transfer will only be effective if the procedure set out in
              clause 21.5 (Procedure for transfer) is complied with.

       (C)    Each of the parties irrevocably authorises the Lenders to deliver,
              and the Agent to receive, undertakings under clause 21.2(A) and/or
              Transfer Certificates in accordance with clause 21.5 (Procedure
              for transfer). In addition, each party (other than the Existing
              Lender and the New Lender) irrevocably authorises the Agent to
              execute any completed Transfer Certificates on its behalf.

       (D)    The Borrower shall enter into such additional documentation (if
              any) required by the Agent to effect any assignment or transfer in
              accordance with this clause 21.

       The Agent shall distribute payments received by it in relation to the
       Loans to the Lenders indicated in the records of the Agent as being
       entitled thereto on the date on which such payment fell due (and, if
       that date is the due date on which an assignment or transfer of such
       portion takes effect, to the Lenders so indicated before such
       assignment or transfer took effect).

                                       40
<PAGE>

21.3   Assignment or transfer fee

       On the date of the Agent's receipt of the undertaking required under
       clause 21.2(A) (Conditions of assignment or transfer) or of the
       Transfer Certificate, the relevant New Lender shall pay a fee of
       HK$5,000 to the Agent.

21.4   Limitation of responsibility of Existing Lenders

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

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

              (2)    the financial condition, affairs, status or nature of the
                     Borrower or any of its Subsidiaries or the observance by
                     the Borrower of any term of the Finance Documents;

              (3)    the performance and observance by the Borrower of its
                     obligations under the Finance Documents or any other
                     documents; or

              (4)    the accuracy and/or completeness of any statements or
                     information (whether written or oral) made in or in
                     connection with or supplied to it in connection with any
                     Finance Document or any other document or supplied to it in
                     connection with the Borrower Group,

              and any representations or warranties implied by law are excluded.

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

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

              (2)    will continue to make its own independent appraisal of the
                     creditworthiness of the Borrower and its related entities
                     whilst any amount is or may be outstanding under the
                     Finance Documents or any Commitment is in force;

              (3)    has received copies of the Finance Documents and all
                     documentation and information required by it in connection
                     with this transaction (other than the Fee Letter referred
                     to in clause 10.2 (Front-end fee)); and

              (4)    has received copies of all outstanding consents and waiver
                     requests and will be bound by any decisions made by the
                     Existing Lender which have been communicated to the Agent
                     prior to the Transfer Date.

       (C)    Nothing in any Finance Document obliges an Existing Lender to:

                     (1)    accept a re-transfer from a New Lender of any of the
                            rights and obligations assigned or transferred under
                            this clause 21; or

                                       41
<PAGE>

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

21.5   Procedure for transfer

       (A)    If an Existing Lender wishes to transfer any rights and/or
              obligations under the Finance Documents in accordance with clause
              21.1 (Assignments and transfers by the Lenders) such transfer will
              only be effective if the Agent receives three executed copies of a
              Transfer Certificate signed by the Existing Lender(s) and the New
              Lender(s) at least 7 Business Days prior to the proposed Transfer
              Date specified in the Transfer Certificate (or such shorter period
              agreed by the Agent). As soon as reasonably practicable after its
              receipt of a duly completed Transfer Certificate appearing to
              comply with the terms of this Agreement, the Agent shall execute
              that Transfer Certificate.

       (B)    On the Transfer Date specified in the Transfer Certificate (or if
              later, on the date on which the Agent executes the Transfer
              Certificate):

              (1)    to the extent that the Existing Lender(s) elect(s) in the
                     Transfer Certificate to transfer rights and obligations
                     under the Finance Documents, the Borrower and the Existing
                     Lender(s) shall each be released from further obligations
                     to the other and their respective rights against each other
                     cancelled (except for rights accrued before the date on
                     which the Transfer Certificate takes effect);

              (2)    the Borrower and the New Lender(s) shall acquire rights
                     against each other and assume obligations towards each
                     other which differ from the rights and obligations so
                     cancelled and released only insofar as the Borrower and the
                     New Lender(s) have acquired and assumed them in place of
                     the Borrower and the Existing Lender(s);

              (3)    the New Lender(s) and the Finance Parties shall acquire the
                     same rights and assume the same obligations between
                     themselves as they would have acquired and assumed had the
                     New Lender(s) been original parties to the Finance
                     Documents as Lender(s) with the rights and obligations
                     acquired and assumed as a result of such transfer (and, to
                     that extent, the Existing Lender(s) and the Finance Parties
                     shall each be released from further obligations to each
                     other under the Finance Documents); and

              (4)    the New Lender(s) shall become a party to the Finance
                     Documents as a "Lender".

21.6   Reference Banks

       If a Reference Bank (or, if a Reference Bank is not a Lender, the
       Lender of which it is an Affiliate) ceases to be one of the Lenders,
       the Agent shall (after consultation with the Borrower) appoint another
       Lender or an Affiliate of a Lender to replace that Reference Bank.

21.7   Sub-participations

       Nothing in this Agreement restricts the ability of a Lender to
       sub-contract an obligation if it remains liable under this Agreement
       for that obligation.

                                       42
<PAGE>

21.8   Limitation of specified indemnities

       If, at any time, any Lender assigns or transfers any of its rights,
       benefits and obligations under this Agreement and, at the time of such
       assignment or transfer, there arises an obligation on the part of the
       Borrower under clause 11.2 (Tax gross-up) or clause 12 (Increased
       Costs) to pay to such Lender or its assignee or transferee any amount
       in excess of the amount it would have then been obliged to pay but for
       such assignment or transfer, then the Borrower shall not be obliged to
       pay the amount of such excess provided that this clause 21.8 shall not
       apply to any assignment or transfer made (1) pursuant to clause 14.2
       (Mitigation) or (2) with prior consent of the Borrower or (3) at any
       time whilst an Event of Default is Continuing.

21.9   Confidentiality

       The Borrower agrees that the Finance Parties may at any time disclose
       such information relating to the Borrower and other Borrower Group
       Company as shall come into their possession whether or not in relation
       to the Facility:

       (A)    to any prospective assignee, New Lender or sub-participant;

       (B)    to their respective advisers, professional or otherwise;

       (C)    to the other Finance Parties or any Affiliate of a Finance Party;

       (D)    if required to do so by an order of a court in any jurisdiction;

       (E)    under any law or regulation or to any applicable regulatory
              authority (including the Hong Kong Monetary Authority) in any
              jurisdiction; and

       (F)    where such information shall have already entered the public
              domain,

       and in the case of paragraphs (A), (B) and (C) above, subject to
       requiring and receiving a written confidentiality undertaking
       substantially in the form of Schedule 6 (Form of Confidentiality
       Undertaking), a copy of which shall, as soon as practicable, be
       delivered to the Borrower.

21.10  Agent's notification

       The Agent shall as soon as practicable notify the Borrower of its
       receipt of an undertaking under clause 21.2(A) (Conditions of
       assignment and transfer) or upon execution of a Transfer Certificate
       under clause 21.5 (Procedure for transfer).

21.11  Universal succession

       If a Lender is to be merged with any other person by universal
       succession, that Lender shall, at its own cost, within 30 days of that
       merger furnish to the Agent:

       (A)    a copy of a legal opinion issued by a qualified legal counsel
              practising law in its jurisdiction of incorporation confirming
              that all that Lender's assets, rights and obligations generally
              have been duly vested in the succeeding entity who has succeeded
              to all relationships as if those assets, rights and obligations
              had been originally acquired, incurred or entered into by the
              succeeding entity; and

                                       43
<PAGE>

       (B)    a written confirmation by the Agent's legal counsel that the laws
              of the jurisdiction in which the Facility Office is located
              recognise such merger by universal succession under the relevant
              foreign laws,

       whereupon a transfer and novation of all that Lender's assets, rights
       and obligations to its succeeding entity shall have been, or be deemed
       to have been, duly effected as at the date of the said merger. If that
       Lender, in a universal succession, does not comply with the
       requirements under this clause 21.11, the Agent has the right to
       decline to recognise the succeeding entity and demand that Lender and
       the succeeding entity to sign and deliver a Transfer Certificate to the
       Agent evidencing the disposal of all rights and obligations of that
       Lender to that succeeding entity.

22.    CHANGES TO THE BORROWER

       The Borrower may not assign any of its rights or transfer any of its
       rights or obligations under the Finance Documents.

                          PART 8: THE FINANCE PARTIES

23.    AGENT

23.1   Appointment

       (A)    Appointment: Each Lender appoints the Agent to act as its agent in
              connection with this Agreement; and authorises the Agent:

              (a)    to execute on its behalf those Finance Documents or any
                     document or certificate relating thereto expressed by this
                     Agreement to be executed by the Agent on behalf of the
                     Finance Parties;

              (b)    to exercise such rights, powers and discretions as are
                     specifically delegated to them by the terms of the Finance
                     Documents together with all reasonably incidental rights,
                     powers and discretions; and

              (c)    to make or receive any payment on its behalf as required by
                     the terms of any of the Finance Documents.

              The Borrower shall be entitled to assume that the Agent
              represents the Lender(s) or the Majority Lenders (as the case
              may be), and that all consents and notices given by the Agent
              on their behalf are validly given.

       (B)    Chinese Wall: In acting as Agent for the Lenders, the Agent's
              syndication division (or such other division as may undertake such
              task) shall be treated as a separate entity from any other of its
              divisions or departments and, despite the provisions of this
              clause 23, if the Agent acts for or transacts business with any
              Group Company in any capacity in relation to any other matter
              (including as a Lender under this Agreement), any information
              given by any Group Company to the Agent in such other capacity may
              be treated as confidential by the Agent.

                                       44
<PAGE>

23.2   Powers

       The Agent may:

       (A)    assume that:

              (1)    any representation made by the Borrower in or in connection
                     with the Finance Documents is true;

              (2)    no Default has occurred (unless it has actual knowledge of
                     a Default arising under clause 20.1(A) (Non-payment));

              (3)    the Borrower is not in breach of or default under its
                     obligations under any Finance Document; and

              (4)    any right, power, authority or discretion vested in any
                     party or the Majority Lenders has not been exercised;

              unless the Agent has in its capacity as agent (or, where
              relevant, as agent and trustee) for the Lenders actually
              received written notice to the contrary from any other party
              to this Agreement;

       (B)    assume that each New Lender's Facility Office is that identified
              in the Transfer Certificate under which it became a party to this
              Agreement until it has received from such New Lender a notice
              designating some other office of such New Lender as its Facility
              Office, and may act upon any such notice until the same is
              superseded by a further such notice;

       (C)    engage and pay for the advice or services of any lawyers,
              accountants or other advisers whose advice or services may seem
              necessary, expedient or desirable to it and may rely upon any
              advice so obtained;

       (D)    rely as to matters of fact which might reasonably be expected to
              be within the knowledge of the Borrower upon a certificate or
              statement signed by or on behalf of the Borrower;

       (E)    rely upon any communication or document believed by it to be
              genuine and correct and to have been communicated or signed by the
              person by whom it purports to be communicated or signed;

       (F)    refrain from exercising any right, power or discretion vested in
              it under any Finance Document unless and until instructed by the
              Majority Lenders or all of the Lenders (as the case may be)
              whether or not such right, power or discretion is to be exercised
              and, if it is to be exercised, as to the manner in which it should
              be exercised, and it shall not be liable for acting or refraining
              from acting in accordance with or in the absence of instructions
              from the Majority Lenders or all of the Lenders (as the case may
              be);

       (G)    refrain from taking any step to protect or enforce the rights of
              any Lender under any Finance Document and from beginning any legal
              action or proceeding arising out of or in connection with any
              Finance Document until it has been indemnified and/or secured as
              it may require (whether by way of payment in advance or otherwise)

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              against all costs, claims, expenses (including legal fees) and
              liabilities which it will or may expend or incur in complying with
              such instructions;

       (H)    refrain from doing anything which would or might in its opinion be
              contrary to any applicable law or any requirements (whether or not
              having the force of law) of any governmental, judicial or
              regulatory body or otherwise render it liable to any person, and
              it may do anything which is in its opinion necessary to comply
              with any such applicable law or requirement;

       (I)    do any act or thing in the exercise of any of its powers and
              duties under the Finance Documents which may lawfully be done and
              which in its absolute discretion it deems advisable for the
              protection and benefit of the Finance Parties collectively
              including the investment of monies in any investments authorised
              by any applicable law;

       (J)    perform any of its duties, obligations and responsibilities under
              the Finance Documents by or through its personnel or agents;

       (K)    accept deposits from, lend money (secured or unsecured) to and
              generally engage in any kind of banking or other business with any
              Group Company without any liability to account;

       (L)    carry on any banking or other business with any Group Company
              without liability to account as though it were not the Agent and
              without notice to or consent of the Lenders and shall be under no
              obligation to provide any information regarding any Group Company
              which it receives as a result of such activities to any other
              Finance Party. With respect to its participation in the Facility,
              the Agent shall have the same rights and powers under this
              Agreement as any other Lender and may exercise the same as though
              it were not the Agent;

       (M)    deposit any instruments, documents or deeds delivered to it with
              any Lender or professional custodian or with any Finance Party's
              legal advisers and shall not be liable for any loss thereby
              incurred in the absence of any gross negligence or wilful default
              by it; and

       (N)    delegate from time to time by power of attorney or otherwise to
              any person it thinks fit any of its rights, trusts, powers,
              authorities or discretions vested in it by any Finance Document
              which, in each case, relate to purely administrative acts only and
              on any terms and subject to any conditions or regulations as it
              thinks fit.

23.3   Duties

       The Agent shall:

       (A)    except as regards purely administrative acts, consult whenever
              reasonably practicable with the Lenders before doing or refraining
              from doing any act or thing in the exercise of its powers as agent
              and/or trustee;

       (B)    as soon as practicable upon receipt inform each Lender of the
              contents of any notice or document or other information (addressed
              to all Lenders generally or which the Lenders are expressly
              entitled to receive pursuant to the terms of this Agreement)
              received by it in its capacity as Agent under this Agreement from
              the Borrower;

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<PAGE>

       (C)    promptly following receipt of the notice referred to below, notify
              each Lender of the occurrence of any Default or any material
              breach by the Borrower in the due performance of its obligations
              under this Agreement which is either a default in the payment of
              principal or interest of which the Agent has received notice from
              any other party to this Agreement;

       (D)    subject to the provisions of this clause 23 and except as
              stipulated in clause 24 (Amendments and decisions), act in
              accordance with any instructions given to it by the Majority
              Lenders;

       (E)    if so instructed by the Majority Lenders, refrain from exercising
              any right, power or discretion vested in it under the Finance
              Documents; and

       (F)    refrain from beginning any legal action or proceedings in
              connection with the Finance Documents on behalf of any Finance
              Party until such Finance Party has given its written consent to
              the proposed action.

       This clause relates to every consent to be given, decision to be taken,
       discretions to be exercised, or determination to be made which is
       expressed to be made or taken by the Agent, except where the words "at
       the request of any Lender" or similar, are used, or where the consent,
       decision or discretion to be made or exercised would fall within the
       scope of clause 24.2 (Unanimous Consent) in which case the Agent shall
       act accordingly. Any requirement that such consent, decision or
       determination must be reasonable or that the Agent is to "act
       reasonably" is to be construed as an obligation on the Lenders granting
       such consent or making such a decision or determination and not as an
       individual obligation binding on the Agent in that capacity. The
       Agent's duties under the Finance Documents are solely mechanical and
       administrative in nature.

23.4   Exoneration

       Despite anything to the contrary expressed or implied in this
       Agreement, none of the Agent, the Co-ordinating Arranger or the Lenders
       shall:

       (A)    be bound to enquire as to:

              (1)    whether or not any representation or warranty made by the
                     Borrower under or in connection with any Finance Document
                     is true;

              (2)    the occurrence or otherwise of any Default;

              (3)    the performance by the Borrower of its obligations under
                     any Finance Document;

              (4)    any breach or default by the Borrower of or under its
                     obligations under any Finance Document;

       (B)    be bound to account to any Finance Party for any fee or other sum
              or the profit element of any sum received by it for its own
              account;

       (C)    be bound to disclose to any other person any information relating
              to any Group Company if such disclosure would or might in its
              opinion constitute a breach of any law or regulation or be
              otherwise actionable at the suit of any person;

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<PAGE>

       (D)    be under any fiduciary or other duty towards any Finance Party or
              under any obligations (including any liability to hold any money
              paid to it on trust or be liable to account for interest on such
              money);

       (E)    be liable or responsible (in the absence of its own gross
              negligence or wilful default):

              (1)    for any failure, omission, or defect in the due execution,
                     delivery, validity, legality, adequacy, performance,
                     enforceability, or admissibility in evidence of any Finance
                     Document or any communication, report or other document
                     delivered under any Finance Document; or

              (2)    in respect of its exercise or failure to exercise any of
                     its powers and duties under any Finance Document; or

              (3)    for the collectability of any sums payable under any
                     Finance Documents; or

              (4)    for any recital, statement, representation or warranty made
                     by any Borrower Group Company or any officer thereof,
                     contained in any Finance Document, or in any certificate,
                     report, statement or other document referred to or provided
                     for in, or received by it under or in connection with any
                     Finance Document; or

              (5)    for the supervision of any person to whom it has delegated
                     any trusts, powers, authorities or discretions vested in it
                     or (in the absence of gross negligence or wilful default by
                     the Agent) be in any way liable for any loss incurred
                     through the misconduct or default of such delegate;

       (F)    be under any obligations other than those expressly provided for
              in this Agreement and shall have no liability or responsibility of
              any kind to:

              (1)    the Borrower arising out of or in relation to any failure
                     or delay in the performance or breach by any Finance Party
                     (other than itself) of any of its obligations under any
                     Finance Document; or

              (2)    any Finance Party arising out of or in relation to any
                     failure or delay in the performance or breach by the
                     Borrower of any of its obligations under any Finance
                     Document; or

       (G)    be liable in any manner and each of them shall be fully protected
              if it acts in accordance with the instructions of the Majority
              Lenders in connection with the exercise of any right, power or
              discretion or any matter not expressly provided for in the Finance
              Documents. Any such instructions given by the Majority Lenders
              will be binding on all the Finance Parties. In the absence of such
              instructions the Agent may act as they consider to be in the best
              interests of all the Finance Parties and in so doing shall be
              fully protected.

23.5   Lenders' indemnity

       Each Lender shall, on demand by the Agent, indemnify the Agent against
       any and all fees (to the extent properly chargeable by the Agent under
       any Finance Document but not promptly recovered from the Borrower),
       costs, claims and expenses and liabilities which the Agent may pay or
       incur (otherwise than by reason of its own gross negligence or wilful

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<PAGE>

       misconduct) in acting in its capacity as agent for the Finance Parties.
       The cost of indemnifying the Agent shall be borne by the Lenders in the
       proportions determined in accordance with the definition of Relevant
       Percentage. If a Lender (referred to in this clause 23.5 as a
       "defaulting Lender") fails to pay its due contribution under this
       indemnity, then the Agent may (without prejudice to its other rights
       and remedies) deduct the amount due from the defaulting Lender from any
       sums which are then or afterwards in its possession which would
       otherwise be payable to the defaulting Lender.

23.6   Disclaimer

       The Agent, the Co-ordinating Arranger and the Lenders accept no
       responsibility to any other Finance Party for the accuracy and/or
       completeness of any information supplied in connection with any Finance
       Document or for the legality, validity, effectiveness, adequacy or
       enforceability of any Finance Document and the Agent, the Co-ordinating
       Arranger and the Lenders shall be under no liability to any other
       Finance Party as a result of taking or omitting to take any action in
       relation to any Finance Document (except in the case of its gross
       negligence or wilful misconduct of the Agent, the Co-ordinating
       Arranger or the Lenders (as the case may be)).

23.7   No actions against individuals

       Each of the Finance Parties agrees that it will not assert or seek to
       assert against any director, officer or employee of any other Finance
       Party any claim it may have against any of them in respect of the
       matters referred to in this clause 23 and such directors, officers or
       employees may rely on this clause.

23.8   Credit appraisals

       It is agreed by each Finance Party that it has itself been, and will
       continue to be, solely responsible for making its own independent
       appraisal of and investigations into the financial condition,
       creditworthiness, condition, affairs, status and nature of each Group
       Company, and, accordingly, each Lender confirms to each other Finance
       Party that it has not relied, and will not rely, on any other Finance
       Party:

       (A)    to check or enquire on its behalf into the adequacy, accuracy or
              completeness of any information provided by or on behalf of any
              Group Company in connection with any Finance Document and/or the
              transactions contemplated in the Finance Documents (whether or not
              such information has been or is after the date of this Agreement
              circulated to such Lender by another Finance Party); or

       (B)    to assess or keep under review on its behalf the financial
              condition, creditworthiness, condition, affairs, status or nature
              of any Group Company.

       Each Lender acknowledges that none of the Agent-Related Persons has
       made any representation or warranty to it, and that no act by the Agent
       taken in the future, including any review of the affairs of the Group,
       shall be deemed to constitute any representation or warranty by the
       Agent or any Agent-Related Person to any Lender.

23.9   Extensions of protection to Agent-Related Persons

       (A)    All the provisions of this clause 23 and of any other provision of
              this Agreement protecting or limiting the liability of an Agent,
              or exonerating it from liability or responsibility, which may
              enure to the benefit of an Agent shall also be deemed to

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<PAGE>

              be given for the benefit of the Co-ordinating Arranger and all
              Agent-Related Persons to whom they are capable of relating or in
              respect of whom they are capable of taking effect.

       (B)    For the avoidance of doubt, the guarantee, indemnity, exonerations
              and other protections in favour of the Agent, the Co-ordinating
              Arranger, the Lenders and the Agent-Related Persons contained in
              this Agreement and the other Finance Documents shall take effect
              in respect of all events, action and omissions occurring before
              the execution and completion of this Agreement as well as events,
              actions and omissions occurring on or after its execution and
              completion.

23.10  No duties

       Except as specifically provided in this Agreement, the Co-ordinating
       Arranger and the Lenders have no duties or responsibilities under or in
       connection with any Finance Document.

23.11  Accession Deeds and Subordination Deeds

       Each Lender:

       (A)    expressly authorises the Agent to execute on its behalf any Group
              Subordination Deed and any Third Party Subordination Deed and to
              undertake the obligations thereunder;

       (B)    agrees to take all and any steps necessary to enable the Agent to
              comply with its obligations under the documents referred to in
              paragraph (A) above; and

       (C)    agrees not to take or omit to take any action which could result
              in the Agent being in breach of any of its obligations thereunder.

24.    AMENDMENTS AND DECISIONS

24.1   Majority Lenders decisions

       Except as provided in clause 24.2 (Unanimous Consent), with the prior
       written consent of the Majority Lenders, the Agent and the Borrower may
       from time to time enter into written amendments, supplements or
       modifications to the Finance Documents (however fundamental) for the
       purpose of adding any provisions to the Finance Documents or changing
       in any manner the rights and/or obligations of all or any of the
       Parent, the Borrower, the Agent and the Lenders, and:

       (A)    the Agent may execute and deliver to the Parent or the Borrower a
              written instrument waiving prospectively or retrospectively, on
              such terms and conditions as the Agent may specify in such
              instrument, any of the requirements of any of the Finance
              Documents;

       (B)    the Agent may effect, on behalf of the Majority Lenders, an
              amendment or waiver to which they have agreed;

       (C)    the Agent may effect, on behalf of any Finance Party, any
              amendment or waiver permitted by this clause; and/or

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<PAGE>

       (D)    the Agent shall promptly notify the other Parties of any amendment
              or waiver effected under this clause and any such amendment or
              waiver shall be binding on all the parties.

24.2   Unanimous consent

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

              (1)    an increase or decrease in the amount of any Loan or a
                     lengthening or shortening of any Availability Period or any
                     amendment to the definition of the Final Repayment Date; or

              (2)    a reduction in the rate or rates of interest payable
                     hereunder or in the amount of or the due date for,
                     interest, fees or any other payment owing or to become
                     owing to any of the Lenders hereunder; or

              (3)    any provision relating to prepayment or scheduled payment
                     of principal or interest; or

              (4)    the definition of Majority Lenders or this clause; or

              (5)    the provisions of clause 26 (Sharing Among Lenders); or

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

              (7)    any condition precedent to the availability for drawing of
                     sums hereunder; or

              (8)    clause 2.2 (Finance Party's rights and obligations) or
                     clause 21 (Changes to the Lenders); or

              (9)    a change to the Borrower; or

              (10)   the currency in which any Loan is denominated.

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

       (B)    Regardless of any other provision in this Agreement, no waiver
              amendment, supplement or modification shall be effective without
              the consent of the Agent, the Co-ordinating Arranger or the
              Lenders (as the case may be) if any such waiver, amendment,
              supplement or modification would otherwise amend, modify or waive
              any of the rights of the Agent, the Co-ordinating Arranger or the
              Lenders (as the case may be) under any of the Finance Documents or
              (in each case) subject any of them to any additional obligations
              under such documents or amend any amount payable to them.

24.3   Costs

       If the Borrower requests any amendment, supplement, modification or
       waiver under clause 24.1 (Majority Lenders decisions), or clause 24.2
       (Unanimous Consent) then the Borrower shall, within five Business Days
       of demand by the Agent, reimburse the Agent for the account of itself
       and/or the respective party for all costs and expenses (including,
       without limitation, reasonable legal fees), incurred by the Agent in
       the negotiation, preparation and execution of any written instrument
       contemplated by clause 24.1 (Majority

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<PAGE>

       Lenders decisions) or clause 24.2 (Unanimous Consent).

24.4   Administrative determinations

       The Agent may determine purely administrative matters without reference
       to the Lenders.

24.5   Prior notice

       Where this Agreement provides for any matter to be determined by
       reference to the opinion of the Majority Lenders or to be subject to
       the consent or request of the Majority Lenders or for any action to be
       taken on the instructions of the Majority Lenders, such opinion,
       consent, request or instructions shall only be regarded as having been
       validly given or issued by the Majority Lenders if all the Lenders have
       been given three Business Days' prior notice of the matter on which
       such opinion, consent, request or instructions is sought but so that
       the Borrower shall be entitled (and bound), if so informed by the
       Agent, to assume that such notice has been duly received by each Lender
       and that the relevant majority has been obtained to constitute Majority
       Lenders whether or not this is the case.

24.6   Meaning of all Lenders

       Where this Agreement or any other Finance Document, provides for any
       matter to be determined by reference to the opinion of, or to be
       subject to the consent of or request of all of the Lenders or the
       Lenders acting unanimously or for any action to be taken on the
       instruction of all the Lenders, such opinion, consent, request or
       instructions shall (as between the Lenders) only be regarded as having
       been validly given or issued by all the Lenders (or the Lenders acting
       unanimously) if all the Lenders shall have received prior notice (the
       "Agent's Notice") of such matter containing a request for written
       instructions from such Lender to be received by the Agent within ten
       Business Days of the receipt of the Agent's Notice. If, in respect of a
       Lender, the Agent:

       (A)      shall not have received written instructions in respect of
                such matter from such Lender; and

       (B)      the Agent shall have received written instructions in respect
                of such matter from Lenders constituting the Majority Lenders,

       in each case within such time period, such Lender shall be deemed to
       have renounced and waived its right to make any such determination,
       approval, consent or provide instructions to the Agent in respect of
       such matter; shall not have any rights, recourse or remedy against the
       Agent in respect of such matter; and shall be bound (as shall the
       Borrower) by the determination, approval, consent or instructions of
       the other Lenders in respect of such matter. If the Agent gives written
       notice to the Borrower or any other Group Company that such unanimous
       consent has been obtained from all of the Lenders then the Borrower
       shall be entitled to assume that all the Lenders acted unanimously.

24.7   Lenders to act reasonably

       If any provision of any Finance Document is made subject to or requires
       the consent of the Agent and the Agent is required by such Finance
       Document to act reasonably when considering whether its consent should
       be granted, each of the Lenders agrees to act reasonably when the Agent
       seeks its instructions in respect of the granting of such consent.

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25.    RETIREMENT OF AGENT

25.1   Notice of resignation

       Subject to this clause 25, the Agent may (and, at the request of the
       Majority Lenders shall) give notice of its wish to resign at any time
       by giving at least 30 days' prior written notice to the Borrower and
       the other Finance Parties.

25.2   Appointment of successor

       If the Agent gives notice under clause 25.1 (Notice of resignation),
       then the Majority Lenders, after consultation with the Borrower, may in
       writing appoint a successor with an office in Hong Kong. If no such
       successor is appointed or has not accepted office within 30 days of the
       date of service of the notice of resignation as replacement Agent the
       Agent may, after consultation with the Borrower, appoint a successor
       for itself.

25.3   Provisions relating to successor

       (A)    Upon such appointment in writing and after execution by such
              successor of such documents as may be necessary to transfer and
              vest in the new Agent all the rights and obligations of the
              retiring Agent, the retiring Agent shall be discharged from any
              further obligations (but not, for the avoidance of doubt, from any
              liability which such party shall have actually incurred at the
              date of such retirement) under the Finance Documents (but shall
              remain entitled to the benefit of clause 23 (Agent)) and its
              successor and each of the other parties shall have the same rights
              and obligations amongst themselves as they would have had if such
              successor had been an original party to the Finance Documents; and

       (B)    the costs, charges and expenses of the resigning Agent shall be
              discharged if recoverable under the provisions of this Agreement.

25.4   Transfer to Affiliates

       Notwithstanding the above, the Agent may transfer its role to an
       Affiliate of the Agent without the need to obtain the consent of the
       Finance Parties, provided that the Agent gives at least 30 days notice
       of such transfer to the Borrower and the Finance Parties.

26.    SHARING AMONG LENDERS

26.1   Payments to Lenders

       If a Lender (a "Recovering Lender") receives or recovers any amount
       from the Borrower other than in accordance with clause 27 (Payment
       mechanics) and applies that amount to a payment due under the Finance
       Documents then:

       (A)    the Recovering Lender shall, within three Business Days, notify
              details of the receipt or recovery, to the Agent;

       (B)    the Agent shall determine whether the receipt or recovery is in
              excess of the amount the Recovering Lender would have been paid
              had the receipt or recovery been received or made by the Agent and
              distributed in accordance with clause 27 (Payment mechanics),
              without taking account of any Tax which would be imposed on the
              Agent in relation to the receipt, recovery or distribution; and

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       (C)    the Recovering Lender shall, within three Business Days of demand
              by the Agent, pay to the Agent an amount (the "Sharing Payment")
              equal to such receipt or recovery less any amount which the Agent
              determines may be retained by the Recovering Lender as its share
              of any payment to be made, in accordance with clause 27.5 (Partial
              payments).

26.2   Redistribution of payments

       The Agent shall treat the Sharing Payment as if it had been paid by the
       Borrower and distribute it between the Finance Parties (other than the
       Recovering Lender) in accordance with clause 27.5 (Partial payments).

26.3   Recovering Lender's rights

       (A)    On a distribution by the Agent under clause 26.2 (Redistribution
              of payments), the Recovering Lender will be subrogated to the
              rights of the Finance Parties which have shared in the
              redistribution.

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

26.4   Reversal of redistribution

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

       (A)    each Lender which has received a share of the relevant Sharing
              Payment pursuant to clause 26.2 (Redistribution of payments)
              shall, upon request of the Agent, pay to the Agent for account of
              that Recovering Lender an amount equal to its share of the Sharing
              Payment (together with an amount as is necessary to reimburse that
              Recovering Lender for its proportion of any interest on the
              Sharing Payment which that Recovering Lender is required to pay);
              and

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

26.5   Exceptions

       (A)    This clause 26 shall not apply to the extent that the Recovering
              Lender would not, after making any payment pursuant to this
              clause, have a valid and enforceable claim against the Borrower.

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

              (1)    it notified the other Lenders of the legal or arbitration
                     proceedings; and

              (2)    the other Lender had an opportunity to participate in those
                     legal or arbitration proceedings but did not do so as soon
                     as reasonably practicable having received notice or did not
                     take separate legal or arbitration proceedings.

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27.    PAYMENT MECHANICS

27.1   Payments to the Agent

              (A)    On each date on which a payment is due from the Borrower or
                     any Lender under this Agreement or any other Finance
                     Document, the Borrower or that Lender shall make such
                     payment to the Agent by 11:00 a.m. in immediately available
                     funds to such account of the Agent in Hong Kong in Hong
                     Kong Dollars as the Agent may have specified for this
                     purpose.

              (B)    Payments of principal, interest, default interest,
                     commitment fee, Taxes, Increased Costs, Unpaid Sums and
                     Break Costs shall be made in Hong Kong Dollars.

              (C)    Any payment of losses, costs, Taxes and expenses shall be
                     paid in the currency in which they were incurred.

27.2   Distributions by the Agent

       Each payment received by the Agent under the Finance Documents for
       another party shall, subject to clause 27.3 (Distributions to the
       Borrower) and clause 27.4 (Clawback) be made available by the Agent as
       soon as practicable after receipt to the party entitled to receive
       payment in accordance with this Agreement (in the case of a Lender, for
       the account of its Facility Office), to such account as that party may
       notify to the Agent by not less than five Business Days' notice being
       an account with a bank in the principal financial centre of the country
       of that currency.

27.3   Distributions to the Borrower

       The Agent may (with the consent of the Borrower or in accordance with
       clause 29 (Set-off)) apply any amount received by it for the Borrower
       in or towards payment (on the date and in the currency and funds of
       receipt) of any amount due from the Borrower under the Finance
       Documents or in or towards purchase of any amount of any currency to be
       so applied.

27.4   Clawback

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

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

27.5   Partial payments

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

                                       55
<PAGE>

              (1)    first, in or towards payment pro rata of any unpaid fees,
                     costs and expenses of the Agent under the Finance
                     Documents;

              (2)    secondly, in or towards payment pro rata of any accrued
                     interest or commission due but unpaid under this Agreement;

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

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

       (B)    The Agent shall, if so directed by the Majority Lenders, vary
              the order set out in sub-paragraphs (A)(2) to (4) above.

       (C)    Paragraphs (A) and (B) above will override any appropriation
              made by the Borrower.

27.6   No set-off by the Borrower

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

28.    PAYMENT OF TAXES AND RECOVERIES

28.1   Payment of Taxes

       The Agent shall be entitled to make the deductions and withholdings (on
       account of Taxes or otherwise) from payments to the Agent under the
       Finance Documents or any other Finance Party, which it is required by
       any applicable law to make and to pay all Taxes assessed against it by
       virtue of its capacity as agent or any act done by it in such capacity.

28.2   Application of recoveries

       All sums recovered by the Agent or any of the Lenders shall be applied
       as follows:

       (A)    first, to pay to the Agent the amount of any fees due from the
              Borrower and in addition such sums as shall be necessary to
              reimburse the Agent for all costs (including legal costs), charges
              and expenses properly incurred by it in its capacity as such under
              or in connection with the Finance Documents and to indemnify it
              fully against any obligations or liabilities incurred by it in its
              capacity as Agent; and

       (B)    second, in accordance with the provisions of clause 27.5(A)
              (Partial payments).

                                       56
<PAGE>

                             PART 9: MISCELLANEOUS

29.    SET-OFF

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

30.    CONDUCT OF BUSINESS BY THE FINANCE PARTIES

       No provision of this Agreement will:

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

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

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

31.    NOTICES

31.1   Communications through the Agent

       Save as expressly provided to the contrary in this Agreement, any
       communication or document from or to any Finance Party from or to any
       other party to this Agreement shall be sent in writing to or through
       the Agent.

31.2   Addresses

       Any notices, demands, proceedings or other documents made in writing to
       be sent to any party to this Agreement under this Agreement shall be
       addressed to such party at the address or facsimile number and marked
       for the attention of the person (if any) from time to time designated
       by that party in writing to the Agent (or, in the case of the Agent, by
       it to each other party to this Agreement) for the purpose of this
       Agreement. The initial address and facsimile number and person(s) (if
       any) so designated by each party are set out under its name at the end
       of this Agreement. The initial address and facsimile number and
       person(s) (if any) so designated by a New Lender are those set out at
       the end of the relevant Transfer Certificate.

31.3   Deeming provisions

       (A)    Any communication to the Borrower or to any Finance Party shall be
              deemed to have been received by that Borrower or that Finance
              Party:

              (1)    if delivered by hand, at the time of actual delivery;

              (2)    if transmitted by facsimile, at the time the facsimile
                     transmission report (or other appropriate evidence)
                     confirming that the facsimile transmission has

                                       57
<PAGE>

                     been transmitted to the addressee is received by the
                     sender; and

              (3)    if sent by post at noon on the second Business Day (in the
                     case of an address in Hong Kong) or the fifth Business Day
                     (in the case of an address outside Hong Kong) following the
                     day of posting and shall be effective even if it is
                     misdelivered or returned undelivered.

              In proving such service it shall be sufficient to prove that
              personal delivery was made, or that the envelope containing the
              communication Swas correctly addressed and posted, or that a
              facsimile transmission report (or other appropriate evidence) was
              obtained that the facsimile had been transmitted to the addressee.

       (B)    Any communication to the Agent shall be deemed to have been given
              only on actual receipt by the Agent.

32.    CALCULATIONS AND CERTIFICATES

32.1   Accounts

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

32.2   Certificates and determinations

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

32.3   Day count convention

       Any interest, commission or fee accruing under a Finance Document will
       accrue from day to day and is calculated on the basis of the actual
       number of days elapsed and a year of 365 days.

33.    PARTIAL INVALIDITY

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

34.    REMEDIES AND WAIVERS

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

                                       58
<PAGE>

35.    COUNTERPARTS

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

                     PART 10: GOVERNING LAW AND ENFORCEMENT

36.    GOVERNING LAW

       This Agreement is governed by and construed in accordance with the Laws
       of Hong Kong.

37.    ENFORCEMENT

       Jurisdiction of Hong Kong courts:

       (A)    The courts of Hong Kong have exclusive jurisdiction to settle any
              dispute arising out of or in connection with this Agreement
              (including a dispute regarding the existence, validity or
              termination of this Agreement) (a "Dispute").

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

       (C)    This clause 37 is for the benefit of the Finance Parties only. As
              a result, no Finance Party shall be prevented from taking
              proceedings relating to a Dispute in any other courts with
              jurisdiction. To the extent allowed by law, the Finance Parties
              may take concurrent proceedings in any number of jurisdictions.

                                       59
<PAGE>

                       SCHEDULE 1: THE ORIGINAL LENDER

Name of the Original Lender                                    Commitment (HK$)
---------------------------                                    ----------------

Industrial and Commercial Bank of China (Asia) Limited
                                                                  2,000,000,000
                                                                  -------------
                                                TOTAL:            2,000,000,000
                                                                  =============

                                       60
<PAGE>

                  SCHEDULE 2: CONDITIONS PRECEDENT (clause 4.1)

1.     Borrower Corporate Documents

       (A)    Certified copies of the certificate of incorporation, certificate
              of incorporation on change of name (if any) and up-to-date
              memorandum and articles of association of the Borrower.

       (B)    A certified copy of a resolution (or an extract thereof) of the
              board of directors of the Borrower:

              (1)    approving the terms of, and the transactions contemplated
                     by, the Finance Documents to which it is a party and
                     resolving that it executes the Finance Documents to which
                     it is a party;

              (2)    authorising a specified person or persons to execute the
                     Finance Documents to which it is a party on its behalf; and

              (3)    authorising a specified person or persons, on its behalf,
                     to sign and/or despatch all documents and notices
                     (including any Drawdown Notice) to be signed and/or
                     despatched by it under or in connection with the Finance
                     Documents to which it is a party.

       (C)    A specimen of the signature of each person authorised by the
              resolution referred to in paragraph (B) above.

       (D)    The Original Financial Statements.

       (E)    A certificate signed by an authorised signatory of the Borrower to
              the effect that :

              (1)    the resolution in paragraph (B) has been duly and properly
                     passed and is attached;

              (2)    such resolution is still in effect and has not been varied
                     or rescinded; and

              (3)    borrowing the Total Commitments would not cause any
                     borrowing or similar limit binding on the Borrower to be
                     exceeded.

2.     Legal opinion

       (A)    A legal opinion of Lovells, legal advisers to the Finance Parties,
              addressed to the Agent (for and on behalf of itself and the
              Lenders), as to Hong Kong Law, substantially in the form
              distributed to such parties prior to signing this Agreement which
              will include customary assumptions and reservations.

       (B)    A legal opinion of Simmons & Simmons, legal advisers to the
              Borrower, addressed to the Agent (for and on behalf of itself and
              the Lenders), as to Hong Kong Law, substantially in the form
              distributed to such parties prior to signing this Agreement which
              will include customary assumptions and reservations.

                                       61
<PAGE>

3.     Other documents and evidence

       (A)    The Fee Letter duly executed by the Borrower.

       (B)    The fees, costs and expenses then due from the Borrower
              pursuant to clause 10 (Fees) and clause 15 (Costs and
              expenses) have been paid.

       (C)    Executed copies of each Finance Document.

       (D)    A list of Encumbrances in existence on or prior to the date of
              this Agreement created by the Borrower or any Principal
              Subsidiary (other than the Listed Principal Subsidiaries and
              their Subsidiaries) executed by an authorised signatory of the
              Borrower.

                                       62
<PAGE>

                 SCHEDULE 3: DRAWDOWN NOTICE (clause 4.2(A))

From:  PCCW-HKT Telephone Limited

To:    Industrial and Commercial Bank of China (Asia) Limited (as Agent)
       10/F, 122-126 Queen's Road Central
       Hong Kong

       Attn: Esther Cheng / Amy Wong, Loans Processing Dept.

                                                                     Date: [o]

Dear Sirs

HK$2,000,000,000 Revolving Loan Facility Agreement dated 22 December 2003 with
PCCW-HKT Telephone Limited as borrower (the "Facility Agreement")

We refer to the Facility Agreement (as the same may from time to time be
amended, varied, supplemented, restated or novated). Terms defined in the
Facility Agreement shall have the same meanings when used in this notice.

We:

(a)    give you notice that we request for an advance under the Facility in an
       amount of HK$[insert amount] (or if less, the Available Facility) on
       [insert date];

[(b)   request that the proceeds of such advance are to be made available by
       credit directly to the following account:

       [o]] *

(c)    confirm that the Interest Period of such advance shall be
       [one/two/three/six/longer period]* Month(s) [provided that, if this
       request for a 6 month or longer period is not accepted by the Lenders,
       we shall be deemed to have requested an Interest Period of
       [one/two/three]* Month(s) being the Fallback Period]; *

(d)    confirm that the representations and warranties referred to and deemed
       to be repeated in accordance with clause 16.18 (Repetition) of the
       Facility Agreement are true and accurate as if made on the date of this
       notice with reference to the facts and circumstances now existing;

(e)    confirm that no [Event of Default/Default]* is Continuing or would
       result from the making of such advance; and

(f)    [confirm that no Material Adverse Change has occurred since the date of
       the Facility Agreement or, if later, the date of the latest Financial
       Statements delivered to you pursuant to clause 17.1 (Financial
       Statements) of the Facility Agreement.]*

This Drawdown Notice is irrevocable and is governed by Hong Kong law.

Yours faithfully

For and on behalf of
PCCW-HKT Telephone Limited

........................................
Name:
Title:
* delete if not applicable

                                       63
<PAGE>

               SCHEDULE 4: FORM OF TRANSFER CERTIFICATE (clause 21.5)

To:    Industrial and Commercial Bank of China (Asia) Limited (as Agent)
       10/F, 122-126 Queen's Road Central
       Hong Kong

       Attn: Esther Cheng / Amy Wong, Loans Processing Dept.

From:    [The  Existing  Lender] (the  "Existing  Lender") and [The New Lender]
         (the "New Lender")

Date:    [o]

Dear Sirs

HK$2,000,000,000 Revolving Loan Facility Agreement dated 22 December 2003 with
PCCW-HKT Telephone Limited as borrower (the "Facility Agreement")

We refer to the Facility Agreement (as the same may from time to time be
amended, varied, supplemented, restated or novated). Terms defined in the
Facility Agreement shall have the same meanings when used in this notice.

1.     We refer to clause 21.5 (Procedure for transfer) of the Facility
       Agreement:

       (A)    The Existing Lender and the New Lender agree to the Existing
              Lender and the New Lender transferring by novation all or part of
              the Existing Lender's Commitment, rights and obligations referred
              to in the Schedule in accordance with clause 21.5 (Procedure for
              transfer).

       (B)    The proposed Transfer Date is [o].

       (C)    The Facility Office and address, fax number and attention details
              for notices of the New Lender for the purposes of clause 31.2
              (Addresses) are set out in the Schedule.

2.     The New Lender expressly acknowledges the limitations on the Existing
       Lender's obligations set out in paragraph (C) of clause 21.4
       (Limitation of responsibility of Existing Lenders) and the provisions
       regarding outstanding waivers and consents in sub-paragraph (B)(4) of
       clause 21.4.

3. This transfer Certificate is governed by Hong Kong law.

                                       64
<PAGE>

                                THE SCHEDULE

                 Details of Participation to be transferred

Transfer Details                            :
Interest Period(s)                          :        [o]
Participation Transferred
Commitment Transferred
         Drawn Amount                       :        [o]
         Undrawn Amount                     :        [o]

                      Administrative Details of New Lender

Name of New Lender:

Facility Office:

Address for service of notices (if different):

Account for payments:

Telephone:

Telex:

Facsimile:

Attention:

Date: ______________________________         Date: _____________________________

SIGNED by ___________________________        SIGNED by _________________________
For and on behalf of [Existing Lender]       For and on behalf of [New Lender]

Date: ______________________________

SIGNED by___________________________
For and on behalf of the Agent and all
the other parties to the Facility
Agreement

                                       65
<PAGE>

           SCHEDULE 5: FORM OF ASSIGNEE'S UNDERTAKING (clause 21.2(A))

To:    (1)  Industrial and Commercial Bank of China (Asia) Limited (as Agent)
            10/F, 122-126 Queen's Road Central
            Hong Kong

            Attn: Esther Cheng / Amy Wong, Loans Processing Dept.

       (2)  PCCW-HKT Telephone Limited
            39th Floor, PCCW Tower
            TaiKoo Place
            979 King's Road
            Quarry Bay
            Hong Kong

            Attention: Company Secretary

                                                                     Date: [o]

                           Assignee's Undertaking

This Assignee's Undertaking relates to a facility agreement (the "Agreement",
which expression shall include any amendments to it in force from time to time)
dated 22 December 2003 between PCCW-HKT Telephone Limited as Borrower and
Industrial and Commercial Bank of China (Asia) Limited as Agent, Co-ordinating
Arranger and Original Lender. Terms defined in the Agreement shall have the same
meanings in this Assignee's Undertaking.

1.     [*insert name of Assignor Bank*] (the "Assignor")

       (a)    confirms that the details appearing in the attached Schedule are
              correct; and

       (b)    assigns to [*insert name of Assignee Bank*] (the "Assignee") the
              portion of the Loan(s) specified in the attached Schedule by
              countersigning and delivering this Assignee's Undertaking to the
              Agent at its address for the service of notice specified in the
              Agreement.

2.     The Assignee requests the Agent to accept this Assignee's Undertaking
       as being delivered under and for the purpose of paragraph (B) of clause
       21.2 of the Agreement so as to take effect in accordance with the terms
       of such clause on [*insert date of assignment*] (the "Assignment Date")
       [or on such later date as may be determined in accordance with its
       terms].

3.     The Assignee undertakes to the Agent, the Assignor and each of the
       other parties to the Agreement that it will be bound by the terms of
       the Finance Documents as a Lender after delivery of this Assignee's
       Undertaking to the Agent and after satisfaction of the conditions (if
       any) subject to which this Assignee's Undertaking is expressed to take
       effect.

4.     The Assignee shall be substituted for the Assignor in respect of all of
       the rights of the Assignor under Finance Documents and have the same
       rights against the Borrower as it would have had if it had been an
       original party to the Agreement.

5.     The Assignee confirms that:

                                       66
<PAGE>

       (a)    it has received copies of the Finance Documents and all other
              documentation and information required by the Assignee in
              connection with the transactions contemplated by this
              Assignee's Undertaking;

       (b)    it has made and will continue to make its own assessment of
              the adequacy, legality, enforceability and validity of the
              Finance Documents and this Assignee's Undertaking and has not
              relied and will not rely on the Agent or any statements made
              by it in that respect;

       (c)    it has made and will continue to make its own credit
              assessment of the Borrower and the other parties to the
              Finance Documents and has not relied and will not rely on the
              Agent or any statements made by the Agent in that respect; and

       (d)    the Agent shall not have any liability or responsibility to
              the Assignee in respect of any of the foregoing matters.

6.     The Assignor makes no representation or warranty and assumes no
       responsibility with respect to the adequacy, legality, enforceability
       or validity of any Finance Document and assumes no responsibility for
       the financial condition of the Borrower or any other party to any
       Finance Document or for the performance and observance by the Borrower
       or any other such party of any of its obligations under any Finance
       Document and all such conditions and warranties, whether expressed or
       implied by law or otherwise, are excluded.

7.     Nothing in this Assignee's Undertaking, any Finance Document obliges
       the Assignor to:

       (a)      accept a re-assignment from the Assignee of any of the rights
                and/or obligations assigned, transferred or novated under
                clause 21 (Changes to the Lenders) of the Agreement; or

       (b)      support any losses incurred by the Assignee by reason of the
                non-performance by the Borrower of any of its obligations
                under any Finance Document or otherwise.

8.     This Assignee's Undertaking and the rights and obligations of the
       parties under it shall be governed by and construed in accordance with
       the law of Hong Kong.

Note:  This Assignee's Undertaking is not a security, bond, note, debenture,
       investment or other similar instrument.

AS WITNESS the hands of the authorised signatories of the parties the day and
year first above written.

                                       67
<PAGE>

                       SCHEDULE TO ASSIGNEE'S UNDERTAKING

                     Details of Participation to be assigned

Assignment Details                            :
Interest Period(s)                            :      [o]
Amount of Participation Assigned              :      [o]

                       Administrative Details of Assignee

Name of Assignee:

Facility Office:

Address for service of

notices (if different):

Account for payments:

Telephone:

Facsimile No:

Attention:

Dated: ..........................              Dated: ..........................

SIGNED by .......................              SIGNED by........................
for and on behalf of                           for and on behalf of
[*Assignor Bank*]                              [*Assignee Bank*]

                                       68
<PAGE>

             SCHEDULE 6: FORM OF CONFIDENTIALITY UNDERTAKING (clause 21.9)

PCCW-HKT Telephone Limited
39th Floor, PCCW Tower
TaiKoo Place
979 King's Road
Quarry Bay
Hong Kong

Attention: Company Secretary

                                                                     Date: [o]

Dear Sirs

HK$2,000,000,000 Revolving Loan Facility Agreement dated 22 December 2003 with
PCCW-HKT Telephone Limited as borrower (the "Facility Agreement")

We refer to the above Facility Agreement, a copy of which has been (or will be
upon execution of this Undertaking) provided to us. Capitalised terms used
herein and not otherwise defined shall have the same meaning as in the Facility
Agreement. We may from time to time have access to a number of agreements and
other non-public, confidential proprietary information regarding the
Borrower/Borrower Group and the Facility (the "Confidential Information").

In consideration of your supplying or agreeing to the supply of, such
Confidential Information to us, by signature of this letter we undertake:

1.     (a)    to hold and ensure that our officers, employees and agents
              hold the Confidential Information whether received in written,
              diskette or electronic medium, in complete confidence and not
              disclose or otherwise make available the whole or any part of the
              Confidential Information to any third party;

       (b)    upon written demand from you, to:

              (i)    return the Confidential Information and any copies of it to
                     you; or

              (ii)   confirm to you in writing that it has been destroyed,

              save that we shall be permitted to retain one copy of the
              Confidential Information for legal, regulatory, compliance or
              internal records purpose and we undertake to keep such information
              confidential on the terms of this letter.

2.     Subject to paragraph 1 above, we shall be entitled to disclose the
       Confidential Information:

       (a)    to any affiliate, subsidiary or outside professional
              consultant in connection with the Facility but only after
              first obtaining an agreement of confidentiality in similar
              form to this letter from such affiliate, subsidiary or
              consultant;

       (b)    where we are required to disclose the Confidential Information
              by law or any regulatory or governmental authority.

                                       69
<PAGE>

3.     Nothing in paragraphs 1(a) and (b) of this letter shall apply to any
       Confidential Information which:

       (a)    at the time of its disclosure is in the public domain or comes
              into the public domain for any reason except our failure, or
              failure on the part of any disclosee, to comply with the terms
              of this letter;

       (b)    is disclosed on a non-confidential basis;

       (c)    was lawfully in our possession prior to such disclosure; or

       (d)    is subsequently received by us from a third party without
              obligations of confidentiality.

4.     We acknowledge and agree that you may be irreparably harmed by the
       breach of the terms of this letter and that damages may not be an
       adequate remedy.

5.     Our obligations under this letter shall terminate at such time as we
       become a party to the Facility Agreement and bound by the terms
       thereof.

This letter shall be governed by Hong Kong law.

Yours faithfully
For and on behalf of

---------------------------
[Authorised Signatory]
[Title]

                                       70
<PAGE>

              SCHEDULE 7: FORM OF COMPLIANCE CERTIFICATE (clause 17.2(D))

To:    Industrial and Commercial Bank of China (Asia) Limited (as Agent)
       10/F, 122-126 Queen's Road Central
       Hong Kong

       Attn: Esther Cheng / Amy Wong, Loans Processing Dept.

                                                                     Date: [o]

HK$2,000,000,000 Revolving Loan Facility Agreement dated 22 December 2003 with
PCCW-HKT Telephone Limited as borrower (the "Facility Agreement")

We refer to the Facility Agreement (as the same may from time to time be
amended, varied, supplemented, restated or novated). Terms defined in the
Facility Agreement shall have the same meanings when used in this certificate.

Financial Covenants

We confirm that, in respect of the Relevant Period from [o] to [o]:

(A)    EBITDA was HK$[o];

(B)    Total Debt of the Borrower Group as at the last day of the Relevant
       Period was HK$[o];

(C)    Interest for the Relevant Period was HK$[o]; and

(D)    therefore:

       (1)    the ratio of EBITDA to Interest for such Relevant Period was
              [o] to 1; and

       (2)    the ratio of Total Debt of the Borrower Group to EBITDA for
              such Relevant Period was [o] to 1.

...........................................
For and on behalf of [name of auditors]* /
PCCW-HKT Telephone Limited

* delete as appropriate

                                       71
<PAGE>

AS WITNESS the hands of the duly authorised representatives of the parties on
the date first above written.

                                   SIGNATORIES

THE BORROWER

PCCW-HKT TELEPHONE LIMITED

39th Floor
PCCW Tower
TaiKoo Place
979 King's Road
Quarry Bay
Hong Kong

Facsimile No:  (852) 2962 5725  (copy (852) 2521 5979)

Attention:     Company Secretary / Group Treasurer

By:            (Sd)  W. Michael Verge

               (Sd)  Winnie Chow

THE CO-ORDINATING ARRANGER AND THE ORIGINAL LENDER

INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED

10/F, 122-126 Queen's Road Central
Hong Kong

Facsimile No:  (852) 2851 9361

Attention:     Esther Cheng / Amy Wong, Loans Processing Dept.

By:            (Sd)   Wilson Wan

               (Sd)   Marco Leung

                                       72
<PAGE>

THE AGENT

INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED

10/F, 122-126 Queen's Road Central
Hong Kong

Facsimile No:  (852) 2851 9361

Attention:     Esther Cheng / Amy Wong, Loans Processing Dept.

By:            (Sd)     Wilson Wan

               (Sd)     Marco Leung

                                       73EXHIBIT 4(kk)

                               Dated 5 March 2004

                                  PCCW LIMITED

                                      and

                         DONG FANG GAS HOLDINGS LIMITED

                          SALE AND PURCHASE AGREEMENT

   relating to the sale and purchase of the whole of the issued share capital
                                       of
                            Ipswich Holdings Limited
                                and other assets

Linklaters

10th Floor, Alexandra House
Chater Road
Hong Kong

Telephone (852) 2842 4888
Facsimile (852) 2810 8133/2810 1695

<PAGE>

                          Sale and Purchase Agreement

This Agreement is made on 5 March 2004

Between:

(1)      PCCW LIMITED, a company incorporated in Hong Kong whose registered
         office is at 39/F, PCCW Tower, TaiKoo Place, 979 King's Road, Quarry
         Bay, Hong Kong (the "Seller"); and

(2)      DONG FANG GAS HOLDINGS LIMITED, a company incorporated in Bermuda with
         limited liability whose registered office is at Clarendon House, 2
         Church Street, Hamilton HM11 Bermuda and whose principal place of
         business in Hong Kong is at 9th Floor, Paul Y Centre, 51 Hung To Road,
         Kwun Tong, Kowloon, Hong Kong (the "Purchaser").

Whereas:

(A)      The Seller has agreed to sell (or procure the sale of) the Sale Shares
         and the Sale Assets and to assume the obligations imposed on the
         Seller under this Agreement.

(B)      The Purchaser has agreed to purchase the Sale Shares and the Sale
         Assets from the Seller and to assume the obligations imposed on the
         Purchaser under this Agreement.

It is agreed as follows:

1        Interpretation

         In this Agreement and the Recitals, unless the context otherwise
         requires, the provisions in this Clause 1 apply:

1.1      Definitions

         "Accounts" means the unaudited combined accounts of the Group for the
         twelve month period ended on the Accounts Date;

         "Accounts Date" means 31 December 2002;

         "Agreed Terms" means, in relation to a document, such document in the
         terms agreed between the Seller and the Purchaser and signed for
         identification by the Purchaser's Lawyers and the Seller's Lawyers
         (with such alterations as may be agreed in writing between the Seller
         and the Purchaser from time to time);

         "Business Day" means a day which is not a Saturday, Sunday or a public
         holiday in Hong Kong;

         "Capital Reorganisation" means the reduction of the nominal value of
         each Existing Issuer's Share in issue, the 10:1 share consolidation,
         the cancellation of each unissued Existing Issuer's Share and the
         cancellation of the share premium account of the Purchaser, as
         contemplated in the Condition Precedent set out in Clause 4.1.1;

         "Certificates" means the relevant certificates to be issued in respect
         of the Tranche A Note and the Tranche B Note substantially in the form
         set out in Schedule 8;

         "Charts" means the corporate charts of the Group which are attached to
         the Seller's Disclosure Letter;

         "Companies Ordinance" means the Companies Ordinance (Cap. 32 of the
         Laws of Hong Kong);

                                       1
<PAGE>

         "Company" means Ipswich Holdings Limited, details of which are set
         out in paragraph 1 of Schedule 1;

         "Completion" means the completion of the sale of the Sale Shares and
         the Sale Assets pursuant to Clause 6 of this Agreement;

         "Completion Date" means the date on which Completion takes place;

         "Confidentiality Agreement" means the confidentiality agreement dated
         21 February 2004 between the Seller and the Buyer pursuant to which
         the parties made available to each other certain confidential
         information relating to the Group and the Purchaser's Group;

         "Consent" includes any licence, consent, approval, authorisation,
         permission, waiver, order or exemption;

         "Conditions" means the terms and conditions to be attached to the
         Certificate substantially in the form set out in Schedule 8 (with such
         amendments thereto as the Purchaser and the Seller may agree), and
         "Condition" refers to the relative numbered paragraph of the
         Conditions;

         "Conditions Precedent" means the conditions precedent to this
         Agreement set out in Clause 4.1;

         "Consideration" means the consideration for the transfer of the Sale
         Shares and the Sale Assets pursuant to Clause 3.1 in the aggregate
         amount of HK$6,557 million, which shall be satisfied in accordance
         with Clause 3;

         "Consideration Shares" means the 1,648,333,333 New Shares to be
         allotted and issued to the Seller to satisfy part of the Consideration
         payable by the Purchaser to the Seller pursuant to Clause 3;

         "Conversion Date" means any date on which the Conversion Rights (or
         any of them) are exercised in accordance with the Conditions;

         "Conversion Price" means HK$2.25 per New Share and HK$3.60 per New
         Share in respect of the Tranche A Note and the Tranche B Note
         respectively (subject to adjustments pursuant to the Conditions);

         "Conversion Rights" means the rights attached to the Convertible Notes
         to convert the principal amount (or any part thereof) thereof into New
         Shares;

         "Conversion Shares" means the New Shares to be issued by the Purchaser
         upon exercise by the Noteholder of the Conversion Rights, and a
         "Conversion Share" shall be construed accordingly;

         "Convertible Notes" means the Tranche A Note and the Tranche B Note;

         "Developer" means Cyber-Port Limited, which will be a wholly-owned
         subsidiary in the Group after the Restructuring and immediately before
         Completion;

         "Development Right" means the future rights (if any) of the Exchange
         Company (or, if applicable, another member of the Seller's Group) to
         redevelop the Telecom Exchanges;

         "Encumbrance" means any claim, charge, mortgage, lien, option, equity,
         power of sale, hypothecation, retention of title, right of
         pre-emption, right of first refusal or other third party right or
         security interest of any kind or an agreement, arrangement or
         obligation to create any of the foregoing;

                                       2
<PAGE>

         "Equity Share Capital" means (for the purposes of the Conditions) the
         issued share capital of the Purchaser excluding any part thereof which
         does not either as respects dividends or as respects capital carry any
         right to participate beyond a specified amount or beyond an amount
         calculated by reference to a specified rate in a distribution;

         "Exchange Company" means PCCW-HKT Telephone Limited, being a
         wholly-owned subsidiary of the Seller;

         "Exchange Developer" means Smart Phoenix Limited, which will be a
         wholly-owned subsidiary in the Group after the Restructuring and
         immediately before Completion;

         "Executive" means the Executive Director of the Corporate Finance
         Division of the Securities and Futures Commission or any delegate for
         the time being of the Executive Director;

         "Existing Issuer's Shares" means the ordinary shares of HK$0.40 each
         in the share capital of the Purchaser;

         "Group" means the Group Companies, taken as a whole, after the
         Restructuring;

         "Group Companies" means the Company and the Subsidiaries, and "Group
         Company" means any one of them;

         "HK$" or "Hong Kong Dollars" means Hong Kong dollars, the lawful
         currency of Hong Kong;

         "Hong Kong" means the Hong Kong Special Administrative Region of the
         PRC;

         "Intellectual Property" means trade marks, service marks, trade names,
         domain names, logos, get-up, patents, inventions, registered and
         unregistered design rights, copyrights, semi-conductor topography
         rights, database rights and all other similar rights in any part of
         the world (including Know-how) including, where such rights are
         obtained or enhanced by registration, any registration of such rights
         and applications and rights to apply for such registrations;

         "Issuer's Shares" means the ordinary shares of HK$0.10 each in the
         share capital of the Purchaser;

         "JV" means a joint venture between the Exchange Developer and the
         Exchange Company (or, if applicable, another member of the Seller's
         Group) to redevelop each relevant Telecom Exchange if and when that
         company obtains that Development Right in the future;

         "Know-how" means confidential and proprietary industrial and
         commercial information and techniques in any form including (without
         limitation) drawings, formulae, test results, reports, project reports
         and testing procedures, instruction and training manuals, tables of
         operating conditions, market forecasts, lists and particulars of
         customers and suppliers;

         "Listing Rules" means the Rules Governing the Listing of Securities on
         the Stock Exchange;

         "Loan Assignment" means the loan assignment in respect of the Loans
         set out in Annexure A;

         "Loans" means some of the shareholder loans owing or to be owed by the
         relevant Group Companies to the Seller, details of which are set out
         in the Loan Assignment;

         "Losses" means all losses, liabilities, costs (including without
         limitation legal costs and experts' and consultants' fees), charges,
         expenses, actions, proceedings, claims and demands;

                                       3
<PAGE>

         "Management Accounts" means the unaudited combined accounts of the
         Group drawn up to 31 December 2003 (the "Management Accounts Date");

         "material subsidiary" means (for the purposes of the Conditions) any
         subsidiary of the Issuer whose gross revenue exceeds 10% of the
         Purchaser's consolidated gross revenue or whose gross assets exceed
         10% of the Purchaser's consolidated gross assets, as shown in the
         Purchaser's latest consolidated audited accounts at the time of such
         determination;

         "New Shares" means new Reorganised Issuer's Shares;

         "Noteholder" means a registered holder of any Convertible Note;

         "PRC" means the People's Republic of China;

         "Properties" means the properties set out in Parts 1 and 2 of Schedule
         3, and "Property" means any one of them;

         "Project Agreement" means the project agreement relating to the
         Cyberport project dated 17 May 2000 between the Seller, the Developer,
         Hong Kong Cyberport Development Holdings Limited, Hong Kong Cyberport
         Management Company Limited and Hong Kong Cyberport (Ancillary
         Development) Limited;

         "Purchaser" means the Purchaser, further details of which are set out
         in paragraph 1 of Schedule 2;

         "Purchaser's Accounts" means the audited consolidated accounts of the
         Purchaser's Group for the twelve month period ended on the Purchaser's
         Accounts Date;

         "Purchaser's Accounts Date" means 31 March 2003;

         "Purchaser's Chart" means the corporate chart of the Purchaser's Group
         which is attached to the Purchaser's Disclosure Letter;

         "Purchaser's Disclosure Letter" means the letter dated on the same
         date as this Agreement from the Purchaser to the Seller disclosing:

         (i) information constituting exceptions to the Purchaser's Warranties;
             and

         (ii) details of other matters referred to in this Agreement;

         "Purchaser's Group" means the Purchaser's Group Companies, taken as a
         whole;

         "Purchaser's Group Companies" means the Purchaser and the Purchaser's
         Subsidiaries, and "Purchaser's Group Company" means any one of them;

         "Purchaser's Lawyers" means Richards Butler of 20/F, Alexandra House,
         16-20 Chater Road, Central, Hong Kong;

         "Purchaser's Management Accounts" means the unaudited interim accounts
         relating to the Purchaser's Group drawn up to 30 September 2003 (the
         "Purchaser's Management Accounts Date");

         "Purchaser's Properties" means the properties set out in Parts 1 and 2
         of Schedule 4, and "Purchaser's Property" means any one of them;

         "Purchaser's Subsidiaries" means the subsidiaries listed in paragraph
         2 of Schedule 2, and "Purchaser's Subsidiary" means any one of them;

                                       4
<PAGE>

         "Purchaser's Warranties" means the warranties and representations
         given by the Purchaser pursuant to Clause 8.4 and Schedule 7, and
         "Purchaser's Warranty" means any one of them;

         "Queen's Road Exchange" means the building(s) and erection(s) at Ko
         Shing Street and Wo Fung Street erected on Subsection 3 of Section F
         of Marine Lot No.58, Subsection 5 of Section F of Marine Lot No.58,
         The Remaining Portion of Section F of Marine Lot No.58, Subsection 2
         of Section F of Marine Lot No.58 and Subsection 1 of Section C of
         Marine Lot No.58;

         "Reduced Issuer's Shares" means shares of HK$0.01 each in the share
         capital of the Purchaser immediately after the cancellation of HK$0.39
         of capital paid up on each issued Existing Issuer's Share;

         "Reorganised Issuer's Shares" means the Issuer's Shares of HK$0.10
         each after completion of the Capital Reorganisation;

         "Restructuring" means the restructuring of the Group before Completion
         as described in the Seller's Disclosure Letter;

         "S&P Agreement" means the sale and purchase agreement in respect of
         the Queen's Road Exchange set out in Annexure B;

         "Sale Assets" means the Loans and the Queen's Road Exchange;

         "Sale Shares" means the two ordinary shares of US$1.00 each in the
         issued capital of the Company, being the whole of the issued share
         capital of the Company;

         "Seller's Disclosure Letter" means the letter dated on the same date
         as this Agreement from the Seller to the Purchaser disclosing:

         (i) information constituting exceptions to the Seller's Warranties;
             and

         (ii) details of other matters referred to in this Agreement;

         "Seller's Group" means the Seller and its subsidiaries;

         "Seller's Lawyers" means Linklaters of 10th Floor, Alexandra House,
         Chater Road, Hong Kong;

         "Seller's Warranties" means the warranties and representations given
         by the Seller pursuant to Clause 8.1 and Schedule 6, and "the Seller's
         Warranty" means any one of them;

         "Senior Employee" means any employee employed or engaged in relation
         to the Group on an annual salary (on the basis of full-time
         employment) in excess of HK$3,000,000;

         "Senior Purchaser Employee" means any employee employed or engaged in
         relation to the Purchaser's Group on an annual salary (on the basis of
         full-time employment) in excess of HK$1,000,000;

         "Stock Exchange" means The Stock Exchange of Hong Kong Limited;

         "Subsidiaries" means the subsidiaries listed in paragraph 2 of
         Schedule 1, and "Subsidiary" means any one of them;

         "Takeovers Code" means the Hong Kong Code on Takeovers and Mergers;

         "Taxation" or "Tax" means all forms of taxation whether direct or
         indirect and whether levied by reference to income, profits, gains,
         net wealth, asset values, turnover, added value or other reference and
         statutory, governmental, state, provincial, local governmental or
         municipal

                                       5
<PAGE>

         impositions, duties, contributions, rates and levies (including
         without limitation social security contributions and any other payroll
         taxes), whenever imposed (whether imposed by way of a withholding or
         deduction for or on account of tax or otherwise) and in respect of any
         person and all penalties, charges, costs and interest relating
         thereto;

         "Tax Authority" means any taxing or other authority (in Hong Kong, the
         PRC and the British Virgin Islands) competent to impose any liability
         in respect of Taxation or responsible for the administration and/or
         collection of Taxation or enforcement of any law in relation to
         Taxation;

         "Telecom Exchanges" means the premises which are mostly held at
         present under private treaty grants from the Hong Kong Government and
         used by the Exchange Company primarily for the purpose of allowing
         telephone lines to be connected to one another for the provision of
         telecommunications services to the public (excluding the Queen's Road
         Exchange);

         "Tranche A Note" means the Tranche A convertible note in the principal
         sum of HK$1,170 million to be issued by the Purchaser to the Seller in
         accordance with the terms and conditions of this Agreement;

         "Tranche B Note" means the Tranche B convertible note in the principal
         sum of HK$2,420 million to be issued by the Purchaser to the Seller in
         accordance with the terms and conditions of this Agreement;

         "US" means the United States of America;

         "US$" means United States dollars, the lawful currency of the US.

1.2      Modification etc. of Ordinances

         References to an ordinance or statutory provision include:

         1.2.1    that ordinance or provision as from time to time modified,
                  re-enacted or consolidated whether before or after the date
                  of this Agreement;

         1.2.2    any past ordinance or statutory provision (as from time to
                  time modified, re-enacted or consolidated) which that
                  ordinance or provision has directly or indirectly replaced;
                  and

         1.2.3    any subordinate legislation made from time to time under that
                  ordinance or statutory provision, which is in force at the
                  date of this Agreement,

         except to the extent that any statute, statutory provision or
         subordinate legislation made or enacted after the date of this
         Agreement would create or increase a liability of the Seller under
         this Agreement.

1.3      Singular, plural, gender

         References to one gender include all genders and references to the
         singular include the plural and vice versa.

1.4      References to persons and companies

         References to:

         1.4.1    a person include any company, partnership or unincorporated
                  association (whether or not having separate legal
                  personality); and

         1.4.2    a company shall include any company, corporation or any body
                  corporate, wherever incorporated.

                                       6
<PAGE>

1.5      References to subsidiaries and holding companies

         The words "holding company" and "subsidiary" shall have the same
         meaning in this Agreement as their respective definitions in the
         Companies Ordinance.

1.6      Accounts

         Any reference to "accounts" shall include the directors' and auditors'
         reports, relevant balance sheets and profit and loss accounts and
         related notes together with all documents which are or would be
         required by law to be annexed to the accounts of the company concerned
         to be laid before that company in general meeting in respect of the
         accounting reference period in question.

1.7      Schedules etc.

         References to this Agreement shall include any Schedules to it and
         references to Clauses and Schedules are to Clauses of, and Schedules
         to, this Agreement. References to paragraphs and Parts are to
         paragraphs and Parts of the Schedules.

1.8      Headings

         Headings shall be ignored in interpreting this Agreement.

1.9      Legal Terms

         References to any Hong Kong legal term shall, in respect of any
         jurisdiction other than Hong Kong, be construed as references to the
         term or concept which most nearly corresponds to it in that
         jurisdiction.

2        Agreement to Sell and Purchase

         2.1.1    On and subject to the terms of this Agreement, the Seller
                  agrees to sell (or procure the sale), and the Purchaser
                  agrees to purchase, the Sale Shares and the Sale Assets.

         2.1.2    The Sale Shares and the Sale Assets shall be sold (or procure
                  to be sold) by the Seller free from Encumbrances and together
                  with all rights and advantages attaching to them as at
                  Completion (including, without limitation, the right to
                  receive all dividends or distributions declared, made or paid
                  on or after Completion).

         2.1.3    The Seller shall procure that on or prior to Completion any
                  and all rights of pre-emption over the Sale Shares are waived
                  irrevocably by the persons entitled thereto.

3        Consideration

3.1      Subject to fulfilment of the Conditions Precedent, the Consideration
         shall be satisfied at Completion:

         3.1.1    as to HK$2,967 million, by way of the issue and allotment of
                  the Consideration Shares at an issue price of HK$1.80 per
                  share by the Purchaser to the Seller;

         3.1.2    as to HK$3,590 million, by way of the issue of the
                  Convertible Notes by the Purchaser to the Seller in their
                  full face value, upon and subject to the Conditions and the
                  Certificate.

                                       7
<PAGE>

3.2      The Consideration Shares shall be allotted and issued in accordance
         with Clause 3.1 credited as fully paid at the issue price and shall
         rank pari passu among themselves and with all Issuer's Shares in issue
         on or after the date of Completion.

3.3      The Convertible Notes shall be issued in accordance with Clause 3.1
         credited as fully paid at its full face value.

3.4      The parties agree that the Consideration is to be allocated as
         follows:

         3.4.1    as to the Loans in respect of Gain Score Limited, US$150
                  million by way of the Tranche A Note;

         3.4.2    as to the Loans in respect of Partner Link Investments
                  Limited, HK$2,359 million by way of part of the Tranche B
                  Note;

         3.4.3    as to the Queen's Road Exchange, HK$61 million by way of the
                  Tranche B Note and HK$97 million by way of Consideration
                  Shares; and

         3.4.4    as to the Sale Shares, by way of the remaining part of the
                  Consideration Shares.

4        Conditions

4.1      Conditions Precedent

         The agreement to sell and purchase the Sale Shares and the Sale Assets
         contained in Clause 2 is conditional upon satisfaction of the
         following Conditions Precedent, or their satisfaction subject only to
         Completion:

         4.1.1    the passing of a resolution by the shareholders of the
                  Purchaser at a general meeting of the Purchaser approving:

                  (i)    the reduction of the nominal value of every Existing
                         Issuer's Share of HK$0.40 by the cancellation of
                         HK$0.39 of the capital paid up on each issued Existing
                         Issuer's Share so as to form a Reduced Issuer's Share
                         of HK$0.01;

                  (ii)   the consolidation of every 10 issued Reduced Issuer's
                         Share into one Reorganised Issuer's Share of HK$0.10
                         each;

                  (iii)  the cancellation of an amount of approximately
                         HK$47.14 million standing to the credit of the share
                         premium account of the Purchaser as at the date of
                         this Agreement;

                  (iv)   the transfer of the aggregate amount of credit balance
                         of the share premium account of the Purchaser as at
                         the date of this Agreement and the credit arising from
                         the Capital Reorganisation to the contributed surplus
                         account of the Purchaser; and

                  (v)    upon the reduction and the consolidation referred to
                         sub-paragraphs (i) and (ii) above taking effect, the
                         cancellation of each unissued Existing Issuer's Share
                         comprised in the Purchaser's authorised share capital
                         and, thereafter, the increase in the authorised share
                         capital of the Purchaser from HK$11,612,654 to
                         HK$1,000,000,000 by the creation of an additional
                         9,883,873,460 Reorganised Issuer's Shares;

         4.1.2    approval by the independent shareholders of the Purchaser of:
                  (i) the acquisition by the Purchaser of the Sale Shares and
                  the Sale Assets; (ii) issue and allotment of the

                                       8
<PAGE>

                  Consideration Shares to the Seller; (iii) issue of the
                  Convertible Notes to the Seller; (iv) issue and allotment of
                  the New Shares to be issued from time to time upon any
                  exercise of the Conversion Rights; and (v) all other
                  transactions contemplated under this Agreement, at a general
                  meeting of the Purchaser;

         4.1.3    approval by the shareholders of the Seller of the disposal by
                  the Seller of: (i) the Sale Shares and the Sales Assets; and
                  (ii) all other transactions contemplated under this
                  Agreement, at a general meeting of the Seller;

         4.1.4    (i)    the passing of an ordinary resolution by an
                         independent vote (within the meaning of Note 1 of the
                         Notes on dispensations from Rule 26 of the Takeovers
                         Code or as may be required by the Executive) of the
                         shareholders of the Purchaser approving a waiver of
                         the obligation of the Seller and parties acting in
                         concert with it to make a mandatory offer for all the
                         Issuer's Shares under Rule 26 of the Takeovers Code as
                         a result of the issue of the Consideration Shares to
                         the Seller (or as it may direct); and

                  (ii)   such a waiver having been obtained from the Executive
                         and not having been revoked or amended and, where such
                         waiver is granted subject to conditions, such
                         conditions being reasonably acceptable to the Seller
                         and, to the extent any such conditions are required to
                         be fulfilled before the waiver becomes effective, they
                         are so fulfilled;

         4.1.5    (i)    the passing of an ordinary resolution by an
                         independent vote (within the meaning of Note 1 of the
                         Notes on dispensations from Rule 26 of the Takeovers
                         Code or as may be required by the Executive) of the
                         shareholders of the Purchaser approving a waiver of
                         the obligation of the Seller and parties acting in
                         concert with it to make a mandatory offer for all the
                         Issuer's Shares under Rule 26 of the Takeovers Code as
                         a result of the issue of New Shares to the Seller (or
                         as it may direct) pursuant to a partial or full
                         exercise of the Conversion Rights; and

                 (ii)    such a waiver having been obtained from the Executive
                         and not having been revoked or amended and, where such
                         waiver is granted subject to conditions, such
                         conditions being reasonably acceptable to the Seller
                         and, to the extent any such conditions are required to
                         be fulfilled before the waiver becomes effective, they
                         are so fulfilled;

         4.1.6    the Listing Committee of the Stock Exchange granting the
                  listing of and permission to deal in the Consideration Shares
                  and the Conversion Shares (in each case, subject only to
                  conditions to which the Seller and the Purchaser have no
                  reasonable objection);

         4.1.7    (i)    the compliance of announcement and shareholders'
                         approval requirements under the Listing Rules or
                         otherwise of the Stock Exchange in relation to present
                         and future transactions contemplated as at the date of
                         this Agreement which will constitute continuing
                         connected transactions of the Purchaser following
                         Completion, including, if required, the approval by
                         independent shareholders of the Purchaser in respect
                         of those connected transactions and in respect of any
                         waivers relating thereto (if required under the
                         Listing Rules) as referred to in Clause 4.1.7(ii)
                         below; and

                                       9
<PAGE>

                  (ii)   the granting by the Stock Exchange of such waivers (if
                         required under the Listing Rules) relating to those
                         connected transactions on such terms as may be
                         reasonably acceptable to both the Seller and the
                         Purchaser;

         4.1.8    the compliance of any other requirements under the Listing
                  Rules or otherwise of the Stock Exchange which requires
                  compliance at any time prior to Completion in relation to the
                  sale and purchase of the Sale Shares and the Sales Assets,
                  the issue of the Consideration Shares, the issue of the
                  Convertible Notes, the issue of the Conversion Shares upon
                  any exercise of the Conversion Rights, and the other
                  transactions contemplated under this Agreement, to the
                  reasonable satisfaction of the Seller and the Purchaser;

         4.1.9    (where required) the Bermuda Monetary Authority granting its
                  permission to the issue of the Convertible Notes, and the
                  issue and allotment of the Consideration Shares, and the
                  issue and allotment of the Conversion Shares;

         4.1.10   the obtaining of all Consents from the Government of Hong
                  Kong and any other relevant persons which are necessary or
                  desirable in connection with the transfer of the Sale Shares
                  (and, where such Consents are given subject to conditions,
                  such conditions are on terms as may be reasonably acceptable
                  to the Seller);

         4.1.11   the obtaining of all Consents from government or regulatory
                  authorities or other third parties which are necessary or
                  desirable in connection with the execution and performance of
                  this Agreement and any of the transactions contemplated under
                  this Agreement;

         4.1.12   the Seller having obtained a legal opinion of a firm of
                  Bermuda lawyers acceptable to the Seller covering such issues
                  and matters of laws and requirements in Bermuda in respect of
                  the Purchaser, this Agreement, the issue of the Consideration
                  Shares, the issue of the Convertible Notes and the issue of
                  the Conversion Shares, in such form and substance reasonably
                  satisfactory to the Seller;

         4.1.13   all the Consents referred to above remaining in full force
                  and effect at Completion;

         4.1.14   completion of legal and financial due diligence on the
                  Purchaser's Group to the reasonable satisfaction of the
                  Seller;

         4.1.15   completion of legal and financial due diligence on the Group
                  to the reasonable satisfaction of the Purchaser;

         4.1.16   all the Seller's Warranties being true and correct in all
                  material respects as at the Completion Date by reference to
                  the facts and circumstances subsisting as at that date; and

         4.1.17   all the Purchaser's Warranties being true and correct in all
                  material respects as at the Completion Date by reference to
                  the facts and circumstances subsisting as at that date.

4.2      Fulfilment

         4.2.1    The Seller shall use all reasonable endeavours to procure the
                  fulfilment of the Conditions Precedent set out in Clauses
                  4.1.3, 4.1.10 to 4.1.14 and 4.1.16 (in the case of Clauses
                  4.1.11 and 4.1.13, as far as Consents relating to the Seller
                  are concerned);

         4.2.2    the Purchaser shall use all reasonable endeavours to procure
                  the fulfilment of the Conditions Precedent set out in Clauses
                  4.1.1, 4.1.2, 4.1.4 to 4.1.9, 4.1.11, 4.1.13,

                                      10
<PAGE>

                  4.1.15 and 4.1.17 (in the case of Clauses 4.1.11 and
                  4.1.13, as far as Consents relating to the Purchaser are
                  concerned),

         as soon as reasonably practicable and in any event before 30 June 2004
         (or such later date as the Seller and the Purchaser may agree in
         writing).

4.3      Subject to compliance with relevant laws, rules and regulations,
         approval from shareholders or independent shareholders of the
         Purchaser in respect of the matters required to be so approved as
         referred to in Clauses 4.1.1, 4.1.2, 4.1.4, 4.1.5 and 4.1.7 shall be
         sought in such number and combination of resolutions as the Seller and
         the Purchaser may require, so that some or all of those matters shall
         be contained in the same resolution in the notice of the relevant
         general meeting or meetings of the Purchaser.

4.4      The Purchaser may at any time waive in writing the Conditions
         Precedent set out in Clauses 4.1.15 and/or 4.1.16 and such waiver may
         be made subject to such terms and conditions as are determined by the
         Purchaser.

4.5      The Seller may at any time waive in writing any of the Conditions
         Precedent set out in Clauses 4.1.4, 4.1.5, 4.1.12, 4.1.14 and/or
         4.1.17 and such waiver may be made subject to such terms and
         conditions as are determined by the Seller. The Seller shall not waive
         the Condition Precedent set out in Clause 4.1.4 unless it shall have
         demonstrated to the satisfaction of the Executive that it has
         sufficient financial resources to fulfil its obligations under Rule 26
         of the Takeovers Code (unless the Executive has in writing waived such
         a requirement). The Seller hereby undertakes that it shall make an
         offer for all the securities of the Purchaser (as required by the
         Takeovers Code) and shall comply with its obligations thereunder in
         respect of such an offer, if it waives the Condition Precedent set out
         in Clause 4.1.4.

4.6      The Seller and the Purchaser may at any time jointly waive in writing
         the Condition Precedent set out in Clauses 4.1.1 (except the part for
         the increase of authorised capital), 4.1.11 and/or 4.1.13 if it is
         agreed that the Consents which have not been obtained are not material
         to the business of the Purchaser's Group and the Group taken as a
         whole, and such waiver may be made subject to such terms and
         conditions determined by the Seller and the Purchaser jointly.

4.7      The Seller and the Purchaser shall each provide such reasonable
         assistance as requested to procure the fulfilment of those Conditions
         Precedent set out in Clauses 4.1.1 to 4.1.15 which the other is to
         procure to fulfil.

4.8      If any of the Conditions Precedent set out in Clause 4.1 has not been
         fulfilled (or waived by the relevant party) by 30 June 2004 (or such
         other date as the parties may agree in writing), except the Conditions
         Precedent set out in Clauses 4.1.16 and 4.1.17 which shall be
         fulfilled simultaneously upon Completion, this Agreement shall lapse
         and be terminated and thereafter all rights, obligations and
         liabilities of all parties hereunder shall cease and determine and no
         party shall have any claim against the others under this Agreement
         except for antecedent breach.

4.9      The Purchaser shall, as soon as practicable after the fulfillment of
         any of the Conditions Precedent set out in Clause 4.2.2 (as far as
         Consents relating to the Purchaser are concerned), provide to the
         Seller certified copies of the documents (or such other evidence as is
         satisfactory to the Seller) which evidence such fulfillment.

                                      11
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4.10     The Seller shall, as soon as practicable after the fulfillment of any
         of the Conditions Precedent set out in Clause 4.2.1 (as far as
         Consents relating to the Seller are concerned) provide to the
         Purchaser certified copies of the documents (or such other evidence as
         is reasonably satisfactory to the Purchaser) which evidence such
         fulfillment.

5        Pre-Completion

5.1      The Seller's Obligations in Relation to the Conduct of Business

         The Seller undertakes to use reasonable endeavours to procure that,
         between the date of this Agreement and Completion (unless the prior
         consent of the Purchaser has been obtained), each Group Company:

         5.1.1    shall carry on its business as a going concern in the
                  ordinary course as carried on prior to the date of this
                  Agreement, save in so far as agreed in writing by the
                  Purchaser (such consent not to be unreasonably withheld or
                  delayed);

         5.1.2    shall (or shall procure that the relevant members of the
                  Seller's Group shall) maintain in force all existing
                  insurance policies in all material respects on the same terms
                  and similar level of cover prevailing at the date of this
                  Agreement for the benefit of the Group Companies;

         5.1.3    without prejudice to the generality of Clause 5.1.1, shall
                  not except as may be required to give effect to and to comply
                  with this Agreement without the prior written consent of the
                  Purchaser (such consent not to be unreasonably withheld or
                  delayed):

                  (i)    enter into any agreement or incur any commitment
                         involving any capital expenditure in excess of
                         HK$30,000,000 per item and HK$200,000,000 in
                         aggregate;

                  (ii)   acquire or dispose of, or agree to acquire or dispose
                         of, any material asset or material stock, or enter
                         into or amend any agreement or incur any commitment to
                         do so, in each case involving consideration,
                         expenditure or liabilities in excess of HK$10,000,000,
                         other than in the ordinary course of business;

                  (iii)  incur any additional borrowings or incur any other
                         indebtedness in each case in excess of HK$10,000,000
                         and otherwise than in the ordinary course of business
                         (except inter-group borrowings or indebtedness within
                         the Group);

                  (iv)   create, allot or issue any share capital or loan
                         capital of any Group Company or any option to
                         subscribe for the same;

                  (v)    repay, redeem or repurchase any share capital or loan
                         capital of any Group Company;

                  (vi)   declare, make or pay any dividend or other
                         distribution to shareholders (other than to a Group
                         Company);

                  (vii)  save as required by law:

                         (a)  make any material amendment to the terms and
                              conditions of employment (including, without
                              limitation, remuneration, pension entitlements
                              and other benefits) of any Senior Employee (other
                              than minor increases in the ordinary course of
                              business which the Seller shall notify to the
                              Purchaser as soon as reasonably possible);

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<PAGE>

                         (b)  dismiss any Senior Employee; or

                         (c)  engage or appoint any additional Senior Employee;

                  (viii) make any change to its accounting practices or
                         policies or amend its memorandum or articles of
                         association or bye-laws.

5.2      The Seller's other Rights and Obligations Prior to Completion

         5.2.1    Without prejudice to the generality of Clause 5.1, prior to
                  Completion, the Seller shall procure that the Group Companies
                  shall collaborate with the Purchaser in relation to all
                  material matters concerning the running of the Group.

         5.2.2    Notwithstanding any other provisions in this Agreement:

                  (i)    the Purchaser agrees that the Seller shall implement
                         the Restructuring without any restrictions under this
                         Agreement; and

                  (ii)   the Seller shall complete the Restructuring at its own
                         costs and at least five Business Days before
                         Completion.

         5.2.3    The Seller shall deliver at it own costs to the Purchaser as
                  soon as practicable (but in any event not later than five
                  Business Days prior to the date of despatch of the
                  Purchaser's circular to its shareholders in connection with
                  this Agreement) certificates of title in respect of the Hong
                  Kong Properties referred to in Part 1 of Schedule 3 (issued
                  to the Seller or the relevant property holding company) by a
                  firm of Hong Kong lawyers acceptable to the Purchaser, acting
                  reasonably, and a legal opinion as to the matters which are
                  required to be covered under Practice Note 12 of the Listing
                  Rules in respect of the PRC Properties referred to in Part 1
                  of Schedule 3 (issued to the Seller or the relevant property
                  holding company) by a firm of PRC lawyers acceptable to the
                  Purchaser, acting reasonably.

5.3      The Purchaser's Obligations in relation to the Conduct of Business

         The Purchaser undertakes to use reasonable endeavours to procure
         that, between the date of this Agreement and Completion (unless the
         prior consent of the Seller has been obtained), each Purchaser's
         Group Company:

         5.3.1    shall carry on its business as a going concern in the
                  ordinary course as carried on prior to the date of this
                  Agreement, save in so far as agreed in writing by the Seller
                  (such consent not to be unreasonably withheld or delayed);

         5.3.2    shall (or shall procure that the relevant members of the
                  Purchaser's Group shall) maintain in force all existing
                  insurance policies in all material respects on the same terms
                  and similar level of cover prevailing at the date of this
                  Agreement for the benefit of the Purchaser's Group Companies;

         5.3.3    without prejudice to the generality of Clause 5.3.1, shall
                  not except as may be required to give effect to and to comply
                  with this Agreement without the prior written consent of the
                  Seller (such consent not to be unreasonably withheld or
                  delayed):

                  (i)    enter into any agreement or incur any commitment
                         involving any capital expenditure in excess of
                         HK$3,000,000 per item and HK$10,000,000 in aggregate;

                  (ii)   acquire or dispose of, or agree to acquire or dispose
                         of, any material asset or material stock, or enter
                         into or amend any agreement or incur any commitment

                                      13
<PAGE>

                         to do so, in each case involving consideration,
                         expenditure or liabilities in excess of HK$3,000,000,
                         other than in the ordinary course of business;

                  (iii)  incur any additional borrowings or incur any other
                         indebtedness in each case in excess of HK$3,000,000
                         and otherwise than in the ordinary course of business
                         (except inter-group borrowings or indebtedness within
                         the Purchaser's Group);

                  (iv)   create, allot or issue any share capital or loan
                         capital of any Purchaser's Group Company or any option
                         to subscribe for the same;

                  (v)    repay, redeem or repurchase any share capital or loan
                         capital of any Purchaser's Group Company;

                  (vi)   declare, make or pay any dividend or other
                         distribution to shareholders (other than to a
                         Purchaser's Group Company);
                  (vii)   save as required by law:

                         (a)  make any material amendment to the terms and
                              conditions of employment (including, without
                              limitation, remuneration, pension entitlements
                              and other benefits) of any Senior Purchaser
                              Employee (other than minor increases in the
                              ordinary course of business which the Purchaser
                              shall notify to the Seller as soon as reasonably
                              possible);

                         (b)  dismiss any Senior Purchaser Employee; or

                         (c)  engage or appoint any additional Senior Purchaser
                              Employee;

                  (viii) make any change to its accounting practices or
                         policies or amend its memorandum or articles of
                         association or bye-laws.

5.4      The Purchaser's other Obligations Prior to Completion

         Without prejudice to the generality of Clause 5.3, prior to
         Completion, the Purchaser shall procure that the Purchaser's Group
         Companies shall collaborate with the Seller in relation to all
         material matters concerning the running of the Purchaser's Group.

6        Completion

6.1      Date and Place

         Subject to Clause 4, Completion shall take place at 2:00 pm at the
         Seller's office on the fifth Business Day following fulfilment or
         waiver of the last of the Conditions Precedent (other than those set
         out in Clauses 4.1.8, 4.1.11, 4.1.16 and 4.1.17, provided that no
         notice has been received by either the Purchaser or the Seller that
         such Conditions Precedent will not be fulfilled at or before
         Completion) (or at such other location, time or date as may be agreed
         between the Purchaser and the Seller).

6.2      Completion Events

         On Completion, the Seller and the Purchaser shall comply with their
         respective obligations specified in Schedule 5.

6.3      Payment on Completion

         On Completion, the Purchaser shall pay the Consideration to the
         Seller.

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<PAGE>

7        Specific Undertakings

7.1      Payment of Proceeds

         7.1.1    In respect of the Developer, the Seller represents and
                  warrants in favour of the Purchaser that:

                  (i)    the Developer is indebted to the Seller, which
                         indebtedness amounted to HK$4,503 million as at 31
                         January 2004 and is repayable on demand (but the
                         Seller agrees that no demand can be made unless: (a)
                         the Developer fails to comply with its obligations
                         under Clause 7.1.2(i); (b) there is a material adverse
                         change in the business or financial position or
                         prospects of the Developer; or (c) the Developer is
                         the subject of any of the events described in
                         paragraph 15 of Schedule 6), without interest;

                  (ii)   the indebtedness was used solely for the purpose of
                         financing the development by the Developer of its
                         business and its overhead expenses (incurred in the
                         ordinary and usual course of it business);

                  (iii)  the principal amount of the indebtedness set out in
                         Clause 7.1.1(i) outstanding as at Completion will not
                         exceed HK$4,860 million;

                  (iv)   as at the date of this Agreement and as at Completion,
                         the Developer does not and will not have any
                         indebtedness which is required (whether as a matter of
                         contract or otherwise) to be repaid in priority to the
                         indebtedness to the Seller referred to in
                         sub-paragraph (i) above; and

                  (v)    the Developer's business since its incorporation has
                         been and still is the execution of the Project
                         Agreement (and related agreements) and the performance
                         of its obligations thereunder.

         7.1.2    Subject to Completion, the Purchaser undertakes to procure
                  that the Developer:

                  (i)    (to the extent that it could lawfully do so) repays
                         its indebtedness to the Seller referred to in Clause
                         7.1.1 in priority to all other debts which may be owed
                         by the Developer as and when the Developer has the
                         funds (and is not prohibited or prevented, whether
                         under applicable laws or the terms of any contract or
                         undertaking entered into or given by the Developer at
                         or prior to Completion, to do so) to repay all or part
                         of such indebtedness to the Seller; and

                  (ii)   as soon as practicable after Completion, ascertains
                         the audited accounting profit of the Developer (from
                         the date of its incorporation up to the Completion
                         Date) attributable to the shareholders of the
                         Developer calculated on a basis consistent with the
                         Management Accounts, subject to adjustment, (the
                         "Profit") and the Purchaser shall procure the
                         Developer to pay an amount equivalent to the Profit to
                         the Seller (by way of adjustment to the Consideration)
                         within 14 days of the Profit being ascertained (or, if
                         later, after the indebtedness to the Seller referred
                         to in Clause 7.1.1(i) has been repaid in full and the
                         Developer has the funds to pay the Profit).

         7.1.3    For the purposes of Clause 7.1.2(ii), the Profit shall be
                  adjusted downwards (to the extent so attributable) by the
                  amount of any claim, loss or damage incurred or suffered by
                  the Developer as a result of any act, omission or default on
                  the part of any member of the Seller's Group before
                  Completion which may be ascertained before payment of the
                  Profit. For the purpose of this Clause 7.1.3, if before any
                  payment of the Profit is

                                      15
<PAGE>

                  made by the Developer, the Developer has in writing to the
                  Seller notified it of the amount by which the Profit should
                  be adjusted downwards pursuant to this Clause, giving brief
                  particulars of the basis of such claim, that amount (not
                  exceeding the amount of the Profit payable) shall not be
                  paid over to the Seller until such time the actual amount
                  of adjustment is finally determined by written agreement
                  between the Seller and the Developer or by a court or
                  arbitrator of competent jurisdiction.

         7.1.4    For the avoidance of doubt:

                  (i)    notwithstanding anything to the contrary in this
                         Agreement, but without prejudice to the Seller's
                         rights if the Purchaser is in breach of its
                         procurement obligations under Clause 7.1.2, the
                         Purchaser shall have no liability (whether actual or
                         contingent) to pay to the Seller any of the sums
                         payable by the Developer under Clause 7.1; and

                  (ii)   any priority payment made by the Developer pursuant to
                         Clause 7.1.2 shall not constitute any variation of the
                         terms of the Project Agreement.

7.2      Development Right

         7.2.1    The Seller and the Purchaser acknowledge that the Exchange
                  Company or another member of the Seller's Group (the
                  "Relevant Company") may obtain rights to redevelop any or all
                  of the Telecom Exchanges in the future, but there is no
                  assurance that any such redevelopment right will be obtained
                  by the Relevant Company.

         7.2.2    Subject to Completion, the Seller undertakes to procure the
                  Relevant Company to grant (with effect from Completion) a
                  right of first refusal in favour of the Exchange Developer to
                  participate in each JV on no less favourable terms which the
                  Relevant Company is prepared to enter into such JV with any
                  bona fide third party. For that purpose, the Relevant Company
                  shall present its proposed terms of joint venture for each JV
                  to the Exchange Developer, and the Exchange Developer shall
                  have 45 days (the "Period") to consider whether to accept the
                  offer and if the Exchange Developer fails to accept such
                  offer within the Period, the Relevant Company may enter into
                  such JV with any bona fide third party on no less favourable
                  terms than those offered to the Exchange Developer within 120
                  days after the expiry of the Period.

         7.2.3    The key terms of each JV shall be as follows:

                  (i)    the Relevant Company shall pay for any new equipments
                         necessitated by vacating the existing premises;

                  (ii)   the Exchange Developer shall pay for all the costs of
                         relocating the equipments, demolition, land premium,
                         development, construction and marketing in connection
                         with the redevelopment; and

                  (iii)  the Relevant Company will share in 15% of the net
                         profit from the JV,

                  in respect of each relevant Telecom Exchange.

8        Warranties

8.1      Seller's Warranties

         8.1.1    Subject to Clause 8.2, the Seller warrants to the Purchaser
                  that the statements set out in Schedule 6:

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<PAGE>

                  (i)    are true and accurate in all material respects and not
                         misleading in any material respect as at the date of
                         this Agreement (save for those statements which relate
                         to the ownership of the Group Companies or any other
                         matters affected by or in connection with the
                         Restructuring, which will be true and accurate in all
                         material respects and not misleading in any material
                         respect as at the date of completion of the
                         Restructuring); and

                  (ii)   will be true and accurate in all material respects and
                         not misleading in any material respect as at the
                         Completion Date.

         8.1.2    The Seller acknowledges that the Purchaser has entered into
                  this Agreement in reliance upon the Seller's Warranties.

         8.1.3    The Seller's Warranties shall be separate and independent and
                  shall not be limited by reference to any other paragraph of
                  Schedule 6 or by anything in this Agreement.

         8.1.4    Any Seller's Warranty qualified by the expression "to the
                  best of the Seller's knowledge, information and belief" or
                  any similar expression shall, unless otherwise stated, be
                  deemed to refer to the knowledge of the executive directors
                  of the Seller.

8.2      Seller's Disclosures

         The Seller's Warranties are subject to the specific matters which are
         fairly disclosed in or pursuant to this Agreement or the Seller's
         Disclosure Letter.

8.3      Effect of Completion

         The Seller's Warranties and all other provisions of this Agreement, to
         the extent that they have not been performed by Completion, shall not
         be extinguished or affected by Completion or by any other event or
         matter (including, without limitation, any satisfaction and/or waiver
         of any Conditions Precedent), except by a specific and duly authorised
         written waiver or release by the Purchaser.

8.4      The Purchaser's Warranties

         8.4.1    Subject to Clause 8.5, the Purchaser warrants to the Seller
                  that the statements set out in Schedule 7:

                  (i)    are true and accurate in all material respects and not
                         misleading in any material respect as at the date of
                         this Agreement; and

                  (ii)   will be true and accurate in all material respects and
                         not misleading in any material respect as at the
                         Completion Date.

         8.4.2    The Purchaser acknowledges that the Seller has entered into
                  this Agreement in reliance upon the Purchaser's Warranties.

         8.4.3    The Purchaser's Warranties shall be separate and independent
                  and shall not be limited by reference to any other paragraph
                  of Schedule 7 or by anything in this Agreement.

         8.4.4    Any Purchaser's Warranty qualified by the expression "to the
                  best of the Purchaser's knowledge, information and belief" or
                  any similar expression shall, unless otherwise stated, be
                  deemed to refer to the knowledge of the executive directors
                  of the Purchaser.

                                      17
<PAGE>

8.5      Purchaser's Disclosures

         The Purchaser's Warranties are subject to the specific matters which
         are fairly disclosed in or pursuant to this Agreement or the
         Purchaser's Disclosure Letter.

8.6      Effect of Completion

         The Purchaser's Warranties and all other provisions of this Agreement,
         to the extent that they have not been performed by Completion, shall
         not be extinguished or affected by Completion or by any other event or
         matter (including, without limitation, any satisfaction and/or waiver
         of any Conditions Precedent), except by a specific and duly authorised
         written waiver or release by the Seller.

9        Limitation of Seller's Liability

9.1      Time Limitation for Claims

         The Seller shall not be liable under this Agreement in respect of any
         claim unless a notice of the claim is given by the Purchaser to the
         Seller:

         9.1.1    in the case of any claim under paragraph 12 of Schedule 6
                  (tax warranties), within three years following Completion;
                  and

         9.1.2    in the case of any other claim, within 18 months following
                  Completion,

         except that there shall be no time limitation for giving notice of any
         claim under paragraphs 1.1 and 14 of Schedule 6.

         Any claim notified by the Purchaser to the Seller pursuant to this
         Clause shall specify the matters set out in Clause 10.2.

9.2      Minimum Claims

         9.2.1    The Seller shall not be liable under this Agreement in
                  respect of any individual claim (or a series of claims
                  arising from substantially identical facts or circumstances)
                  where the liability agreed or determined (disregarding the
                  provisions of this Clause 9.2) in respect of any such claim
                  or series of claims does not exceed HK$5,000,000.

         9.2.2    Where the liability agreed or determined in respect of any
                  such claim or series of claims exceeds HK$5,000,000, the
                  liability of the Seller shall be for the whole amount of
                  liability and not only the excess.

9.3      Aggregate Minimum Claims

         9.3.1    The Seller shall not be liable under this Agreement in
                  respect of any claim unless the aggregate amount of all
                  claims for which the Seller would otherwise be liable under
                  this Agreement (disregarding the provisions of this Clause
                  9.3) exceeds HK$100,000,000.

         9.3.2    Where the liability agreed or determined in respect of all
                  claims referred to in Clause 9.3.1 exceeds HK$100,000,000,
                  the liability of the Seller shall be for the whole amount of
                  the liability and not only the excess.

9.4      Maximum Liability

         The aggregate liability of the Seller in respect of all breaches of
         this Agreement shall not exceed the Consideration.

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<PAGE>

9.5      Provisions

         The Seller shall not be liable under this Agreement in respect of any
         claim if and to the extent that proper allowance, provisions or
         reserve is made in the Accounts or the Management Accounts for the
         matter giving rise to the claim.

9.6      Matters Arising Subsequent to this Agreement

         The Seller shall not be liable under this Agreement in respect of any
         matter to the extent that the same would not have occurred but for:

         9.6.1    Agreed matters

                  any matter or thing done or omitted to be done pursuant to and
                  in compliance with this Agreement or otherwise at the request
                  in writing or with the approval in writing of the Purchaser;

         9.6.2    Changes in legislation

                  (i)    the passing of, or any change in, after the date of
                         this Agreement, any law, rule, regulation or
                         administrative practice of any government,
                         governmental department, agency or regulatory body
                         including (without prejudice to the generality of the
                         foregoing) any increase in the rates of Taxation or
                         any imposition of Taxation or any withdrawal of relief
                         from Taxation not actually (or prospectively) in
                         effect at the date of this Agreement; or

                  (ii)   any change after the date of this Agreement of any
                         generally accepted interpretation or application of
                         any legislation;

         9.6.3    Accounting and Taxation Policies

                  any change in accounting or Taxation policy, advance ruling,
                  standards, bases or practice of the Purchaser or any of the
                  Group Companies introduced or having effect after Completion.

9.7      Recovery from Third Parties following Recovery from the Seller

         If the Seller has paid an amount in discharge of any claim under this
         Agreement and the Purchaser or any Group Company is entitled to
         recover (whether by payment, discount, credit, relief, insurance or
         otherwise) from a third party a sum which indemnifies or compensates
         the Purchaser or any Group Company (in whole or in part) in respect
         of the loss or liability which is the subject matter of the claim,
         the Purchaser or the relevant Group Company shall pay to the Seller
         as soon as practicable after receipt an amount equal to (i) any sum
         recovered from the third party less any costs and expenses incurred
         in obtaining such recovery (less any Taxation attributable to the
         recovery after taking account of any tax relief available in respect
         of any matter giving rise to the claim) or, if less (ii) the amount
         previously paid by the Seller to the Purchaser less any Taxation
         attributable to it.

9.8      Mitigation of Losses

         The Purchaser shall procure that all reasonable steps are taken and
         all reasonable assistance is given to avoid or mitigate any Losses
         which in the absence of mitigation might give rise to a liability in
         respect of any claim under this Agreement.

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<PAGE>

9.9      Fraud

         None of the limitations contained in this Clause 9 shall apply to any
         claim which arises or is increased, or to the extent to which it
         arises or is increased, as the consequence of, or which is delayed as
         a result of, fraud by the Seller, any Group Company or any of their
         respective directors, officers, employees or agents.

10       Claims Against the Seller

10.1     Notification of Potential Claims

         10.1.1   If the Purchaser or any Group Company becomes aware of any
                  fact, matter or circumstance that may give rise to a claim
                  against the Seller under this Agreement, the Purchaser shall
                  as soon as reasonably practicable give a notice in writing to
                  the Seller setting out such information as is available to
                  the Purchaser or Group Company as is reasonably necessary to
                  enable the Seller to assess the merits of the claim, to act
                  to preserve evidence and to make such provision as the Seller
                  may consider necessary.

         10.1.2   In the event of any Tax claim arising, the Purchaser or any
                  Group Company which becomes aware of that event shall give
                  notice (and the Purchaser shall procure that such notice is
                  given by the relevant Group Company) in writing to the Seller
                  as soon as reasonably practicable and, in any event, in the
                  case of the receipt of any written assessment from any Tax
                  Authority which constitutes a Tax claim, within 10 days of
                  the date of issue of such Tax claim.

10.2     Notification of Claims under this Agreement

         Notices of claims under this Agreement shall be given by the Purchaser
         to the Seller within the time limits specified in Clause 9.1,
         specifying full information in relation to the legal and factual basis
         of the claim and the evidence on which the Purchaser relies and, if
         practicable, an estimate of the amount of Losses which are, or are to
         be, the subject of the claim (including any Losses which are
         contingent on the occurrence of any future event).

10.3     Commencement of Proceedings

         Any claim notified pursuant to Clause 10.2 shall (if it has not been
         previously satisfied, settled or withdrawn) be deemed to be
         irrevocably withdrawn six months after the notice is given pursuant to
         Clause 10.2 or in the case of any contingent liability, six months
         after such contingent liability becomes an actual liability and is due
         and payable unless legal proceedings in respect of it: (i) have been
         commenced by being both issued and served; and (ii) are being and
         continue to be pursued with reasonable diligence.

10.4     Investigation by the Seller

         In connection with any matter or circumstance that may give rise to a
         claim against the Seller under this Agreement:

         10.4.1   the Purchaser shall allow, and shall procure that the
                  relevant Group Company allows, the Seller and their tax,
                  financial, accounting or legal advisers to investigate the
                  matter or circumstance alleged to give rise to a claim and
                  whether and to what extent any amount is payable in respect
                  of such claim; and

         10.4.2   the Purchaser shall disclose to the Seller all material of
                  which the Purchaser is aware which relates to the claim and
                  shall (and shall procure that any other relevant members of
                  the Purchaser's Group shall) give, subject to their being
                  paid all

                                      20
<PAGE>

                  reasonable costs and expenses, all such information and
                  assistance (including access to premises and personnel, and
                  the right to examine and copy or photograph any assets,
                  accounts, documents and records) as the Seller or its tax,
                  financial, accounting or legal advisers may reasonably
                  request, subject to the Seller agreeing in such form as the
                  Purchaser may reasonably require to keep all such
                  information confidential and to use it only for the purpose
                  of investigating and defending the claim in question.

10.5     Conduct of Third Party Claims

         If the matter or circumstance that may give rise to a claim against
         the Seller under this Agreement is a result of or in connection with a
         claim by or liability to a third party, then the Purchaser or other
         member of the Purchaser's Group shall be entitled, in its absolute
         discretion, to take such action as it shall deem necessary to avoid,
         dispute, deny, defend, resist, appeal, compromise or contest such
         claim or liability (including, without limitation, making
         counterclaims or other claims against third parties) but shall, so far
         as practicable, consult with the Seller before taking any such action.

11       Limitation of Purchaser's Liability

11.1     Time Limitation for Claims

         The Purchaser shall not be liable under this Agreement in respect of
         any claim unless a notice of the claim is given by the Seller to the
         Purchaser:

         11.1.1   in the case of any claim under paragraph 12 of Schedule 7
                  (tax warranties), within three years following Completion;
                  and

         11.1.2   in the case of any other claim, within 18 months following
                  Completion,

         except that there shall be no time limitation for giving notice of any
         claim under paragraphs 1.1 and 14 of Schedule 7.

         Any claim notified by the Seller to the Purchaser pursuant to this
         Clause shall specify the matters set out in Clause 12.2.

11.2     Minimum Claims

         11.2.1   The Purchaser shall not be liable under this Agreement in
                  respect of any individual claim (or a series of claims
                  arising from substantially identical facts or circumstances)
                  where the liability agreed or determined (disregarding the
                  provisions of this Clause 11.2) in respect of any such claim
                  or series of claims does not exceed HK$1,000,000.

         11.2.2   Where the liability agreed or determined in respect of any
                  such claim or series of claims exceeds HK$1,000,000, the
                  liability of the Purchaser shall be for the whole amount of
                  the liability and not only the excess.

11.3     Aggregate Minimum Claims

         11.3.1   The Purchaser shall not be liable under this Agreement in
                  respect of any claim unless the aggregate amount of all
                  claims for which the Purchaser would otherwise be liable
                  under this Agreement (disregarding the provisions of this
                  Clause 11.3) exceeds HK$20,000,000.

         11.3.2   Where the liability agreed or determined in respect of all
                  claims referred to in Clause 11.3.1 exceeds HK$20,000,000,
                  the liability of the Purchaser shall be for the whole amount
                  of the liability and not only the excess.

                                      21
<PAGE>

11.4     Maximum Liability

         The aggregate liability of the Purchaser in respect of all breaches of
         this Agreement shall not exceed the Consideration.

11.5     Provisions

         The Purchaser shall not be liable under this Agreement in respect of
         any claim if and to the extent that proper allowance, provisions or
         reserve is made in the Purchaser's Accounts or the Purchaser's
         Management Accounts for the matter giving rise to the claim.

11.6     Matters Arising Subsequent to this Agreement

         The Purchaser shall not be liable under this Agreement in respect of
         any matter to the extent that the same would not have occurred but
         for:

         11.6.1   Agreed matters

                  any matter or thing done or omitted to be done pursuant to and
                  in compliance with this Agreement or otherwise at the request
                  in writing or with the approval in writing of the Seller;

         11.6.2   Changes in legislation

                  (i)    the passing of, or any change in, after the date of
                         this Agreement, any law, rule, regulation or
                         administrative practice of any government,
                         governmental department, agency or regulatory body
                         including (without prejudice to the generality of the
                         foregoing) any increase in the rates of Taxation or
                         any imposition of Taxation or any withdrawal of relief
                         from Taxation not actually (or prospectively) in
                         effect at the date of this Agreement; or

                  (ii)   any change after the date of this Agreement of any
                         generally accepted interpretation or application of
                         any legislation;

         11.6.3   Accounting and Taxation Policies

                  any change in accounting or Taxation policy, advance ruling,
                  standards, bases or practice of the Seller or any of the
                  Purchaser's Group Companies introduced or having effect after
                  Completion.

11.7     Recovery from Third Parties following Recovery from the Purchaser

         If the Purchaser has paid an amount in discharge of any claim under
         this Agreement and the Seller is entitled to recover (whether by
         payment, discount, credit, relief, insurance or otherwise) from a
         third party a sum which indemnifies or compensates the Seller (in
         whole or in part) in respect of the loss or liability which is the
         subject matter of the claim, the Seller shall pay to the Purchaser as
         soon as practicable after receipt an amount equal to (i) any sum
         recovered from the third party less any costs and expenses incurred
         in obtaining such recovery (less any Taxation attributable to the
         recovery after taking account of any tax relief available in respect
         of any matter giving rise to the claim) or, if less (ii) the amount
         previously paid by the Purchaser to the Seller less any Taxation
         attributable to it.

11.8     Mitigation of Losses

         The Seller shall procure that all reasonable steps are taken and all
         reasonable assistance is given to avoid or mitigate any Losses which
         in the absence of mitigation might give rise to a liability in respect
         of any claim under this Agreement.

                                      22
<PAGE>

11.9     Fraud

         None of the limitations contained in this Clause 11 shall apply to any
         claim which arises or is increased, or to the extent to which it
         arises or is increased, as the consequence of, or which is delayed as
         a result of, fraud by the Purchaser, any Purchaser's Group Company or
         any of their respective directors, officers, employees or agents.

12       Claims Against the Purchaser

12.1     Notification of Potential Claims

         12.1.1   If the Seller becomes aware of any fact, matter or
                  circumstance that may give rise to a claim against the
                  Purchaser under this Agreement, the Seller shall as soon as
                  reasonably practicable give a notice in writing to the
                  Purchaser setting out such information as is available to the
                  Seller as is reasonably necessary to enable the Purchaser to
                  assess the merits of the claim, to act to preserve evidence
                  and to make such provision as the Purchaser may consider
                  necessary.

         12.1.2   In the event of any Tax claim arising, the Seller on becoming
                  aware of that event shall give notice in writing to the
                  Purchaser as soon as reasonably practicable and, in any
                  event, in the case of the receipt of any written assessment
                  from any Tax Authority which constitutes a Tax claim, within
                  10 days of the date of issue of such Tax claim.

12.2     Notification of Claims under this Agreement

         Notices of claims under this Agreement shall be given by the Seller to
         the Purchaser within the time limits specified in Clause 11.1,
         specifying full information in relation to the legal and factual basis
         of the claim and the evidence on which the Seller relies and, if
         practicable, an estimate of the amount of Losses which are, or are to
         be, the subject of the claim (including any Losses which are
         contingent on the occurrence of any future event).

12.3     Commencement of Proceedings

         Any claim notified pursuant to Clause 12.2 shall (if it has not been
         previously satisfied, settled or withdrawn) be deemed to be
         irrevocably withdrawn six months after the notice is given pursuant to
         Clause 12.2 or in the case of any contingent liability, six months
         after such contingent liability becomes an actual liability and is due
         and payable unless legal proceedings in respect of it: (i) have been
         commenced by being both issued and served; and (ii) are being and
         continue to be pursued with reasonable diligence.

12.4     Investigation by the Purchaser

         In connection with any matter or circumstance that may give rise to a
         claim against the Purchaser under this Agreement:

         12.4.1   the Seller shall allow the Purchaser and its tax, financial,
                  accounting or legal advisers to investigate the matter or
                  circumstance alleged to give rise to a claim and whether and
                  to what extent any amount is payable in respect of such
                  claim; and

         12.4.2   the Seller shall disclose to the Purchaser all material of
                  which the Seller is aware which relates to the claim and
                  shall give, subject to their being paid all reasonable costs
                  and expenses, all such information and assistance (including
                  access to premises and personnel, and the right to examine
                  and copy or photograph any assets, accounts, documents and
                  records) as the Purchaser or its tax, financial, accounting
                  or legal advisers may reasonably request, subject to the
                  Purchaser agreeing in such form

                                      23
<PAGE>

                  as the Seller may reasonably require to keep all such
                  information confidential and to use it only for the purpose
                  of investigating and defending the claim in question.

12.5     Conduct of Third Party Claims

         If the matter or circumstance that may give rise to a claim against
         the Purchaser under this Agreement is a result of or in connection
         with a claim by or liability to a third party, then the Seller shall
         be entitled, in its absolute discretion, to take such action as it
         shall deem necessary to avoid, dispute, deny, defend, resist, appeal,
         compromise or contest such claim or liability (including, without
         limitation, making counterclaims or other claims against third
         parties) but shall, so far as practicable, consult with the Purchaser
         before taking any such action.

13       Confidentiality

13.1     Announcements

         Pending Completion, no announcement or circular in connection with the
         existence or the subject matter of this Agreement shall be made or
         issued by or on behalf of the Seller or the Purchaser without the
         prior written approval of the Seller and the Purchaser. This shall not
         affect any announcement or circular required by law or any regulatory
         body or the rules of any recognised stock exchange but the party with
         an obligation to make an announcement or issue a circular shall
         consult with the other party insofar as is reasonably practicable
         before complying with such an obligation.

13.2     Confidentiality

         13.2.1   The Confidentiality Agreement shall cease to have any force
                  or effect from the date of this Agreement.

         13.2.2   Subject to Clause 13.1 and Clause 13.2.3:

                  (i)    the Seller and the Purchaser shall treat as strictly
                         confidential and not disclose or use any information
                         received or obtained as a result of entering into this
                         Agreement (or any agreement entered into pursuant to
                         this Agreement) which relates to:

                         (a)  the provisions of this Agreement and any
                              agreement entered into pursuant to this
                              Agreement; or

                         (b)  the negotiations relating to this Agreement (and
                              any such other agreements);

                  (ii)   the Seller shall treat as strictly confidential and
                         not disclose or use any information relating to the
                         Group Companies following Completion and any other
                         information relating to the business, financial or
                         other affairs (including future plans and targets) of
                         the Purchaser's Group;

                  (iii)  the Purchaser shall treat as strictly confidential and
                         not disclose or use any information relating to the
                         business, financial or other affairs (including future
                         plans and targets) of the Seller's Group including,
                         prior to Completion, the Group Companies.

         13.2.3   Clause 13.2.2 shall not prohibit disclosure or use of any
                  information if and to the extent:

                                      24
<PAGE>

                  (i)    the disclosure or use is required by law, any
                         government or regulatory body or any recognised stock
                         exchange;

                  (ii)   the disclosure or use is required to vest the full
                         benefit of this Agreement in the Seller or the
                         Purchaser;

                  (iii)  the disclosure or use is required for the purpose of
                         any judicial proceedings arising out of this Agreement
                         or any other agreement entered into under or pursuant
                         to this Agreement or the disclosure is made to a Tax
                         Authority in connection with the Tax affairs of the
                         disclosing party;

                  (iv)   the disclosure is made to professional advisers of the
                         Seller or the Purchaser on terms that such
                         professional advisers undertake to comply with the
                         provisions of Clause 13.2.2 in respect of such
                         information as if they were a party to this Agreement;

                  (v)    the information is or becomes publicly available
                         (other than by breach of the Confidentiality Agreement
                         at any time prior to the signing of this Agreement or
                         of this Agreement);

                  (vi)   the other party has given prior written approval for
                         the disclosure or use; or

                  (vii)  the information is independently developed after
                         Completion,

                 provided that prior to disclosure or use of any information
                 pursuant to Clause 13.2.3(i), (ii) or (iii), the party
                 concerned shall promptly notify the other parties of such
                 requirement with a view to providing the other parties with
                 the opportunity to contest such disclosure or use or otherwise
                 to agree the timing and content of such disclosure or use.

14       Other Provisions

14.1     Further Assurances

         14.1.1   The Seller and the Purchaser shall (and shall use reasonable
                  endeavours to procure that any necessary third party shall)
                  from time to time execute such documents and perform such
                  acts and things, as either of the Seller or the Purchaser may
                  reasonably require, to transfer the Sale Shares and the Sale
                  Assets to the Purchaser and to give each of them the full
                  benefit of this Agreement. Each of the Seller and the
                  Purchaser undertakes to the other promptly to provide all
                  information and assistance which the other may reasonably
                  request from time to time for the purpose of facilitating
                  prompt and full compliance with the public disclosure
                  requirements of the Listing Rules and the Takeovers Code
                  applicable to the requesting party.

         14.1.2   The Purchaser shall (and shall procure that the relevant
                  Group Companies shall) retain for a reasonable period from
                  Completion the books, records and documents of the Group
                  Companies to the extent they relate to the period prior to
                  Completion and shall (and shall procure that the relevant
                  Group Companies shall) allow the Seller reasonable access to
                  such books, records and documents, including the right to
                  take copies.

14.2     Whole Agreement

         14.2.1   This Agreement contains the whole agreement between the
                  Seller and the Purchaser relating to the subject matter of
                  this Agreement at the date of this Agreement, to the

                                      25
<PAGE>

                  exclusion of any terms implied by law which may be excluded
                  by contract, and supersedes any previous written or oral
                  agreement between the Seller and the Purchaser in relation to
                  the matters dealt with in this Agreement.

         14.2.2   The Purchaser acknowledges that it has not been induced to
                  enter into this Agreement by any representation, warranty or
                  undertaking not expressly incorporated into it.

         14.2.3   The Seller acknowledges that it has not been induced to enter
                  into this Agreement by any representation, warranty or
                  undertaking not expressly incorporated into it.

         14.2.4   So far as is permitted by law and except in the case of
                  fraud, the Seller and the Purchaser agrees and acknowledges
                  that its only right and remedy in relation to any
                  representation, warranty or undertaking made or given in
                  connection with this Agreement shall be for breach of the
                  terms of this Agreement to the exclusion of all other rights
                  and remedies (including those in tort or arising under
                  statute).

         14.2.5   In Clauses 14.2.1 to 14.2.3 and 14.3, "this Agreement"
                  includes the Seller's Disclosure Letter, the Purchaser's
                  Disclosure Letter and all documents entered into pursuant to
                  this Agreement.

14.3     Reasonableness

         The Seller and the Purchaser confirms it has received independent
         legal advice relating to all the matters provided for in this
         Agreement, including the terms of Clause 14.2 (Whole Agreement), and
         agrees that the provisions of this Agreement are fair and reasonable.

14.4     Assignment

         14.4.1   Except as otherwise expressly provided in this Agreement,
                  neither the Seller nor the Purchaser may without the prior
                  written consent of the other parties, assign, grant any
                  security interest over, hold on trust or otherwise transfer
                  the benefit of the whole or any part of this Agreement.

         14.4.2   Except as otherwise expressly provided in this Agreement, the
                  Seller or the Purchaser may, without the consent of the other
                  parties, assign to a connected company the benefit of the
                  whole or any part of this Agreement, provided that:

                  (i)    such assignment shall not be absolute but shall be
                         expressed to have effect only for so long as the
                         assignee remains a connected company of the party
                         concerned;

                  (ii)   the assignee shall not be entitled to receive under
                         this Clause any greater amount than that to which the
                         assignor would have been entitled; and

                  (iii)  it shall be a term of the assignment that the assignee
                         takes the subject matter subject to any prior equities
                         in favour of the Purchaser or the Seller (as the case
                         may be).

                 For the purposes of this Clause, a "connected company" is a
                 company which is a subsidiary of the party concerned or which
                 is a holding company of such party or a subsidiary of such
                 holding company.

         14.4.3   For the avoidance of doubt, this Clause 14.4 shall survive
                  the termination of this Agreement.

                                      26
<PAGE>

14.5     Variation

         No variation of this Agreement shall be effective unless in writing
         and signed by or on behalf of the Seller and the Purchaser.

14.6     Time of the Essence

         Time shall be of the essence of this Agreement both as regards any
         dates, times and periods mentioned and as regards any dates, times and
         periods which may be substituted for them in accordance with this
         Agreement or by agreement in writing between the Seller and the
         Purchaser.

14.7     Method of Payment

         Wherever in this Agreement provision is made for the payment by one
         party to the other, such payment shall be effected by crediting for
         same day value the account specified by the payee to the payer,
         reasonably in advance and in sufficient detail to enable payment by
         telegraphic or other electronic means to be effected on or before the
         due date for payment.

14.8     Costs

         14.8.1   The Seller shall bear all costs incurred by it in connection
                  with the preparation, negotiation and entry into of this
                  Agreement.

         14.8.2   The Purchaser shall bear all such costs incurred by it in
                  connection with the preparation, negotiation and entry into
                  of this Agreement.

14.9     Stamp Duty, Fees and Taxes

         The Purchaser shall bear the cost of all stamp duty and all
         registration and transfer taxes and duties or their equivalents in all
         jurisdictions where such fees, taxes and duties are payable as a
         result of the transactions contemplated by this Agreement. The
         Purchaser shall be responsible for arranging the payment of such stamp
         duty and all other such fees, taxes and duties, including fulfilling
         any administrative or reporting obligation imposed by the jurisdiction
         in question in connection with the payment of such taxes and duties.
         The Purchaser shall indemnify the Seller or any other member of the
         Seller's Group against any Losses suffered by the Seller or member of
         the Seller's Group as a result of the Purchaser failing to comply with
         its obligations under this Clause 14.9.

14.10    Interest

         If the Seller or the Purchaser defaults in the payment when due of any
         sum payable under this Agreement, its liability shall be increased to
         include interest on such sum from the date when such payment is due
         until the date of actual payment (after as well as before judgment) at
         a rate per annum of two per cent above the best lending rate for HK$
         from time to time of The Hongkong and Shanghai Banking Corporation
         Limited. Such interest shall accrue from day to day and shall be
         compounded monthly.

14.11    Grossing-up of Indemnity Payments

         14.11.1  Where any payment is made under this Agreement pursuant to an
                  indemnity, compensation or reimbursement provision and that
                  sum is subject to a charge to Taxation in the hands of the
                  recipient (other than Taxation attributable to a payment
                  being properly treated as an adjustment to the consideration
                  paid by the Purchaser for the Group), the sum payable shall
                  be increased to such sum as will ensure that, after

                                      27
<PAGE>

                  payment of such Taxation (and after giving credit for any
                  tax relief available to the recipient in respect of the
                  matter giving rise to the payment), the recipient shall be
                  left with a sum equal to the sum that it would have
                  received in the absence of such a charge to taxation.

         14.11.2  Where any sum constituting an indemnity, compensation or
                  reimbursement to any party to this Agreement (the "Party") is
                  paid to a person other than the Party, but is treated as
                  taxable in the hands of the Party, the payer shall promptly
                  pay to the Party such sum as shall reimburse the Party for
                  all Taxation suffered by it in respect of the payment (after
                  giving credit for any tax relief available to the Party in
                  respect of the matter giving rise to the payment).

14.12    Notices

         14.12.1  Any notice or other communication in connection with this
                  Agreement (each, a "Notice") shall be:

                  (i)    in writing;

                  (ii)   delivered by hand, fax, pre-paid first class post or
                         courier.

         14.12.2  A Notice to the Seller shall be sent to the following
                  address, or such other person or address as the Seller may
                  notify to the Purchaser from time to time:

                  39/F
                  PCCW Tower
                  TaiKoo Place
                  979 King's Road
                  Quarry Bay
                  Hong Kong

                  Fax:                             2962 5725

                  Attention:                       Company Secretary

         14.12.3  A Notice to the Purchaser shall be sent to the following
                  address, or such other person or address as the Purchaser may
                  notify to the Seller from time to time:

                  9th Floor, Paul Y Centre
                  51 Hung To Road
                  Kwun Tong
                  Kowloon
                  Hong Kong

                  Fax:                             2372 0611

                  Attention:                       Company Secretary

         14.12.4  A Notice shall be effective upon receipt and shall be deemed
                  to have been received:

                  (i)    two Business Days after posting, if delivered by
                         pre-paid first class post;

                  (ii)   at the time of delivery, if delivered by hand or
                         courier;

                  (iii)  at the time of transmission in legible form, if
                         delivered by fax.

                                      28
<PAGE>

14.13    Invalidity

         14.13.1  If any provision in this Agreement shall be held to be
                  illegal, invalid or unenforceable, in whole or in part, the
                  provision shall apply with whatever deletion or modification
                  is necessary so that the provision is legal, valid and
                  enforceable and gives effect to the commercial intention of
                  the parties.

         14.13.2  To the extent it is not possible to delete or modify the
                  provision, in whole or in part, under Clause 14.13.1, then
                  such provision or part of it shall, to the extent that it is
                  illegal, invalid or unenforceable, be deemed not to form part
                  of this Agreement and the legality, validity and
                  enforceability of the remainder of this Agreement shall,
                  subject to any deletion or modification made under Clause
                  14.13.1, not be affected.

14.14    Counterparts

         This Agreement may be entered into in any number of counterparts, all
         of which taken together shall constitute one and the same instrument.
         The Seller and the Purchaser may enter into this Agreement by signing
         any such counterpart.

14.15    Governing Law and Submission to Jurisdiction

         14.15.1  This Agreement shall be governed by and construed in
                  accordance with the laws of Hong Kong.

         14.15.2  The Seller and the Purchaser irrevocably agrees that the
                  courts of Hong Kong are to have exclusive jurisdiction to
                  settle any dispute which may arise out of or in connection
                  with this Agreement and that accordingly any proceedings
                  arising out of or in connection with this Agreement shall be
                  brought in such courts. The Seller and the Purchaser
                  irrevocably submits to the jurisdiction of such courts and
                  waives any objection to proceedings in any such court on the
                  ground of venue or on the ground that proceedings have been
                  brought in an inconvenient forum.

                                      29
<PAGE>

In witness whereof this Agreement has been duly executed.

SIGNED by                     )
on behalf of the Seller       )
in the presence of:           )

SIGNED by                     )
on behalf of the Purchaser    )
in the presence of:           )

                                      30
<PAGE>

                                   Schedule 1

                                   The Group

<TABLE>
<S>    <C>                                                   <C>
1      Particulars of the Company

       Name of Company:                                      Ipswich Holdings Limited

       Registered number:                                    370317

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      18 February 2000, British Virgin Islands

       Issued share capital:                                 USD1.00 divided into 1 share of USD1.00

       Authorised share capital:                             USD50,000.00 divided into 50,000 shares
                                                             of USD1.00

       Registered shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):

       Beneficial shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):

       Registered shareholders and shares held               PCCW Limited (2 shares)
       (immediately after the Restructuring):

       Beneficial shareholders and shares held               PCCW Limited (2 shares)
       (immediately after the Restructuring):

       Directors:                                            Peter Anthony Allen
                                                             Yuen Tin Fan
                                                             Wayne Michael Verge
                                                             Mak Chi Kin
                                                             Lui Kon Wai
                                                             Alexander Anthony Arena

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      31
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
2      Particulars of the Subsidiaries

       Name of Company:                                      Extra Lite International Limited

       Registered number:                                    337656

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      6 August 1999, British Virgin Islands

       Issued share capital:                                 USD1.00 divided into 1 share of USD1.00

       Authorised share capital:                             USD50,000.00 divided into 50,000 shares
                                                             of USD1.00

       Registered shareholders and shares held               Asian Motion Limited (1 share)
       (as at the date of this Agreement):

       Beneficial shareholders and shares held               Asian Motion Limited (1 share)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):

       Beneficial shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):

       Directors:                                            Lee Chi Hong, Robert
                                                             Alexander Anthony Arena
                                                             Wayne Michael Verge
                                                             Peter Anthony Allen
                                                             Yuen Tin Fan
                                                             Mak Chi Kin

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      32
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Cyber-Port Management Limited

       Registered number:                                    700578

       Registered office:                                    39th Floor, PCCW Tower, TaiKoo Place, 979
                                                             King's Road, Quarry Bay, Hong Kong

       Date and place of incorporation:                      12 January 2000, Hong Kong

       Issued share capital:                                 HKD2.00 divided into 2 shares of HKD1.00

       Authorised share capital:                             HKD10,000 divided into 10,000 shares of
                                                             HKD1.00

       Registered shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):                   PCCW Nominees Limited (1 share)

       Beneficial shareholders and shares held               PCCW Properties Limited (2 shares)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):                Excel Bright Properties Limited
                                                             (1 share)

       Beneficial shareholders and shares held               Ipswich Holdings Limited (2 shares)
       (immediately after the Restructuring):

       Directors:                                            Alexander Anthony Arena
                                                             William John Latter
                                                             Wayne Michael Verge
                                                             Peter Anthony Allen
                                                             Yuen Tin Fan
                                                             Lee Chi Hong, Robert

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      33
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      PCCW Real Estate Agency Limited

       Registered number:                                    706704

       Registered office:                                    39th Floor, PCCW Tower, TaiKoo Place, 979
                                                             King's Road, Quarry Bay, Hong Kong

       Date and place of incorporation:                      6 March 2000, Hong Kong

       Issued share capital:                                 HKD2.00 divided into 2 shares of HKD1.00

       Authorised share capital:                             HKD10,000 divided into 10,000 shares of
                                                             HKD1.00

       Registered shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):                   Pacific Century Regional Services
                                                             Limited (1 share)

       Beneficial shareholders and shares held               PCCW Properties Limited (2 shares)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):                Excel Bright Properties Limited
                                                             (1 share)

       Beneficial shareholders and shares held               Ipswich Holdings Limited (2 shares)
       (immediately after the Restructuring):

       Directors:                                            Alexander Anthony Arena
                                                             Gan Kim See, Wendy
                                                             Wayne Michael Verge
                                                             Peter Anthony Allen
                                                             Yuen Tin Fan
                                                             Lee Chi Hong, Robert
       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      34
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Pride Pacific Limited

       Registered number:                                    832235

       Registered office:                                    39th Floor, PCCW Tower, TaiKoo Place, 979
                                                             King's Road, Quarry Bay, Hong Kong

       Date and place of incorporation:                      5 February 2003, Hong Kong

       Issued share capital:                                 HKD2.00 divided into 2 shares of HKD1.00

       Authorised share capital:                             HKD10,000 divided into 10,000 shares of
                                                             HKD1.00

       Registered shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):                   PCCW Nominees Limited (1 share)

       Beneficial shareholders and shares held               PCCW Properties Limited (2 shares)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):                Excel Bright Properties Limited
                                                             (1 share)

       Beneficial shareholders and shares held               Ipswich Holdings Limited (2 shares)
       (immediately after the Restructuring):

       Directors:                                            Alexander Anthony Arena
                                                             Gan Kim See, Wendy
                                                             Wayne Michael Verge
                                                             Yuen Tin Fan
                                                             Lee Chi Hong, Robert

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      35
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Island South Property Management Limited

       Registered number:                                    831223

       Registered office:                                    39th Floor, PCCW Tower, TaiKoo Place, 979
                                                             King's Road, Quarry Bay, Hong Kong

       Date and place of incorporation:                      24 January 2003, Hong Kong

       Issued share capital:                                 HKD2.00 divided into 2 shares of HKD1.00

       Authorised share capital:                             HKD10,000 divided into 10,000 shares of
                                                             HKD1.00

       Registered shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):                   PCCW Nominees Limited (1 share)

       Beneficial shareholders and shares held               PCCW Properties Limited (2 shares)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):                Excel Bright Properties Limited
                                                             (1 share)

       Beneficial shareholders and shares held               Ipswich Holdings Limited (2 shares)
       (immediately after the Restructuring):

       Directors:                                            Alexander Anthony Arena
                                                             Gan Kim See, Wendy
                                                             Wayne Michael Verge
                                                             Yuen Tin Fan
                                                             Lee Chi Hong, Robert
                                                             Mak Chi Kin

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      36
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Midgre Properties Limited

       Registered number:                                    361474

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      5 January 2000, British Virgin Islands

       Issued share capital:                                 USD1.00 divided into 1 share of USD1.00

       Authorised share capital:                             USD50,000.00 divided into 50,000 shares
                                                             of USD1.00

       Registered shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):

       Beneficial shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):

       Beneficial shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):

       Directors:                                            Peter Anthony Allen
                                                             Yuen Tin Fan
                                                             Wayne Michael Verge
                                                             Lee Chi Hong, Robert
                                                             Mak Chi Kin
                                                             Martin John Mitchell Coombes
                                                             Lui Kon Wai

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      37
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Partner Link Investments Limited

       Registered number:                                    488877

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      26 March 2002, British Virgin Islands

       Issued share capital:                                 USD1.00 divided into 1 share of USD1.00

       Authorised share capital:                             USD50,000.00 divided into 50,000 share of
                                                             USD1.00

       Registered shareholders and shares held               Midgre Properties Limited (1 share)
       (as at the date of this Agreement):

       Beneficial shareholders and shares held               Midgre Properties Limited (1 share)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Midgre Properties Limited (1 share)
       (immediately after the Restructuring):

       Beneficial shareholders and shares held               Midgre Properties Limited (1 share)
       (immediately after the Restructuring):

       Directors:                                            Peter Anthony Allen
                                                             Yuen Tin Fan
                                                             Wayne Michael Verge
                                                             Martin John Mitchell Coombes
                                                             Mak Chi Kin
                                                             Lee Chi Hong, Robert
                                                             Lui Kon Wai

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      38
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Excel Bright Properties Limited

       Registered number:                                    469846

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      16 November 2001, British Virgin Islands

       Issued share capital:                                 USD1.00 divided into 1 share of USD1.00

       Authorised share capital:                             USD50,000.00  divided into 50,000 shares
                                                             of USD1.00

       Registered shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):

       Beneficial shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):

       Beneficial shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):

       Directors:                                            Yuen Tin Fan
                                                             Peter Anthony Allen
                                                             Wayne Michael Verge
                                                             Lee Chi Hong, Robert
                                                             Lui Kon Wai
                                                             Martin John Mitchell Coombes
                                                             Mak Chi Kin

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      39
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Monance Limited

       Registered number:                                    322881

       Registered office:                                    39th Floor, PCCW Tower, TaiKoo Place, 979
                                                             King's Road, Quarry Bay, Hong Kong

       Date and place of incorporation:                      22 August 1991, Hong Kong

       Issued share capital:                                 HKD1,000 divided into 100 shares of
                                                             HKD10.00

       Authorised share capital:                             HKD1,000 divided into 100 shares of
                                                             HKD10.00

       Registered shareholders and shares held               Midgre Properties Limited (98 shares)
       (as at the date of this Agreement):                   PCCW Nominees Limited (1 share)
                                                             PCCW-HKT Limited (1 share)

       Beneficial shareholders and shares held               PCCW-HKT Limited (2 shares)
       (as at the date of this Agreement):                   Midgre Properties Limited (98 shares)

       Registered shareholders and shares held               Midgre Properties Limited (98 shares)
       (immediately after the Restructuring):                PCCW Nominees Limited (1 share)
                                                             PCCW-HKT Limited (1 share)

       Beneficial shareholders and shares held               PCCW-HKT Limited (2 shares)
       (immediately after the Restructuring):                Midgre Properties Limited (98 shares)

       Directors:                                            Yuen Tin Fan
                                                             Alexander Anthony Arena
                                                             Mak Chi Kin

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      40

<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Gain Score Limited

       Registered number:                                    217595

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      5 February 1997, British Virgin Islands

       Issued share capital:                                 USD1.00 divided into 1 share of USD1.00

       Authorised share capital:                             USD50,000.00 divided into 50,000 shares
                                                             of USD1.00

       Registered shareholders and shares held               Excel Bright Properties Limited
       (as at the date of this Agreement):                   (1 share)

       Beneficial shareholders and shares held               Excel Bright Properties Limited
       (as at the date of this Agreement):                   (1 share)

       Registered shareholders and shares held               Excel Bright Properties Limited
       (immediately after the Restructuring):                (1 share)

       Beneficial shareholders and shares held               Excel Bright Properties Limited
       (immediately after the Restructuring):                (1 share)

       Directors:                                            Peter Anthony Allen
                                                             Wayne Michael Verge
                                                             Yuen Tin Fan
                                                             Lee Chi Hong, Robert
                                                             Lui Kon Wai
                                                             Martin John Mitchell Coombes
                                                             Mak Chi Kin

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      41

<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Beijing Jing Wei House & Land Estate
                                                             Development Co Limited

       Registered number:                                    006816

       Registered office:                                    Unit 1318, IBM Tower,
                                                             Pacific Century Place,
                                                             2A Gong Ti,
                                                             Bei Lu,
                                                             Chaoyang District,
                                                             Beijing
                                                             PRC 100027

       Date and place of incorporation:                      29 November 1993, The People's Republic
                                                             of China

       Issued share capital:                                 USD50,000,000.00

       Authorised share capital:                             USD100,000,000

       Registered shareholders and shares held               BMEI Co. Ltd.
      (as at the date of this Agreement):                    Gain Score Limited
                                                             Beijing JingGong Real and Estate Development Head Company

       Beneficial shareholders and shares held               BMEI Co. Ltd.
       (as at the date of this Agreement):                   Gain Score Limited
                                                             Beijing JingGong Real and Estate Development Head Company

       Registered shareholders and shares held               BMEI Co. Ltd.
       (immediately after the Restructuring):                Gain Score Limited
                                                             Beijing JingGong Real and Estate Development Head Company

       Beneficial shareholders and shares held               BMEI Co. Ltd.
       (immediately after the Restructuring):                Gain Score Limited
                                                             Beijing JingGong Real and Estate Development Head Company

       Directors:                                            Lee Chi Hong, Robert
                                                             Zhang, Zi Li
                                                             Fu Lian Jun
                                                             Mak Chi Kin
                                                             Lui Kon Wai
                                                             Martin John Mitchell Coombes
                                                             Tan Phiak Chuan, Andrew
                                                             Ma, Guang Xin
                                                             Kang, Shao Peng

       Secretary:                                            n/a
</TABLE>

                                      42
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      PCCW Properties (HK) Limited

       Registered number:                                    675179

       Registered office:                                    39th Floor, PCCW Tower, TaiKoo Place, 979
                                                             King's Road, Quarry Bay, Hong Kong

       Date and place of incorporation:                      10 May 1999, Hong Kong

       Issued share capital:                                 HKD2.00 divided into 2 shares of HKD1.00

       Authorised share capital:                             HKD10,000.00 divided into 10,000 shares
                                                             of HKD1.00

       Registered shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):                   Pacific Century Regional Services Limited
                                                             (1 share)

       Beneficial shareholders and shares held               PCCW Properties Limited (2 shares)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):                Excel Bright Properties Limited
                                                             (1 share)

       Beneficial shareholders and shares held               Ipswich Holdings Limited (2 shares)
       (immediately after the Restructuring):

       Directors:                                            Peter Anthony Allen
                                                             Wayne Michael Verge
                                                             Lee Chi Hong, Robert
                                                             Mak Chi Kin
                                                             Gan Kim See, Wendy

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      43
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      PCCW Property Management Limited

       Registered number:                                    290458

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      10 August 1998, British Virgin Islands

       Issued share capital:                                 USD1.00 divided into 1 share of USD1.00

       Authorised share capital:                             USD50,000.00 divided into 50,000 shares
                                                             of USD1.00

       Registered shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):

       Beneficial shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):

       Beneficial shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):

       Directors:                                            Peter Anthony Allen
                                                             Wayne Michael Verge
                                                             Mak Chi Kin
                                                             Martin John Mitchell Coombes

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      44
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      PCCW Facilities Management Limited

       Registered number:                                    724020

       Registered office:                                    39th Floor, PCCW Tower, TaiKoo Place, 979
                                                             King's Road, Quarry Bay, Hong Kong

       Date and place of incorporation:                      14 July 2000, Hong Kong

       Issued share capital:                                 HKD2.00 divided into 2 shares of HKD1.00

       Authorised share capital:                             HKD10,000.00 divided into 10,000 shares
                                                             of HKD1.00

       Registered shareholders and shares held               PCCW Services Limited (1 share)
       (as at the date of this Agreement):                   PCCW Property Management Limited (1 share)

       Beneficial shareholders and shares held               PCCW Property Management Limited (2
       (as at the date of this Agreement):                   shares)

       Registered shareholders and shares held               PCCW Property Management Limited (1 share)
       (immediately after the Restructuring):                Excel Bright Properties Limited
                                                             (1 share)

       Beneficial shareholders and shares held               PCCW Property Management Limited (2
       (immediately after the Restructuring):                shares)

       Directors:                                            Alexander Anthony Arena
                                                             Yuen Tin Fan
                                                             Martin John Mitchell Coombes
                                                             Mak Chi Kin

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      45
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Wise Union Enterprises Limited

       Registered number:                                    491332

       Registered office:                                    P. O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      12 April 2002, British Virgin Islands

       Issued share capital:                                 USD1.00 divided into 1 share of USD1.00

       Authorised share capital:                             USD50,000.00 divided into 50,000 shares
                                                             of USD1.00

       Registered shareholders and shares held               PCCW Property Management Limited (1 share)
       (as at the date of this Agreement):

       Beneficial shareholders and shares held               PCCW Property Management Limited (1 share)
       (as at the date of this Agreement):

       Registered shareholders and shares held               PCCW Property Management Limited (1 share)
       (immediately after the Restructuring):

       Beneficial shareholders and shares held               PCCW Property Management Limited (1 share)
       (immediately after the Restructuring):

       Directors:                                            Alexander Anthony Arena
                                                             Yuen Tin Fan
                                                             Martin John Mitchell Coombes
                                                             Mak Chi Kin

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      46
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Beijing Jingwei Property Management Co
                                                             Limited

       Registered number:                                    014097

       Registered office:                                    A2, Workers' Gymnasium North Road, Chaoyang District, Beijing, PRC

       Date and place of incorporation:                      29 July 1999, The People's Republic of
                                                             China

       Issued share capital:                                 USD150,000

       Authorised share capital:                             USD150,000

       Registered shareholders and shares held               Wise Union Enterprises Limited
       (as at the date of this Agreement):

       Beneficial shareholders and shares held               Wise Union Enterprises Limited
       (as at the date of this Agreement):

       Registered shareholders and shares held               Wise Union Enterprises Limited
       (immediately after the Restructuring):

       Beneficial shareholders and shares held               Wise Union Enterprises Limited
       (immediately after the Restructuring):

       Directors:                                            Lee Chi Hong, Robert
                                                             Martin John Mitchell Coombes
                                                             Mak Chi Kin
                                                             Tan Phiak Chuan, Andrew
                                                             Li Gao Qian

       Secretary:                                            n/a
</TABLE>

                                      47
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Carmay Investment Limited

       Registered number:                                    367862

       Registered office:                                    39th Floor, PCCW Tower, TaiKoo Place, 979
                                                             King's Road, Quarry Bay, Hong Kong

       Date and place of incorporation:                      9 July 1992, Hong Kong

       Issued share capital:                                 HKD2.00 divided into 2 shares of HKD1.00

       Authorised share capital:                             HKD10,000.00 divided into 10,000 shares
                                                             of HKD1.00

       Registered shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):                   PCCW Nominees Limited (1 share)

       Beneficial shareholders and shares held               PCCW Properties Limited (2 shares)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):                Excel Bright Properties Limited
                                                             (1 share)

       Beneficial shareholders and shares held               Ipswich Holdings Limited (2 shares)
       (immediately after the Restructuring):

       Directors:                                            Alexander Anthony Arena
                                                             Peter Anthony Allen
                                                             Yuen Tin Fan
                                                             Wayne Michael Verge
                                                             Lui Kon Wai
                                                             Mak Chi Kin

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      48
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      ACCA Investment Limited

       Registered number:                                    382126

       Registered office:                                    39th Floor, PCCW Tower, TaiKoo Place, 979
                                                             King's Road, Quarry Bay, Hong Kong

       Date and place of incorporation:                      29 September 1992, Hong Kong

       Issued share capital:                                 HKD2.00 divided into 2 shares of HKD1.00

       Authorised share capital:                             HKD10,000.00 divided into 10,000 shares
                                                             of HKD1.00

       Registered shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):                   PCCW Nominees Limited (1 share)

       Beneficial shareholders and shares held               PCCW Properties Limited (2 shares)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):                Excel Bright Properties Limited
                                                             (1 share)

       Beneficial shareholders and shares held               Ipswich Holdings Limited (2 shares)
       (immediately after the Restructuring):

       Directors:                                            Alexander Anthony Arena
                                                             Peter Anthony Allen
                                                             Yuen Tin Fan
                                                             Wayne Michael Verge
                                                             Lui Kon Wai
                                                             Mak Chi Kin

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      49
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Smart Phoenix Limited

       Registered number:                                    578934

       Registered office:                                    P.O. Box 957
                                                             Offshore Incorporations Centre,
                                                             Road Town,
                                                             Tortola,
                                                             British Virgin Islands

       Date and place of incorporation:                      22 January 2004, British Virgin Islands

       Issued share capital                                  -
       (as at the date of this Agreement):

       Issued share capital                                  USD1.00 divided into 1 share of USD1.00
       (immediately after the Restructuring):

       Authorised share capital:                             USD50,000.00 divided into 50,000 shares
                                                             of USD1.00

       Registered shareholders and shares held               Shelf Company to be transferred to
       (as at the date of this Agreement):                   Ipswich Holdings Limited

       Beneficial shareholders and shares held               Shelf Company to be transferred to
       (as at the date of this Agreement):                   Ipswich Holdings Limited

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):

       Beneficial shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):

       Directors                                             -
       (as at the date of this Agreement):

       Secretary                                             -
       (as at the date of this Agreement):
</TABLE>

                                      50
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Talent Master Investments Limited

       Registered number:                                    576896

       Registered office:                                    P.O. Box 957,
                                                             Offshore Incorporations Centre,
                                                             Road Town,
                                                             Tortola,
                                                             British Virgin Islands

       Date and place of incorporation:                      8 January 2004, British Virgin Islands

       Issued share capital                                  -
       (as at the date of this Agreement):

       Issued share capital                                  USD1.00 divided into 1 share of USD1.00
       (immediately after the Restructuring):

       Authorised share capital:                             USD50,000.00 divided into 50,000 shares
                                                             of USD1.00

       Registered shareholders and shares held               Shelf Company to be transferred to
       (as at the date of this Agreement):                   Ipswich Holdings Limited

       Beneficial shareholders and shares held               Shelf Company to be transferred to
       (as at the date of this Agreement):                   Ipswich Holdings Limited

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):

       Beneficial shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):

       Directors                                             -
       (as at the date of this Agreement):

       Secretary                                             -
       (as at the date of this Agreement):
</TABLE>

                                      51
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Madeline Investments Limited

       Registered number:                                    703664

       Registered office:                                    39th Floor, PCCW Tower, TaiKoo Place, 979
                                                             King's Road, Quarry Bay, Hong Kong

       Date and place of incorporation:                      9 February 2000, Hong Kong

       Issued share capital:                                 HKD2.00 divided into 2 shares of HKD1.00

       Authorised share capital:                             HKD10,000.00 divided into 10,000 shares
                                                             of HKD1.00

       Registered shareholders and shares held               PCCW Properties Limited (1 share)
       (as at the date of this Agreement):                   Ipswich Holdings Limited (1 share)

       Beneficial shareholders and shares held               Ipswich Holdings Limited (2 shares)
       (as at the date of this Agreement):

       Registered shareholders and shares held               Ipswich Holdings Limited (1 share)
       (immediately after the Restructuring):                Excel Bright Properties Limited
                                                             (1 share)

       Beneficial shareholders and shares held               Ipswich Holdings Limited (2 shares)
       (immediately after the Restructuring):

       Directors:                                            Alexander Anthony Arena
                                                             Peter Anthony Allen
                                                             Yuen Tin Fan
                                                             Wayne Michael Verge
                                                             Lui Kon Wai
                                                             Mak Chi Kin

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      52
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Atkins Developments Limited

       Registered number:                                    336917

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      30 July 1999, British Virgin Islands

       Issued share capital:                                 USD1.00 divided into 1 share of USD1.00

       Authorised share capital:                             USD50,000.00 divided into 50,000 shares
                                                             of USD1.00

       Registered shareholders and shares held               Extra Lite International Limited
       (as at the date of this Agreement):                   (1 share)

       Beneficial shareholders and shares held               Extra Lite International Limited
       (as at the date of this Agreement):                   (1 share)

       Registered shareholders and shares held               Extra Lite International Limited
       (immediately after the Restructuring):                (1 share)

       Beneficial shareholders and shares held               Extra Lite International Limited
       (immediately after the Restructuring):                (1 share)

       Directors:                                            Lee Chi Hong, Robert
                                                             Alexander Anthony Arena
                                                             Wayne Michael Verge
                                                             Peter Anthony Allen
                                                             Yuen Tin Fan
                                                             Mak Chi Kin

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      53
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Cyber-Port Limited

       Registered number:                                    669442

       Registered office:                                    39th Floor, PCCW Tower, TaiKoo Place, 979
                                                             King's Road, Quarry Bay, Hong Kong

       Date and place of incorporation:                      12 March 1999, Hong Kong

       Issued share capital:                                 HKD2.00 divided into 2 shares of HKD1.00

       Authorised share capital:                             HKD10,000.00 divided into 10,000 shares
                                                             of HKD1.00

       Registered shareholders and shares held               Asian Motion Limited (1 share)
       (as at the date of this Agreement):                   Atkins Developments Limited
                                                             (1 share)

       Beneficial shareholders and shares held               Atkins Developments Limited
       (as at the date of this Agreement):                   (2 shares)

       Registered shareholders and shares held               Atkins Developments Limited
       (immediately after the Restructuring):                (1 share)
                                                             Excel Bright Properties Limited
                                                             (1 share)

       Beneficial shareholders and shares held               Atkins Developments Limited
       (immediately after the Restructuring):                (2 shares)

       Directors:                                            Lee Chi Hong, Robert
                                                             Alexander Anthony Arena
                                                             Wayne Michael Verge
                                                             Peter Anthony Allen
                                                             Yuen Tin Fan
                                                             William John Latter
       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      54
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Name of Company:                                      Carlyle International Limited

       Registered number:                                    685589

       Registered office:                                    39th Floor, PCCW Tower, TaiKoo Place, 979
                                                             King's Road, Quarry Bay, Hong Kong

       Date and place of incorporation:                      18 August 1999, Hong Kong

       Issued share capital:                                 HKD2.00 divided into 2 shares of HKD1.00

       Authorised share capital:                             HKD10,000.00 divided into 10,000 shares
                                                             of HKD1.00

       Registered shareholders and shares held               Asian Motion Limited (1 share)
       (as at the date of this Agreement):                   Extra Lite International Limited
                                                             (1 share)

       Beneficial shareholders and shares held               Extra Lite International Limited
       (as at the date of this Agreement):                   (2 shares)

       Registered shareholders and shares held               Extra Lite International Limited
       (immediately after the Restructuring):                (1 share)
                                                             Excel Bright Properties Limited
                                                             (1 share)

       Beneficial shareholders and shares held               Extra Lite International Limited
       (immediately after the Restructuring):                (2 shares)

       Directors:                                            Alexander Anthony Arena
                                                             William John Latter
                                                             Wayne Michael Verge
                                                             Peter Anthony Allen
                                                             Yuen Tin Fan
                                                             Lee Chi Hong, Robert

       Secretary:                                            PCCW Secretaries Limited
</TABLE>

                                      55
<PAGE>

                                   Schedule 2
                             The Purchaser's Group

<TABLE>
<S>    <C>                                                   <C>
1      Particulars of the Purchaser

       Name of Company:                                      Dong Fang Gas Holdings Limited

       Registered number:                                    25074 (Bermuda) / F9193 (HK)

       Registered office:                                    Clarendon House, 2 Church Street,
                                                             Hamilton HM11, Bermuda

       Date and place of incorporation:                      19-06-1998        Bermuda

       Issued share capital:                                 HK$464,506,162.40 divided into
                                                             1,161,265,406 shares

       Authorised share capital:                             HK$600,000,000 divided into 1,500,000,000
                                                             shares of HK$0.40 each

       Shareholders:                                         China Strategic Holdings Limited

       No. of shares held:                                   500,000,000 shares*

       Executive Directors:                                  Dr. Chan Kwok Keung, Charles
                                                             Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung
                                                             Mr. Zhang Shi Chen

       Independent Non-executive Directors:                  Mr. Zhao Wenfu
                                                             Mr. Tsang Link Carl, Brian

       Secretary:                                            Ng Yuk Yee, Feona
</TABLE>

*The 500,000,000 shares are held by Great Joint Profits Limited, a wholly-owned
subsidiary of China Strategic (B.V.I.) Limited which is in turn a wholly-owned
subsidiary of China Strategic Holdings Limited. Both China Strategic (B.V.I.)
Limited and China Strategic Holdings Limited are deemed to be interested in
500,000,000 shares in the Company held by Great Joint Profits Limited.

                                      56
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
2      Particulars of the Purchaser's Subsidiaries

       Name of Company:                                      Dong Fang Gas (B.V.I.) Limited

       Registered number:                                    513189

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      12-09-2002  British Virgin Islands

       Issued share capital:                                 US$1.00 divided into 1 share

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders:               Dong Fang Gas Holdings Limited

       No. of shares held:                                   1 share

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Management Limited
</TABLE>

                                      57
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Digital Delight Limited

       Registered number:                                    502871

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      02-07-2002  British Virgin Islands

       Issued share capital:                                 US$1.00 divided into 1 share

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders:               Dong Fang Gas (B.V.I.) Limited
                                                             (formerly known as Growth Choice Limited)

       No. of shares held:                                   1 share

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Management Limited
</TABLE>

                                      58
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Success Trinity Limited

       Registered number:                                    501388

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      02-07-2002  British Virgin Islands

       Issued share capital:                                 US$1.00 divided into 1 share

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders:               Dong Fang Gas (B.V.I.) Limited
                                                             (formerly known as Growth Choice Limited)

       No. of shares held:                                   1 share

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Management Limited
</TABLE>

                                      59
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Emporium Profits Limited

       Registered number:                                    512134

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      06-09-2002  British Virgin Islands

       Issued share capital:                                 US$1.00 divided into 1 share

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders:               Dong Fang Gas (B.V.I.) Limited (formerly
                                                             known as Growth Choice Limited)

       No. of shares held:                                   1 share

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Management Limited
</TABLE>

                                      60
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Ample Master Resources Limited

       Registered number:                                    513167

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      12-09-2002  British Virgin Islands

       Issued share capital:                                 US$1.00 divided into 1 share

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders:               Dong Fang Gas (B.V.I.) Limited (formerly
                                                             known as Growth Choice Limited)

       No. of shares held:                                   1 share

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Management Limited
</TABLE>

                                      61
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Chance Gateway Limited

       Registered number:                                    513270

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      12-09-2002  British Virgin Islands

       Issued share capital:                                 US$1.00 divided into 1 share

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders:               Dong Fang Gas (B.V.I.) Limited
                                                             (formerly known as Growth Choice Limited)

       No. of shares held:                                   1 share

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Management Limited
</TABLE>

                                      62
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Easy Accurate Profits Limited

       Registered number:                                    513206

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      12-09-2002  British Virgin Islands

       Issued share capital:                                 US$1.00 divided into 1 share

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders:               Dong Fang Gas (B.V.I.) Limited
                                                             (formerly known as Growth Choice Limited)

       No. of shares held:                                   1 share

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Management Limited
</TABLE>

                                      63
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Global High Profits Limited

       Registered number:                                    513307

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      12-09-2002  British Virgin Islands

       Issued share capital:                                 US$1.00 divided into 1 share

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders:               Dong Fang Gas (B.V.I.) Limited
                                                             (formerly known as Growth Choice Limited)

       No. of shares held:                                   1 share

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Management Limited
</TABLE>

                                      64
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Chief Atlantic Profits Limited

       Registered number:                                    514108

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      18-09-2002  British Virgin Islands

       Issued share capital:                                 US$1.00 divided into 1 share

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders:               Dong Fang Gas (B.V.I.) Limited
                                                             (formerly known as Growth Choice Limited)

       No. of shares held:                                   1 share

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Management Limited
</TABLE>

                                      65
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Dong Fang Gas Management Limited

       Registered number:                                    789983

       Registered office:                                    9th Floor,  Paul Y. Centre, 51 Hung To
                                                             Road, Kowloon, Hong Kong

       Date and place of incorporation:                      20-03-2002  Hong Kong

       Issued share capital:                                 HK$2.00 divided into 2 shares

       Authorised share capital:                             HK$10,000 divided into 10,000 shares of
                                                             HK$1.00 each

       Shareholders and shares held:                         Dong Fang Gas (B.V.I.) Limited
                                                             (formerly known as Growth Choice Limited)
                                                             1 share
                                                             Dong Fang Gas Limited
                                                             1 share (held for and on behalf of Dong
                                                             Fang Gas (B.V.I.) Limited)

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Limited
</TABLE>

                                      66
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      China Crystal Investment Ltd.

       Registered number:                                    512773

       Registered office:                                    Beaufort House, P.O. Box 438, Road Town,
                                                             Tortola, British Virgin Islands

       Date and place of incorporation:                      10-09-2002  British Virgin Islands

       Issued share capital:                                 US$1.00 divided into 1 share

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders:               Dong Fang Gas (B.V.I.) Limited

       No. of shares held:                                   1 share

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:
</TABLE>

                                      67
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Dong Fang Gas Limited

       Registered number:                                    815429

       Registered office:                                    9th Floor, Paul Y. Centre, 51 Hung To
                                                             Road, Kwun Tong, Kowloon, Hong Kong

       Date and place of incorporation:                      25-09-2002  Hong Kong

       Issued share capital:                                 HK$2.00 divided into 2 shares

       Authorised share capital:                             HK$10,000 divided into 10,000 shares of
                                                             HK$1.00 each

       Shareholders and shares held:                         Dong Fang Gas (B.V.I.) Limited
                                                             (formerly known as Growth Choice Limited)
                                                             1 share
                                                             Dong Fang Gas Management Limited
                                                             1 share (held on trust for and on behalf
                                                             of Dong Fang Gas (B.V.I.) Limited)

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Management Limited
</TABLE>

                                      68
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Dong Fang Gas (China) Limited

       Registered number:                                    545923.

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      16-05-2003  British Virgin Islands

       Issued share capital:                                 US$1.00 divided into 1 share

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders:               Dong Fang Gas (B.V.I.) Limited
                                                             (formerly known as Growth Choice Limited)

       No. of shares held:                                   1 share

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Management Limited
</TABLE>

                                      69
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:
                                                             Top Power Holdings Limited

       Registered number:                                    465762

       Registered office:                                    3rd Floor, Omar Hodge Building, Wickhams
                                                             Cay I, P.O. Box 362, Road Town, Tortola,
                                                             British Virgin Islands

       Date and place of incorporation:                      08-10-2001  British Virgin Islands

       Issued share capital:                                 US$100 divided into 100 shares

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders                Dong Fang Gas (China.) Limited
       and shares held:                                      73 shares
                                                             Realux Limited
                                                             27 shares

       Directors:                                            Realux Limited
                                                             Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            Dong Fang Gas Management Limited
</TABLE>

                                      70
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Beijing Continental Gas Co. Ltd.

       Registered number:                                    N/A

       Registered office:                                    Technology Training Center, 30 Bai Shi Qiao Road, Haidian District,
                                                             Beijing, PRC

       Date and place of incorporation:                      15-07-1997  People's Republic of China

       Issued share capital:                                 RMB 10 million

       Authorised share capital:                             RMB 10 million

       Registered and beneficial shareholders                Top Power Holdings Limited
       and shares held:                                      70%

       Directors:                                            Yeung Dik Man
                                                             Ho Chak Man
                                                             Dr. Yap, Allan
                                                             Chan Kwok Hung

       Secretary:                                            N/A
</TABLE>

                                      71

<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Apex Landmark Limited

       Registered number:                                    558122

       Registered office:                                    P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      28-08-2003   British Virgin Islands

       Issued share capital:                                 US$1.00 divided into 1 share

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1.00 each

       Registered and beneficial shareholders:               Companion Building Material (Holdings)
                                                             Limited

       No. of shares held:                                   1 share

       Directors:                                            Dr. Yap, Allan
                                                             Mr. Chan Kwok Hung

       Secretary:                                            N/A
</TABLE>

                                      72
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Companion-China Limited
                                                             (formerly known as Taico
                                                             Investments Limited) - 27/10/1992)

       Registered number:                                    369349

       Registered office:                                    Suites 1307-8, 13/F., Great Eagle Centre,
                                                             23 Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      16-07-1992       Hong Kong

       Issued share capital:                                 HK$137,839,000 divided into 137,839,000
                                                             shares of HK$1 each

       Authorised share capital:                             HK$137,839,000 divided into 137,839,000
                                                             shares of HK$1 each

       Registered Shareholders:                              Companion Building Material
                                                               (Holdings) Limited
                                                             (137,838,999 Shares)
                                                             Ng Kwun Wan (1 Share)

       Beneficial Shareholder:                               Companion Building Material
                                                               (Holdings) Limited
                                                             137,839,000 Shares

       Directors:                                            Leung Kwok Wa
                                                             Ng Kwun Wan

       Secretary:                                            Leung Ying Mei Florice

       Auditors:                                             Deloitte Touche Tohmatsu

       Business                                              Manufacturing, Building Material Supplies
</TABLE>

                                      73
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Companion-China (Supplies) Limited

       Registered number:                                    607499

       Registered office:                                    Suites 1307-8, 13/F., Great Eagle Centre,
                                                             23 Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      12-05-1997       Hong Kong

       Issued share capital:                                 HK$10,000 divided into 5,000 shares  of
                                                             HK$2 each

       Authorised share capital:                             HK$10,000 divided into 5,000 shares of
                                                             HK$2 each

       Registered Shareholders:                              Companion-China Limited (1 Share)
                                                             Ng Kwun Wan (1 Share)

       Beneficial Shareholder:                               Companion-China Limited (2 Shares)

       Directors:                                            Leung Kwok Wa
                                                             Ng Kwun Wan

       Secretary:                                            Leung Ying Mei, Florice
</TABLE>

                                      74
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      King Unity Investments Limited

       Registered number:                                    405845

       Registered office:                                    Suites 1307-8, 13/F., Great Eagle Centre,
                                                             23 Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      02-03-1993       Hong Kong

       Issued share capital:                                 HK$20,000 divided into 20,000 shares of
                                                             HK$1 each

       Authorised share capital:                             HK$20,000 divided into 20,000 shares of
                                                             HK$1 each

       Registered Shareholders:                              Companion-China Limited
                                                             (5,999 Shares)
                                                             Chen Ming Yin, Tiffany
                                                             (2,600 Shares)
                                                             Chiu Mei Ku
                                                             (1,400 Shares)
                                                             Ng Kwun Wan
                                                             (1 Share)
                                                             Placemakers Limited
                                                             (10,000 Shares)

       Shareholding beneficially held by Companion-China     16,000 Shares
       Limited:

       Directors:                                            Leung Kwok Wa
                                                             Ng Kwun Wan
                                                             Chen Ming Yin, Tiffany

       Secretary:                                            Leung Ying Mei Florice
</TABLE>

                                      75
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Saint Galerie Tiles Limited

       Registered number:                                    92453

       Registered office:                                    Suites 1307-8, 13/F., Great Eagle Centre,
                                                             23 Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      23-01-1981       Hong Kong

       Issued share capital:                                 HK$13,750,000 divided into 13,750,000
                                                             shares

       Authorised share capital:                             HK$80,000,000 divided into 80,000 shares
                                                             of HK$1,000 each

       Registered Shareholders:                              Super Trend Limited
                                                             (13,749 Shares)
                                                             Ng Kwun Wan
                                                             (1 Share)

       Beneficial Shareholders                               Super Trend Limited
                                                             (13,750 Shares)

       Directors:                                            Leung Kwok Wa
                                                             Ng Kwun Wan

       Secretary:                                            Leung Ying Mei Florice
</TABLE>

                                      76
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Saint Galerie Trading Company Limited

       Registered number:                                    30983

       Registered office:                                    Suites 1307-8, 13/F., Great Eagle Centre,
                                                             23 Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      15-12-1972       Hong Kong

       Issued share capital:                                 HK$4,000 divided into 400 shares

       Authorised share capital:                             HK$500,000 divided into 500,000 shares of
                                                             HK$1 each

       Registered Shareholders:                              Super Trend Limited
                                                             (399 Shares)
                                                             Saint Galerie Tiles Limited
                                                             (1 Share)

       Beneficial Shareholders                               Super Trend Limited
                                                             (400 Shares)

       Directors:                                            Leung Kwok Wa
                                                             Ng Kwun Wan

       Secretary:                                            Leung Ying Mei Florice
</TABLE>

                                      77
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Super Trend Limited

       Registered office:                                    80 Broad Street, Morovia, Liberia

       Date and place of incorporation:                      13-05-1987       Republic of Liberia

       Issued share capital:                                 US$4 divided into 4 shares of US$1 each

       Authorised share capital:                             US$500 divided into 500 shares of US$1
                                                             each

       Shareholder:                                          Companion-China Limited (4 shares)

       Directors:                                            Leung Kwok Wa
                                                             Ng Kwan Wan

       Secretary:                                            Ng Kwun Wan
</TABLE>

                                      78
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Asean Fortune Corporation

       Registered number:                                    208190

       Registered office:                                    Offshore Incorporations Limited
                                                             P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      03-12-1996       BVI

       Issued share capital:                                 US$60 divided into 60 shares of US$1 each

       Authorised share capital:                             US$50,000 divided into 50,000 shares  of
                                                             US$1 each of US$1 each

       Shareholders:                                         Eminent Development Limited
                                                             (30 Shares)
                                                             Companion-China Limited
                                                             (30 Shares)

       Directors:                                            Leung Kowk Wa
                                                             Chow Yu Chun, Alexander
                                                             Ki Man Fung, Leonie
                                                             Chan Ching (alternate to Mr Chow Yu Chun
                                                             Alexander)
                                                             Ng Kwun Wan
</TABLE>

                                      79
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Brightsilver Investments Limited

       Registered number:                                    215795

       Registered office:                                    Offshore Incorporations Limited
                                                             P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      23-01-1997       BVI

       Issued share capital:                                 US$2 divided into 2 shares of US$1 each

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1 each of US$1 Each

       Registered Shareholders:                              Companion-China Limited
                                                             (2 Shares)

       Directors:                                            Leung Kwok Wa
                                                             Ng Kwun Wan
</TABLE>

                                      80
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Wenzhou Xishan United Ceramics Co., Ltd

       Registered number:                                    0063860
                                                             Approved Certificate by
                                                             Zhejiang Bureau of Foreign Trade & Economic Cooperation
                                                             Ref No: 199202316

       Registered office:                                    229 Xishan East Road, Wenzhou City, Zhejiang, PRC

       Date and place of incorporation:                      30-11-1992       PRC

       Registered capital:                                   US$6,800,000

       Total Investment:                                     US$13,600,000

       Shareholders:                                         Wenzhou Xishan Wall Tile Factory
                                                             (US$1,800,000)
                                                             Companion-China Limited
                                                             (US$5,000,000)

       Directors:                                            Leung Kwok Kui
                                                             Tsui Hin Kit
                                                             Ng Tik Hong
                                                             Ng Sai Hung
                                                             Ng Kwun Wan
                                                             Cheung Ben Yee
                                                             Lee Wah Ching
                                                             Ha Ka Lam
                                                             Chiang Ching Fat
                                                             Chu Ding Sun
                                                             Chan King Wai
</TABLE>

                                      81
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Chongqing Golden City Ceramics Co Ltd

       Registered number:                                    0080095
                                                             Approved Certificate by:
                                                             Chongqing Foreign Economic Relations and Trade Commission
                                                             Ref Number: 199202316

       Registered office:                                    No. 49, Gong Kuang Road, Li Jia Tuo, Jiu Long Po District,
                                                             Chongqing City, PRC

       Date and place of incorporation:                      03-08-1993       PRC

       Registered Capital:                                   US$5,500,000

       Total Investment:                                     US$11,000,000

       Shareholders:                                         Chongqing Sixth Cotton Mill Yakka Service Co.
                                                             (US$1,650,000)
                                                             King Unity Investment Limited
                                                             (US$3,850,000)

       Directors:                                            Leung Kwok Wa
                                                             Tang Wei
                                                             Ng Kwun Wan
                                                             Ng Tik Hong
                                                             Chu Ding Sun
                                                             Lee Hiu Ling
                                                             Wong Tak
                                                             Cheung Wing Ching
</TABLE>

                                      82
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      YiXing United Ceramics Co., Ltd

       Registered number:                                    0086239
                                                             Approved Certificate by:
                                                             Department of Foreign Trade and Economic Cooperation, Jiangsu
                                                             Ref Number: 19939958

       Registered office:                                    Industrial Park for Environmental Science and Technology, YiXing, PRC

       Date and place of incorporation:                      06-03-1993       PRC

       Registered Capital:                                   US$11,360,000

       Total Investment:                                     US$27,160,000

       Shareholders:                                         Asean Fortune Corporation
                                                             (US$15,560,000)
                                                             YiXing Economic Development Zone Corporations
                                                             (US$800,000)

       Directors:                                            Leung Kwok Wa
                                                             Chu Ding Sun
                                                             Ng Kwun Wan
                                                             Ng Tik Hong
                                                             Ki Man fung, Leonie
                                                             Wong Wing Shu
                                                             Mok Hak Ming
                                                             Shum Ming Ming
</TABLE>

                                      83
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Companion-China Limited Manufacturer of Ceramics Tiles

       Registered number:                                    19950059
                                                             Approved Certificate by:
                                                             Department of Foreign Trade and Economics Relations of Guangdong
                                                             Province Ref Number: 19950059

       Registered office:                                    Industrial Development Zone, Shuang Shui Town, Xinhui, Guangdong, PRC

       Date and place of incorporation:                      13-07-1998       PRC

       Registered Capital:                                   US$2,600,000

       Total Investment:                                     US$2,700,000

       Shareholders:                                         Companion-China Limited
                                                             (US$2,600,000)

       Directors:                                            Leung Kwok Wa
                                                             Chu Ding Sun
                                                             Tai Kin Fai
</TABLE>

                                      84
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Shanghai Companion Building Material Co., Ltd

       Registered number:                                    19950059
                                                             Approved Certificate by:
                                                             Shanghai Minhang Foreign Economic Relations and Trade Commission
                                                             Ref Number: 1997501

       Registered office:                                    Li An West Road, Minhang District, Shanghai, PRC

       Date and place of incorporation:                      27-12-1997       PRC

       Registered Capital                                    US$3,000,000

       Total Investment                                      US$5,000,000

       Shareholders:                                         Shanghai Xin Wu Group Co., Ltd.
                                                             Companion-China Limited
                                                             90%

       Directors:                                            Leung Kwok Wa
                                                             Chu Ding Sun
                                                             Ng Dai Shan
</TABLE>

                                      85
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Companion Building Material (BVI) Limited

       Registered number:                                    274121

       Registered office:                                    Offshore Incorporations Limited
                                                             P.O. Box 957, Offshore Incorporations
                                                             Centre, Road Town, Tortola, British
                                                             Virgin Islands

       Date and place of incorporation:                      31-03-1998       BVI

       Issued share capital:                                 US$2 divided into 2 shares of US$1 each

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1 each

       Shareholder:                                          The Purchaser
                                                             (2 Shares)

       Directors:                                            Ng Sai Hung
                                                             Ng Tik Hong
</TABLE>

                                      86
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Companion Building Material (Holdings)
                                                             Limited

       Registered number:                                    33493

       Registered office:                                    Suite 2901, 29/F., Great Eagle Centre, 23
                                                             Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      18-05-1973       Hong Kong

       Issued share capital:                                 HK$490,385,924 divided into 2,451,929,620
                                                             shares of HK$0.20 each

       Authorised share capital:                             HK$600,000,000 divided into 3,000,000,000
                                                             shares of HK$0.20 each

       Registered Shareholders:                              Companion Building Material
                                                               (BVI) Limited
                                                             (2,451,929,619 shares)
                                                             Ng Kwun Wan (1 Share)

       Beneficial Shareholder:                               Companion Building Material (BVI) Limited
                                                             (2,451,929,620 Shares)

       Directors:                                            Leung Kwok Wa
                                                             Ng Kwun Wan
                                                             Ng Sai Hung
                                                             Ng Tik Hong

       Secretary:                                            Wah Pui Shan
</TABLE>

                                      87

<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Companion - First Top Limited

       Registered number:                                    492285

       Registered office:                                    Suite 2901, 29/F., Great Eagle Centre, 23
                                                             Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      27-09-1994       Hong Kong

       Issued share capital:                                 HK$1,000,000 divided into 1,000,000
                                                             shares of HK$1 each

       Authorised share capital:                             HK$1,000,000 divided into 1,000,000
                                                             shares of HK$1 each

       Shareholders:                                         Companion Building Material
                                                               (Holdings) Limited
                                                             (750,000 Shares)
                                                             Danta Enterprises (International)
                                                               Corporation
                                                             (250,000 Shares)

       Directors:                                            Ng Tik Hong
                                                             Ng Sai Hung
                                                             Tsoi Chi Yin

       Secretary:                                            Wah Pui Shan
</TABLE>

                                      88
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Companion Finance Limited

       Registered number:                                    138959

       Registered office:                                    P.O Box 71, Craigmuir Chambers, Road
                                                             Town, Tortola,
                                                             British Virgin Islands

       Date and place of incorporation:                      05-01-1995       BVI

       Issued share capital:                                 US$100 divided into 100 shares of US$1
                                                             each

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1 each

       Registered and Beneficial Shareholder:                Companion Building Material
                                                               (Holdings) Limited
                                                             (100 shares)

       Directors:                                            Siu York Chee
                                                             Shiu Yeuk Yuen
                                                             Leung Kwok Kui
                                                             Ng Tik Hong
                                                             Ng Sai Hung
                                                             Ng Kwun Wan

       Secretary:                                            Leung Kwok Kui
</TABLE>

                                      89
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Companion Transport Limited

       Registered number:                                    488079

       Registered office:                                    Suite 2901, 29/F., Great Eagle Centre, 23
                                                             Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      09-08-1994       Hong Kong

       Issued share capital:                                 HK$1,500,000 divided into 1,500,000
                                                             shares of HK$1 each

       Authorised share capital:                             HK$1,500,000 divided into 1,500,000
                                                             shares of HK$1 each

       Registered Shareholders:                              Companion Building Material
                                                               (Holdings) Limited
                                                             (1,499,999 shares)
                                                             Ng Kwun Wan (1 share)

       Beneficial Shareholder:                               Companion Building Material
                                                               (Holdings) Limited
                                                             (1,500,000 shares)

       Directors:                                            Ng Sai Hung
                                                             Ng Kwun Wan

       Secretary:                                            Wah Pui Shan
</TABLE>

                                      90
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Crown Empire Limited

       Registered number:                                    613748

       Registered office:                                    Suite 2901, 29/F., Great Eagle Centre, 23
                                                             Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      20-06-1997       Hong Kong

       Issued share capital:                                 HK$2 divided into 2 shares of HK$1 each

       Authorised share capital:                             HK$10,000 divided into 10,000 shares of
                                                             HK$1 each

       Registered Shareholders:                              Companion Building Material
                                                               (Holdings) Limited (1 share)
                                                             Ng Kwun Wan (1 share)
       Beneficial Shareholder:                               Companion Building Material
                                                               (Holdings) Limited (2 shares)

       Directors:                                            Ng Tik Hong
                                                             Ng Sai Hung

       Secretary:                                            Wah Pui Shan
</TABLE>

                                      91
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Crown Rise Investments Limited

       Registered number:                                    661824

       Registered office:                                    Suite 2901, 29/F., Great Eagle Centre, 23
                                                             Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      07-12-1998       Hong Kong

       Issued share capital:                                 HK$2 divided into 2 shares of HK$1 each

       Authorised share capital:                             HK$10,000 divided into 10,000 shares of
                                                             HK$1 each

       Registered Shareholders:                              Companion Building Material
                                                               (Holdings) Limited (1 share)
                                                             Ng Kwun Wan (1 share)

       Beneficial Shareholder:                               Companion Building Material
                                                               (Holdings) Limited (2 shares)

       Directors:                                            Ng Tik Hong
                                                             Ng Kwun Wan
                                                             Ng Sai Hung

       Secretary:                                            Wah Pui Shan
</TABLE>

                                      92
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Ellca Company Limited

       Registered number:                                    109767

       Registered office:                                    Suite 2901, 29/F., Great Eagle Centre, 23
                                                             Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      12-03-1982       Hong Kong

       Issued share capital:                                 HK$10,000 divided into 10,000 shares of
                                                             HK$1 each

       Authorised share capital:                             HK$1,000,000 divided into 1,000,000
                                                             shares of HK$1 each

       Registered Shareholders:                              Companion Building Material
                                                               (Holdings) Limited (9,999 shares)
                                                             Ng Kwun Wan (1 share)

       Beneficial Shareholder:                               Companion Building Material
                                                               (Holdings) Limited (10,000 shares)

       Directors:                                            Ng Sai Hung
                                                             Ng Kwun Wan

       Secretary:                                            Wah Pui Shan
</TABLE>

                                      93
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Four Strong Winds Limited

       Registered number:                                    435936

       Registered office:                                    Suite 2901, 29/F., Great Eagle Centre, 23
                                                             Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      15-07-1993       Hong Kong

       Issued share capital:                                 HK$20 divided into 2 shares of HK$10 each

       Authorised share capital:                             HK$1,000 divided into 100 shares of HK$10
                                                             each

       Registered Shareholders:                              Companion Building Material
                                                               (Holdings) Limited (1 share)
                                                             Ng Kwun Wan (1 share)

       Beneficial Shareholder:                               Companion Building Material
                                                               (Holdings) Limited (2 shares)

       Directors:                                            Ng Sai Hung
                                                             Ng Kwun Wan
                                                             Ng Tik Hong

       Secretary:                                            Wah Pui Shan
</TABLE>

                                      94
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      New Oriental Management Limited

       Registered number:                                    611272

       Registered office:                                    Suite 2901, 29/F., Great Eagle Centre, 23
                                                             Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      04-06-1997       Hong Kong

       Issued share capital:                                 HK$2 divided into 2 shares of HK$1 each

       Authorised share capital:                             HK$10,000 divided into 10,000 shares of
                                                             HK$1 each

       Registered Shareholders:                              Companion Building Material
                                                               (Holdings) Limited (1 share)
                                                             Ng Kwun Wan (1 share)

       Beneficial Shareholder:                               Companion Building Material
                                                               (Holdings) Limited (2 shares)

       Directors:                                            Ng Sai Hung
                                                             Ng Kwun Wan

       Secretary:                                            Wah Pui Shan
</TABLE>

                                      95
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Placemakers Limited

       Registered number:                                    133996

       Registered office:                                    P.O Box 71, Craigmuir Chambers, Road
                                                             Town, Tortola,
                                                             British Virgin Islands

       Date and place of incorporation:                      22-11-1994       BVI

       Issued share capital:                                 US$100 divided into 100 shares of US$1
                                                             each

       Authorised share capital:                             US$50,000 divided into 50,000 shares of
                                                             US$1 each

       Registered and Beneficial Shareholder:                Companion Building Material
                                                               (Holdings) Limited (100 shares)

       Directors:                                            Ng Sai Hung
                                                             Ng Tik Hong
</TABLE>

                                      96
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Sino Pearl Limited

       Registered number:                                    662361

       Registered office:                                    Suite 2901, 29/F., Great Eagle Centre, 23
                                                             Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      11-12-1998       Hong Kong

       Issued share capital:                                 HK$2 divided into 2 shares of HK$1 each

       Authorised share capital:                             HK$10,000 divided into 10,000 shares of
                                                             HK$1 each

       Registered Shareholders:                              Companion Building Material
                                                               (Holdings) Limited (1 share)
                                                             Ng Kwun Wan (1 share)

       Beneficial Shareholders:                              Companion Building Material
                                                               (Holding) Limited (2 shares)
       Directors:                                            Ng Tik Hong
                                                             Ng Kwun Wan
                                                             Ng Sai Hung
       Secretary:                                            Wah Pui Shan
</TABLE>

                                      97
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Union Faith Enterprises Limited

       Registered number:                                    646709

       Registered office:                                    Suite 2901, 29/F., Great Eagle Centre, 23
                                                             Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      05-06-1998       Hong Kong

       Issued share capital:                                 HK$2 divided into 2 shares of HK$1 each

       Authorised share capital:                             HK$10,000 divided into 10,000 shares of
                                                             HK$1 each

       Registered Shareholders:                              Companion Building Material
                                                               (Holdings) Limited (1 share)
                                                             Ng Kwun Wan (1 share)

       Beneficial Shareholder                                Companion Building Material
                                                               (Holdings) Limited (2 shares)

       Directors:                                            Ng Tik Hong
                                                             Ng Kwun Wan

       Secretary:                                            Wah Pui Shan
</TABLE>

                                      98
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Weber Trading Company Limited

       Registered number:                                    120007

       Registered office:                                    Suite 2901, 29/F., Great Eagle Centre, 23
                                                             Harbour Road, Wanchai, Hong Kong

       Date and place of incorporation:                      21-12-1982       Hong Kong

       Issued share capital:                                 HK$20 divided into 2 shares of HK$10 each

       Authorised share capital:                             HK$10,000 divided into 1,000 shares of
                                                             HK$10 each

       Registered Shareholders:                              Companion Building Material
                                                               (Holdings) Limited (1 share)
                                                             Ng Kwun Wan (1 share)

       Beneficial Shareholder:                               Companion Building Material
                                                               (Holdings) Limited (2 shares)

       Directors:                                            Ng Tik Hong
                                                             Ng Kwun Wan
                                                             Ng Sai Hung

       Secretary:                                            Wah Pui Shan
</TABLE>

                                      99
<PAGE>

<TABLE>
<S>    <C>                                                   <C>
       Particulars of the Purchaser's Subsidiaries (cont'd)

       Name of Company:                                      Companion (Malta) Limited

       Registered number:

       Date and place of incorporation:                      25-04-1994       Malta

       Issued share capital:                                 US$6,000 divided into 6,000 shares of
                                                             US$1 each

       Authorised share capital:                             US$6,000 divided into 6,000 shares of
                                                             US$1 each

       Registered Shareholders:

       Beneficial Shareholder:                               Companion Building Material
                                                             (Holdings) Limited
                                                             (6,000 shares)

       Directors:                                            Carniel Buttiging
                                                             John A. Psaile
                                                             John J. Attenrd
</TABLE>

                                      100
<PAGE>

                                   Schedule 3
                                 The Properties
                                  (Clause 1.1)

                                     Part 1
                   Particulars of Properties owned by a Group Company

<TABLE>
Name of Group Company owning the Property         Address of Property
-----------------------------------------         -------------------------------------------------------
<S>    <C>                                        <C>    <C>
1      Carmay Investment Limited                  (1)    Units 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13,
                                                         14 and 15 on 18th Floor;

                                                  (2)    Female Disable Lavatory; Male Lavatory; and
                                                         Disable Lavatory and Lift Lobby and Corridor on
                                                         18th Floor;

                                                  (3)    Parking Space Nos.5, 6 and L5 on 1st Floor of
                                                         Paramount Building,No.12 Ka Yip Street, Hong Kong

2      ACCA Investment Limited                    (1)    Units 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13,
                                                         14 and 15 on 20th Floor;

                                                  (2)    Roof;

                                                  (3)    Female Disable Lavatory; Male Lavatory; and
                                                         Disable Lavatory and Lift Lobby and Corridor on
                                                         20th Floor;

                                                  (4)    Parking Space Nos.7, 8, L3 and L4 on 1st Floor

                                                  of Paramount Building, No.12 Ka Yip Street, Hong Kong

3      Beijing Jing Wei House and Land Estate     Pacific Century Place, Beijing, 2A Worker's Stadium Road
       Development Company Limited                North, Chaoyang District, Beijing PRC
</TABLE>

                                      101
<PAGE>

                                     Part 2
              Particulars of Properties leased by a Group Company

The following details to be completed in respect of each Property leased by a
Group Company:

Address of Property:         PCCW Tower, Taikoo Place, 979 King's Road,
                             Quarry Bay, Hong Kong comprising the following
                             portions of the building known as Dorset House
                             (which comprises a 4 level basement car park, a
                             podium and 2 contiguous tower blocks above the
                             podium) (the "Building") erected on Portions of
                             Section S and the Remaining Portion of Quarry
                             Bay Marine Lot No. 1:

                             1  those portions of the Building now
                                known as PCCW Tower (formerly known at
                                the date of the Lease as Hongkong
                                Telecom Tower (Tower A)) as shown
                                coloured Yellow on Plans 2 to 51
                                annexed to the lease; and

                             2  those loading and unloading bays on
                                the Ground Floor of the Building as
                                shown coloured Yellow hatched Black on
                                Plan 6 annexed to the lease; and

                             3  those car parking spaces on Basement
                                Levels 1 to 4 of the Building as shown
                                coloured Yellow hatched Black on Plans
                                2 to 5 annexed to the lease.

Original parties to lease:   Taikoo Place Holdings Limited (1) (as Owner)
                             Monance Limited (2) (as Lessee)
                             Swire Properties Limited (3) (as Owner's Guarantor)
                             PCCW-HKT Limited (4) (as Lessee's Guarantor)

Date of lease:               13 December 2000

Term:                        999 years from and including 2 February 1882
                             (less the last 3 days thereof)

Rent:                        HK$1.00 per annum (if demanded)

Current lessee:              Partner Link Investments Limited by virtue of an
                             assignment of the lease dated 6 September 2002
                             made between Monance Limited (as assignor),
                             Partner Link Investments Limited (as assignee) and
                             PCCW-HKT Limited (as assignee's guarantor)

                                      102
<PAGE>

                                   Schedule 4
                           The Purchaser's Properties
                                  (Clause 1.1)

LEASED PROPERTIES

<TABLE>
Company                           Location of Leased Properties                                               Leased Term

<S>                               <C>
Digital Delight Limited           Units 01-03 & 08-11, 9/F, Paul Y Centre, 51 Hung To Road               21/10/02 to 20/12/04
                                  Kwun Tong, Kowloon, Hong Kong

Beijing Continental Gas           2nd Floor, Technology and Training Centre                              15/01/01 to 14/01/04
Co. Ltd.                          Zhongguancun Science Park, Chinese Academy of Agriculture Sciences,
                                  12 Zhongguancun South Road, Haidian District, Beijing, PRC

Companion China Limited           Units 1307-8, Great Eagle Centre, Wanchai,                             16/06/03 to 15/06/06
                                  Hong Kong

Chongqing Golden Unity            No. 3456, Chongqing Ceramics Market,                                   25/06/03 to 25/06/04
Ceramics Co Ltd                   Da Du Kou District, Chongqing, PRC.
</TABLE>

                                      103
<PAGE>

LIST OF LAND AND BUILDINGS

<TABLE>
Held by Chongqing Golden Unity Ceramics (56% effectively held by Companion China Ltd)
-------------------------------------------------------------------------------------

Year          Nature                     Location                        Area/description
<S>           <C>                        <C>                             <C>
12/1993       Land Use Right             No. 49, Gong Kuang Road,        720 sq.m
              Certificate                Li Jia Tou, Jiu Long Po
                                         District
12/1993       Land Use Right             No. 49, Gong Kuang Road,        16,569 sq.m
              Certificate                Li Jia Tou, Jiu Long Po
                                         District
12/1993       Land Use Right             No. 49, Gong Kuang Road,        44sq.m
              Certificate                Li Jia Tou, Jiu Long Po
                                         District
10/1996       Building Ownership         No. 49 Gong Kuang Road,         1 machine room , 1 Gas
              Certificate                Li Jia Tou Ma Wang Ping,        station
                                         Banan District.
10/1996       Building Ownership         No. 49 Gong Kuang Road,         1 Ball Mill Machine
              Certificate                Li Jia Tou Ma Wang Ping,
                                         Banan District
10/1996       Building Ownership         No. 49 Gong Kuang Road,         5 Auxiliary Units
              Certificate                Li Jia Tou Ma Wang Ping,        (Southern)
                                         Banan District
10/1996       Building Ownership         Qun Le Village, Hua Xi,         5 Residential Units in 1
              Certificate                Banan District, Chongqing       floor
10/1996       Building Ownership         Qun Le Village, Hua Xi,         5 Residential Units in 1
              Certificate                Banan District, Chongqing       Floor
</TABLE>

<TABLE>
Held by Wenzhou Xishan United Ceramics Co Ltd (73.5% effectively held by Companion China Ltd)
---------------------------------------------------------------------------------------------

Year          Nature                      Location                      Area/Description      Terms
<S>           <C>                         <C>                           <C>                   <C>
8/1998        Land Use Right             No. 229, Xishan East Road,      53,216.7 sq.m
              Certificate                Wenzhou City,
                                         ZheJiang
1/2000        Building Ownership         No. 229, Xishan East Road,      6 storeys of Commercial
              Certificate                Wenzhou City,                   Building
                                         ZheJiang
1/2000        Building Ownership         No. 229, Xishan East Road,      2 storeys of Factory
              Certificate                Wenzhou City,                   Building
                                         Zhejiang
1/2000        Building Ownership         No. 229, Xishan East Road,      2 storeys of Factory
              Certificate                Wenzhou City,                   Building
                                         Zhejiang

</TABLE>

<TABLE>
Held by Xinhui (100% subsidiary of Companion China)
---------------------------------------------------

Year          Nature                      Location                      Area/Description      Terms
<S>           <C>                         <C>                           <C>                   <C>
              Factory, Godown and        Industrial Development          11,000 m2            25 years
              Office                     Zone, Shuang Shui Town,
                                         Xinhui, Jiangmen City,
                                         Guangdong Province
              Workers' Flat (vacant)     Room 202, 2nd Floor, 4          86.86 m2
                                         Agricultural and Science
                                         New Village Road West,
                                         Xinhui, Jiangmen City,
                                         Guangdong Province
</TABLE>

<TABLE>
Held by Companion China Limited
-------------------------------

Year          Nature                      Location                      Area/Description      Terms
<S>           <C>                         <C>                           <C>                   <C>
              Worker's Flat (vacant)     Room 603 (6th Floor) and        127.42 m2 (apartment)
                                         Room 36 (1st Floor),            and 14.6 m2 (car park)
                                         Block 3, Prince
                                         Apartment, 118 Pun Yu
                                         Road, Shanghai
</TABLE>

                                      104
<PAGE>

                                   Schedule 5
                             Completion Obligations
                                   (Clause 6)

1        Seller's Obligations

1.1      General Obligations

         On Completion, the Seller shall deliver or make available to the
         Purchaser the following:

         1.1.1    evidence of the due fulfilment of the Conditions Precedent
                  for which the Seller are responsible;

         1.1.2    transfers of the Sale Shares duly executed by the registered
                  holders in favour of the Purchaser (or as it may direct)
                  accompanied by the relative share certificates (or an express
                  indemnity in a form satisfactory to the Purchaser in the case
                  of any certificate found to be missing);

         1.1.3    the Loan Assignment duly executed by the Seller in favour of
                  the Purchaser (or as it may direct);

         1.1.4    the S&P Agreement duly executed by the Exchange Company in
                  favour of the Purchaser (or as it may direct) and accompanied
                  by the related title documents;

         1.1.5    application by the Seller (or such person as it may direct)
                  to subscribe for the Consideration Shares;

         1.1.6    a certified true copy or certified extracts of the
                  resolutions of the board of directors of the Seller (and, if
                  applicable, resolutions of the shareholders of the Seller)
                  approving this Agreement and the transactions contemplated in
                  this Agreement; and

         1.1.7    all such other documents as may reasonably be required to
                  enable the Purchaser and/or its nominees to be registered as
                  holder(s) of the Sale Shares and the Sale Assets.

2        The Purchaser's Obligations

2.1      Delivery Obligations

         On Completion, the Purchaser shall deliver or make available to the
         Seller:

         2.1.1    evidence of the due fulfilment of the Conditions Precedent
                  for which the Purchaser is responsible;

         2.1.2    the Consideration Shares duly issued and allotted (credited
                  as fully paid) to the Seller (or as it may direct), and
                  procure that the name(s) of the person or persons (including,
                  where appropriate, HKSCC Nominees Limited) so notified by the
                  Seller shall be entered in the register of the members of the
                  Purchaser accordingly (without payment of any registration
                  fee);

         2.1.3    the Certificates in respect of the Convertible Notes duly
                  issued and allotted (credited as fully paid) to the Seller
                  (or as it may direct);

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         2.1.4    a certified true copy of the approval from the Stock Exchange
                  granting listing of and permission to deal in the
                  Consideration Shares and the Conversion Shares upon any
                  exercise of the Conversion Rights (if not already delivered
                  before Completion);

         2.1.5    a certified true copy of the resolutions of the board of
                  directors of the Purchaser approving this Agreement and the
                  issue and allotment of the Consideration Shares to the Seller
                  (or as it may direct), the issue of the Convertible Notes to
                  the Seller (or as it may direct) and the issue of the
                  Conversion Shares upon any exercise of the Conversion Rights;

         2.1.6    in accordance with the written directions of the Seller
                  (issued by the Seller and to the Purchaser at least one
                  Business Day before the expected date of Completion): (1)
                  share certificates for such number of the Consideration
                  Shares as so directed in the name of the Seller (or as it may
                  direct); and (2) share certificates for such number of the
                  Consideration Shares as so directed in the name of HKSCC
                  Nominees Limited to be delivered through the facilities of
                  HKSCC for immediate credit to such CCASS stock accounts
                  pursuant to paragraph 2.2.1 below;

         2.1.7    a copy of the Purchaser's written instruction to its branch
                  share registrar in Hong Kong to update the register of
                  members to reflect the issue of the Consideration Shares, and
                  evidence that the Seller (or the person(s) nominated by it)
                  and/or HKSCC Nominees Limited (if so directed by the Seller
                  pursuant to paragraph 2.1.2 above) has been registered as a
                  shareholder of the Purchaser as to such number of the
                  Consideration Shares as directed by the Seller under
                  paragraph 2.1.2 above;

         2.1.8    certified true copies of resolutions of the board of
                  directors of the Purchaser Group Companies appointing the
                  five nominees of the Seller to be directors of the Purchaser
                  (such appointment to take effect at the earliest time
                  permissible under the Takeovers Code);

         2.1.9    the Loan Assignment duly executed by the Purchaser (or the
                  assignee as it may direct);

         2.1.10   the S&P Agreement duly executed by the Purchaser in favour of
                  the Exchange Company (or as it may direct);

         2.1.11   copies of the instruction letters, placing forms and other
                  documents issued by the Purchaser to its branch share
                  registrar in Hong Kong required for the deposit by the Seller
                  (or any others as the Seller may direct) of the Consideration
                  Shares or any part thereof in CCASS; and

         2.1.12   unless otherwise retained by the Seller, resignations of each
                  director of the Purchaser with an acknowledgement that such
                  director has no claim against the Purchaser for wrongful
                  dismissal or otherwise (such resignation to take effect at
                  the earliest time permissible under the Takeovers Code or
                  such later time as the Seller may require).

2.2      Procurement Obligations

         On Completion, the Purchaser shall:

         2.2.1    (where the directions from the Seller relating to the issue
                  and delivery of the Consideration Shares are such that any
                  part of those shares are to be delivered through the
                  facilities of HKSCC) procure that the relevant Consideration
                  Shares shall be delivered through the facilities of HKSCC for
                  immediate credit to the

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                  relevant CCASS stock accounts as shall be notified by the
                  Seller to the Purchaser for such purpose; and

         2.2.2    promptly execute and deliver to the Seller (or as it may
                  direct) such other forms, instruments or documents, and do
                  such acts as the Seller may require from time to time to
                  facilitate the settlement of any placing of the Consideration
                  Shares which the Seller (or any other persons to whom the
                  Consideration Shares or any part thereof are to be allotted
                  and issued at the direction of the Seller) may have
                  undertaken.

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                                   Schedule 6
                Warranties given by the Seller under Clause 8.1

1        Corporate Information

1.1      The Sale Shares and the Group Companies

         1.1.1    The Seller will be the sole legal and beneficial owner of the
                  Sale Shares after the Restructuring and immediately before
                  Completion and has the right to exercise all voting and other
                  rights over the Sale Shares.

         1.1.2    The Sale Shares comprise the whole of the issued and allotted
                  share capital of the Company, have been properly and validly
                  issued and allotted and are each fully paid or credited as
                  fully paid.

         1.1.3    The shareholders specified in paragraph 2 of Schedule 1 are
                  the sole legal and beneficial owners of the shares in the
                  Subsidiaries and have the right to exercise all voting and
                  other rights over such shares.

         1.1.4    The shares in the Subsidiaries comprise the relevant
                  percentage of the issued and allotted share capital of the
                  Subsidiaries as set out in the Charts, have been properly and
                  validly issued and allotted and each are fully paid or
                  credited as fully paid.

         1.1.5    The particulars contained in Schedule 1 are true, accurate
                  and not misleading.

         1.1.6    No person has the right (whether exercisable now or in the
                  future and whether contingent or not) to call for the
                  allotment, conversion, issue, registration, sale or transfer,
                  amortisation or repayment of any share or loan capital or any
                  other security giving rise to a right over, or an interest
                  in, the capital of any Group Company under any option,
                  agreement or other arrangement (including conversion rights
                  and rights of pre-emption).

         1.1.7    There are no Encumbrances on the shares in any Group Company.

         1.1.8    No Group Company:

                  (i)    has any interest in, or has agreed to acquire, any
                         share capital or other security referred to in
                         paragraph 1.1.6 of any other company (wherever
                         incorporated) other than the Subsidiaries set out in
                         Schedule 1; and

                  (ii)   has any branch, division, establishment or operations
                         outside the jurisdiction in which it is incorporated.

         1.1.9    The Charts contain an accurate description of the corporate
                  structure of the Group before and immediately after
                  Restructuring.

1.2      Constitutional Documents, Corporate Registers and Minute Books

         1.2.1    The constitutional documents of the Group Companies contain
                  full details of the rights and restrictions attached to the
                  share capital of the relevant Group Company and (to the best
                  of the Seller's knowledge, information and belief) there have
                  not been and are not any breaches by any Group Company which
                  would have a material adverse effect on the business of the
                  Group.

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         1.2.2    The statutory books, books of account and other records of
                  whatsoever kind of each Group Company are in all material
                  respects up-to-date, maintained in accordance with applicable
                  law on a proper and consistent basis, contain complete and
                  accurate records of all matters required to be dealt with in
                  such books and records and have attached to them copies of
                  all such resolutions and agreements as are required by law to
                  be delivered to the Hong Kong Registrar of Companies or
                  analogous authority in the relevant incorporation
                  jurisdiction of the Group Companies and all other resolutions
                  passed by the relevant Group Company or any class of members
                  or shareholders, other than resolutions relating to ordinary
                  business at any annual general meeting.

         1.2.3    All books and records referred to in paragraph 1.2.2 and all
                  other documents (including documents of title and copies of
                  all subsisting agreements to which any Group Company is a
                  party) which are the property of each Group Company or ought
                  to be in its possession are in the possession (or under the
                  control) of the relevant Group Company.

         1.2.4    All accounts, documents and returns required by law to be
                  delivered or made to the Hong Kong Registrar of Companies or
                  analogous authority in relevant incorporation jurisdiction of
                  the Group Companies have been duly and correctly delivered or
                  made on a timely basis.

         1.2.5    The register of members of the Company is maintained in the
                  British Virgin Islands and transfer of the Sale Shares are
                  only required to be registered in the British Virgin Islands
                  and not elsewhere.

2        Accounts

         The Accounts and the Management Accounts:

         (a)      have been prepared in accordance with applicable law and in
                  accordance with the accounting principles, standards and
                  practices generally accepted in Hong Kong, and have been
                  prepared in accordance with accounting policies used in
                  preparing the published accounts of the Seller applied on a
                  consistent basis; and

         (b)      having regard to the purpose for which they were drawn up
                  (and except for any audit adjustments in the Accounts and the
                  Management Accounts arising out of the differences between
                  the generally accepted accounting principles in the PRC and
                  those in Hong Kong) do not materially misstate the assets and
                  liabilities of the Group as at the Accounts Date or the
                  Management Accounts Date (as the case may be) nor the profits
                  or losses of the Group for each period concerned.

3        Financial Obligations

3.1      Financial Facilities

         To the best of the Seller's knowledge, information and belief, there
         are no circumstances whereby the continuation of any financial
         facilities material to the businesses of the Group as a whole might be
         prejudiced or affected as a result of a transaction effected by this
         Agreement.

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3.2      Guarantees

         Other than in the ordinary and usual course of business, there is no
         outstanding guarantee, indemnity, suretyship or security (whether or
         not legally binding) given by, or for the benefit of, any Group
         Company.

3.3      No Undisclosed Liabilities

         There are no liabilities, whether actual or contingent, of the Group
         Companies other than: (i) liabilities disclosed or provided for in the
         Management Accounts; (ii) liabilities incurred in the ordinary course
         of business since the Management Accounts Date, none of which is
         material to the business of the Group as a whole; or (iii) liabilities
         disclosed elsewhere in this Agreement.

3.4      No Liabilities

         Save as fully and specifically disclosed in the Seller's Disclosure
         Letter, the Company has no liabilities at all (whether actual or
         contingent).

4        Property

4.1      The Property

         The Properties comprise all of the premises and land owned by the
         Group Companies or in which the Group Companies have any right or
         interest in the nature of ownership.

4.2      Title

         In relation to each Property referred to in Part 1 of Schedule 3, to
         the best of the Seller's knowledge, information and belief, the Group
         Company named in Part 1 of Schedule 3 as owner of the Property has
         good title to the Property and is beneficially entitled to the whole
         of the proceeds of sale of the Property.

4.3      Properties Leased to or by a Group Company

         In relation to each tenancy, lease, sub-lease or licence entered into
         by the Group Companies (whether as landlord, licensor, tenant or
         licensee), so far as the Seller is aware, there is no material
         subsisting breach nor any material non-observance of any covenants,
         condition or agreement contained therein on the part of either the
         relevant landlord, licensor, tenant or licensee.

4.4      The Developer

         The Developer has in all material respects complied with its
         obligations under the Project Agreement and all other agreements
         entered into by it in connection with the Project Agreement. There has
         not been any material misrepresentation to any purchaser of any part
         of the property which has been and is being developed by the
         Developer.

5        Assets

5.1      Ownership of Assets

         All assets which are reasonably necessary for the operations of the
         Group, other than the Properties, the Intellectual Property and any
         assets disposed of or realised in the ordinary course of business are
         legally and beneficially owned by the Group Companies and are

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         free from Encumbrances (other than lien arising by operation of law
         in the ordinary course of business).

5.2      Debts

         None of the debts receivable or due to any Group Company of an amount
         more than HK$5,000,000 and which are included in the Management
         Accounts or which have subsequently arisen has been outstanding for
         more than six months from its due date for payment or has been
         released on terms that the debtor has paid less than the full value of
         his debt.

5.3      Sufficiency of Assets

         To the best of the Seller's knowledge, information and belief, the
         property, rights and assets owned or leased by the Group Companies
         comprise all the property, rights and assets necessary for the
         carrying on of the business of each Group Company substantially in the
         manner in, and to the extent to, which it is presently conducted.

5.4      Sale Assets

         5.4.1    The Seller will be the legal and beneficial owner of the
                  Loans and has the power and authority to enter into the Loan
                  Assignment at Completion. The total outstanding principal
                  amount of the Loans as at Completion will not be less than
                  the amount stated in the attached form of the Loan
                  Assignment. Save for the Loans and the indebtedness owing by
                  the Developer referred to in Clause 7.1.1(i), immediately
                  after Completion, the Group does not have any other
                  indebtedness due to the Seller's Group (excluding the
                  Purchaser Group and the Group) save for those which arise in
                  the ordinary course of business.

         5.4.2    The Queen's Road Exchange is owned by a wholly-owned
                  subsidiary of the Seller (free from Encumbrances) and that
                  subsidiary has good title to that property and the power and
                  authority to enter into the S&P Agreement at Completion.

         5.4.3    Once the relevant Development Right has been obtained, the
                  Relevant Company (as defined in Clause 7.2) will have the
                  right to enter into a JV for the purpose of Clause 7.2.

6        Intellectual Property and Information Technology

6.1      Infringement

         So far as the Seller is aware, no claims of infringement of any third
         party Intellectual Property rights or interests of material importance
         have been made against the Seller by any third party.

6.2      Information Technology

         In the 12 months prior to the date of this Agreement, there have been
         no failure or breakdown of any computer systems, communication
         systems, software and hardware owned or used by the Group which have
         caused material disruption to the business of the Group.

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7        Contracts

7.1      Contracts

         No Group Company is a party to or subject to any contract,
         transaction, arrangement, understanding or obligation which is
         material to the business of the Group as a whole which is outstanding
         and which:

         7.1.1    is not in the ordinary course of business;

         7.1.2    is not wholly on an arm's length basis;

         7.1.3    restricts its freedom to carry on its business in any part of
                  the world in such manner as it thinks fit so as to have a
                  material adverse effect on the Group.

7.2      Compliance with Agreements

         To the best of the Seller's knowledge, information and belief:

         7.2.1    all the material contracts and all leases, tenancies,
                  licences, concessions and agreements of a material nature to
                  which any of the Group Companies is a party are valid,
                  binding and enforceable obligations of the parties thereto
                  and the terms thereof have been complied with in all material
                  respects by the relevant Group Company;

         7.2.2    no notice of termination or of intention to terminate has
                  been received in respect of any of them.

7.3      Effect of Sale of the Sale Shares and the Sale Assets

         To the best of the knowledge, information and belief of the Seller
         neither entering into, nor compliance with, nor completion of this
         Agreement will, or is likely to result in a material breach of, or
         give any third party a right to terminate or vary, or result in any
         Encumbrance under, any contract or arrangement to which any Group
         Company is a party which is material to the business of the Group as a
         whole.

8        Employees

         All employees engaged in the operation of the business of the Group
         are employed by the relevant Group Companies.

9        Licences and Consents

9.1      All licences, consents, authorisations, orders, warrants,
         confirmations, permissions, certificates, approvals, registrations and
         authorities material to the business of the Group and necessary for
         the carrying on of the business of the Group ("Licences") have been
         obtained, are in full force and effect and have been and are being
         complied with in all material respects.

9.2      To the best of the Seller's knowledge, information and belief, there
         is no reason why any Licence should be suspended, modified or revoked.

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10       Litigation

10.1     Current Proceedings

         No Group Company is involved whether as claimant or defendant or other
         party in any claim, legal action, proceeding, suit, litigation,
         prosecution, investigation, enquiry, mediation or arbitration (other
         than as claimant in the collection of debts arising in the ordinary
         and usual course of its business) which is material to the business of
         the Group as a whole.

10.2     Pending or Threatened Proceedings

         To the best of the Seller's knowledge, information and belief, no such
         claim, legal action, proceeding, suit, litigation, prosecution,
         investigation, enquiry, mediation or arbitration of material
         importance is pending or threatened by or against any Group Company.

11       Insurance

11.1     All assets material to the business of the Group as a whole which are
         capable of being insured have at all material times been and are
         insured in amounts reasonably regarded as adequate against fire and
         other risks normally insured against by companies carrying on similar
         businesses or owning assets of a similar nature.

11.2     Each Group Company has at all material times been and is adequately
         covered against accident, physical loss or damage, third party
         liability and other risks normally covered by insurance by such
         companies.

12       Tax

12.1     All returns, computations, notices and information which are or have
         been required to be made or given by each Group Company for any
         Taxation purpose: (i) have been made or given within the requisite
         periods and on a proper basis and are up-to-date and correct; and (ii)
         none of them is the subject of any dispute with the Inland Revenue
         Department or other Taxation authorities.

12.2     Each Group Company is in possession of sufficient information or has
         reasonable access to such information to enable it to compute its
         liability to Taxation insofar as it depends on any transaction
         occurring on or before Completion.

13       Important Business Issues Since the Management Accounts Date

         Since the Management Accounts Date as regards each Group Company:

         (a)      there has been no material adverse change in the financial
                  position (other than a change affecting or likely to affect
                  all companies carrying on business in similar countries in
                  which the Group carries on business);

         (b)      the business of the Group has been carried on as a going
                  concern in the ordinary and usual course;

         (c)      no Group Company has declared, made or paid any dividend or
                  other distribution to its members;

         (d)      no Group Company has issued or allotted or agreed to issue or
                  allot any share capital or any other security giving rise to
                  a right over its capital;

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         (e)      no Group Company has redeemed or purchased or agreed to
                  redeem or purchase any of its share capital.

14       General

14.1     The Seller and each of the Group Companies is validly existing and is
         a company duly incorporated under the law of its jurisdiction of
         incorporation.

14.2     The Seller has the legal right and full power and authority to enter
         into and perform this Agreement and any other documents to be executed
         by it pursuant to or in connection with this Agreement.

14.3     The documents referred to in paragraph 14.2 will, when executed,
         constitute valid and binding obligations on the Seller, in accordance
         with their respective terms.

14.4     The Seller has taken all corporate action required by it to authorise
         it to enter into and to perform this Agreement, and any other
         documents to be executed by it pursuant to or in connection with this
         Agreement.

15       Insolvency etc.

15.1     No Group Company is insolvent or unable, whether as defined by Section
         178 of the Companies Ordinance or otherwise, to pay its debts,
         including its future and prospective debts.

15.2     No Group Company has proposed or intends to propose any arrangement of
         any type with its creditors or any group of creditors whether by court
         process or otherwise under which such creditors shall receive or be
         paid less than the amounts contractually or otherwise due to them.

15.3     No Group Company nor any creditor of any Group Company has presented
         any petition, application or other proceedings for any administration
         order, creditors' voluntary arrangement or similar relief by which the
         affairs, business or assets of the company concerned are managed by a
         person appointed for the purpose by a Court, governmental agency or
         similar body, or by any creditor or by the company itself nor has any
         such order or relief been granted or appointment made.

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                                   Schedule 7
               Warranties given by the Purchaser under Clause 8.4

1        Corporate Information

1.1      The Purchaser's Group Companies

         1.1.1    The whole of the issued and allotted share capital of the
                  Purchaser comprise of 1,161,265,406 Existing Issuer's Shares,
                  have been properly and validly issued and allotted and are
                  each fully paid or credited as fully paid.

         1.1.2    The shareholders specified in paragraph 2 of Schedule 2 are
                  the sole legal and beneficial owners of the shares in the
                  Purchaser's Subsidiaries and have the right to exercise all
                  voting and other rights over such shares.

         1.1.3    The shares in the Purchaser's Subsidiaries comprise the whole
                  of the issued and allotted share capital of the Purchaser's
                  Subsidiaries, have been properly and validly issued and
                  allotted and each are fully paid or credited as fully paid.

         1.1.4    The particulars contained in Schedule 2 are true, accurate
                  and not misleading.

         1.1.5    No person has the right (whether exercisable now or in the
                  future and whether contingent or not) to call for the
                  allotment, conversion, issue, registration, sale or transfer,
                  amortisation or repayment of any share or loan capital or any
                  other security giving rise to a right over, or an interest
                  in, the capital of any Purchaser's Group Company under any
                  option, agreement or other arrangement (including conversion
                  rights and rights of pre-emption).

         1.1.6    There are no Encumbrances on the shares in any Purchaser's
                  Subsidiaries.

         1.1.7    No Purchaser's Group Company:

                  (i)    has any interest in, or has agreed to acquire, any
                         share capital or other security referred to in
                         paragraph 1.1.5 of any other company (wherever
                         incorporated) other than the Purchaser's Subsidiaries
                         set out in Schedule 2; and

                  (ii)   has any branch, division, establishment or operations
                         outside the jurisdiction in which it is incorporated.

         1.1.8    The Purchaser's Chart contains an accurate description of the
                  corporate structure of the Purchaser's Group.

1.2      Constitutional Documents, Corporate Registers and Minute Books

         1.2.1    The constitutional documents of the Purchaser's Group
                  Companies contain full details of the rights and restrictions
                  attached to the share capital of the relevant Purchaser's
                  Group Company and (to the best of the Purchaser's knowledge,
                  information and belief) there have not been and are not any
                  breaches by any Purchaser's Group Company which would have a
                  material adverse effect on the business of the Purchaser's
                  Group.

         1.2.2    The statutory books, books of account and other records of
                  whatsoever kind of each Purchaser's Group Company are in all
                  material respects up-to-date,

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                  maintained in accordance with applicable law on a proper
                  and consistent basis, contain complete and accurate records
                  of all matters required to be dealt with in such books and
                  records and have attached to them copies of all such
                  resolutions and agreements as are required by law to be
                  delivered to the Hong Kong Registrar of Companies or
                  analogous authority in the relevant incorporation
                  jurisdiction of the Purchaser's Group Companies and all
                  other resolutions passed by the relevant Purchaser's Group
                  Company or any class of members or shareholders, other than
                  resolutions relating to ordinary business at any annual
                  general meeting.

         1.2.3    All books and records referred to in paragraph 1.2.2 and all
                  other documents (including documents of title and copies of
                  all subsisting agreements to which any Purchaser's Group
                  Company is a party) which are the property of each
                  Purchaser's Group Company or ought to be in its possession
                  are in the possession (or under the control) of the relevant
                  Purchaser's Group Company.

         1.2.4    All accounts, documents and returns required by law to be
                  delivered or made to the Hong Kong Registrar of Companies or
                  analogous authority in relevant incorporation jurisdiction of
                  the Purchaser's Group Companies have been duly and correctly
                  delivered or made on a timely basis.

2        Purchaser's Accounts

2.1      Latest Purchaser's Accounts

         The Purchaser's Accounts have been prepared in accordance with
         applicable law and in accordance with the accounting principles,
         standards and practices generally accepted in Hong Kong and give a
         true and fair view of the assets, liabilities and state of affairs of
         the Purchaser's Group at the Purchaser's Accounts Date and of the
         profits or losses of the Purchaser's Group for the period concerned.

2.2      Purchaser's Management Accounts

         The Purchaser's Management Accounts have been prepared in accordance
         with accounting policies used in preparing the Purchaser's Accounts
         applied on a consistent basis and having regard to the purpose for
         which they were drawn up do not materially misstate the assets and
         liabilities of the Purchaser's Group as at the Relevant Purchaser's
         Management Accounts Date nor the profits or losses of the Purchaser's
         Group for the period concerned.

3        Financial Obligations

3.1      Financial Facilities

         To the best of the Purchaser's knowledge, information and belief,
         there are no circumstances whereby the continuation of any financial
         facilities material to the businesses of the Purchaser's Group as a
         whole might be prejudiced or affected as a result of a transaction
         effected by this Agreement.

3.2      Guarantees

         Other than in the ordinary and usual course of business, there is no
         outstanding guarantee, indemnity, suretyship or security (whether or
         not legally binding) given by, or for the benefit of, any Purchaser's
         Group Company.

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3.3      No Undisclosed Liabilities

         There are no liabilities, whether actual or contingent, of the
         Purchaser's Group Companies other than: (i) liabilities disclosed or
         provided for in the Purchaser's Management Accounts; (ii) liabilities
         incurred in the ordinary course of business since the Purchaser's
         Management Accounts Date, none of which is material to the business of
         the Purchaser's Group as a whole; or (iii) liabilities disclosed
         elsewhere in this Agreement.

3.4      No Liabilities

         Save as fully and specifically disclosed in the Purchaser's Disclosure
         Letter, the Purchaser has no liabilities at all (whether actual or
         contingent).

4        Property

4.1      The Property

         The Purchaser's Properties comprise all of the premises and land owned
         by the Purchaser's Group Companies or in which the Purchaser's Group
         Companies have any right or interest in the nature of ownership.

4.2      Title

         In relation to each Purchaser's Property referred to in Schedule 4, to
         the best of the Purchaser's knowledge, information and belief, the
         Purchaser's Group Company named in Schedule 4 as owner of the
         Purchaser's Property has good title to the Purchaser's Property and is
         beneficially entitled to the whole of the proceeds of sale of the
         Purchaser's Property.

4.3      Properties Leased to or by a Purchaser's Group Company

         In relation to each tenancy, lease, sub-lease or licence entered into
         by the Purchaser's Group Companies (whether as landlord, licensor,
         tenant or licensee), so far as the Purchaser is aware, there is no
         material subsisting breach nor any material non-observance of any
         covenants, condition or agreement contained therein on the part of
         either the relevant landlord, licensor, tenant or licensee.

5        Assets

5.1      Ownership of Assets

         All assets which are reasonably necessary for the operations of the
         Purchaser's Group, other than the Purchaser's Properties, the
         Intellectual Property and any assets disposed of or realised in the
         ordinary course of business are legally and beneficially owned by the
         Purchaser's Group Companies and are free from Encumbrances (other than
         lien arising by operation of law in the ordinary course of business).

5.2      Debts

         None of the debts receivable or due to any Purchaser's Group Company
         of an amount more than HK$1,000,000 and which are included in the
         Purchaser's Management Accounts or which have subsequently arisen has
         been outstanding for more than six months from its due date for
         payment or has been released on terms that the debtor has paid less
         than the full value of his debt.

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5.3      Sufficiency of Assets

         To the best of the Purchaser's knowledge, information and belief, the
         property, rights and assets owned or leased by the Purchaser's Group
         Companies comprise all the property, rights and assets necessary for
         the carrying on of the business of each Purchaser's Group Company
         substantially in the manner in, and to the extent to, which it is
         presently conducted.

6        Intellectual Property and Information Technology

6.1      Infringement

         So far as the Purchaser is aware, no claims of infringement of any
         third party Intellectual Property rights or interests of material
         importance have been made against the Purchaser by any third party.

6.2      Information Technology

         In the 12 months prior to the date of this Agreement, there have been
         no failure or breakdown of any computer systems, communication
         systems, software and hardware owned or used by the Purchaser's Group
         which have caused material disruption to the business of the
         Purchaser's Group.

7        Contracts

7.1      Contracts

         No Purchaser's Group Company is a party to or subject to any contract,
         transaction, arrangement, understanding or obligation which is
         material to the business of the Purchaser's Group as a whole which is
         outstanding and which:

         7.1.1    is not in the ordinary course of business;

         7.1.2    is not wholly on an arm's length basis;

         7.1.3    restricts its freedom to carry on its business in any part of
                  the world in such manner as it thinks fit so as to have a
                  material adverse effect on the Purchaser's Group.

7.2      Compliance with Agreements

         To the best of the Purchaser's knowledge, information and belief:

         7.2.1    all the material contracts and all leases, tenancies,
                  licences, concessions and agreements of a material nature to
                  which any of the Purchaser's Group Companies is a party are
                  valid, binding and enforceable obligations of the parties
                  thereto and the terms thereof have been complied with in all
                  material respects by the relevant Purchaser's Group Company;

         7.2.2    no notice of termination or of intention to terminate has
                  been received in respect of any of them.

7.3      Effect of Purchase of the Sale Shares and the Sale Assets

         To the best of the knowledge, information and belief of the Purchaser
         neither entering into, nor compliance with, nor completion of this
         Agreement will, or is likely to result in a material breach of, or
         give any third party a right to terminate or vary, or result in any
         Encumbrance

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<PAGE>

         under, any contract or arrangement to which any Purchaser's Group
         Company is a party which is material to the business of the
         Purchaser's Group as a whole.

8        Employees

         All employees engaged in the operation of the business of the
         Purchaser's Group are employed by the relevant Purchaser's Group
         Companies.

9        Licences and Consents

9.1      All licences, consents, authorisations, orders, warrants,
         confirmations, permissions, certificates, approvals, registrations and
         authorities material to the business of the Purchaser's Group and
         necessary for the carrying on of the business of the Purchaser's Group
         ("Licences") have been obtained, are in full force and effect and have
         been and are being complied with in all material respects.

9.2      To the best of the Purchaser's knowledge, information and belief,
         there is no reason why any Licence should be suspended, modified or
         revoked.

10       Litigation

10.1     Current Proceedings

         No Purchaser's Group Company is involved whether as claimant or
         defendant or other party in any claim, legal action, proceeding, suit,
         litigation, prosecution, investigation, enquiry, mediation or
         arbitration (other than as claimant in the collection of debts arising
         in the ordinary and usual course of its business) which is material to
         the business of the Purchaser's Group as a whole.

10.2     Pending or Threatened Proceedings

         To the best of the Purchaser's knowledge, information and belief, no
         such claim, legal action, proceeding, suit, litigation, prosecution,
         investigation, enquiry, mediation or arbitration of material
         importance is pending or threatened by or against any Purchaser's
         Group Company.

11       Insurance

11.1     All assets material to the business of the Purchaser's Group as a
         whole which are capable of being insured have at all material times
         been and are insured in amounts reasonably regarded as adequate
         against fire and other risks normally insured against by companies
         carrying on similar businesses or owning assets of a similar nature.

11.2     Each Purchaser's Group Company has at all material times been and is
         adequately covered against accident, physical loss or damage, third
         party liability and other risks normally covered by insurance by such
         companies.

12       Tax

12.1     All returns, computations, notices and information which are or have
         been required to be made or given by each Purchaser's Group Company
         for any Taxation purpose: (i) have been made or given within the
         requisite periods and on a proper basis and are up-to-date

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<PAGE>

         and correct; and (ii) none of them is the subject of any dispute with
         the Inland Revenue Department or other Taxation authorities.

12.2     Each Purchaser's Group Company is in possession of sufficient
         information or has reasonable access to such information to enable it
         to compute its liability to Taxation insofar as it depends on any
         transaction occurring on or before Completion.

13       Important Business Issues Since the Purchaser's Management Accounts
         Date

         Since the Purchaser's Management Accounts Date as regards each
         Purchaser's Group Company:

         (a)      there has been no material adverse change in the financial
                  position (other than a change affecting or likely to affect
                  all companies carrying on business in similar countries in
                  which the Purchaser's Group carries on business);

         (b)      the business of the Purchaser's Group has been carried on as
                  a going concern in the ordinary and usual course;

         (c)      no Purchaser's Group Company has declared, made or paid any
                  dividend or other distribution to its members;

         (d)      no Purchaser's Group Company has issued or allotted or agreed
                  to issue or allot any share capital or any other security
                  giving rise to a right over its capital;

         (e)      no Purchaser's Group Company has redeemed or purchased or
                  agreed to redeem or purchase any of its share capital.

14       General

14.1     The Purchaser and each of the Purchaser's Group Companies is validly
         existing and is a company duly incorporated under the law of its
         jurisdiction of incorporation.

14.2     The Purchaser has the legal right and full power and authority to
         enter into and perform this Agreement and any other documents to be
         executed by it pursuant to or in connection with this Agreement.

14.3     The documents referred to in paragraph 14.2 will, when executed,
         constitute valid and binding obligations on the Purchaser, in
         accordance with their respective terms.

14.4     The Purchaser has taken all corporate action required by it to
         authorise it to enter into and to perform this Agreement, and any
         other documents to be executed by it pursuant to or in connection with
         this Agreement.

15       Insolvency etc.

15.1     No Purchaser's Group Company is insolvent or unable, whether as
         defined by Section 178 of the Companies Ordinance or otherwise, to pay
         its debts, including its future and prospective debts.

15.2     No Purchaser's Group Company has proposed or intends to propose any
         arrangement of any type with its creditors or any group of creditors
         whether by court process or otherwise under which such creditors shall
         receive or be paid less than the amounts contractually or otherwise
         due to them.

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<PAGE>

15.3     No Purchaser's Group Company nor any creditor of any Purchaser's Group
         Company has presented any petition, application or other proceedings
         for any administration order, creditors' voluntary arrangement or
         similar relief by which the affairs, business or assets of the company
         concerned are managed by a person appointed for the purpose by a
         Court, governmental agency or similar body, or by any creditor or by
         the company itself nor has any such order or relief been granted or
         appointment made.

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<PAGE>

                                   Schedule 8
                            Form of the Certificate

                         Dong Fang Gas Holdings Limited
           (a company incorporated in Bermuda with limited liability)

                                                           Certificate No.: [o]

                     HK$[o] TRANCHE [A/B] CONVERTIBLE NOTE

Issued pursuant to the memorandum of association and bye-laws of Dong Fang Gas
Holdings Limited (the "Issuer"), a resolution of the board of directors of the
Issuer passed on [o] 2004 and a resolution of the shareholders of the Issuer
passed on [o] 2004.

THIS IS TO CERTIFY that [o] whose registered office is situate at 39/F, PCCW
Tower, TaiKoo Place, 979 King's Road, Quarry Bay, Hong Kong is the registered
holder (the "Noteholder") of the above-mentioned Convertible Note (the "Note").
The Noteholder is entitled to require the Issuer to convert the whole or any
part(s) of the principal amount outstanding under this Note into ordinary
shares in the capital of the Issuer subject to and in accordance with the terms
and conditions attached hereto which shall form an integral part of this
Certificate (the "Conditions").

Subject to the foregoing, the Issuer, for value received, promises to redeem
the Note and pay the principal sum of HK$[o] to the Noteholder in accordance
with the Conditions.

The Issuer shall pay interest on the principal amount of the Note in accordance
with the Conditions.

GIVEN under the seal of the Issuer on [o] 2004.

-----------------------
Director

-----------------------
Secretary/Director

Notes:

The Note cannot be transferred to bearer on delivery and is only transferable
to the extent permitted by Condition 2. This Certificate must be delivered to
the company secretary of the Issuer for cancellation and reissue of an
appropriate certificate in the event of any such transfer.

(For endorsement in the event of partial conversion or redemption)

Date               Amount Converted/Redeemed                 Amount Outstanding
                   (please specify)

                                   122
<PAGE>

                        TERMS AND CONDITIONS OF THE NOTE

The Note shall be held subject to and with the benefit of the terms and
conditions set out below and such terms and conditions shall be binding on Dong
Fang Gas Holdings Limited (the "Issuer") and the Noteholder. Expressions
defined in the agreement between PCCW Limited and the Issuer dated 5 March 2004
relating to, inter alia, the acquisition of the entire issued share capital of
Ipswich Holdings Limited and the issue of the Note (the "Agreement") shall bear
the same meaning in this Certificate. In addition, "Issue Date" means the date
of issue of the Note. The definitions and rules of construction set out in the
Agreement shall apply in the interpretation of the Conditions.

1        PERIOD

         Subject as provided herein, the Issuer shall repay the outstanding
         principal amount of the Note (together with all unpaid interest
         accrued thereon up to and including the date of actual repayment)
         subject to and in accordance with the Conditions on the Business Day
         immediately preceding the [seventh/tenth] {for the Tranche A Note and
         Tranche B Note respectively} anniversary of the Issue Date ("Maturity
         Date").

2        STATUS AND TRANSFER

2.1      The obligations of the Issuer arising under the Note constitute
         general unsubordinated, direct, unconditional, unsecured obligations
         of the Issuer and shall at all times rank equally among themselves and
         pari passu with all other present and future unsecured and
         unsubordinated obligations of the Issuer except for obligations
         accorded preference by mandatory provisions of applicable law. No
         application will be made for a listing of the Note on any stock
         exchange.

2.2      Subject to the conditions, approvals, requirements and any other
         provisions of or under: (a) the Stock Exchange (and any other stock
         exchange on which the Issuer's Shares may be listed at the relevant
         time) or their rules and regulations; (b) the approval for listing in
         respect of the Conversion Shares; and (c) all applicable laws and
         regulations, the Note may (subject further to Condition 2.4) be
         transferred to any person.

2.3      Any assignment or transfer of the Note shall be of the whole or any
         part of the outstanding principal amount of the Note in whole
         multiples of HK$1,000,000 and the Issuer shall use all reasonable
         endeavours to facilitate any such assignment or transfer of the Note,
         including making any necessary applications to the Stock Exchange for
         approval. As a condition precedent to any such assignment or transfer
         (other than an assignment or transfer of the entire Note), the
         Noteholder and the Issuer shall execute such deed or other document as
         may be necessary or desirable in the reasonable opinion of the Issuer:
         (i) to provide for a new form of the Conditions by excluding
         cross-references to the Agreement; (ii) to provide for meetings of
         holders of Notes of the same series (being Notes derived from this
         Note); and (iii) to amend the terms of this Note so that (where the
         consent, agreement or approval of the Noteholder is required under
         these Conditions) the approval by a simple majority of the Noteholders
         notified to the Issuer shall suffice and the right of the Noteholder
         under Condition 10 may not be exercisable unless a simple majority of
         the Noteholders approving the exercise of such right shall have been
         obtained. For this purpose, "simple majority" of the Noteholders shall
         be a resolution passed by not less than holders of 50% of the
         principal amount of the Notes then outstanding and attending the
         meeting of Noteholders (or by way of a written confirmation signed by
         the relevant majority of Noteholders).

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<PAGE>

2.4      In relation to any assignment or transfer of the Note permitted under
         or otherwise pursuant to this Condition 2:

         (a)      The Note may only be transferred by execution of a form of
                  transfer ("Transfer Form") which shall be in a form
                  previously agreed between the Issuer and the Noteholder by
                  the transferor and the transferee (or their duly authorised
                  representatives). In this Condition, "transferor" shall,
                  where the context permits or requires, include joint
                  transferors or can be construed accordingly.

         (b)      The Certificate of the Note must be delivered to the Issuer
                  accompanied by: (i) a duly executed (and if required, duly
                  stamped) Transfer Form; and (ii) in the case of the execution
                  of the Transfer Form on behalf of a corporation by its
                  officers, the authority of that person or those persons to do
                  so and a copy of the constitutional document of such
                  corporation. The Issuer shall, within three (3) Business Days
                  of receipt of such documents from the Noteholder, cancel the
                  existing Certificate and issue a new certificate under the
                  seal of the Issuer, in favour of the transferee or assignee
                  in respect of the Note (or the transferred or assigned part
                  of the Note) as applicable and, if the Note is assigned or
                  transferred in part only, issue a new certificate under the
                  seal of the Issuer, in favour of the transferor in relation
                  to the part of the Note not assigned or transferred.

3        INTEREST

         [The Note will bear no interest.]/

3.1      [Subject to Condition 3.2, the Note will bear interest from the Issue
         Date at a rate of one per cent. (1%) per annum on the principal amount
         of the Note outstanding from time to time. The interest will, subject
         as provided herein, be payable by the Issuer once every six (6) months
         in arrear on 30 June and 31 December of each year after the Issue Date
         and before the Maturity Date (pro-rata for the actual number of days
         in case the relevant period is less than six months).

3.2      If the Noteholder has converted any part or the whole of the principal
         amount of the Note and upon delivery to the Issuer of the Certificate
         for the Note, the Noteholder shall be entitled to interest in respect
         of such part or the whole of the principal amount being converted for
         the period from the immediately preceding interest payment date (or
         the Issue Date, as the case may be) up to and including the Conversion
         Date concerned.

3.3      Interest shall accrue from day to day and shall be calculated on the
         basis of the actual number of days elapsed and a 365-day year,
         including the first day of the period during which it accrues and
         including the last.]

         {for the Tranche A Note and Tranche B Note respectively}

4        PAYMENTS

4.1      Payment of the interest and principal (if any) in respect of the Note
         shall be made for value on the due dates into such bank account in
         Hong Kong as the Noteholder may notify the Issuer in writing from time
         to time. All payments by the Issuer shall be made in Hong Kong dollars
         in immediately available funds free and clear of any withholding or
         deduction for any present or future taxes, imposts, levies, duties or
         other charge payable by the Issuer. If the Issuer is required by law
         to make any such deduction or withholding from any amount paid (except
         where such deduction or withholding represents tax on the overall
         income of

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<PAGE>

         the Noteholder), the Issuer shall pay to the Noteholder such
         additional amount as shall be necessary so that the Noteholder
         receives an amount equal to the amount which it would have received
         if such withholding or deduction had not been made.

4.2      All payments by the Issuer hereunder shall be made, not later than
         11:00 a.m. (Hong Kong time) on the due date.

4.3      If the due date for payment of any amount in respect of the Note is
         not a Business Day, the Noteholder will be entitled to payment on the
         next following Business Day in the same manner together with interest
         accrued in respect of any such delay.

4.4      The Issuer shall not be liable to make any payment in respect of the
         outstanding principal amount of the Note unless and until the original
         of the Certificate is presented to the Issuer at its address specified
         in Condition 16. The Issuer shall retain the original of the
         Certificate upon the redemption or conversion thereof in full.

4.5      Save as provided under the Conditions, the outstanding principal
         amount of the Note or any part thereof shall not be repaid or prepaid
         by the Issuer.

4.6      If the Issuer defaults in the payment of any sum due and payable under
         this Note, the Issuer shall pay interest on such sum to the Noteholder
         from the due date to the date of actual payment in full (both before
         and after judgment) calculated at the rate of three per cent. (3%) per
         annum.

5        REDEMPTION

         Unless previously converted in accordance with these Conditions, upon
         presentation on the Maturity Date of the original of the Certificate
         to the Issuer at its address specified in Condition 16, the Issuer
         shall redeem the Note at [its principal amount outstanding together
         with accrued interest thereon up to and including the Maturity
         Date]/[120% of its principal amount outstanding] {for the Tranche A
         Note and Tranche B Note respectively} in Hong Kong dollars as provided
         in Condition 4.

6        CONVERSION

         The Noteholder may at any time on or after the Issue Date and on or
         prior to the Maturity Date, in compliance with the provisions of
         Condition 8, require the Issuer to convert the whole or any part of
         the principal amount outstanding (in whole multiples of HK$100,000 or,
         if less, the then outstanding principal amount of the Note) under this
         Note into Shares at the Conversion Price. The New Shares shall be
         allotted and issued in the name of the Noteholder or if it so directs
         any other persons pursuant to such conversion and shall be delivered
         to the Noteholder within three (3) Business Days after the date of
         presentation of the relevant original Certificate. No fraction of a
         Share will be issued on conversion but (except in cases where any such
         cash payment would amount to less than HK$10) a cash payment will be
         made to the Noteholder in respect of such fraction. Such Shares shall
         rank pari passu in all respects with all other Shares in issue on the
         date of the conversion notice and shall be entitled to all dividends,
         bonuses and other distributions the record date of which falls on a
         date on or after the date of the conversion notice.

7        ADJUSTMENTS

7.1      Subject as hereinafter provided, the Conversion Price shall from time
         to time be adjusted in accordance with the following relevant
         provisions and so that if the event giving rise to any

                                      125
<PAGE>

         such adjustment shall be such as would be capable of falling within
         more than one of sub-paragraphs (a) to (g) inclusive of this
         Condition 7.1, it shall fall within the first of the applicable
         paragraphs to the exclusion of the remaining paragraphs provided that
         if such event would be capable of falling within sub-paragraph (h) as
         well, sub-paragraph (h) shall apply:

         (c)      If and whenever the Issuer's Shares by reason of any
                  consolidation or sub-division become of a different nominal
                  amount, the Conversion Price in force immediately prior
                  thereto shall be adjusted by multiplying it by the following
                  fraction:

                                       A
                                    --------
                                       B
                  where:

                  A = the revised nominal amount; and

                  B = the former nominal amount.

                  Each such adjustment shall be effective from the close of
                  business in Hong Kong on the day immediately preceding the
                  date on which the consolidation or sub-division becomes
                  effective.

         (d)      If and whenever the Issuer shall issue (other than in lieu of
                  a cash dividend) any Shares credited as fully paid by way of
                  capitalisation of profits or reserves (including any share
                  premium account or capital redemption reserve fund), the
                  Conversion Price in force immediately prior to such issue
                  shall be adjusted by multiplying it by the following
                  fraction:

                                       C
                                    --------
                                       D
                  in each case, where:

                  C = the aggregate nominal amount of the issued Shares
                      immediately before such issue; and

                  D = the aggregate nominal amount of the issued Shares
                      immediately after such issue.

                  Each such adjustment shall be effective (if appropriate,
                  retroactively) from the commencement of the day next
                  following the record date for such issue.

         (e)      If and whenever the Issuer shall make any Capital
                  Distribution (as defined in Condition 7.2) to holders (in
                  their capacity as such) of Shares (whether on a reduction of
                  capital or otherwise) or shall grant to such holders rights
                  to acquire for cash assets of the Issuer or any of its
                  subsidiaries, the Conversion Price in force immediately prior
                  to such distribution or grant shall be adjusted by
                  multiplying it by the following fraction:

                                     A - B
                                  ------------
                                       A
                  where:

                  A = the market price (as defined in Condition 7.2) on
                      the date on which the Capital Distribution or, as the
                      case may be, the grant is publicly announced

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<PAGE>

                      or (failing any such announcement) the date immediately
                      preceding the date of the Capital Distribution or, as the
                      case may be, of the grant; and

                  B = the fair market value on the day of such
                      announcement or (as the case may require) the
                      immediately preceding day, as determined in good faith
                      by an approved merchant bank of the portion of the
                      Capital Distribution or of such rights which is
                      attributable to one Share,

                  Provided that:

                  (i)    if in the opinion of the relevant approved merchant
                         bank, the use of the fair market value as aforesaid
                         produces a result which is significantly inequitable,
                         it may instead determine (and in such event the above
                         formula shall be construed as if B meant) the amount
                         of the said market price which should properly be
                         attributed to the value of the Capital Distribution or
                         rights; and

                  (ii)   the provisions of this sub paragraph (c) shall not
                         apply in relation to the issue of Shares paid out of
                         profits or reserves and issued in lieu of a cash
                         dividend.

                  Each such adjustment shall be effective (if appropriate,
                  retroactively) from the commencement of the day next following
                  the record date for the Capital Distribution or grant.

         (f)      If and whenever the Issuer shall offer to holders of Shares
                  new Shares for subscription by way of rights, or shall grant
                  to holders of Shares any options or warrants to subscribe for
                  new Shares, at a price which is less than ninety five per
                  cent. (95%) of the market price (as defined in Condition 7.2)
                  at the date of the announcement of the terms of the offer or
                  grant, the Conversion Price shall be adjusted by multiplying
                  the Conversion Price in force immediately before the date of
                  the announcement of such offer or grant by the following
                  fraction:

                                      Q x R
                                 P + -------
                                        S
                                 -----------
                                    P + Q

         where:

                  P =    the number of Shares in issue immediately before the
                         date of such announcement;

                  Q =    the aggregate number of Shares so offered for
                         subscription;

                  R =    the amount (if any) payable for the right, option or
                         warrant to subscribe for each new Share, plus the
                         subscription price payable for each new Share;

                  S =    the market price of one Share on the trading day
                         immediately prior to such announcement.

                  Such adjustment shall become effective (if appropriate
                  retroactively) from the commencement of the day next following
                  the record date for the offer or grant.

         (g)      (i)    If and whenever the Issuer shall issue wholly for cash
                         any securities which by their terms are convertible
                         into or exchangeable for or carry rights of
                         subscription for new Shares, and the total Effective
                         Consideration per

                                      127
<PAGE>

                         Share (as defined below) initially receivable for such
                         securities is less than ninety five per cent. (95%) of
                         the market price (as defined in Condition 7.2) at the
                         date of the announcement of the terms of issue of such
                         securities, the Conversion Price shall be adjusted by
                         multiplying the Conversion Price in force immediately
                         prior to the issue by a fraction of which the
                         numerator is the number of Shares in issue immediately
                         before the date of the issue plus the number of Shares
                         which the total Effective Consideration for the
                         securities issued would purchase at such market price
                         and the denominator is the number of Shares in issue
                         immediately before the date of the issue plus the
                         number of Shares to be issued upon conversion or
                         exchange of, or the exercise of the subscription
                         rights conferred by, such securities at the initial
                         conversion or exchange rate or subscription price.
                         Such adjustment shall become effective (if appropriate
                         retrospectively) from the close of business in Hong
                         Kong on the Business Day next preceding whichever is
                         the earlier of the date on which the issue is
                         announced and the date on which the issuer determines
                         the conversion or exchange rate or subscription price

                  (ii)   If and whenever the rights of conversion or exchange
                         or subscription attached to any such securities as are
                         mentioned in section (i) of this sub-paragraph (e) are
                         modified so that the total Effective Consideration per
                         Share (as defined below) initially receivable for such
                         securities shall be less than ninety five per cent.
                         (95%) of the market price (as defined in Condition
                         7.2) at the date of announcement of the proposal to
                         modify such rights of conversion or exchange or
                         subscription, the Conversion Price shall be adjusted
                         by multiplying the Conversion Price in force
                         immediately prior to such modification by a fraction
                         of which the numerator is the number of Shares in
                         issue immediately before the date of such modification
                         plus the number of Shares which the total Effective
                         Consideration receivable for the securities issued at
                         the modified conversion or exchange price would
                         purchase at such market price and of which the
                         denominator is the number of Shares in issue
                         immediately before such date of modification plus the
                         number of Shares to be issued upon conversion or
                         exchange of or the exercise of the subscription rights
                         conferred by such securities at the modified
                         conversion or exchange rate or subscription price.
                         Such adjustment shall become effective (if
                         appropriate, retrospectively) as at the date upon
                         which such modification shall take effect. A right of
                         conversion or exchange or subscription shall not be
                         treated as modified for the foregoing purpose where it
                         is adjusted to take account of rights or
                         capitalisation issues and other events which have
                         given rise to adjustment of the Conversion Price under
                         this Condition 7.

                  For the purpose of this sub-paragraph (e), the "total
                  Effective Consideration" receivable for the securities issued
                  shall be deemed to be the consideration receivable by the
                  Issuer for any such securities plus the additional minimum
                  consideration (if any) to be received by the Issuer upon (and
                  assuming) the conversion or exchange thereof or the exercise
                  of such subscription rights, and the "total Effective
                  Consideration per Share" initially receivable for such
                  securities shall be such aggregate consideration divided by
                  the number of Shares to be issued upon (and assuming) such
                  conversion or exchange at the initial conversion

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<PAGE>

                  or exchange rate or the exercise of such subscription rights
                  at the initial subscription price, in each case without any
                  deduction for any commissions, discounts or expenses paid,
                  allowed or incurred in connection with the issue.

         (h)      If and whenever the Issuer shall issue wholly for cash any
                  Shares at a price per Share which is less than ninety five
                  per cent. (95%) of the market price (as defined in Condition
                  7.2) at the date of the announcement of the terms of such
                  issue, the Conversion Price shall be adjusted by multiplying
                  the Conversion Price in force immediately before the date of
                  such announcement by a fraction of which the numerator is the
                  number of Shares in issue immediately before the date of such
                  announcement plus the number of Shares which the aggregate
                  amount payable for the issue would purchase at such market
                  price and the denominator is the number of Shares in issue
                  immediately before the date of such announcement plus the
                  number of Shares so issued. Such adjustment shall become
                  effective on the date of the issue.

         (i)      If and whenever the Issuer shall issue Shares for the
                  acquisition of any asset at a total Effective Consideration
                  per Share (as defined in this sub-paragraph (g) below) which
                  is less than ninety five per cent. (95%) of the market price
                  (as defined in Condition 7.2) at the date of the announcement
                  of the terms of such issue, the Conversion Price shall be
                  adjusted in such manner as may be determined by an approved
                  merchant bank (as defined in Condition 7.2). Such adjustment
                  shall become effective on the date of issue. For the purpose
                  of this sub-paragraph (g) "total Effective Consideration"
                  shall be the aggregate consideration credited as being paid
                  for such Shares by the Issuer on acquisition of the relevant
                  asset without any deduction of any commissions, discounts or
                  expenses paid, allowed or incurred in connection with the
                  issue thereof, and the "total Effective Consideration per
                  Share" shall be the total Effective Consideration divided by
                  the number of Shares issued as aforesaid.

         (j)      If the Issuer or the Noteholder determines that an adjustment
                  should be made to the Conversion Price as a result of one or
                  more events or circumstances (whether or not referred to in
                  sub-paragraphs (a) to (g) above) (even if the relevant event
                  or circumstance is specifically excluded in the Conditions
                  from the operation of sub-paragraphs (a) to (g) above), or
                  that an adjustment should be made in a manner other than in
                  accordance with sub-paragraphs (a) to (g) above, or that an
                  adjustment should not be made (even if the relevant event or
                  circumstance is specifically provided for in sub-paragraphs
                  (a) to (g) above), or that the effective date for the
                  relevant adjustment should be a date other than that
                  mentioned in sub-paragraphs (a) to (g) above, the Issuer or
                  the Noteholder may, at its own expense, request an approved
                  merchant bank, acting as expert, to determine as soon as
                  practicable (i) what adjustment (if any) to the Conversion
                  Price is fair and reasonable to take account thereto and is
                  appropriate to give the result which the approved merchant
                  bank considers in good faith to reflect the intentions of the
                  provisions of this Condition 7; and (ii) the date on which
                  such adjustment should take effect; and upon such
                  determination such adjustment (if any) shall be made and
                  shall take effect in accordance with such determination,
                  provided that an adjustment shall only be made pursuant to
                  this sub-paragraph (i) if the approved merchant bank is so
                  requested to make such a determination.

7.2      For the purposes of this Condition 7:

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<PAGE>

         "announcement" shall include the release of an announcement to the
         press or the delivery or transmission by telephone, telex or otherwise
         of an announcement to the Stock Exchange and "date of announcement"
         shall mean the date on which the announcement is first so released,
         delivered or transmitted and "announced" shall have a corresponding
         meaning;

         "approved merchant bank" means a merchant bank of repute in Hong Kong
         selected by the Issuer and agreed by the Noteholder for the purpose of
         providing a specific opinion or calculation or determination hereunder
         or, in the absence of such appointment, such merchant bank as may be
         appointed by the President for the time being of The Hong Kong Society
         of Accountants upon the request of either the Issuer or the
         Noteholder;

         "Capital Distribution" shall mean any cash dividend or a distribution
         in specie and any dividend charged or provided for in the accounts for
         any financial period shall (whenever paid and however described) be
         deemed to be a Capital Distribution provided that any such dividend
         shall not be so deemed if

         (a)      it is paid out of the aggregate of the net profits (less
                  losses) attributable to the holders of Shares for all
                  financial periods after that ended 31 December, 2003 as shown
                  in the audited consolidated profit and loss account of the
                  Issuer and its subsidiaries for each such financial period;
                  or

         (b)      to the extent that (a) above does not apply, the rate of that
                  dividend, together with all other dividends on the class of
                  capital in question charged or provided for in the accounts
                  for the financial period in question, does not exceed the
                  aggregate rate of dividend on such class of capital charged
                  or provided for in the accounts for the last preceding
                  financial period. In computing such rates, such adjustments
                  may be made as are in the opinion of an approved merchant
                  bank appropriate to the circumstances and shall be made if
                  the lengths of such periods differ materially;

         "issue" shall include allot;

         "market price" means the average closing price of Shares on the Stock
         Exchange for each of the last twenty (20) Stock Exchange dealing days
         on which dealings in the Issuer's Shares on the Stock Exchange took
         place ending on the last such dealing day immediately preceding the
         day on or as of which the market price is to be determined;

         "reserves" includes unappropriated profits;

         "rights" includes rights in whatsoever form issued; and

         "Shares" includes, for the purpose of Shares comprised in any offer
         pursuant to paragraphs (c), (d), (e) or (f) of Condition 7.1, any such
         ordinary shares of the Issuer as, when fully paid, will be Shares.

7.3      The  provisions of  sub-paragraphs  (b), (c), (d), (e) and (f) of
         Condition 7.1 shall not apply to:

         (a)      an issue of fully paid Shares upon the exercise of any
                  conversion rights attached to securities convertible into
                  Shares or upon exercise of any rights (including any
                  conversion of part or the whole of the Note) to acquire
                  Shares (except a rights issue) provided that an adjustment
                  (if required) has been made under this Condition 7 in respect
                  of the issue of such securities or granting of such rights
                  (as the case may be);

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<PAGE>

         (b)      an issue of Shares or other securities of the Issuer or any
                  subsidiary of the Issuer wholly or partly convertible into,
                  or rights to acquire, Shares pursuant to any share option
                  scheme of the Issuer adopted in accordance with the Listing
                  Rules;

         (c)      an issue of fully paid Shares by way of capitalisation of all
                  or part of any subscription right reserve, or any similar
                  reserve which has been or may be established pursuant to the
                  terms of any securities wholly or partly convertible into or
                  rights to acquire Shares; or

         (d)      an issue of Shares pursuant to a scrip dividend scheme where
                  an amount not less than the nominal amount of the Issuer's
                  Shares so issued is capitalised and the market value of such
                  Shares is not more than 110 per cent. of the amount of
                  dividend which holders of the Issuer's Shares could elect to
                  or would otherwise receive in cash, for which purpose the
                  "market value" of a Share shall mean the average of the
                  closing prices for such Stock Exchange dealing days on which
                  dealings in the Issuer's Shares took place (being not less
                  than twenty (20) such days) as are selected by the directors
                  of the Issuer in connection with determining the basis of
                  allotment in respect of the relevant scrip dividend and which
                  fall within the period of one month ending on the last day on
                  which holders of Shares may elect to receive or (as the case
                  may be) not to receive the relevant dividend in cash.

7.4      Any adjustment to the Conversion Price shall be made to the nearest
         one tenth of a cent so that any amount under one twentieth of a cent
         shall be rounded down and any amount of one twentieth of a cent or
         more shall be rounded up and in no event shall any adjustment
         (otherwise than upon the consolidation of Shares into Shares of a
         larger nominal amount) involve an increase in the Conversion Price. In
         addition to any determination which may be made by the directors of
         the Issuer, every adjustment to the Conversion Price shall be
         certified by an approved merchant bank.

7.5      Notwithstanding anything contained herein, no adjustment shall be made
         to the Conversion Price in any case in which the amount by which the
         same would be reduced in accordance with the foregoing provisions of
         this Condition would be less than one-tenth of a cent and any
         adjustment that would otherwise be required then to be made shall be
         carried forward.

7.6      If the Issuer or any subsidiary of the Issuer shall modify the rights
         attached to any share or loan capital so as wholly or partly to
         convert or make convertible such share or loan capital into, or attach
         thereto any rights to acquire, Shares, the Issuer shall appoint an
         approved merchant bank to consider whether any adjustment to the
         Conversion Price is appropriate (and if such approved merchant bank
         shall certify that any such adjustment is appropriate, the Conversion
         Price shall be adjusted accordingly and the provisions of Conditions
         7.4, 7.5, 7.7, 7.8 and 7.9 shall apply).

7.7      Whenever the Conversion Price is adjusted as herein provided, the
         Issuer shall as soon as possible but not later than seven (7) Business
         Days after the relevant adjustment has been determined give notice to
         the Noteholder that the Conversion Price has been adjusted (setting
         out brief particulars of the event giving rise to the adjustment, the
         Conversion Price in effect prior to such adjustment, the adjusted
         Conversion Price and the effective date thereof) and shall at all
         times thereafter so long as the Note remains outstanding make
         available for inspection at its principal place of business in Hong
         Kong a signed copy of the said certificate of the approved merchant
         bank.

                                      131
<PAGE>

7.8      Notwithstanding any other provision of this Condition 7, no adjustment
         shall be made which would (but for this Condition 7.8) result in the
         Conversion Price being reduced so that on conversion, Shares shall
         fall to be issued at a discount to their nominal value, and in such
         case an adjustment shall be made to the effect that the Conversion
         Price will be reduced to the nominal value of a Share.

8        PROCEDURE FOR CONVERSION

8.1      The Conversion Rights may, subject as provided herein and in Condition
         6.1, be exercised on any Business Day on or prior to the Maturity Date
         by the Noteholder delivering to the Issuer in accordance with
         Condition 16 a written notice stating the intention of the Noteholder
         to convert and the address in Hong Kong for the delivery of the share
         certificates of the Conversion Shares pursuant to Condition 8.2
         together with the original of the Certificate. The conversion notice
         shall be in the form annexed to these Conditions. The Issuer shall be
         responsible for payment of all taxes and stamp, issue and registration
         duties (if any), and Stock Exchange levies and charges (if any)
         arising on any such conversion.

8.2      The Conversion Shares shall be allotted and issued by the Issuer,
         credited as fully paid, to the Noteholder or as it may direct within
         three (3) Business Days after, and with effect from, the date the
         conversion notice is served by the Noteholder against delivery of the
         original Certificate (which the Noteholder is obliged to deliver to
         the Issuer following such conversion), and the Issuer shall issue
         certificates for the Conversion Shares to which the Noteholder or such
         person as it may direct shall become entitled in consequence of
         exercising its Conversion Rights in board lots with one certificate
         for any odd lot of Shares arising from conversion and shall deliver
         the share certificates to the Noteholder in Hong Kong at its address
         set out in Condition 16, (if appropriate) together with the original
         Certificate with an endorsement on it by a director of the Issuer for
         any balance of the Note not converted within the three (3) Business
         Day period referred to above.

9        PROTECTION OF THE NOTEHOLDER

9.1      So long as the Note is outstanding, unless with the prior written
         approval of the Noteholder:

         (a)      the Issuer shall not amend and/or repeal any provision of its
                  memorandum of association or bye-laws (save for any amendment
                  required by the Listing Rules);

         (b)      the Issuer shall not issue or authorise the issue of any
                  securities of any class having any right, preference or
                  priority superior to or on a parity with the Note;

         (c)      the Issuer shall not declare or pay any dividend on any
                  securities other than the Issuer's Shares;

         (d)      the Issuer shall not authorise or effect a merger, sale or
                  lease of all or substantially all the assets of the Issuer or
                  a voluntary liquidation, recapitalisation or reorganisation
                  of the Issuer;

         (e)      the Issuer shall not change the nature of its business;

         (f)      the Issuer shall keep available for issue, free from
                  pre-emptive rights, out of its authorised but unissued
                  capital, sufficient Shares to satisfy in full the Conversion
                  Rights at the Conversion Price from time to time and all
                  other rights for the time being outstanding of subscription
                  for and conversion into Shares;

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<PAGE>

         (g)      the Issuer shall not in any way modify the rights attached to
                  the Issuer's Shares (except as contemplated under Condition
                  7) as a class or attach any special restrictions thereto;

         (h)      the Issuer shall procure that at no time shall there be in
                  issue Shares of different nominal values;

         (i)      other than as a result of, or in circumstances where, an
                  offer made to holders of Shares to acquire all or any
                  proportion of the Issuer's Shares becoming unconditional, the
                  Issuer shall use all reasonable endeavours: (i) to maintain a
                  listing for all the issued Shares on the Stock Exchange; (ii)
                  to obtain and maintain a listing on the Stock Exchange for
                  all the Conversion Shares issued on the exercise of the
                  Conversion Rights attaching to the Note; and (iii) to obtain
                  a listing for all the Issuer's Shares issued on the exercise
                  of the Conversion Rights attaching to the Note on any other
                  stock exchange on which any of the Issuer's Shares are for
                  the time being listed and will forthwith give notice to the
                  holder of the Note in accordance with Condition 16 of the
                  listing or delisting of the Issuer's Shares by any such stock
                  exchange;

         (j)      the Issuer shall provide the Noteholder with (i) a copy of
                  its annual reports, annual financial statements, interim
                  reports and all other statements and circulars sent by the
                  Issuer to its shareholders within three (3) Business Days
                  after the Issuer sends the same to its shareholders, and (ii)
                  a copy of each press announcement and press release, teletext
                  announcement released or made by the Issuer in accordance
                  with the Listing Rules within three (3) Business Days after
                  date of release;

         (k)      the Issuer shall ensure that all the Conversion Shares will
                  be duly and validly issued fully paid and registered;

         (l)      the Issuer shall comply with and procure the compliance of
                  all conditions imposed by the Stock Exchange or by any other
                  competent authority (in Hong Kong or elsewhere) for approval
                  of the issue of the Note or for the listing of and permission
                  to deal in the Conversion Shares issued or to be issued on
                  the exercise of the Conversion Rights and to ensure the
                  continued compliance thereof (provided in each case that the
                  Noteholder complies with and satisfies all such conditions
                  applicable to it);

         (m)      the Issuer shall not issue or pay up any securities by way of
                  capitalisation of profits or reserves other than (i) by the
                  issue of fully paid Shares to holders of its Shares; or (ii)
                  as mentioned in Condition 7.3(c); or (iii) by the issue of
                  Shares in lieu of a cash dividend in the manner referred to
                  in Condition 7.3(d);

         (n)      the Issuer shall not create or permit to be in issue any
                  Equity Share Capital other than Shares, provided that nothing
                  in this Condition 9.1(o) shall prevent (i) any consolidation
                  or sub-division of the Issuer's Shares; or (ii) the issue of
                  Equity Share Capital which does not participate in dividends
                  in respect of a certain financial period but is pari passu in
                  all other respects with the Issuer's Shares;

         (o)      the Issuer shall procure that (i) no securities issued by the
                  Issuer shall be converted into Shares or exchanged for Shares
                  except in accordance with the terms of issue thereof, and
                  (ii) no securities issued by the Issuer without rights to

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<PAGE>

                  convert into Shares or to be exchanged for Shares shall
                  subsequently be granted such rights;

         (p)      the Issuer shall not make any issue, grant or distribution or
                  take any other action if the effect thereof would be that on
                  the exercise of the Conversion Rights, it would but for
                  Condition 7.8 be required to issue Shares at a discount to
                  their nominal value or to adjust the Conversion Price to a
                  level below the nominal value of the Issuer's Shares;

         (q)      if an offer is made to holders of Shares to acquire all or
                  any proportion of the Issuer's Shares, the Issuer shall
                  forthwith give notice of such offer to the Noteholder and
                  shall use all reasonable endeavours to procure that a similar
                  offer is extended in respect of the Note or in respect of any
                  Shares issued on conversion of the Note during the period of
                  the offer;

         (r)      the Issuer shall not make any distribution in specie to
                  holders of Shares unless the Noteholder is entitled to the
                  Specie Distribution Right in accordance with Condition 11;

         (s)      the Issuer shall not, subject as hereinafter provided, make
                  any reduction or redemption of share capital, share premium
                  account or capital redemption reserve involving the repayment
                  of money to shareholders of the Issuer (other than to
                  shareholders of the Issuer having the right on a winding up
                  to a return of capital in priority to the holders of Shares)
                  or reduce any uncalled liability in respect thereof unless,
                  in any such case, the same gives rise (or would, but for the
                  provisions of Conditions 7.5 or 7.8 give rise) to an
                  adjustment of the Conversion Price in accordance with
                  Condition 7; and

         (t)      the Issuer shall not enter into any deed, agreement,
                  assignment, instrument or documents whatsoever binding on it
                  which may result in any breach of any of the terms and
                  conditions of the Note.

10       EVENTS OF DEFAULT

         If any of the following events ("Events of Default") occurs, the
         Noteholder may give notice to the Issuer that the Note has, on the
         giving of such notice, become immediately due and payable at its
         principal amount then outstanding together with any accrued and unpaid
         interest under Condition 3.1 calculated up to and including the date
         of payment:

         (a)      other than as a result of, or in circumstances where, an
                  offer made to holders of Shares to acquire all or any
                  proportion of the Issuer's Shares becoming unconditional, the
                  listing of the Issuer's Shares (as a class) on the Stock
                  Exchange:

                  (i)    ceases; or

                  (ii)   is suspended for a continuous period of fifteen (15)
                         days on each of which the Stock Exchange is generally
                         open for trading due to the default of the Issuer or
                         any of its directors, officers, employees or agents;
                         or

         (b)      (i)    the breach of any of the Purchaser's Warranties which
                         will have a material adverse effect on the Purchaser's
                         Group or on the Issuer's ability to perform any of its
                         obligations contemplated hereunder; or

                  (ii)   the Issuer defaults in performance or observance or
                         compliance with any of its material obligations
                         contained in the terms and conditions of the Note,

                                      134
<PAGE>

                         and such event continues to subsist for a continuous
                         period of fifteen (15) Business Days after notice of
                         such event is sent from the Noteholder to the Issuer;
                         or

         (c)      the Issuer fails to pay the principal when due or the Issuer
                  fails to pay interest on the Note when due unless non payment
                  of such interest is due solely to administrative or technical
                  error and payment is made within three (3) Business Days of
                  the due date thereof; or

         (d)      (i)    any amounts of principal repayment or interest payment
                         in relation to bank borrowings of the Issuer or any of
                         its subsidiaries are not paid when due, or as the case
                         may be, within any applicable grace period and the
                         relevant bank notifies the Issuer or the relevant
                         subsidiary that such non-payment constitutes an event
                         of default under the terms of relevant loan; or

                  (ii)   the Issuer or any of its material subsidiaries fails
                         to pay when due or expressed to be due any amounts
                         payable or expressed to be payable by it under any
                         present or future guarantee for any moneys borrowed
                         from or raised through a financial institution and the
                         relevant financial institution notifies the Issuer or
                         the relevant subsidiary that such failure to pay
                         constitutes an event of default under the terms of the
                         guarantee or the loan in relation to which the
                         guarantee was given; or

         (e)      an encumbrancer takes possession or a receiver, manager or
                  other similar officer is appointed of the whole or any
                  material part of the undertaking, property, assets or
                  revenues of the Issuer or any of its subsidiaries; or

         (f)      the Issuer or any of its material subsidiaries becomes
                  insolvent or is unable to pay its debts as they mature or
                  applies for or consents to or suffers the appointment of any
                  administrator, liquidator or receiver of the Issuer or any of
                  its material subsidiaries or the whole or any material part
                  of the undertaking, property, assets or revenues of the
                  Issuer or any of its material subsidiaries or takes any
                  proceeding under any law for a readjustment or deferment of
                  its obligations or any part of them or makes or enters into a
                  general assignment or compromise with or for the benefit of
                  its creditors; or

         (g)      an order is made or an effective resolution passed for
                  winding-up of the Issuer or any of its material subsidiaries,
                  except in the case of winding up of subsidiaries in the
                  course of internal reorganisation; or

         (h)      a moratorium is agreed or declared in respect of any
                  indebtedness of the Issuer or any of its subsidiaries or any
                  governmental authority or agency condemns, seizes,
                  compulsorily purchases or expropriates all or any material
                  part of the assets of the Issuer or any of its subsidiaries;
                  or

         (i)      the Issuer or any of its material subsidiaries consolidates
                  or amalgamates with or merge into any other corporation
                  (other than a consolidation, amalgamation or merger in which
                  the Issuer or such material subsidiary is the continuing
                  corporation), or the Issuer or any of its material
                  subsidiaries sells or transfers all or substantially all of
                  its assets, or

         (j)      at any time any indebtedness, including any obligation
                  (whether present or future, actual or contingent, secured or
                  unsecured, as principal or surety or otherwise) for the
                  payment or repayment of money, of any member of the
                  Purchaser's Group

                                      135
<PAGE>

                  becomes  due and payable prior to its stated maturity by
                  reason of default, or event of default (howsoever described)
                  by any member of the Purchaser's Group.

         Provided that notwithstanding the foregoing, if the Issuer shall fail
         to issue the Conversion Shares in accordance with the Conditions, the
         Noteholder shall be entitled to bring an action against the Issuer for
         either specific performance or damages. The Issuer will forthwith on
         becoming aware of any such event as is mentioned in this Condition
         give notice in writing thereof to the Noteholder. At any time after
         any interest amount or the principal amount of the Note has become
         payable and payment of which has not been made, the Noteholder may
         without further notice institute such proceedings as it may think fit
         to enforce payment of the monies due.

         [In the event that the Noteholder gives notice to the Issuer that the
         Note has become immediately due and payable on the occurrence of any
         Event of Default, the Issuer shall immediately repay the principal
         amount then outstanding together with any accrued and unpaid interest
         under Condition 3.1 and a proportionate part of the 20% redemption
         premium under Condition 5, calculated up to and including the date of
         payment.] {for the Tranche B Note only}

11       DISTRIBUTION IN SPECIE

         If the Issuer declares a distribution in specie other than an issue of
         Shares in lieu of a cash dividend falling under Condition 7.3(d) (a
         "Specie Distribution") to shareholders at any time during the period
         in which the Noteholder can exercise its Conversion Rights, the
         Noteholder will, unless an adjustment to the Conversion Price has been
         made under Condition 7 in respect of the Specie Distribution in full,
         be entitled to an amount (the "Specie Distribution Right") which shall
         be determined as follows:

         (a)      the Issuer and the Noteholder will on the date of
                  announcement of the Specie Distribution instruct an approved
                  merchant bank (as defined in Condition 7.2) to value the
                  Specie Distribution which would have been payable to the
                  Noteholder on the Issuer's Shares falling to be issued if the
                  Noteholder had exercised its Conversion Rights immediately
                  prior to the record date for the Specie Distribution in
                  respect of the whole of the principal amount of the Note then
                  outstanding (the "Notional Specie Distribution"); and

         (b)      upon the determination of the approved merchant bank's
                  valuation of the Notional Specie Distribution (which
                  valuation shall be final and binding on both the Issuer and
                  the Noteholder) the Issuer will pay a cash amount equal to
                  the value of the Notional Specie Distribution to the
                  Noteholder.

12       VOTING

         The Noteholder will not be entitled to receive notices of, attend or
         vote at any meetings of the Issuer by reason only of it being the
         Noteholder.

13       SELLING RESTRICTIONS
         The Noteholder agrees not to offer the Note or Shares issued and
         allotted to it upon any exercise of the Conversion Rights for sale or
         subscription to the public pursuant to a prospectus within the meaning
         of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong)
         except such as, and under circumstances that are, permitted under the
         Companies Ordinance.

                                      136
<PAGE>

14       EXPERTS

         In giving any certificate or making any adjustment hereunder, any
         approved merchant bank appointed by the Issuer shall be deemed to be
         acting as experts and not as arbitrators and, in the absence of
         manifest error, their decision shall be conclusive and binding on the
         Issuer and the Noteholder and all persons claiming through or under
         them respectively.

15       REPLACEMENT NOTE

         If the Certificate is lost or mutilated, the Noteholder shall notify
         the Issuer as soon as practicable and a replacement Certificate shall
         be issued if the Noteholder provides the Issuer with: (a) the
         mutilated Certificate or a declaration by the Noteholder or its
         officer that the Certificate had been lost or mutilated (as the case
         may be) or other evidence that the Certificate had been lost or
         mutilated; and (b) an appropriate indemnity in such form and content
         as the Issuer may reasonably require. Any Certificate replaced in
         accordance with this Condition shall forthwith be cancelled.

16       NOTICES

         Each notice, demand or other communication to be given or made under
         this Agreement shall be in writing and delivered or sent to the
         relevant party at its respective address or facsimile number set out
         below (or such other address or facsimile number as the addressee has
         by five (5) days' prior written notice specified to the other party):

         To the Issuer:

                              Facsimile:         2372 0611
                              Attention:         Company Secretary

         To the Noteholder:

                              Facsimile:         2962 5725
                              Attention:         Company Secretary

         Any notice, demand or other communication so addressed to the relevant
         party shall be deemed to have been delivered: (a) if given or made by
         letter and delivered by hand or courier when actually delivered to the
         relevant address; (b) if given or sent by registered mail, on the date
         which is two (2) Business Days (in the case of mail sent to a local
         address) or five (5) Business Days (in the case of mail sent to an
         overseas address) after the posting thereof; and (c) if given or made
         by facsimile, when despatched with confirmation of successful
         transmission (and if the deemed date of delivery is not a Business
         Day, on the immediately following Business Day).

17       AMENDMENT

         The terms and conditions of the Note may be varied, expanded or
         amended by agreement in writing between the Issuer and the Noteholder.

18       GOVERNING LAW AND JURISDICTION

         The Note and the Conditions are governed by and shall be construed in
         accordance with the laws of Hong Kong and the Parties agree to submit
         to the non-exclusive jurisdiction of the courts of Hong Kong.

                                      137
<PAGE>

                               CONVERSION NOTICE

Terms defined in the agreement between PCCW Limited and Dong Fang Gas Holdings
Limited (the "Issuer") dated 5 March 2004 relating to, inter alia, the
acquisition of the entire issued share capital of Ipswich Holdings Limited and
the issue of the Note and in the Certificate relating to the Note (as may be
amended) shall bear the same meaning in this Conversion Notice.

The undersigned hereby irrevocably elects to convert the following amount of
the Note into shares of the Issuer in accordance with the Conditions, as of the
date specified below, such shares to be issued in the name of the Shareholder
set out below.

Name of Noteholder:

Certificate Number(s):

Amount to be converted:

Conversion Date:
(being the date of this notice and on which the original Certificate is
presented to the Issuer)

Applicable Conversion Price:

Name in which shares are to be issued:

Address of Shareholder:

Signature of Noteholder:

Dated [o] 200[o]

                                      138
<PAGE>

                                   Annexure A
                                Loan Assignment

                                      139
<PAGE>

                                   Annexure B
                                 S&P Agreement

                                      140
<PAGE>

                               Table of Contents

Contents                                                                   Page

1        Interpretation.......................................................1

2        Agreement to Sell and Purchase.......................................7

3        Consideration........................................................7

4        Conditions...........................................................8

5        Pre-Completion......................................................12

6        Completion..........................................................14

7        Specific Undertakings...............................................15

8        Warranties..........................................................16

9        Limitation of Seller's Liability....................................18

10       Claims Against the Seller...........................................20

11       Limitation of Purchaser's Liability.................................21

12       Claims Against the Purchaser........................................23

13       Confidentiality.....................................................24

14       Other Provisions....................................................25

Schedule 1 The Group.........................................................31

Schedule 2 The Purchaser's Group.............................................56

Schedule 3 The Properties (Clause 1.1)......................................101

Schedule 4 The Purchaser's Properties (Clause 1.1)..........................103

Schedule 5 Completion Obligations (Clause 6)................................105

Schedule 6 Warranties given by the Seller under Clause 8.1..................108

Schedule 7 Warranties given by the Purchaser under Clause 8.4...............108

Schedule 8 Form of the Certificate..........................................122

Annexure A Loan Assignment..................................................139

                                       i
<PAGE>

Annexure B S&P Agreement....................................................140

                                      ii

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