Document:

Exhibit 4(rr)

THIS AGREEMENT                     is made the 21st day of December Two Thousand
and Four

BETWEEN the Vendor whose name(s), address(es)/registered office(s) and
identification number/business registration number are more particularly set out
in Part A of Schedule 1 hereto ("the Vendor") of the one part and the Purchaser
whose names(s), address(es)/registered office(s) and identification
number/business registration number are more particularly set out in Part B of
Schedule 1 hereto ("the Purchaser") of the other part.

WHEREAS :-

(A)  Under and by virtue of an Agreement for Lease dated 21st May 1992 and
     registered in the Land Registry by Memorial No.5342490 as supplemented by a
     Supplemental Agreement dated 13th December 2000 and registered in the Land
     Registry by Memorial No.8276621 and the Lease dated 13th December 2000 and
     registered in the Land Registry by Memorial No.8276622 as rectified by a
     Deed of Rectification and Confirmation dated 12th March 2001 and registered
     in the Land Registry by Memorial No.8340656 issued pursuant thereto (the
     Lease Memorial No. 8276622 as so rectified "the Lease"), Taikoo Place
     Holdings Limited ("the Owner") as owner let and Monance Limited ("the
     Lessee") as lessee took the Land and the Premises more particularly
     described in Part C of Schedule 1 hereto for the term of 999 years from and
     including 2nd February 1882, less the last 3 days thereof ("the Term")
     subject to the payment of rent and other amounts thereby reserved and to
     the terms and conditions therein contained including the restriction on
     alienation contained in Clause 5.9 of the Lease.

(B)  Under and by virtue of an Assignment dated 6th September 2002 and
     registered in the Land Registry by Memorial No.8777848, the Lessee assigned
     to the Vendor by way of sale the Land and the Premises held by the Lessee
     under the Lease for the residue of the Term created under the Lease subject
     to the rent and other amounts payable under the Lease and to the covenants,
     conditions and provisos contained in the Government Lease of Quarry Bay
     Marine Lot No.1 ("the Government Lease") and the Lease.

(C)  The Vendor has agreed to sell and the Purchaser has agreed to purchase the
     Land and the Premises held by the Vendor under the Lease for the residue of
     the Term created under the Lease subject to the rent and other amounts
     payable under the Lease and to

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     the covenants, conditions and provisos contained in the Government Lease
     and the Lease in the manner hereinafter appearing.

NOW IT IS HEREBY AGREED as follows :-

1.       1.1      The Vendor shall sell and the Purchaser shall purchase All
                  That the Land and the Premises held by the Vendor under the
                  Lease (the Land and the Premises held by the Vendor under the
                  Lease are hereinafter referred to as "the Property") together
                  with all the estate rights title benefit interest privileges
                  and appurtenances thereunto belonging or appertaining
                  including the furniture, chattels, fittings, facilities,
                  equipment and all other effects now installed therein at the
                  date hereof (collectively "Furniture and Fittings") for the
                  residue of the Term created under the Lease subject to the
                  payment of the rent and other amounts payable under the Lease
                  and subject also to the covenants, conditions and provisos
                  contained in the Government Lease and the Lease at the
                  purchase price referred to in Clause 2 hereof ("the Purchase
                  Price").

         1.2      The Vendor shall assign the Property by one assignment to the
                  Purchaser which shall be prepared by and at the expense of the
                  Purchaser.

         1.3      The Purchaser shall not sub-sell the Property or transfer the
                  benefit of this Agreement, whether by way of a direct or
                  indirect reservation, right of first refusal, option, trustee
                  or power of attorney, nomination or any other method,
                  arrangement or document of any description, conditional or
                  unconditional or enter into any agreement so to do before the
                  completion of the sale and purchase and execution of the
                  Assignment to the Purchaser and the Purchaser hereby covenants
                  to that effect with the Vendor. The Purchaser shall not be
                  entitled to required the Vendor to assign the Property to
                  anyone other than the Purchaser. TMW Asia Property Fund I GmbH
                  & Co., KG. shall remain the ultimate beneficial owner of not
                  less than 50% of the entire issued share capital of the
                  Purchaser on completion.

         1.4      The Property is sold and will be assigned subject to and with
                  the benefit of all rights of way, lights, drainage and other
                  easements and quasi-easements and rights of adjoining owners
                  (if any) and/or the Government adversely or beneficially
                  affecting the Property.

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         1.5      For the purpose of completing the purchase herein, the
                  Purchaser shall as from completion comply with all the terms
                  and conditions of the Lease including but not limited to enter
                  into direct covenants with the Owner to perform and observe
                  all the Lessee's covenants and provisions of the Lease
                  including without limitation the restriction on alienation
                  contained in Clause 5.9 of the Lease. The Purchaser shall
                  before completion enter into direct covenants with the Owner
                  in accordance with Clause 5.9 of the Lease.

2.       The Purchase Price of the Property shall be in the sum set out in Part
         H of Schedule 1 hereto which shall be paid and satisfied by the
         Purchaser to the Vendor in the manner set out in Schedule 2 hereto.

3.       3.1      Completion shall take place at the offices of Messrs Woo,
                  Kwan, Lee & Lo at Room 2801, Sun Hung Kai Centre, No.30
                  Harbour Road, Wanchai, Hong Kong on the date specified in Part
                  G of Schedule 1 hereto between the hours of 9:30a.m. and
                  5:00p.m. on weekdays and 9:30a.m. and 1:00p.m. on Saturdays
                  Provided that the Vendor shall have the right to call for
                  early completion by giving not less than 14 days notice in
                  writing to the Purchaser whereupon completion shall take place
                  on the date of expiry of such notice Provided Further that
                  such notice may not be served earlier than 25 January 2005.
                  The parties hereto expressly agree that completion of the sale
                  and purchase shall be implemented by way of the usual
                  solicitors' undertaking subject to the usual Law Society
                  Qualifications.

         3.2      Notwithstanding Clause 3.1 above, either party may by written
                  notice served to the other party not less than seven business
                  days before completion request for formal completion in which
                  case formal completion shall take place and the balance of
                  purchase price shall be paid by cashier orders.

4.       Time shall in every respect be of the essence of this Agreement.

5.       5.1      Completion of the sale and purchase under this Agreement is
                  subject to and conditional upon the compliance by Pacific
                  Century Premium Developments Limited (the holding company of
                  the Vendor), with the requirements of The

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                  Stock Exchange of Hong Kong Limited ("the Stock Exchange") and
                  in particular the requirements under The Rules Governing the
                  Listing of Securities on the Stock Exchange ("the Listing
                  Rules") in relation to this Agreement and the transactions
                  contemplated under this Agreement, including without
                  limitation (if required) the passing of a resolution by the
                  shareholders of Pacific Century Premium Developments Limited
                  at a general meeting approving this Agreement and the
                  transactions contemplated under this Agreement in accordance
                  with the Listing Rules.

         5.2      In the event that the condition precedent referred to in
                  Clause 5.1 hereof is not fulfilled on or before 31 January
                  2005, or such later date as the parties hereto may agree, this
                  Agreement shall immediately determine in which event :-

                  (a)      all the deposits and/or part payment (if any) of the
                           Purchase Price paid by the Purchaser to the Vendor
                           hereunder shall be returned to the Purchaser within 7
                           days with interest;

                  (b)      if possession of the Land and/or the Premises or any
                           part(s) thereof has already been delivered by the
                           Vendor to the Purchaser, the Purchaser shall
                           re-deliver the same to the Vendor within 7 days
                           thereof; and

                  (c)      such determination shall not prejudice any rights
                           and/or remedies that either party may have against
                           the other in respect of any antecedent breach of
                           obligations.

6.       6.1      (a)      The Property is to be assigned to the Purchaser upon
                           completion with good title and free from
                           encumbrances.

                  (b)      The Purchaser has reviewed the Vendor's title to the
                           Property before signing this Agreement and the
                           Purchaser shall be deemed to have accepted the
                           Vendor's title to the Property as at the date hereof
                           upon signing this Agreement and no objections and
                           requisitions (if any) may be made by the Purchaser in
                           respect of such title to the Property.

         6.2      For proof of title purposes, the Vendor shall undertake to get
                  all the assurance and act (if any) which shall be required for
                  getting in, surrendering or

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                  releasing any outstanding estate, right, title or interest or
                  for completing or perfecting the Vendor's title or for
                  stamping any unstamped or insufficiently stamped document or
                  for any other purpose shall be prepared, made and done by and
                  at the expenses of the Vendor.

         6.3      The Vendor shall not be required to prove that the Property
                  sold corresponds with the description contained in the
                  muniments of title, and if there shall be any immaterial
                  error, mis-statement, mis-description or omission, the same
                  shall not annul the sale nor entitle the Purchaser to be
                  discharged from his purchase, nor shall any compensation be
                  allowed or paid by the Vendor in respect thereof.

7.       7.1      The Property shall be sold to the Purchaser on an "as is"
                  basis. The Purchaser acknowledges that it has been invited to
                  inspect the Property or has caused it to be inspected on its
                  behalf. The Purchaser is deemed to have full knowledge of the
                  physical state and condition of the Property.

         7.2      The Vendor gives no warranty expressly or by implication as
                  to:

                  (a)      the fittings and finishes or the installations and
                           appliances (if any) incorporated in the Property or
                           in the building or buildings of which the Property
                           form(s) part;

                  (b)      the state and condition of the Property or of the
                           said building or buildings or of the fittings,
                           finishes, installations, chattels or appliances
                           therein or thereof;

                  (c)      the composition of the said building or buildings or
                           the nature or manner of its or their construction;

                  (d)      the floor area of the Property;

                  (e)      the permitted user of the Property; and

                  (f)      the fitness or otherwise of the Property for
                           development or re-development.

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         7.3      The Vendor gives no warranty whatsoever whether the Property
                  is included in any lay-out plans (draft or approved) under the
                  Town Planning Ordinance (Cap.131). The Purchaser shall in
                  respect of the matters aforesaid be responsible for making its
                  own inquiry and investigation regarding any provisions or
                  redevelopment restrictions affecting the Property under the
                  said Ordinance and/or any other relevant ordinance for the
                  time being in force and the Purchaser is deemed to have agreed
                  to purchase the Property subject to such provisions and/or
                  restrictions, if any, and the Purchaser shall be bound to
                  complete the purchase notwithstanding any notice which may be
                  given or issued or published in pursuance of the said
                  Ordinance and/or any other relevant ordinance for the time
                  being in force after the signing of this Agreement.

         7.4      The Vendor does not warrant or represent that each and every
                  fixture, fitting, erection, structure and building works (if
                  any) on the Property or any part or parts thereof is erected
                  in all respects in compliance with the Buildings Ordinance,
                  the Fire Safety (Commercial Premises) Ordinance and/or their
                  respective subsidiary legislations and/or any other
                  legislation or regulation. The Vendor shall be under no
                  liability whatsoever if it is discovered at any time (whether
                  before or after completion of the purchase) that the present
                  use of the Property or any part or parts thereof is not a
                  permitted use or that at the date hereof or before completion,
                  there is or are any erection, structure, fittings, fixture
                  and/or building works (if any) in any part or parts of the
                  Property which is in contravention of the Buildings Ordinance,
                  the Fire Safety (Commercial Premises) Ordinance and their
                  respective subsidiary legislations and/or other legislation or
                  regulation, and the Vendor shall not be held responsible for
                  the demolition, alteration, removal, reinstatement,
                  reinforcement and/or any other works relating to such illegal
                  erection, structure, fixture, fittings and/or building works
                  (if any) or for any costs and expenses of and incidental
                  thereto whether or not such works are required by the Building
                  Authority or the incorporated owners or the manager of the
                  building or buildings of which the Property form(s) part or
                  any other public authorities or body or otherwise. The
                  Purchaser shall not be entitled to rescind this Agreement or
                  to annul the sale or to claim any compensation or damages from
                  the Vendor by reason of or in connection with any such

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                  contravention.

         7.5      The Vendor gives no warranty whatsoever as to whether the
                  Property is affected by any notice under the Government Lands
                  Resumption Ordinance, Cap.124 or the Mass Transit Railway
                  (Land Resumption and Related Provisions) Ordinance Cap.276 or
                  any other form of notice of similar nature. The Purchaser
                  shall be personally responsible for making its own inquiry and
                  investigation in respect of the matters aforesaid and of any
                  provisions or redevelopment restrictions affecting the
                  Property under any Ordinance. If it shall be ascertained at
                  any time before completion of the purchase that the Property
                  is affected by any of the said Ordinances, the Purchaser is
                  deemed to have agreed to purchase the Property subject to such
                  provisions and/or restrictions, if any, and the Purchaser
                  shall be bound to complete the purchase notwithstanding any
                  notice which may be given or issued or published in pursuance
                  of any Ordinance after signing of this Agreement.

         7.6      The Purchaser hereby expressly declares and agrees to purchase
                  the Property subject to any notice(s) and/or order(s) from
                  time to time and at any time issued or to be issued by the
                  Government or other competent authority or the manager of the
                  Property either requiring, without limitation, the Vendor to
                  demolish, alter, reinstate, repair, renovate or improve any
                  part of the Property and/or requiring the Vendor as one of the
                  co-owners of the Property to effect any demolition,
                  alteration, reinstatement, repair, renovation or improvement
                  to any common part or facility of the building or buildings of
                  which the Property form(s) part and/or to any adjacent
                  slope(s) the repairing obligation of which lies with the
                  co-owners of the Property and/or to contribute towards the
                  expenses incurred or to be incurred in connection with all or
                  any of the foregoing. All costs and expenses for such
                  demolition, alteration, reinstatement, repair, renovation or
                  improvement or contribution shall be borne by the Purchaser
                  absolutely and the Purchaser shall indemnify the Vendor
                  against non-payment.

8.       8.1      All stamp duties (whether ad valorem or otherwise) and
                  land registration fees payable in connection with this sale
                  and purchase (including but not limited to the stamp duty and
                  land registration fees payable on the preliminary agreement
                  for sale and purchase as specified in Part F of Schedule 1
                  hereto

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                  ("the Preliminary Agreement"), this Agreement and the
                  subsequent Assignment made pursuant to this Agreement) shall
                  be borne by the Purchaser absolutely. In the event of the
                  consideration stated in the Preliminary Agreement, this
                  Agreement and the subsequent Assignment not being accepted by
                  the Collector of Stamp Revenue as representing the true value
                  of the Property the additional stamp duties charged by him in
                  accordance with his valuation of the Property shall be borne
                  by the Purchaser absolutely who shall indemnify and keep the
                  Vendor fully indemnified against any loss or damage suffered
                  by the Vendor resulting from any delay or default in payment
                  of the said stamp duty.

         8.2      The Purchaser undertakes to deposit the appropriate amount in
                  respect of stamp duty with the Purchaser's solicitors at
                  completion and further undertakes to procure that the
                  Purchaser's solicitors shall confirm with the Vendor's
                  solicitors that such appropriate amount has been so deposited
                  with them together with documentary evidence in support.

9.       Each party shall bear his own solicitors' costs of and incidental to
         this Agreement and the subsequent Assignment.

10.      10.1     The Vendor declares that Messrs. Woo, Kwan, Lee & Lo are the
                  Vendor's agent for the purposes of receiving all monies
                  payable to the Vendor pursuant to this Agreement including the
                  balance of the Purchase Price payable upon completion.

         10.2     The Vendor further declares that the payment to such agent of
                  any deposit, instalments of the purchase price and the balance
                  thereof (if any) shall be a full and sufficient discharge of
                  the Purchaser's obligations hereunder.

         10.3     The Vendor may revoke the authority of the agent and appoint
                  another solicitor as an agent in his place. No such revocation
                  shall be valid unless:

                  (a)      it is in writing addressed to the Purchaser;
                  (b)      it is delivered to the Purchaser care of his
                           solicitors at least seven clear days prior to
                           completion; and
                  (c)      it specifically identifies this Agreement.

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11       If, between the date of this Agreement and completion, the Property or
         any part thereof is damaged or destroyed due to fire, earthquake, or
         other calamities, force majeure or Act of God, the following provisions
         shall apply:

         (a)      if the total costs and expenses for reinstating the damaged or
                  destroyed portion of the Property together with all
                  professional fees in relation thereto (the "Reinstatement
                  Costs") are less than HK$200,000,000, the Purchaser shall be
                  obliged to pay the balance of the purchase price and complete
                  the purchase of the Property in accordance with Clause 3
                  above;

         (b)      if the Reinstatement Costs are HK$200,000,000 or more, the
                  Purchaser shall have the option to either (i) proceed to
                  completion in accordance with Clause 3 above; or (ii) postpone
                  completion until after the relevant damaged or destroyed
                  portion has been reinstated to its original condition prior to
                  such damage or destruction by, and at the cost of, the Vendor.
                  Such postponed completion shall take place on a date specified
                  by the Vendor in a written notice to the Purchaser provided
                  that (1) the completion of the reinstatement work shall be
                  completed on or before 31 December 2005 and the Vendor shall
                  produce evidence by way of a copy of a certificate of fitness
                  for occupation from an Authorized Person (as defined in the
                  Buildings Ordinance) appointed by the Vendor for such
                  reinstatement work; (2) the specified date must not be less
                  than 30 days from the date of such notice; and (3) if the
                  reinstatement is not completed by 31 December 2005 (in respect
                  of which the time shall be of the essence) the Purchaser shall
                  have the right to terminate this Agreement by written notice
                  to the Vendor and not complete the purchase of the Property
                  hereunder and all moneys paid towards the purchase price by
                  the Purchaser to the Vendor pursuant to the provisions of this
                  Agreement shall be forthwith refunded by the Vendor to the
                  Purchaser.

         The Purchaser shall take out sufficient insurance over the Property
         effective from the date of this Agreement covering damage and
         destruction due to reasons stated above as a minimum. If the Purchaser
         is obliged to or elects to complete the purchase of the Property (other
         than a postponed completion under paragraph (b)(ii) above), the
         Purchaser shall reinstate the Property at its own costs.

         The Reinstatement Costs shall be determined by taking the arithmetic
         mean of the

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         written quotations given by three independent firms of qualified
         surveyors in Hong Kong as being the costs for reinstating the relevant
         damaged or destroyed portion. The three firms are Davis Langdon & Seah
         (HK) Limited, Levett and Bailey Chartered Quantity Surveyor Limited and
         WTP (Hong Kong) Limited and the fees and expenses of such firms shall
         be borne by the Vendor and the Purchaser in equal shares.

12.      Should the Purchaser fail to complete the purchase of the Property in
         accordance with the terms and conditions herein contained the Vendor
         may (without being obliged to tender an Assignment to the Purchaser)
         forthwith determine this Agreement and the Vendor shall thereupon be
         entitled to re-enter upon the Property and repossess the same if
         possession shall have been given to the Purchaser free from any right
         or interest of the Purchaser therein and the Vendor shall be entitled
         to forfeit all the said deposit or further deposits or instalments of
         the Purchase Price paid to the Vendor absolutely.

13.      Upon determination or rescission of this Agreement pursuant to any
         provision herein, the Vendor may resell the Property either as a whole
         or in lots and either by public auction or by tender or by private
         contract or partly by one and partly by the other(s) of such methods
         subject to such stipulations as to title or otherwise as the Vendor may
         think fit and any increase in price on resale shall belong to the
         Vendor. Without prejudice to the Vendor's right to recover the actual
         loss which may flow from the Purchaser's breach of this Agreement after
         taking into account the amount of the said deposit forfeited by the
         Vendor, on such resale any deficiency in price shall be made good and
         all reasonable expenses attending such resale or any attempted resale
         shall be borne by the Purchaser and such deficiency and expenses shall
         be recoverable by the Vendor. This Clause shall not preclude or be
         deemed to preclude the Vendor from taking other steps or remedies to
         enforce the Vendor's rights hereunder or otherwise or prevent the
         Vendor from recovering, in addition to the above, damages representing
         interest paid or lost by him by reason of the Purchaser's failure. On
         the exercise of the Vendor's right to determine or rescind this
         Agreement pursuant to any provision herein, the Vendor shall have the
         right, if this Agreement shall have been registered at the Land
         Registry, to register at the Land Registry an instrument signed by the
         Vendor alone evidencing such determination or rescission as aforesaid
         of the sale of the Property and to vacate the registration of this
         Agreement and on the signing of the said instrument by the Vendor, the
         Purchaser shall be deemed to have

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         been divested of any interest in the Property under this Agreement.

14.      In the event of the Vendor failing to complete the sale of the Property
         in accordance with the terms hereof, all moneys paid by the Purchaser
         to the Vendor pursuant to the provisions of this Agreement shall be
         forthwith returned to the Purchaser who shall also be entitled to
         recover from the Vendor damages (if any) which the Purchaser may
         sustain by reason of such failure on the part of the Vendor and it
         shall not be necessary for the Purchaser to tender an Assignment to the
         Vendor for execution.

15.      Nothing in this Agreement shall be so construed as to prevent either
         the Vendor or the Purchaser from bringing an action and obtaining a
         decree for specific performance of this Agreement either in lieu of the
         aforesaid damages or in addition to such damages as the party bringing
         such action may have sustained by reason of the breach by the other
         party to this Agreement and it shall not be necessary for the Purchaser
         to tender an Assignment to the Vendor for execution before bringing
         such action for specific performance.

16.      Notwithstanding anything herein provided, if the date fixed for
         completion of the sale and purchase of the Property and/or any of the
         date(s) stipulated for payment herein shall fall on a day which is not
         a business day (defined as a day on which The Hongkong and Shanghai
         Banking Corporation Limited is open for business in Hong Kong) or shall
         fall on a day on which typhoon signal No.8 or above or black rainstorm
         signal is hoisted in Hong Kong at any time between 9:30a.m. to 5:00p.m.
         on a weekday or at any time between 9:30a.m. to 1:00 p.m. on a
         Saturday, such date for completion or date(s) of payment (as the case
         may be) shall automatically be postponed to the next business day or
         such next succeeding day on which no typhoon signal No.8 or above or
         black rainstorm signal is hoisted (as the case may be).

17.      Pursuant to Section 29B of the Stamp Duty Ordinance Cap.117, the Vendor
         and the Purchaser hereby state the specified information in Schedule 1
         hereto to the best knowledge and belief of both parties.

18.      The parties hereto hereby declare that they fully understand and
         acknowledge that no other date than the date of the Preliminary
         Agreement, this Agreement and the date of the Assignment pursuant
         thereto (which respective dates will be filled in the Questionnaire
         Form I.R.S.D. 26 for stamping purpose) may be claimed as the relevant

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         dates for valuation of the Property for stamping.

19.      If the Purchaser makes default in the payment of any money ("the
         money") or any part thereof to be payable, transferred or refunded to
         the Vendor hereunder (including but not limited to the deposit(s), the
         balance of the Purchase Price, utility and/or management deposit(s), if
         any, and money payable under the apportionment account) on the relevant
         due date(s), without prejudice to any other rights or remedies of the
         Vendor against the Purchaser, the Vendor may at its absolute discretion
         charge interest on the money or such part thereof as shall for the time
         being remain unpaid at the rate of 2% per annum over the best lending
         rate from time to time stipulated by The Hongkong and Shanghai Banking
         Corporation Limited from the date or respective dates when the money or
         any part thereof falls due or becomes payable until the date(s) of
         payment. Such payment of interest shall be in addition to and shall be
         without prejudice to any other rights and remedies which the Vendor may
         have against the Purchaser on account of the Purchaser's default in
         payment on the due date(s) under this Agreement.

20.      20.1     In respect of each payment of Purchase Price or deposit(s) or
                  any part thereof required to be made hereunder, the party
                  making such payment ("the Payer") shall deliver to the party
                  to whom such payment is to be made ("the Payee") a cashier
                  order issued by a licensed bank in Hong Kong or a solicitor's
                  cheque for the relevant amount.

         20.2     Where the purchase price or any part thereof is required to be
                  applied by the Payee to discharge an existing mortgage, charge
                  or encumbrance, or to pay any person(s) who will be a party to
                  the assignment on completion of the sale and purchase herein,
                  the Payee or the Payee's solicitors shall be entitled to
                  require the Payer to split such payment and deliver to the
                  Payee's solicitors one or more cashier order(s) or solicitor's
                  cheque(s) issued in favour of the person(s) or party(ies)
                  entitled to such payment(s) and a separate cashier order or a
                  solicitor's cheque in favour of the Payee or the Vendor's
                  solicitors for the balance. The provisions of Clause 20.1
                  hereof shall apply to such cashier orders and solicitor's
                  cheques.

         20.3     The Payer shall not be deemed to have discharged the
                  obligation to make payment hereunder unless in making such
                  payment, the Payer also complies

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                  with the provisions of this Clause 20.

21.      21.1     Any notice, request or other communication given by or on
                  behalf of any party hereto pursuant to or in connection with
                  this Agreement shall be deemed to have been validly given if
                  addressed to the party to whom the notice is given or such
                  party's solicitors. Any such notice, request, or other
                  communication, if addressed to the party to whom it is given
                  at such party's address in Hong Kong herein mentioned or such
                  other address in Hong Kong as may from time to time be
                  notified in writing by such party to the other party or his
                  solicitors, or if addressed to the solicitors of such party at
                  its office address, shall be deemed to have been validly
                  given:-
                  (a)   if delivered by hand, at the time of such delivery;
                        and
                  (b)   if sent by ordinary prepaid post, forty-eight(48) hours
                        after the date of posting.

         21.2     The Vendor hereby irrevocably appoints PCPD Corporate Services
                  Limited whose registered office is situate at Units 701-705,
                  Level 7, Cyberport 3, 100 Cyberport Road, Hong Kong to be its
                  agent for the purpose of accepting service of any process or
                  writ of action in respect of any proceedings in the Hong Kong
                  Courts in connection with this Agreement.

22.      Words importing the singular number shall include the plural number and
         vice versa and words importing the masculine gender shall include the
         feminine gender and the neuter gender.

23.      The parties hereto agree and declare that this Agreement sets out the
         full agreement between the parties and that their rights and
         liabilities relating to the sale and purchase of the Property are
         governed solely by this Agreement and that neither of them is bound by
         any statements or representations not contained herein.

24.      The Property comprises non-residential property within the meanings of
         Section 29A(1) of the Stamp Duty Ordinance (Cap.117).

25.      25.1     The Property is sold subject to and with the benefit of
                  the existing tenancies, lettings and licences (collectively,
                  "the Tenancies"), brief particulars of which are set out in
                  Schedule 3 hereto. For the avoidance of doubt, such

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                  particulars are for the Purchaser's information only. The
                  Purchaser hereby acknowledges that it has been supplied with
                  copies of the leases/tenancy agreements/licences/licence
                  agreement in respect of the Tenancies and has inspected or
                  deemed to have inspected the same. The Purchaser is deemed to
                  purchase the Property with full knowledge of the Tenancies and
                  shall take the Property subject to the rights of the tenants
                  thereunder or by reason thereof.

         25.2     The Vendor gives no warranty as to the accuracy of the
                  particulars of the Tenancies set out in Schedule 3 hereto,
                  whether there is any sub-tenancy from each of the tenants and
                  the particulars thereof, if any, and gives no warranty as to
                  the amount of rent lawfully recoverable from the tenants and
                  the effect of any legislation in relation to the Tenancies or
                  as to compliance with any legislation affecting the same. No
                  error or mis-statement in Schedule 3 regarding the Tenancies
                  shall give rise to any right of or action by the Purchaser for
                  rescission compensation or damages. The Vendor warrants that
                  apart from those tenancies set out in Schedule 3, the Vendor
                  has not granted or agreed to grant any other tenancy or lease
                  or licence in respect of the whole or any part of the
                  Property.

         25.3     If any part of the Tenancies shall expire or shall for any
                  reason terminate and the relevant tenant(s) shall have
                  delivered vacant possession of such part of the Property prior
                  to the completion date, the Vendor shall deliver vacant
                  possession of such part of the Property to the Purchaser on
                  completion subject to the terms of the Deed of Appointment of
                  Leasing Agent and Manager referred to in Clause 26 hereof.

         25.4     The Vendor hereby expressly excepts and reserves unto itself
                  the right, after as well as before completion, to claim from
                  the tenants of the Property any arrears of rent and other
                  monies due and owing under the Tenancies up to and inclusive
                  of the actual date of completion and all damages in respect of
                  any breach of the Tenancies before completion. The Purchaser
                  shall give all reasonable assistance to the Vendor to recover
                  such arrears of rent and other monies from the tenants on
                  condition that the Vendor bears all costs and expenses
                  including legal costs in connection with such recovery. The
                  obligations of the Purchaser contained in this Clause 25.4
                  shall remain effective notwithstanding completion of the sale
                  and purchase herein and shall not be merged or otherwise
                  extinguished by the subsequent Assignment. In the event the
                  tenants shall settle

                                       14
<PAGE>

                  and pay to the Purchaser any arrears of rent (which accrued
                  before the date of Completion) after completion the
                  Purchaser shall account and refund to the Vendor such
                  arrears of rent collected by the Purchaser within 7 days of
                  receipt.

         25.5     On completion, the Vendor shall account to the Purchaser for
                  the deposit held by the Vendor pursuant to the terms of the
                  relevant lease or tenancy agreement of the Tenancies, subject
                  to any deduction which (pursuant to the terms of such lease or
                  tenancy agreement) may be made by the Vendor therefrom in
                  respect of any loss, damage, costs or expenses which may be
                  sustained by the Vendor as a result of any non-observance or
                  non-performance of such lease or tenancy agreement by the
                  relevant tenant. The Purchaser shall give and execute an
                  undertaking to the relevant tenant that the Purchaser shall
                  deal with such deposit in accordance with the relevant lease
                  or tenancy agreement of the Tenancies. The Purchaser
                  undertakes to produce a duplicate copy of such undertaking to
                  the Vendor.

         25.6     The Vendor also reserves the right prior to completion to
                  renew/extend any of the Tenancies and/or grant any new
                  tenancies of any part of the Property on such terms and
                  subject to such conditions as the Vendor acting in good faith
                  shall in its absolute discretion deems fit without the
                  necessity of seeking any prior approval from the Purchaser
                  Provided that each such renewal, extension or grant of any new
                  tenancy shall not extend beyond the expiry date of the
                  Guaranteed Period (i.e. 5 years from the date of completion)
                  and shall not contain any option to renew which if exercised
                  will extend beyond the said date or any option to purchase by
                  the tenants. The Vendor shall notify the Purchaser of the
                  details of such renewal or new tenancy, as soon as the offer
                  letters have been issued and accepted.

         25.7     The Vendor further reserves the right prior to completion to
                  serve any notices to quit / termination or further notices to
                  quit / termination on the tenants concerned or enter into any
                  agreement with the tenants and/or any occupants of any part of
                  the Property to surrender such part of the Property and accept
                  any such surrender on such term as it thinks fit prior to
                  completion and further reserves the rights to perform the
                  obligations on its part of such agreement to surrender after
                  completion.

                                       15
<PAGE>

26.      26.1     It is an essential condition of this Agreement that (a) the
                  Purchaser shall upon completion enter into a Deed of
                  Appointment of Leasing Agent and Manager with Pacific Century
                  Paramount Real Estate Company Limited in the form set out in
                  Appendix I hereto and agreed between the parties; and (b) the
                  Vendor and Ipswich Holdings Limited shall upon completion
                  execute a Rental Guarantee in the form set out in Appendix II
                  hereto and agreed between the parties.

         26.2     The Purchaser hereby irrevocably authorizes and directs the
                  Vendor to pay to the Agent the rental deposits payable by the
                  Vendor to the Purchaser pursuant to Clause 25.5 hereof. The
                  Purchaser further declares that the payment to the Agent as
                  aforesaid shall be a full and sufficient discharge of the
                  Vendor's obligation to pay the rental deposit to the Purchaser
                  under Clause 25.5 hereof.

27.      The Vendor shall from time to time before completion upon
         reasonable prior notice of the Purchaser provide access of the
         untenanted portion of the Property to the Purchaser (with or without
         any surveyor or bank staff of the Purchaser's mortgagee bank) for the
         purpose of viewing the untenanted portion of the Property and/or
         carrying out valuation and/or carrying on ongoing due diligence on the
         Tenancies. The Vendor shall also provide access of the untenanted
         portion of the Property to the Purchaser immediately before completion
         to verify vacant possession of the untenanted portion of the Property.
         The Vendor shall use reasonable endeavours to arrange inspection of
         those tenanted portion of the Property.

28.      The rents and profits shall be received and all outgoings shall be
         discharged by the Vendor up to and inclusive of the actual day of
         completion, and as from but exclusive of that day all outgoings shall
         be discharged by the Purchaser. Subject to the production of the
         apportionment account to be prepared by the Vendor 10 business days
         before completion together with the relevant receipts or evidence of
         payment, the apportioned amount shall be settled on completion.

29.      The Vendor covenants with the Purchaser that after the signing of this
         Agreement, the Vendor shall not assign, mortgage, charge or otherwise
         dispose of or cause or permit any encumbrance to be created against the
         Property or any part thereof save and except lettings and tenancies to
         be created by the Vendor in accordance with Clause 25.6 of this
         Agreement before completion.

                                       16
<PAGE>

30.      The Vendor declares and warrants that (save and except the disclosed
         tenancies in Schedule 3) there is no third party having any interest
         over the Property. In the event of there being any valid third party
         claim to the Property which the Vendor is unable to remove on or before
         completion, the Purchaser shall have the option to rescind this
         Agreement whereupon all deposit and purchase monies paid by the
         Purchaser to the Vendor hereunder shall be returned to the Purchaser
         but without prejudice to the Purchaser's rights against the Vendor for
         all losses and damages suffered by the purchaser and it shall not be
         necessary for the Purchaser to tender an assignment to the Vendor for
         execution.

31.      The Vendor shall use its reasonable endeavour to assist the Purchaser
         in the Purchaser's discussion with the Owner for the entering into a
         "Deed of Variation of Lease" with the Owner to vary the terms of the
         Lease in the following manner:-

         (a)      to substitute the term "Telecom Subsidiary" and the meaning
                  thereof specified in the Lease by the term "Lessee Subsidiary"
                  which shall mean "a company which is a subsidiary whether
                  directly or indirectly of the Lessee";

         (b)      to replace the terms "Telecom Subsidiary" mentioned in the
                  Lease by "Lessee Subsidiary" throughout;

         PROVIDED THAT nothing contained in this Clause shall amount to any
         warranty by the Vendor as to whether the Owner would agree to enter
         into the said Deed of Variation nor impose any obligation on the part
         of the Vendor to procure the successful execution of the said Deed of
         Variation or to incur any additional legal costs and expenses for the
         purpose of the preparation and execution of the said Deed of Variation
         and PROVIDED FURTHER THAT all costs and expenses in relation to the
         preparation and execution of the said Deed of Variation shall be borne
         by the Purchaser absolutely.

32.      32.1     Upon completion the Vendor may serve notice(s) ("Notice") to
                  the service providers and contractors ("Contractor(s)") under
                  existing maintenance and/or services contracts ("Contract(s)")
                  for the provision of electrical mechanical lift fire cleaning
                  security and other services for the Property requesting the

                                       17
<PAGE>

                  Contractors to consent to the assignment and novating of the
                  Vendor's rights and obligations under the Contracts to the
                  Purchaser.

         32.2     If the Contractor(s) does not consent to the
                  assignment/novation referred to in Clause 32.2 above or if no
                  response is received from the Contractor(s) within 3 months
                  from the date of service of the Notice, the Vendor may give
                  notice to the Contractor(s) and terminate the relevant
                  Contract(s) if the Vendor has the right to do so thereunder.

         32.3     In the event one or more Contracts are terminated under Clause
                  32.2 above, the Purchaser shall enter into such replacement
                  Contract(s) with such service provider(s) and on such terms
                  and conditions as the Vendor may request provided that such
                  replacement Contract(s) are for a term of not more than 5
                  years from the date of completion of the sale and purchase
                  herein or they contain a right on the part of the Purchaser to
                  terminate by giving notice without penalty or damages.

                                       18
<PAGE>

                                S C H E D U L E  1
                                ------------------
                                     PART A
                                     ------
                                   The Vendor
                                   ----------

Name     :      PARTNER LINK INVESTMENTS LIMITED
Registered Office : P.O. Box No.957, Offshore Incorporations Centre, Road Town,
                    Tortola, British Virgin Islands
Business Registration Number : 3296317

                                     PART B
                                     ------
                                  The Purchaser
                                  -------------

Name     :      RICHLY LEADER LIMITED
Registered Office : Unit B, 22nd Floor, Bank of China Tower, No. 1 Garden Rod,
                    Hong Kong

Business Registration Number : 35095705

                                     PART C
                                     ------
                                    The Land
                                    --------

ALL THAT Portion of the Remaining Portion of Quarry Bay Marine Lot No.1 as shown
coloured Red on Plan 1 annexed to the Lease

                                  The Premises
                                  ------------

All THOSE 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)  All 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)  All 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)  All 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

                                       19
<PAGE>

                                     PART D
                                     ------

     The Property is non-residential property within the meanings of Section
29A(1) of the Stamp Duty Ordinance Cap.117.

                                     PART E
                                     ------

     This Agreement was made on the date as specified on page one.

                                     PART F
                                     ------
                            The Preliminary Agreement
                            -------------------------

     This Agreement was preceded by a preliminary agreement made between the
same parties hereto and on the same terms on 19 November 2004.

                                     PART G
                                     ------

     The agreed date for a conveyance on sale pursuant to this Agreement shall
be on or before 3 March 2005.

                                     PART H
                                     ------

     The agreed consideration for the conveyance on sale that is to, or may,
take place pursuant to this Agreement is DOLLARS TWO THOUSAND EIGHT HUNDRED AND
EIGHT MILLION ONLY HONG KONG CURRENCY (HK$2,808,000,000).

                                     PART I
                                     ------

     Amount or value of any other consideration which each person executing the
document knows has been paid or given or has been agreed to be paid or given to
any person for or in connection with the agreement for sale or any conveyance on
sale (excluding legal expenses and estate agent's commission):     Nil

                                       20
<PAGE>

                                S C H E D U L E  2
                                ------------------
                            Payment of Purchase Price
                            -------------------------

     The Purchase Price shall be paid by the Purchaser to the Vendor in the
manner as follows:

(a)  The Purchaser shall pay to the Vendor the sum of HK$280,800,000 being
     deposit and in part payment of the Purchase Price upon signing hereof.

(b)  The balance of the Purchase Price in the sum of HK$2,527,200,000 shall be
     paid by the Purchaser to the Vendor upon completion.

                                       21

<PAGE>

SIGNED by  YUEN TIN FAN, FRANCIS       )    For and on behalf of
                                       )    PARTNER LINK INVESTMENTS LIMITED
for and on behalf of the Vendor        )
in the presence of                     )    --------------------------------
                                                     Authorised Signature(s)

      Alice Y. L. Chan
          Solicitor
        Hong Kong SAR

RECEIVED on or before the day and year first above)
written of and from the Purchaser the above       )
mentioned deposit of DOLLARS TWO HUNDRED          )
EIGHTY MILLION EIGHT HUNDRED                      )
THOUSAND ONLY Hong Kong Currency                  )HK$280,800,000

                                               For and on behalf of
                                               PARTNER LINK INVESTMENTS LIMITED

                                               --------------------------------
                                                        Authorised Signature(s)

                                             ________________________________
                                                         the Vendor

                                             I hereby verify the sigature of
                                             Yuen Tin Fan, Francis

                                             Luz Yiu Fai
                                             Solicitor, Hong Kong SAR
                                             Luoo, Kwan, Lee & Lo

                                       22
<PAGE>

SIGNED by                                   ) For and on behalf of
  LEONG CHI MENG                            ) PARTNER LINK INVESTMENTS LIMITED
                                            )
for and on behalf of the Purchaser          ) --------------------------------
whose signature(s)is/are verified by :-     )          Authorised Signature(s)

Cheung Yun Kwan, Monica
   Koo and Partners
   In association with
Paul, Hastings, Janofsky & Walker LLP
   Solicitor, Hong Kong, SAR

                                       23
<PAGE>

                                A P P E N D I X  I
                                ------------------

                Deed of Appointment of Leasing Agent and Manager
                ------------------------------------------------

                                       24
<PAGE>

                                                                      Appendix I
                                                                      ----------

THIS DEED is made this         day of

BETWEEN RICHLY LEADER LIMITED a company incorporated in Hong Kong whose
registered office is situate at [                                              ]

(hereinafter called "the Owner") of the one part; And PACIFIC CENTURY PARAMOUNT
REAL ESTATE COMPANY LIMITED a company incorporated in Hong Kong with its
registered office situate at Units 701-5, Level 7, Cyberport 3, 100 Cyberport
Road, Hong Kong (hereinafter called "the Agent") of the other part.

WHEREAS:-

(A) By an Agreement for Sale and Purchase dated [ ] and made between PARTNER
LINK INVESTMENTS LIMITED ("the Vendor") as vendor and the Owner as purchaser
("the Agreement"), the Vendor agreed to sell and the Owner agreed to purchase
the Land and the Premises more particularly described in the Schedule 1 hereto
("the Property") subject to the terms and conditions thereof.

(B) Under and by virtue of an Assignment bearing even date as this Deed, the
Vendor assigned to the Owner by way of sale the Property.

(C) Pursuant to the Agreement and a Deed of Rental Guarantee ("the Deed of
Rental Guarantee") between the Vendor, Ipswich Holdings Limited and the Owner
bearing even date as this Deed, the Owner and the Agent shall enter into this
Deed whereby the Agent is appointed:

     (1)  as the Owner's sole leasing agent to deal with all leasing and tenancy
          matters of the Property; and

     (2)  as the Owner's sole manager of the Property for the management of the
          Property.

NOW THIS DEED WITNESSETH as follows:-

                                   SECTION I
                                   ---------
                          APPOINTMENT OF LEASING AGENT
                          ----------------------------

1. The Owner hereby appoints the Agent as its sole and exclusive leasing agent
who shall have the authority to do such acts and things in relation to the
leasing of the Property or any part(s) thereof subject to and upon the terms and
conditions as set out in this Deed for a period of five (5) years commencing on
the date of this Deed unless the Agent's appointment is terminated earlier
pursuant to the terms of this Deed.

2. As such sole and exclusive leasing agent, the Agent's authority shall be as
follows (all to be performed at the Agent's own costs and expenses):-

     (a) (i) To negotiate with tenants or licensees (collectively called

                                      -1-
<PAGE>

               "Tenants/Licensees" and individually "Tenant/Licensee"), whether
               existing or prospective, in relation to the leasing or licensing
               (including renewal thereof) of the Property or any part(s)
               thereof on such terms and conditions as the Agent shall in its
               discretion think fit but subject always to the terms of Clause
               2A,

        (ii)   To promote and/or advertise the leasing of the Property or any
               part(s) thereof through any media and marketing tools using such
               wording and/or graphics as the Agent shall in its discretion
               think fit;

        (iii)  To organize and/or co-ordinate such leasing promotion activities
               as the Agent shall in its discretion think fit.

               PROVIDED ALWAYS THAT in exercising its discretion under this
               Deed, the Agent shall act for the benefit and advantage of the
               Owner and the Agent shall not act or allow or suffer anything to
               be done whereby the Owner's interest in the Property will be
               prejudicially or adversely affected.

     (b)  Subject to the provisions of Clause 2A hereof, to enter into offer
          letter(s), letter(s) of intent or confirmation(s) for lease/tenancy,
          licence(s), agreement(s) for lease/tenancy and lease(s)/tenancy
          agreements(s) and to grant or renew licences, tenancy agreements and
          leases in respect of the Property or any part(s) thereof (collectively
          called "the Letting Agreements" and individually called "the Letting
          Agreement") at such rent or licence fee and on such terms and
          conditions as the Agent shall in its discretion think fit and to
          receive any earnest money or deposit and advance licence/rental
          payment from the Tenants/Licensees and to give receipts therefor; and
          for this purpose, sign, seal, deliver, execute and perform as the
          Owner's act and deed any Letting Agreements, surrenders, memorials,
          undertakings or any other ancillary or related agreements or
          instruments.

     (c)  To demand, collect, receive and recover from all present and future
          Tenants/Licensees of the Property or any part(s) thereof rents,
          licence fees, management and service charges, air-conditioning charges
          and sums of money payable under the Letting Agreements (collectively
          called "Rents/Fees") from time to time and to give receipts therefor.

     (d)  On non-payment of any Rents/Fees to enter into and upon the relevant
          part of the Property and to distrain for arrears of the Rents/Fees and
          on receipt of the same or any part thereof (including all moneys
          realized under distress) to sign and deliver proper and effectual
          receipts or other discharges or acknowledgements.

     (e)  To sign and give lawful notices to my Tenants/Licensees to quit, to
          repair, to abate nuisance or to remedy a breach of covenant under the
          Letting Agreements and to accept surrenders of any Letting Agreements,
          cancellation of letters of intent, cancellation of confirmation
          letters or cancellation of licence agreement on such terms as the
          Agent may think fit.

                                      -2-
<PAGE>

     (f)  To recover possession of the Property or any part(s) thereof by means
          of all lawful proceedings or legal actions from any Tenants/Licensees
          or occupiers as the Agent may think fit.

     (g)  To take such steps at law to commence and defend any action or other
          legal proceedings in any court or tribunal to enforce any covenants
          and conditions contained in any Letting Agreement and upon any breach
          or non-performance or non-observance of any such covenants or
          conditions to preserve the Owner's rights and interests in the
          Property as the Agent may think fit.

     (h)  To accept delivery of possession from Tenants/Licensees whether on
          expiry or termination of the Letting Agreement or otherwise.

     (i)  To ask demand receive and recover from all intending Tenants/Licensees
          or any part thereof all deposits, advance payments and sums of money
          now or at any time hereafter to become due owing and payable in
          respect of the Property or any part thereof in any manner whatsoever
          and also on non-payment thereof or of any part thereof to take such
          steps including legal proceedings to recover such payments or any part
          thereof as the Agent shall from time to time think fit.

     (j)  To hold all rental and other deposits in respect of the Property or
          any part thereof whether present or future and to deduct therefrom any
          arrears of Rents/Fees which the Owner as landlord is entitled to make
          under the Letting Agreements and to pay over such deducted sum to the
          Vendor direct during the subsistence of the Deed of Rental Guarantee.

     (k)  To enter upon when and as often as the Agent shall think proper the
          Property or any part thereof to view the state of repair thereof and
          where appropriate to order and direct all necessary or proper repairs
          refurbishment and improvements of or concerning the same and in that
          behalf to sign and give notices to any lessees, tenants and licensees
          and occupiers of the Property or any part thereof concerning any
          defects in the repair or condition of the same and requiring them to
          make good such defects.

     (l)  To enforce all covenants conditions and stipulations contained in the
          Letting Agreements or any letter of intent or confirmation letter or
          agreement for lease or agreement for tenancy agreement or agreement
          for licence agreement or lease or tenancy agreement or licence
          agreement or surrender of lease or surrender of tenancy agreement or
          cancellation of letter of intent or cancellation of confirmation
          letter, or cancellation of licence agreement affecting the Property or
          any part thereof or in any provisions contained in any Ordinance of
          Hong Kong relating to the same or any part thereof and upon breach of
          non-performance or non-observance of any such covenants conditions or
          stipulations to enter into and upon the Property or any part thereof
          in relation to which such breach non-performance or non-observance
          shall have happened and to take possession of the same to the intent
          that the Letting Agreement or the letter of intent or confirmation
          letter or agreement for lease or agreement for

                                      -3-
<PAGE>

          tenancy agreement or agreement for licence agreement or lease or
          tenancy agreement or licence agreement under which the Property or any
          part thereof is held shall become void according to the laws of Hong
          Kong or the provisions in that behalf contained in such Letting
          Agreement or letter of intent or confirmation letter or agreement for
          lease or agreement for tenancy agreement or agreement for licence
          agreement or lease or tenancy agreement or licence agreement.

     (m)  To settle compromise or submit to arbitration all accounts, claims and
          disputes arising under the Letting Agreement between the Owner and any
          Tenants/Licensees thereof.

     (n)  To do all other acts and things which the Agent may think expedient or
          necessary for the proper and efficient agreement for leasing, leasing,
          agreement for letting, letting, agreement for licensing, licensing,
          management, services and control of the Property or any part thereof.

     (o)  For all or any of the purposes aforesaid to sign the Owner's name to
          all contracts and other deeds documents and writings and to sign seal
          and as the Owner's act and deed deliver and execute on the Owner's
          behalf all Letting - Agreements, letters of intent, confirmation
          letters, agreements for leases, agreements for tenancy agreements,
          agreements for licence agreements, leases, tenancy agreements, licence
          agreements, supplements to letters of intent, supplements to
          confirmation letters, supplements to agreements for leases,
          supplements to agreements for tenancy agreements, supplements to
          agreements for licence agreements, supplements to leases, supplements
          to tenancy agreements, supplements to licence agreements, assignments
          of leases, assignments of tenancy agreements; assignments of licence
          agreements, novations of leases, novations of tenancy agreements,
          novations of licence agreements, surrenders, cancellation agreements,
          termination agreements, side letters, agreements, contracts and other
          deeds, documents and instruments requisite in the premises whatsoever.

2A.       (a) The provisions of this paragraph (a) shall apply to Letting
          Agreements (1) which expire on or before [insert a date which is 5
          years from completion] (whether under the original term or any renewed
          term); or (2) with an option to renew and the renewed term expires on
          or after [insert a date which is 5 years from completion] but the
          renewed rent is current market rent and the renewed term is not more
          than 3 years:-

          (i)  The Agent shall only make offers for lease/tenancy ("Offer
               Letters") to prospective Tenant/Licensees/ Licensees in the form
               of the pro forma offer letter set out in Schedule 2 hereto ("Pro
               Forma Offer Letter").

          (ii) The Agent shall send a draft of each Offer Letter to the Owner
               for approval on all the terms of an offer letter other than
               Clauses I to 5 of the Pro Forma Offer Letter ("Major Terms")
               whose approval shall not be unreasonably withheld or delayed and
               provided that the Owner's

                                      -4-
<PAGE>

               approval shall be deemed to have been given if the Owner does not
               raise any objection within 2 calendar days after the date of the
               receipt of the draft Offer Letter.

         (iii) The Agent shall only enter into Letting Agreements in the form
               of the pro forma tenancy agreement set out in Schedule 3 hereto
               ("Pro Forma Tenancy Agreement") with such amendments and
               variations as the Agent may in its absolute discretion deemed fit
               provided that in respect of all the terms of the Letting
               Agreement other than those terms which embody Clauses 1 to 5 of
               the Pro Forma Offer Letter ("Important Terms"), any material
               variation of any of the Important Terms must be approved by the
               Owner whose approval shall not be unreasonably withheld or
               delayed and provided that the Owner's approval shall be deemed to
               have been given if the Owner does not raise any objection within
               3 calendar days after the date of the receipt of the draft
               Letting Agreement.

     (b)  The provisions of this paragraph (b) shall apply to Letting Agreements
          which (1) expire on or after [insert a date which is 5 years from
          completion]; or (2) expire on or before [insert a date which is 5
          years from completion] but with an option to renew at a rent other
          than current market rent or for a renewed term of more than 3 years:-

          (i)  The Agent shall only issue Offer Letters to prospective
               Tenant/Licensees/Licensees in the form of the Pro Forma Offer
               Letter.

          (ii) The Agent shall send a draft of each Offer Letter to the Owner
               for approval on all the terms thereof whose approval shall not be
               unreasonably withheld or delayed and provided that the Owner's
               approval shall be deemed to have been given if the Owner does not
               raise any objection within 2 calendar days after the date of the
               receipt of the draft Offer Letter.

         (iii) The Agent shall only enter into Letting Agreements in the form
               of the Pro Forma Tenancy Agreement and incorporating the terms of
               the draft Offer Letter which have been approved by the Owner with
               such amendments and variations as the Agent may in its absolute
               discretion deemed fit provided that any material variation to any
               of the Important Terms must be approved by the Owner whose
               approval shall not be unreasonably withheld or delayed and
               provided that the Owner's approval shall be deemed to have been
               given if the Owner does not raise any objection within 3 calendar
               days after the date of the receipt of the draft Letting
               Agreement.

     (c)  If the Owner disapproves in writing of one or more of the terms of an
          Offer Letter under paragraph (b)(ii) above (or one or more of the
          Major Terms with respect to paragraph (a)(ii) above) or, as the case
          may be, one or more Important Terms of a Letting Agreement, the Agent
          may refer the matter to an

                                      -5-
<PAGE>

               independent firm of qualified surveyors decided by the Agent
               among Jones Lang LaSalle, Chesterton Petty and CB Richard Ellis.
               If none of the three firms stated above is independent, the
               matter will be referred to another firm agreed to by the Owner
               and the Agent and failing agreement within 3 Business Days,
               appointed by the President for the time being of the Hong Kong
               Institute of Surveyors or the professional body succeeding to
               such Institute on the application of either the Owner or the
               Agent. The firm of qualified surveyors shall be instructed to
               determine if the offer set out in the relevant Offer Letter or,
               as the case may be, the terms of the relevant Letting Agreement
               are not unreasonable and are in line with the then current
               market practice within 2 Business Days of the instructions. The
               decision of the agreed or appointed firm of surveyors shall be
               conclusive and binding on the Agent and the Owner and such firm
               of surveyors shall act as an expert and not as an arbitrator.
               The Agent shall be entitled to enter into the relevant Offer
               Letter or, as the case may be, the relevant Letting Agreement if
               the agreed or appointed firm of surveyors determines that the
               terms thereof are not unreasonable and are in line with the then
               current market practice. All costs and disbursements relating to
               the appointment, services and determination of the firm of
               surveyors shall be borne by the Owner and the Agent in equal
               shares.

2B.  (a)  The Agent shall:-

     (i)  prepare an agency report ("Agency Report") setting out the particulars
          of the Letting Agreements entered during the preceding calendar month
          which particulars shall include the following and such additional
          information as the Owner may from time to time reasonably request:

          (1)  the name of the Tenant/Licensee;
          (2)  the registered company address of the Tenant/Licensee;
          (3)  the portion of the Property rented to the Tenant/Licensee;
          (4)  the lettable floor area;
          (5)  major terms and conditions including the term, monthly rental,
               management fee, rent-free period;
          (6)  the amount of the rental deposit and the form of deposit (cash,
               bank guarantee or others).

     (ii) send a copy of the Agency Report to the Owner on or before the 16th
          business day of the following month; and

    (iii) send to the Owner such additional information as the Owner may
          reasonably require within 7 days of receipt of a written request from
          the Owner.

     (b)  The Owner has the right to assess the performance of the Agent by
          comparing the overall annual rental yield achieved for properties
          comparable to the Property and if the Agent consistently and
          substantially fails to achieve a comparable yield for the Property
          which causes damages to the Owner, the Owner has the right to require
          the Agent to provide a written explanation of such failure. If such
          failure continues for a period of 6 months or more, the Owner may, at
          its own cost and expenses, appoint an independent qualified quantity
          surveyor to confirm the Owner's view. If the Owner's

                                      -6-
<PAGE>

          view is confirmed in writing by the quantity surveryor, the Owner has
          the right to terminate the appointment of the Agent under this Deed by
          giving the Agent 1 month's notice.

3. In exercising any duty, responsibility and authority conferred on the Agent
hereunder, the Agent shall act lawfully, honestly and reasonably and shall
exercise due care and diligence. The Agent shall fully indemnify the Owner
against all loss, damage, claim, demand and legal actions or proceedings
directly arising out of, in connection with or in relation to any breach by the
Agent of any covenants, undertakings, terms and conditions of this Deed.

4. The Owner hereby appoints the Agent to be its attorney and in its name and on
its behalf to execute, sign and do all such deeds, instruments, acts and things
whatsoever which is necessary for the purpose of carrying out or exercising all
or any of the powers conferred on the Agent under this Deed and further agrees
to ratify whatsoever the Agent shall lawfully do in accordance with the power
given under this Clause 4. The Owner, during the term of the appointment of the
Agent under this Deed hereby further authorizes and directs the Agent to pay to
the Vendor all Rents/Fees received by the Agent from the Tenants/Licensees
during the subsistence of the Deed of Rental Guarantee.

5. For the avoidance of doubt, it is agreed that during the term of the
appointment of the Agent as set out herein and subject to the Deed of Rental
Guarantee not having been terminated and subject to the Agent paying and
assuming full responsibility for all costs and expenses including legal fees in
connection with enforcement proceedings the Owner shall delegate to the Agent
all its rights to enforce the terms and conditions of the Letting Agreements and
agrees, unless with the prior written consent of the Agent (save that such
consent is not required in respect of the matters set out in Clause 18), not to
enforce the terms and conditions of the Letting Agreements or exercise, whether
in its name or otherwise any of its rights thereunder which include but are not
limited to the institution of any legal proceeding against any Tenants/Licensees
under such Letting Agreement. The Agent shall not, without the prior written
consent of the Owner which consent shall not be unreasonably withheld, grant,
permit, allow or suffered any waiver, time or indulgence to any
Tenants/Licensees, occupier or any person whatsoever as to the payment of
Rents/Fees.

6. For the avoidance of doubt, the Agent shall account to the Owner for all
rental and other deposits paid to or collected by the Agent under the Letting
Agreements in respect of the Property on the expiration or earlier termination
of this Deed.

                                   SECTION II
                                   ----------
                             APPOINTMENT OF MANAGER
                             ----------------------

7. The Owner hereby further appoints the Agent as the manager for the Owner to
undertake the management, operation, servicing, renovation, improvement and
security of the Property in accordance with the provisions of this Deed for a
term of five (5) years commencing from the date of this Deed Provided always
that any contract entered into by the Agent in connection with the management,
operation, servicing, renovation,

                                      -7-
<PAGE>

improvement and security of the Property must not extend beyond [insert a date
which is 5 years from completion] ("Guaranteed Period") and must not have any
renewal right to extend beyond the expiry date of the Guaranteed Period without
the prior written consent of the Owner.

8. During the term of its appointment as the manager, the Agent is authorized to
manage the Property at the Agent's own costs and expenses in accordance with the
provisions of this Deed but subject always to the Lease dated 13 December 2000
registered in the Land Registry by Memorial No.5276622 ("Lease") and the Owner
hereby appoints the Agent as agent for the Owner in respect of any matters
concerning the Property in accordance with the provisions of this Deed with full
power to enforce the provisions of this Deed. The Agent shall have full power
and authority to do all such acts and things as may be necessary or expedient
for the proper management of the Property, all to be performed at the Agent's
own costs and expenses (save and except costs and expenses of a capital or
non-recurring nature) and without in any way limiting the generality of the
foregoing and subject to the Lease, the Agent shall have the following duties
and powers:-

     (a)  To do all things which the Agent shall in its discretion deem
          necessary or desirable for the purposes of maintaining and improving
          all plant machinery equipment facilities and services in or on the
          Property;

     (b)  To commence, conduct, carry on and defend legal and other proceedings
          touching or concerning the management of the Property in the name of
          the Agent;

     (c)  To prevent any person from occupying or using otherwise than in
          accordance with the written permission of the Agent or the provisions
          of the Lease any of part of the Property;

     (d)  To prevent any person detrimentally altering damaging or injuring any
          part of the Property;

     (e)  To demand collect and receive all amounts payable under the provisions
          of this Deed;

     (f)  To recruit dismiss engage and employ and appoint in the name of the
          Agent such staff accountants auditors legal advisers architects
          surveyors engineers or persons for provision of computer services and
          other consultants whatsoever as may from time to time be necessary to
          enable the Agent to exercise its powers on such terms as the Agent
          shall in its absolute discretion decide;

     (g)  To manage and control within the Property parking and loading and
          unloading and to maintain all forms of traffic management and to do
          all such acts and things as may be necessary to provide unimpeded
          access by the persons entitled for the time being to the use of the
          car parking spaces and loading and unloading bays in the Property;

                                      -8-
<PAGE>

     (h)  To delegate or subcontract the management maintenance operation and
          control of any part of the Property and any of its facilities to other
          agents or contractors or managers on such terms and conditions as the
          Agent shall in its discretion think fit;

     (i)  To do all such other things as are reasonably incidental to the
          management of the Property.

9.   (a)  The Owner shall establish and maintain a fund ("Capital Reserve Fund")
          to meet expenditure of works (1) of a capital or non-recurring nature;
          or (2) as required by government authorities; or (3) that are
          necessary for the Owner to comply with the covenants and conditions in
          the Lease; or (4) of ad hoc improvement nature; or (5) for expected
          and/or scheduled maintenance purposes("Capita1 Works"). The Agent may
          prepare and submit to the Owner for the Owner's approval an annual
          capital expenditure budget provided that the Owner's approval shall be
          deemed to have been given if the Owner does not raise any objection
          within 7 calendar days of the receipt of the proposed annual capital
          expenditure budget. Such proposed budget must include details of the
          nature of the Capital Work, the timing for carrying out such Capital
          Work and the anticipated drawdown schedule for payment from the
          Capital Reserve Fund. Provided that such Capital Work has been
          approved by the Owner, the Owner will pay into the Capital Reserve
          Bank Account (as defined below) the amount of capital expenditure
          approved by the Owner for that financial year.

     (b)  The Owner shall open and maintain an interest-bearing account with a
          licensed bank of the Hong Kong Special Administrative Region in the
          name of the Owner ("Capital Reserve Bank Account"), the title of which
          shall refer to the Capital Reserve Fund for the Property, and shall
          use that Capital Reserve Bank Account exclusively for the purpose of
          meeting expenditure of Capital Works that have been approved by the
          Owner.

     (c)  The Agent shall have full power to carry out all Capital Works in
          accordance with the capital expenditure budget approved by the Owner
          and draw on the Capital Reserve Bank Account for such purpose. During
          the term of the appointment of Agent under the Deed, the Owner shall
          authorize and permit the Agent to be the sole signatory to operate the
          Capital Reserve Bank Account, such authorization to the Agent shall
          not be revoked by the Owner unless and until there is a material
          breach of the Agent's obligations hereunder.

     (d)  The Agent in its capacity as the manager of the Property shall apply
          as agent of the Owner all moneys and deposits withdrawn by it from the
          Capital Reserve Bank Account. Such moneys and deposits shall belong to
          the Owner but shall be held and applied as aforesaid by the Agent.

     (e)  If the amount in the Capital Reserve Bank Account is or is expected to
          be insufficient to meet the cost and expenses of any Capital Works
          approved by the Owner, the Agent shall discuss with the Owner as to
          the further contributions that need to be made to such Capital Reserve
          Fund.

                                      -9-
<PAGE>

     (f)  Any surplus in the Capital Reserve Fund shall be carried forward to
          the next financial year and shall be used for paying Capital Works for
          the next financial year.

10. The Agent shall:-

     (a)  within two (2) months after the end of each financial year, prepare a
          statement of account for that year showing details of Capital Reserve
          Fund drawn and the remaining balance; and
     (b)  send a copy to the Owner such statement of account for reference
          purpose only.

11. Each financial year shall be a period of twelve months with the first
financial year commencing on the date of this Deed.

                                  SECTION III
                                  -----------
                         TERMINATION AND MISCELLANEOUS
                         -----------------------------

12. All lawful acts of the Agent carried out in accordance with the provisions
of this Deed shall be binding in all respects on the Owner.

13. The Owner shall fully indemnify the Agent and its officers, employees,
servants and agents against all actions, proceedings, claims and demands arising
directly or indirectly out of or in connection with the Agent acting as the
Owner's agent under this Deed other than (i) those resulting from the wilful
default, negligence or unlawful act or the breach of the terms of this Deed by
the Agent or of its officers, employees, servants and agents and (ii) the costs
and expenses, outgoings agreed to be borne by the Agent under Clauses 4(l)(a) &
(b) of the Deed of Rental Guarantee.

14.  (a)  The Owner shall open and maintain in the name of the Owner with a
          licensed bank in Hong Kong ("Collection Account"). The Agent shall
          arrange for all Rents/Fees, security deposits and other sums payable
          under the Letting Agreements to be paid by the Tenants/Licensees into
          the Collection Account. During the term of the appointment of Agent
          under this Deed, the Owner shall authorize and permit the Agent to be
          the sole signatory to operate the Collection Account, such
          authorization to the Agent shall not be revoked by the Owner unless
          and until there is a material breach of the Agent's obligations
          hereunder.

     (b)  The Agent shall on or before the 16th business day of the following
          month, deliver to the Owner the following:

          (i)  monthly property management reports;

          (ii) monthly accounts;

         (iii) details of all legal proceedings commenced in the name of the
               Owner or commenced against the Owner in respect of the Property;

                                      -10-
<PAGE>

          (iv) details of all service or management contracts entered into by
               the Agent in the name of the Owner pursuant to Clause 7;

          (v)  copies of all Letting Agreements and other contracts entered into
               by the Agent in the name of the Owner,

          pertaining to the preceding calendar month and which have been
          instituted or signed within the preceding calendar month.

     (c)  At least two (2) weeks prior to the expiry of the Guaranteed Period,
          the Agent will grant all reasonable access and assistance to the
          Owner's representatives to arrange for a smooth hand over of all
          information and documents pertaining to the Property on expiry of the
          Guaranteed Period.

15   (a)  The Agent's appointment hereunder shall commence on the date of this
          Deed and shall expire at the end of the fifth year unless terminated
          earlier pursuant to the terms of this Deed PROVIDED ALWAYS THAT the
          Owner is entitled to terminate the appointment of the Agent herein at
          any time without cause by giving 3 months' prior written notice to the
          Agent.

     (b)  In the event that the Deed of Rental Guarantee is terminated then the
          Agent's appointment under this Deed is also terminated.

     (c)  The Owner may by written notice to the Agent forthwith terminate this
          Deed:-

          (i)  if the Agent shall go into liquidation either compulsorily or
               voluntarily (except in the course of a voluntary liquidation for
               the purpose of reconstruction or amalgamation) or shall enter
               into composition or arrangement with its creditors or a receiver
               or manager shall be appointed in respect of any substantial part
               of the properties or assets of the Agent; or

          (ii) if the Agent shall default in the performance or observance of
               any material terms and conditions contained in this Deed and the
               Agent shall neglect or otherwise fail to remedy such breach (if
               capable of remedy) within 14 days of being required in writing to
               do so by the Owner.

16.  Upon expiration or early termination of the Agent's appointment as set out
herein:-

     (a)  this Deed shall terminate and be of no further force or effect but
          without prejudice to the rights and liabilities of each party against
          the other in respect of any antecedent breach which may arise or have
          arisen before the date of expiration or termination;

     (b)  the Agent shall within 14 days deliver to the Owner (i) all documents
          signed or executed by it on behalf of the Owner in respect of the
          Property and (ii) all books (other than the books of account which
          will be delivered within 30 days), records, funds, assets and property
          of the Owner, which are held by or under the control of

                                      -11-
<PAGE>

          the Agent;

     (c)  the Agent shall within 30 days render to the Owner an apportionment
          account for payment of Rents/Rees, rates, management fees,
          air-conditioning charges and other outgoings in respect of the
          Property and account to the Owner for of any surplus in the Capital
          Reserve Bank Account for the Owner's verification; and the
          apportionment account shall be settled within 14 days thereafter.

17. Subject to the Agent bearing all costs and expenses, the Owner agrees to
grant the Agent a power of attorney as its attorney in its name and on its
behalf to demand, collect, receive and recover from all Tenants/Licensees of the
Property or any part(s) thereof any arrears of Rents/Rees which are pavable to
the Vendor under the terms of the Deed of Rental Guarantee, to take such
steps at law to commence any action or other legal proceedings in any court or
tribunal and to give receipts therefore. All sums of money recovered from such
Tenants/Licensees pursuant to this clause after payment of all legal costs and
expenses shall be paid to the Vendor. This Clause will continue to be applicable
notwithstanding the expiry of the Guaranteed Period.

18. In respect of those disabled toilets of the Property which had been
converted into pantries, the Agent will use its best endeavour and at the costs
and expense of the Vendor and/or the Agent to effect the reinstatement of such
disabled toilets during the Guaranteed Period, and such reinstatement works
shall be carried out as soon as practicable in respect of those floors used by
PCCW Services Limited, and for those located on the other floors it is intended
that subject to the agreement of the tenants the reinstatement shall be carried
out at the next renewal of the existing tenancies for such premises provided
that nothing herein shall require the Agent to commence any legal proceedings in
order to effect such reinstatement work and provided further that nothing herein
shall preclude the Owner from taking all actions including legal proceedings
against the Tenants/Licensees to effect such reinstatement works.

19. The Agent hereby undertakes that it shall remain a subsidiary company of
Pacific Century Premium Developments Limited before the expiry or termination of
its appointment.

20. In this Deed, "Business Day" means a day (other than Sunday) on which
commercial banks are generally opened for business in Hong Kong.

21. This Deed shall be governed by and construed in accordance with the laws of
Hong Kong Special Administrative Region of the People's Republic of China ("Hong
Kong") and the parties hereto agree to submit to the non-exclusive jurisdiction
of the courts of Hong Kong.

22. All written notices, requests, demands, and other communications under this
Deed or in connection herewith shall be given by letter (delivered by hand, by
courier, or by prepaid registered air mail) or by facsimile transmission with
confirmed answerback, and shall be addressed to the respective parties as
follows:

                                      -12-
<PAGE>

Owner:    Richly Leader Limited
-------------------------------
          c/o Pramerica Real Estate Investors (Asia) Pte Ltd
          501 Orchard Road #11-02
          Wheelock Place
-------------------------
          Singapore 238880

          Attention: Mr Leong Chi Meng/Ms Wong Ping
          Facsimile No: (65) 6735 2806

Agent:    [                  ]
------------------------------
          [                  ]
          [                  ]
          [                  ]

          Attention:    [                  ]
          Facsimile No: [                  ]

Any party may change its address at any time by written notice to the other
parties.

                                      -13-
<PAGE>

                                   SCHEDULE 1
                                   ----------
                                    The Land
                                    --------

ALL THAT Portion of the Remaining Portion of Quarry Bay Marine Lot No.1 as shown
coloured Red on Plan 1 annexed to the Lease (as defined in the Agreement)

                                  The Premises
                                  ------------

ALL THOSE 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)  All 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)  All 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)  All 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

HELD for the residue of the term created under the Lease.

                                      -14-
<PAGE>

                                   SCHEDULE 2

                             Proforma Offer Letter

Date:______________________________

To:  [Name]
     [Address]

                    Re: [Description of premises to be let]
                    ---------------------------------------

We have pleasure to confirm our offer for the lease of the above premises upon
the following basic terms and conditions:

1. Tenant               : [Name of Tenant]
                          B/R#

2. Tenancy Term         :

3. Rental               : HK$[ ] per month exclusive/inclusive of
                          [Management Fee, Government Rent, Rates
                          Air-conditioning Charges but exclusive of all
                          Utility Charges.]

4. Rent Free Period     :

5. Deposit              : HK$[ ]

6. Formal/Tenancy       : To be signed on or before [     ]
   Agreement

7. The Tenant shall sign the Formal Tenancy Agreement in substantially the form
prepared by the Landlord.

8.   Stamp duty         : To be equally shared by the Landlord and the
                          Tenant.

9.   Other Terms

Yours faithfully,                       Signed and accepted by

                                      -15-
<PAGE>

                               S C H E D U L E 3

                           Pro Foma Tenancy Agreement

                      Dated the      day of            200
                      ------------------------------------

                                       [ ]
                                  (as Landlord)

                                       AND

                                   (as Tenant)

--------------------------------------------------------------------------------

                                     LEASE

                                       of

                            th Floor of PCCW Tower,
              Taikoo Place, 979 King's Road, Quarry Bay, Hong Kong

--------------------------------------------------------------------------------

<PAGE>

                                    I N D E X
                                    ---------

SECTION I: LEASE

            Parties                                                            1
            Recitals                                                           1
1.01        Premises                                                           2
            Term                                                               2
            Rent                                                               2
1.02        Rent Review                                                        2

SECTION II: PAYMENT OF RENT AND OTHER CHARGES

2.01        Rent                                                               7
            Additional Rent                                                    7
            Air-conditioning Charges                                           7
            Management Charges                                                 8
2.02        Rates etc.                                                         9
2.03        Utility Charges and deposits                                       9
2.04        Cleaning Charges                                                   9

SECTION III: TENANT'S OBLIGATIONS

3.01        Compliance with Ordinances                                        10
3.02        To permit access                                                  10
3.03        Fitting out                                                       10
3.04        To Keep the Interior in Good Repair                               14
3.05        Installation of Wires Cables and Services                         14
3.06        Repair of Electrical Installations                                16
3.07        Good Repair of Toilets and Water Apparatus                        16
3.08        Cleaning of Drains                                                16
3.09        Repair of Windows and Glass                                       16
3.10        Indemnification of Landlord and Insurance                         17
3.11        Protection from typhoon                                           17
3.12        To permit Landlord to enter and view                              17
3.13        To execute repair on receipt of notice                            18
3.14        Outside windows                                                   18
3.15        Inform Landlord of Damage                                         18
3.16        Cleaning and Cleaning Contractors                                 18
3.17        Refuse and Garbage Removal                                        18
3.18        Installation of Telephone Cables                                  19
3.19        Directory Boards                                                  19
3.20        Contractors Employees Invitees and Licensees                      19
3.21        Damage to Building                                                19
3.22        Building Rules and Regulations                                    19
3.23        User                                                              19
3.24        Yield Up Premises & Handover                                      20
3.25        Inform Landlord of change of business name                        21
3.26        Insurance                                                         21

SECTION IV: LANDLORD'S OBLIGATIONS AND RIGHTS

4.1         Quiet Enjoyment                                                   22
4.2         Government Rent                                                   22
4.3         Roof and Main Structure                                           23
4.4         Maintenance of Common Areas                                       23
4.5         Maintenance of Services                                           23
4.6         Air-conditioning                                                  23
4.7         Observance of the Head Lease                                      24
4.8         Rights Reserved to the Landlord                                   24

<page>

            and the Manager

SECTION V: RESTRICTIONS AND PROHIBITIONS

5.01        Installation and Alterations                                      26
5.02        Injury to Walls or Floors                                         27
5.03        NO Alterations To Exterior                                        27
5.04        Obstructions to Outside Windows                                   27
5.05        Not Erect Gates or Grilles                                        28
5.06        Noise                                                             28
5.07        Signs                                                             28
5.08        Auction Sales                                                     28
5.09        Illegal or Immoral Use                                            29
5.10        Sleeping or Domestic Use                                          29
5.11        Storage of Merchandise and Hazardous Goods                        29
5.12        User                                                              29
5.13        Obstructions in Passages                                          30
5.14        Parking & Loading                                                 30
5.15        Deliveries and use of Passenger Lifts                             30
5.16        Preparation of food and prevention of Odours                      31
5.17        Not to Misuse Lavatories                                          31
5.18        Animals, pets and infestation                                     31
5.19        No Touting                                                        31
5.20        Breach of Government Lease or Conditions or                       32
            Deed of Mutual Covenants
5.21        Breach of Insurance Policy                                        32
5.22        Alienation                                                        32
5.23        Advertising of Premises                                           34
5.24        Not to commit breach of Head Lease                                34

SECTION VI: EXCLUSIONS

6.01        (a) Lifts, Air-conditioning, Utilities                            34
            (b) Fire and overflow of water                                    35
            (c) Security                                                      35

SECTION VII: SUSPENSION OF RENT

7.01        Suspension of Rent in case of fire etc.                           35

SECTION VIII: DEFAULT

8.01        Default                                                           36
8.02        Interest                                                          38
8.03        Acceptance of Rent                                                38
8.04        Acts of Employees Invitees and Licenses                           39
8.05        Distraint                                                         39
8.06        Exercise of Right of Re-Entry                                     39

SECTION IX: DEPOSIT

9.01        Deposit                                                           39
9.02        Increase of Deposit                                               40
9.03        Repayment of Deposit                                              40
9.04        Transfer of Deposit                                               41

<PAGE>

SECTION X: REGULATIONS

10.01       Introduction of Regulations                                       46
10.02       Conflict                                                          47
10.03       Exclusion of Liability                                            47

SECTION XI: INTERPRETATION AND MISCELLANEOUS

11.01       Marginal Notes, Headings and Index                                47
11.02       Definitions                                                       47
11.03       Gender                                                            48
11.04       Lettable Floor Area                                               48
11.05       Name of Building                                                  49
11.06       Alterations to the Building                                       49
11.07       Condonation not a Waiver                                          49
11.08       Letting Notices and Entry                                         50
11.09       Service of Notices                                                50
11.10       Stamp Duty and Costs                                              50
11.11       Deed of Mutual Covenant                                           50
11.12       No Key Money                                                      51
11.13       Entire Agreement                                                  51

SECTION XI1: SPECIAL CONDITIONS

12          Special Conditions                                                51

FIRST SCHEDULE

PART I      Parties                                                           52
PART II     The Building and the Premises                                     52
PART III    Term                                                              52
PART IV     Rent Free Period                                                  53

SECOND SCHEDULE

part I      RENT                                                              53
Part II     Particulars of Air-conditioning Charges                           53
Part III    Management Charges                                                53
Part IV     Deposit                                                           54

THIRD SCHEDULE

Part I      USER                                                              55

FOURTH SCHEDULE

SPECIAL CONDITIONS
      1.    HANDING OVER OF POSSESSION                                        55
      2.    OPTION TO RENEW                                                   56

Signatures

Plan(s) annexed                                                              62

<PAGE>

                                   SECTION I

                                     LEASE

          1. This Lease made this        day of

          Two Thousand and Four BETWEEN

Parties   (i) [  ] having a principal place of business at [ ] ("the Landlord"
          which expression shall include its successors in title and assigns) of
          the one part and

          (ii) The party particulars of whom are set out in Part I of the First
          Schedule hereto ("The Tenant") of the other part.

          WHEREAS:-

Recitals  (1) Under and by virtue of a Lease dated 13th December 2000 and
          registered in the Land Registry by Memorial No. 8276622 ("the Head
          Lease"), Taikoo Place Holdings Limited (formerly known as Parker
          Valley Estates Limited) ("the Head Landlord") as Owner let and the
          Landlord as lessee took the Building more particularly described in
          Part I1 of the First Schedule ("the Building") for the term of 999
          years from and including the 2nd February 1882, less the last 3 days
          thereof.

          (2) The Landlord has agreed to grant to the Tenant a tenancy of the
          Premises ("the Premises") more particularly described in Part I1 of
          the First Schedule and forming part of the Building for the term and
          subject to the conditions hereinafter appearing, for which the Head
          Landlord's approval has been given.

          (3) This Lease is a Permitted Short Term Underlease within the meaning
          of the Head Lease.

          NOW IT IS HEREBY AGREED as follows:-

                                      -1-
<PAGE>

Premises  1.01 The Landlord hereby agrees to let to the Tenant and the Tenant
          hereby agrees to take a tenancy of ALL THOSE the premises forming part
          of all that the Building TOGETHER WITH the use in common with the
          Landlord the Head Landlord and all others having the like right of (i)
          the landlord's driveways, entrances, staircases, landings and passages
          in the Building in so far as the same are necessary for the proper use
          and enjoyment of the Premises; (ii) the lift service and
          air-conditioning service in the Building and (iii) the free and
          uninterrupted passage and running of water soil gas electricity and
          other services through the sewers drains pipes cables wires and other
          service media in or upon the Building or the raised floors therein and
          serving the Premises and subject to the terms of the Head Lease FOR
Term      THE TERM specified in Part III of the First Schedule hereto ("the
Rent      Term") YIELDING AND PAYING therefore throughout the Term the rent
          set out in Part I of the Second Schedule (subject to a rent-free
          period as provided for and subject to the terms as set out in Part IV
          of the First Schedule) and by way of additional rent the air-
          conditioning charges and management charges as set out in Parts I, I1
          and III of the Second Schedule which rent and additional rent shall be
          paid exclusive of rates in advance free and clear of all deductions on
          the first day of each calendar month throughout the Term the first and
          last of such payments to be apportioned according to the number of
          days in the calendar month in which the Term commences or ends.

Rent
Review    1.02 If the Term shall be longer than 36 months each succeeding
          period of 36 months after the first such period of the Term shall be
          referred to as "a Review Period". The rent payable during a Review
          Period is referred to as "the New Rent". Where the New Rent payable as
          set cut in Part I of the Second Schedule is to be calculated by
          reference to current market rental for the Premises the following
          provisions shall apply:-

                                      -2-
<PAGE>

          (a)  If agreement is reached between the Landlord and the Tenant as to
               the rent to be payable throughout a Review Period such agreement
               shall be in writing signed by both parties and in each such case
               the rent payable during such Review Period shall be the New Rent
               as so agreed.

          (b)  If such an agreement has not been made two ( 2 ) months before
               the commencement of any Review Period either the Landlord or the
               Tenant may serve a notice upon the other calling for an
               independent surveyor and valuer ("The Surveyor") to be appointed
               to determine the New Rent. The Surveyor may be appointed by
               agreement between the Landlord and the Tenant or in default of
               such agreement within one month before the commencement of any
               Review Period the Surveyor may be appointed at the request of
               either of the parties in the first instance by the chairman for
               the time being of the Royal Institution of Chartered Surveyors
               (Hong Kong Branch) or in default of such appointment the Surveyor
               may be appointed at the request of either of the parties by the
               President for the time being of the Hong Kong Institute of
               Surveyors or equivalent professional body. The Surveyor so
               appointed shall give a written decision with reasons and such
               decision as to what shall be the New Rent shall be conclusive and
               binding on the parties hereto.

          (c)  In determining the New Rent the Surveyor shall act as an expert
               and not as an arbitrator and shall take into account the open
               market rent for other whole floor office accommodation elsewhere
               in the Development and/or in similar office buildings in Hong
               Kong having attributes comparable to those of the Building
               obtainable at the time of commencement of the relevant Review
               Period on the following assumptions that at that date :-

                                      -3-
<PAGE>

               (i)  the Premises are fitted out and equipped and fit for
                    immediate occupation and use complete with floor and wall
                    coverings, false ceilings, raised floors and
                    air-conditioning throughout and that no work which has been
                    carried out thereon by the Tenant or its permitted
                    sub-tenants (if any) or predecessors in title has diminished
                    the rental value of the Premises and that in case the
                    Premises have been destroyed or damaged, they have been
                    fully reinstated and restored.

               (ii) the Premises are available for letting by a willing landlord
                    to a willing tenant without a premium but with vacant
                    possession.

              (iii) that the covenants herein contained on the part of the
                    Tenant have been fully performed and observed.

               but disregarding:-

               (iv) any effect on rent of the fact that the Tenant has been in
                    occupation of the Premises.

               (v)  any goodwill attached to the Premises by reason of the
                    carrying on thereat of the business of the Tenant.

                                      -4-
<PAGE>

               (vi) any effect on rental value of the Premises attributable to
                    any special improvement to the Premises or any part thereof
                    carried out by the Tenant with the Landlord's consent where
                    required (otherwise than in pursuance of an obligation of
                    the Tenant) including any special improvements made by the
                    Landlord at the expense of the Tenant prior to the
                    commencement or during the continuance of the Term.

               (vii) any suspension of rent under Clause 7.01

          (d)  The Surveyor shall afford to each of the parties an opportunity
               to make representations to him.

          (e)  If the Surveyor shall die delay or become unwilling or incapable
               of acting or if for any other reason the Chairman for the time
               being of the Royal Institution of Chartered Surveyors (Hong Kong
               Branch) or the President for the time being of the Hong Kong
               Institute of Surveyors as the case may be or the person acting on
               his behalf shall in his absolute discretion think fit he may by
               writing discharge the Surveyor and appoint another in his place.

                                      -5-
<PAGE>

          (f)  If the New Rent shall not have been determined before the
               commencement of a Review Period pending determination of the New
               Rent that shall be payable in respect of any Review Period, the
               Tenant shall continue to pay an account of the New Rent the rent
               that was payable immediately before the beginning of the Review
               Period in question and within fourteen (14) days of the
               determination of the New Rent, the Tenant shall pay to the
               Landlord the difference between the rent actually paid by the
               Tenant during the period pending determination as aforesaid and
               the New Rent payable for the period pending determination plus
               interest on the difference between the old rent and the New Rent
               at the prime lending rate from time to time of the Hongkong and
               Shanghai Banking Corporation Limited from the commencement date
               of the Review Period until the date of payment and in the event
               of the New Rent being less than the rent actually paid the
               Landlord shall within fourteen (14) days of the determination of
               the New Rent refund to the Tenant the difference between the New
               Rent and the rent actually paid by the Tenant during the period
               pending determination plus interest at the rate as aforesaid from
               the commencement of the Review Period until the date of refund.

          (g)  The costs and expenses of the Surveyor including the cost of his
               appointment shall be borne by the Landlord and the Tenant in
               equal shares. All other costs and expenses incurred by the
               Landlord or the Tenant in respect of or in connection with any
               rent review shall be borne by themselves separately.

                                   SECTION II

                       PAYMENT OF RENT AND OTHER CHARGES

2.   The Tenant hereby agrees with the Landlord as follows:-

                                      -6-
<PAGE>

Rent          2.01  To pay on the days and in the manner hereinbefore provided
              without deduction or set off in Hong Kong Currency

Additional    the rent and by way of further or additional rent in
Rent          respect of the Premises:-

Air-          (a)   the Air-Conditioning Charges from time to time payable  by
conditioning        the Tenant as Set out in Part II of the Second Schedule.
Charges

              (b)   in addition to the Air-Conditioning Charges  referred to in
                    Part I1 of the Schedule, if at any time during the Term the
                    cost of providing the air-conditioning service including
                    (without limitation) the amount payable in respect thereof
                    by the Landlord to the Manager under the Head Lease, the
                    cost of maintenance, staff, replacement parts, depreciation,
                    electricity and all other costs related to such service
                    shall have increased, the Landlord shall be entitled to
                    increase the Air-Conditioning Charges payable by the Tenant
                    by an appropriate amount to cover the increase in the cost
                    of providing the service in the first instance since the
                    date hereof and on each occasion thereafter since the last
                    increase. When any notice of increase shall be sent by the
                    Landlord or the Manager to the Tenant the notice (as the
                    Landlord in its absolute discretion may decide) may be
                    accompanied by an explanatory memorandum but the assessment
                    by the Landlord or the Manager of the appropriate increase
                    shall be conclusive and final.

              (c)   any Air-Conditioning Charges payable by the Tenant for
                    additional air-conditioning services provided by the
                    Landlord from time to time as provided in Clause 4.06(b)of
                    Section IV; and

                                      -7-
<PAGE>

Management    (d)   Management Charges for management services provided
Charges             by the Manager and/or the Landlord and the monthly recurring
                    amounts (except those of a capital nature) expended by the
                    Landlord in relation to the management and maintenance of
                    all non-structural portions of the Development which are not
                    let or intended to be let to or occupied by individual
                    tenants ("the Common Areas") from time to time payable by
                    the Tenant as set out in Part III of the Second Schedule.

              (e)   in addition to the Management Charges referred to in
                    Part I11 of the Second Schedule, if at any time or times
                    during the Term the cost to the Landlord of providing the
                    management service to the Common Areas, including (without
                    limitation) the amount payable in respect thereof by the
                    Landlord to the Manager under the Head Lease, the cost of
                    maintenance of plant and machinery, staff, replacement of
                    parts, depreciation, cost of electricity or other services
                    and all other costs related to such service shall have
                    increased, the Landlord shall have the right to increase the
                    amount of the Management Charges payable by the Tenant to
                    cover the increase in the cost to the Landlord of providing
                    the management service since in the first instance the date
                    hereof and thereafter since the date of the last increase.
                    When any notice of increase shall be sent by the Landlord or
                    the Manager to the Tenant the notice (as the Landlord in its
                    absolute discretion may decide) may be accompanied by an
                    explanatory memorandum but the assessment by the Landlord or
                    the Manager of the appropriate increase shall be conclusive
                    and final and not less than one month's prior notice in
                    writing notifying the Tenant of an increase in the
                    Management Charge and setting out the reasons for the
                    increase shall be served.

                                      -8-
<PAGE>

Rates etc.          2.02 To pay and discharge all rates, taxes assessments,
                    duties, impositions, charges and outgoings of an annual or
                    recurring nature now or hereafter to be imposed or levied on
                    the occupier of the Premises by the Government of Hong Kong
                    Special Administrative Region(G0vernment Rent and Property
                    Tax and payments of a capital or non-recurring nature alone
                    excepted). Without prejudice to the generality of this
                    sub-clause the Tenant shall pay all rates imposed on the
                    Premises in the first place to the Landlord who shall settle
                    the same with the Government of Hong Kong Special
                    Administrative Region and in the event of the Premises not
                    yet having been assessed or not having been separately
                    assessed to rates the Tenant shall until such time as the
                    Premises are so assessed to rates pay to the Landlord
                    monthly and in advance a sum equal to the rates which would
                    be charged by the Government of Hong Kong Special
                    Administrative Region for each month on the basis of a
                    rateable value equal to twelve months' rent payable by the
                    Tenant, on account of the Tenant's liability under this
                    Clause.

Utility Charges     2.03 To pay and discharge all deposits and charges in
and Deposits        respect of water, electricity and telephone as may be shown
                    by or operated from the Tenant's own metered supplies or by
                    accounts rendered to the Tenant by the appropriate utility
                    companies in respect of all such utilities consumed on or in
                    the Premises.

Cleaning Charges    2.04 To pay the cost of the daily cleaning of the Premises.

                                  SECTION III
                              TENANT'S OBLIGATIONS

                    3. The Tenant hereby agrees with the Landlord:-

                                      -9-
<PAGE>

Compliance with     3.01 To obey comply with and to indemnify the Landlord
Ordinances          against the breach of all ordinances, regulations, bye-
                    laws, rules and requirements of any Governmental or other
                    competent authority relating to the use and occupation of
                    the Premises by the Tenant or any other act, deed, matter or
                    thing done, permitted, suffered or omitted therein or
                    thereon by the Tenant or any employee agent licensee or
                    permitted sub-tenant of the Tenant and without prejudice to
                    the foregoing to obtain and maintain in force and to observe
                    and comply with the terms of any approval licence or permit
                    required by any Governmental or other competent authority in
                    connection with the Tenant's use and occupation of the
                    Premises prior to the commencement of the Tenant's business
                    and to indemnify the Landlord against the consequences of
                    any breach of this provision.

To permit           3.02 To permit the Landlord and all persons authorized by it
access              upon prior reasonable notice (except in the case of
                    emergency) to enter upon the Premises for any purpose which
                    in the reasonable opinion of the Landlord is necessary to
                    enable it to comply with the covenants on the part of the
                    lessee and the conditions contained in the Head Lease.

Fitting out         3.03 To fit out the interior of the Premises in accordance
                    with such plans and specifications as shall have been first
                    submitted to and approved by the Landlord in writing (such
                    approval not to be unreasonably withheld) in a good and
                    proper workmanlike manner, such fitting out to include but
                    not be limited to the following :-

                    (a)  Connection and reticulation of all electrical wiring
                         including wiring to light fittings together with
                         control switching etc. within the Premises (whether
                         underneath the raised flooring above the false ceilings
                         or otherwise).

                                      -10-
<PAGE>

                    (b)  All floor finishes and partitioning within the
                         Premises provided that any partitioning installed by
                         the Tenant within the Premises shall be dry
                         partitioning only.

                    (c)  Any alteration to the sprinkler system necessitated
                         by the Tenant's layout of the Premises the same to be
                         in all respects in accordance with all permits and
                         consents and in compliance with the requirements of the
                         Fire Services Department.

                    (d)  Any alteration to the air-conditioning ducting that
                         may be required by the Tenant's internal layout of the
                         Premises.

                    (e)  Internal decoration, furnishings and specialized
                         Tenant's equipment.

                    (f)  Any alteration to the raised flooring including the
                         alignment, re-alignment or removal of the raised
                         flooring system, the creation of openings in the raised
                         floor panels and the cutting or sub-division of the
                         raised floor panels.

                         Provided:

                    (A)  The Tenant shall at its own cost prepare and submit to
                         the Landlord suitable drawings, plans and
                         specifications of the works to be carried out by the
                         Tenant together with schematic sketches showing intent
                         as to the Tenant's design and layout proposals
                         (hereinafter collectively called "the Tenant's Plans")
                         to enable the Premises to be fitted out and completed
                         for the purposes specified in this Lease. The Tenant's
                         Plans shall, without limitation:-

                                      -11-
<PAGE>

                    (a)  Include detailed drawings, plans and specifications
                         for all interior layout, decorations, fittings,
                         installations, partitionings and floor coverings.

                    (b)  Include detailed drawings, plans and specifications of
                         all electrical installations which shall be connected
                         to the electrical system installed by the Landlord.

                    (c)  Include details of any proposed amendments, additions
                         or alterations to any electrical mechanical or other
                         building services.

                    (d)  Comply with all relevant Ordinances, regulations and
                         bye-laws from time to time issued by the Government of
                         Hong Kong.

              (B)   The Landlord shall inform the Tenant within 14 days from the
                    submission of the Tenant's Plans to the Landlord as to
                    whether the Tenant's Plans are approved or disapproved or
                    whether any modifications thereto are required.

              (C)   The Tenant acknowledges and agrees that no delay howsoever
                    occasioned in submitting or re-submitting the Tenant's Plans
                    including any delay on the part of the Landlord in the
                    approval of the same shall entitle him to any extension of
                    the rent free period as specified in Part IV of the First
                    Schedule, and subject to Clause 1.2 of the Fourth Schedule
                    hereto all interior fitting out and decoration works
                    (including any alterations required to the Building's
                    services) shall be at the Tenant's own cost and expense.

                                      -12-
<PAGE>

              (D)   Under no circumstances shall the Tenant be entitled to
                    commence any fitting out work to the Premises before the
                    Tenant's Plans shall have been approved by the Landlord.

              (E)   Any and all work involving any alteration to or modification
                    of or in any way associated with the electrical system, the
                    sprinkler system, the security system, the plumbing and
                    drainage system and piping and the fixed air-conditioning
                    ducting, chilled water pipes and air-conditioning controls
                    shall be carried out only by contractors in respect of whom
                    the prior approval in writing of the Landlord shall have
                    been obtained (such approval not to be unreasonably withheld
                    or delayed) IT BEING AGREED that in no circumstances shall
                    any such work be commenced or be permitted to be commenced
                    by any contractor who shall not first have been approved in
                    writing by the Landlord. All works to be carried out by the
                    Tenant its contractors or sub-contractors shall be carried
                    out in accordance with any FITOUT RULES as may be issued by
                    the Landlord or the Manager from time to time provided that
                    the same shall be reasonable and the Tenant shall pay and
                    reimburse to the Landlord on demand any fees and/or costs
                    incurred by the Landlord in consulting outside architect
                    and/or outside specialist consultants in respect of the
                    Tenant's fitting out plans.

              (F)   That the Tenant will not cause or permit to be made any
                    subsequent variation to the approved fitting out plans and
                    specifications or to the approved interior design or layout
                    of the Premises without the previous approval in writing of
                    the Landlord (such approval not to be unreasonably withheld
                    or delayed) and in the event of such approval being
                    requested it shall be a condition precedent to the granting
                    thereof that the Tenant shall pay to the Landlord

                                      -13-
<PAGE>

                    any fees and/or costs incurred by the Landlord in consulting
                    outside architect and/or outside specialist consultants in
                    respect of such variations irrespective of whether approval
                    is ultimately granted.

To Keep the   3.04 To keep and maintain at the expense of the Tenant all the
Interior in   interior parts of the Premises including the flooring  raised
Good Repair   flooring and cables and wires installed thereunder the interior
              plaster or other finishing material or rendering to walls floors
              and ceilings and the Landlord's fixtures and fittings therein
              including (without limitation) all doors, windows, electrical
              installations and wiring, light fittings, suspended ceilings,
              fire fighting apparatus and air-conditioning ducting and all
              waste, drain, water and other pipes and sanitary apparatus and
              fittings therein and all painting, papering and decoration
              thereof in good clean tenantable substantial and proper repair
              and condition and as may be appropriate from time to time
              properly painted and decorated (fair wear and tear excepted).

Installation  3.05  (a)  To install all wires pipes and cables and Wires Cables
of Wires                 other services serving the Premises in and and Services
Cables and               through the ducts trunkings and conduits in the
Services                 Building provided by the Landlord for such purposes and
                         at all times in accordance with the Landlord's
                         directions and not to install any such wires pipes
                         cables or other services without first providing the
                         Landlord with full particulars and a fully detailed
                         plan and diagram of such intended installation and
                         obtaining the Landlord's consent in regard thereto
                         (which consent shall not be unreasonably withheld or
                         delayed).

                                      -14-
<PAGE>

                    (b)  To provide to the Landlord a full coloured diagram of
                         all electrical wiring to be installed by the Tenant
                         within or serving or connected to the Premises and/or
                         within the ducts, trunkings or conduits provided by the
                         Landlord within the Building for the installation of
                         electrical and/or fibre-optical or other wires or
                         cables or means of passing receiving or transmitting
                         information and all telephone and other service wires
                         conduits and cables installed by or at the order of the
                         Tenant and to clearly label and in accordance with any
                         directions given by the Landlord colour-code all such
                         wires conduits and cables to identify the same as being
                         the Tenant's and if required by the Landlord at the
                         expiration or sooner determination of the Term at the
                         Tenant's expense to remove the same from all ducts
                         conduits or trunkings within the Building taking care
                         not to disturb damage or interfere with any wires
                         cables or other means of communication belonging to the
                         Landlord or to other occupiers of any part or parts of
                         the Building or of any other part of the Development
                         that may have been installed within any such ducts
                         conduits or trunkings and making good any damage caused
                         by the Tenant in so doing and the Tenant will indemnify
                         and hold the Landlord harmless against any claim action
                         or demand that may be brought by any person suffering
                         any loss or damage or interference with business or
                         inconvenience caused by or arising from the Tenant's
                         action in complying with its obligations hereunder.

                                      -15-
<PAGE>

Repair of           3.06 To repair or replace if so required by the appropriate
Electrical          utility company, authority or statutory undertaker as the
Installations       case may be under the terms of the Electricity Supply
                    Ordinance or any statutory modification or re-enactment
                    thereof or any Orders in Council or Regulations made
                    thereunder all the electrical wiring installations and
                    fittings within the Premises installed by the Tenant and the
                    wiring from the Tenant's Meter or Meters to the Premises.

Good Repair         3.07 To maintain all toilets and sanitary and water
of Toilets          apparatus located within the Premises (or elsewhere if used
and Water           exclusively by the Tenant its employees invitees and
Apparatus           licensees) in good clean and tenantable state and in proper
                    repair and condition (excepted as in Clause 3.04 hereof
                    is excepted) at all times during the Term in accordance with
                    the Regulations of the Public Health or other Government
                    Authority concerned.

Cleaning of         3.08 To pay on demand to the Landlord the cost incurred by
Drains              the Landlord in cleansing and clearing any of the drains in
                    the Building that become choked or stopped up owing to the
                    improper or careless use of any toilet or water or sanitary
                    or drainage equipment by the Tenant or its employees
                    invitees contractors or licensees.

Repair of           3.09 TO reimburse to the Landlord the cost of repairing
Windows and         or replacing all broken or damaged windows or glass or glass
Glass               curtain wall of or corresponding to the Premises whether or
                    not the same was broken or damaged by the negligence of the
                    Tenant, and to pay or reimburse to the Landlord the cost of
                    repairing and replacing all broken or damaged part or parts
                    of the glass curtain wall of any other part or parts of the
                    Building or of the Development whether or not used
                    exclusively by the Tenant if the damage is caused by the
                    act, default, neglect or omission of the Tenant or any of
                    its servants, agents, employees, contractors or licensees.

                                      -16-
<PAGE>

Indemnification     3.10 To be wholly responsible for any loss damage or injury
of Landlord         caused to any person whomsoever or to any property
and Insurance       whatsoever directly or indirectly through the defective or
                    damaged condition or operation of any part of the interior
                    of the Premises or any machinery or plant or any fixtures or
                    fittings or wiring or piping therein for the repair of which
                    the Tenant is responsible hereunder or in any way or by or
                    owing to the spread of fire smoke or fumes or the leakage or
                    overflow of water of whatsoever origin from the Premises or
                    any part thereof or through the act default or neglect of
                    the Tenant its servants agents contractors licensees
                    partners or customers and to make good the same by payment
                    or otherwise and to indemnify the Landlord against all costs
                    claims demands actions and legal proceedings whatsoever made
                    upon the Landlord by any person in respect of any loss
                    damage or injury as aforesaid and all costs and expenses
                    incidental thereto and to effect adequate insurance cover in
                    respect of such risks in accordance with the provisions of
                    Clause 3.26 thereof.

Protection          3.11 To take all reasonable precautions to protect the
from                interior of the Premises from storm or typhoon damage or
typhoon             heavy rainfall or the like.

To permit           3.12 To permit the Landlord its agents and all persons
Landlord to         authorized by it with or without workmen or others and with
enter and view      or without appliances at all reasonable times and upon prior
                    reasonable notice (save in the case of an emergency) to
                    enter upon the Premises to view the condition thereof and to
                    take inventories of the Landlord's fixtures and fittings
                    therein and to carry out any work or repair required to be
                    done provided that in the event of an emergency the Landlord
                    its servants or agents may enter without notice and forcibly
                    if need be.

                                      -17-
<PAGE>

To execute          3.13 To proceed to make good all defects and wants of
repair on           repairs to the Premises for which the Tenant may be liable
receipt of          within the space of one month from the receipt of written
notice              notice from the Landlord to repair and make good the same,
                    and if the Tenant shall fail to proceed to execute such
                    works or repairs as aforementioned to permit the Landlord to
                    enter upon the Premises and execute the same and the cost
                    thereof shall be a debt due from the Tenant to the Landlord
                    and be recoverable forthwith by action.

Outside windows     3.14 To keep all windows of the Premises closed at all
                    times.

Inform              3.15 To give notice to the Landlord or its agent of any
Landlord            damage that the Premises may suffer and of any defect in the
of Damage           water and gas pipes electrical wiring or fittings, fittings
                    fixtures or other utility supply equipment provided by the
                    Landlord as soon as the Tenant becomes aware of any such
                    damage and defect.

Cleaning and        3.16 To keep the Premises at all times in a clean and
Cleaning            sanitary state and condition, and for the better observance
Contractors         hereof to employ as cleaners of the Premises (at the expense
                    of the Tenant) a firm of specialist cleaners to be nominated
                    by the Landlord.

Refuse and          3.17 To be responsible for the removal of refuse and garbage
Garbage             from the Premises to such location within or adjacent to the
Removal             Building as shall be specified by the Landlord or the
                    Manager from time to time and to use only such type of
                    refuse container as is specified by the Landlord from time
                    to time. In the event of the Landlord or the Manager
                    providing a collection service for refuse and garbage the
                    same shall be used by the Tenant to the exclusion of any
                    other similar service and the Tenant shall bear an
                    appropriate proportion of the reasonable cost of such
                    service.

                                      -18-
<PAGE>

Installation        3.18 Subject to sub-clause 3.03(E) of this Clause the Tenant
of Telephone        shall make its own arrangements with regard to the
Cables              installation of telephones or other communication systems in
                    the Premises, but the installation of telephone and
                    communication lines outside the Premises must be in the
                    common ducting provided in the Building for that purpose and
                    in all respects in accordance with the Landlord's
                    directions.

Directory           3.19 To pay the Landlord immediately upon demand the
Boards              reasonable cost of affixing repairing or replacing as
                    necessary the Tenant's name in lettering to the directory
                    board at the entrances to the Building and to the directory
                    board on the floor on which the Premises are situated.

Contractors         3.20 To be liable for any act default negligence or omission
Employees           of the Tenant's contractors employees invitees licensees as
Invitees and        if it were the act default negligence or omission of the
Licensees           Tenant and to indemnify the Landlord against all costs
                    claims demands expenses or liability to any third party in
                    connection therewith.

Damage to           3.21 To pay to the Landlord immediately on demand the costs
Building            of repairing any part of the Building or the Development or
                    any of the lifts or other services and facilities installed
                    therein that may be damaged by reason of any act default or
                    neglect on the part of the Tenant its agents servants
                    invitees or licensees.

Building Rules      3.22 To obey and comply with the Building Rules and Carpark
and Regulations     Rules made by the Manager from time to time pursuant to the
                    provisions of the Head Lease and also such Regulations as
                    may from time to time be made or adopted by the Landlord in
                    accordance with Section X hereof.

User                3.23 To use the Premises for the purposes described in the
                    Third Schedule and for no other purposes whatsoever.

                                      -19-
<PAGE>

Yield Up Premises   3.24 To yield up the Premises with all fixtures fittings and
& Handover          additions therein and thereto (other than the Tenant's
                    fixtures and fittings) at the expiration or sooner
                    determination of this Lease in good clean and tenantable
                    repair and condition in accordance with the stipulations
                    hereinbefore contained (excepted as in Clause 3.04 hereof is
                    excepted) together with all keys giving access to all parts
                    of the Premises Provided That the Tenant shall at the
                    Tenant's sole cost and expense remove or do away with all or
                    any alterations fixtures fittings or additions made or
                    installed by the Tenant or any part or portion thereof and
                    to make good and repair in a proper and workmanlike manner
                    any damage to the Premises and the Landlord's fixtures and
                    fittings therein as a result thereof and reinstate the
                    Premises or any part thereof to the original condition
                    thereof as at the date when possession was first handed over
                    to the Tenant before delivering up the Premises to the
                    Landlord PROVIDED FURTHER THAT without limitation to the
                    generality of the foregoing it is hereby expressly agreed
                    that:-

                    (a)  the Tenant shall remove all or any fixtures or fittings
                         purchased by the Tenant from the Landlord;

                    (b)  if the Tenant removes any of the raised floor panels
                         with or without the approval of the Landlord the Tenant
                         shall at its own risk cost and expense store all panels
                         so removed and shall upon the expiration or sooner
                         determination of this Lease at its cost and expense
                         reinstate the raised floor panels at the relevant part
                         of the Premises; and

                                      -20-
<PAGE>

                    (c)  if the Tenant carries out any other work to the raised
                         flooring system with or without the approval of the
                         Landlord the Tenant shall upon the expiration or sooner
                         determination of this Lease, at its own cost and
                         expense reinstate the raised flooring system to the
                         same condition as at the commencement of this Lease
                         (excepted as in Clause 3.04 hereof is excepted) and to
                         the extent to which such reinstatement cannot be
                         effected the Tenant shall at its own cost and expense
                         replace the relevant part of the raised flooring
                         system.

Inform Landlord     3.25 To inform the Landlord forthwith in writing of any
change of           change of the Tenant's business name.
business name

Insurance           3.26 To effect and during the currency of this tenancy and
                    any period during which the Tenant is in occupation of the
                    Premises or any part thereof insurance cover

                    (a)  in respect of third party and/or public liability for
                         loss or damage to any person or property whatsoever
                         caused through or by any act default or neglect of the
                         Tenant which might give rise to a claim of indemnity
                         pursuant to Clause 3.10 hereof;

                    (b)  in respect of the full replacement value of all glass
                         now or hereafter on or in the Premises; and

                    (c)  against damage to fixtures and fittings for the full
                         insurable value occurring in respect of the use or
                         misuse of the fire sprinkler system installed within
                         the Premises or the incursion of water herein.

                                      -21-
<PAGE>

                    The policy of insurance shall be endorsed to show the
                    Landlord as the beneficiary and shall be effected with a
                    reputable insurance company and in such amount as shall be
                    approved by the Landlord and shall contain a clause to the
                    effect that the insurance cover thereby effected and the
                    terms and conditions thereof shall not be cancelled modified
                    or restricted without notice in advance to the Landlord. The
                    Tenant hereby further undertakes to produce to the Landlord
                    as and when required by the Landlord such policy of
                    insurance together with a receipt for the last payment of
                    premium and a certificate from the insurance company that
                    the policy is in all respects valid and subsisting.

                                   SECTION IV

                       LANDLORD'S OBLIGATIONS AND RIGHTS

                    4. The Landlord agrees with the Tenant as follows:-

Quiet Enjoyment     4.01 To permit the Tenant (duly paying the rent, the
                    Air-conditioning Charges the Management Charges and rates
                    and other payments hereby agreed to be paid on the days and
                    in manner herein provided for payment of the same and
                    observing and performing the agreements stipulations terms
                    conditions and obligations herein contained) to have quiet
                    possession and enjoyment of the Premises during the Term
                    without any interruption by the Landlord or any person
                    lawfully claiming under or through or in trust for the
                    Landlord.

Government Rent     4.02 To pay the Government Rent, Property Tax and all
                    payments of a capital nature necessary for the proper
                    discharge of the Landlord's obligations and duties hereunder
                    attributable to or payable in respect of the Premises and to
                    pay all taxes, assessments, duties, impositions and charges
                    now or hereafter imposed or levied on the Landlord or owner
                    of the Premises by the Government of Hong Kong.

                                      -22-
<PAGE>

Roof and Main       4.03 To use its reasonable endeavours to maintain or cause
Structure           the Manager to maintain and keep the main structure roofs
                    main electricity supply cables main drains water pipes main
                    walls and exterior window frames of the Building (except in
                    so far as the same are within the responsibility of the
                    Tenant hereunder) in a proper and substantial state of
                    repair and condition Provided that the Landlord shall not be
                    liable for breach of this Clause unless and until written
                    notice of any defect or want of repair shall have been given
                    to the Landlord by the Tenant and the Landlord shall have
                    failed to take reasonable steps to repair or remedy the same
                    within a reasonable period after the service on it of such
                    notice.

Maintenance of      4.04 To carry out maintenance to the Common Areas of the
Common Areas        Building as the Landlord shall in its absolute discretion
                    decide necessary.

Maintenance of      4.05 To use its reasonable endeavours to maintain or cause
Services            the Manager to maintain the escalators, lifts, fire services
                    equipment, security installations and air-conditioning
                    plant and water chilling apparatus and other services
                    provided within the Building not within the Premises in
                    proper working order and condition.

Air-
conditioning

                    4.06 (a) The Landlord shall subject to Sub-clause 4.08(c) of
                             this Section and to Sub-clause 6.01(a) of Section
                             VI of this Lease provide and maintain or cause the
                             Manager to provide and maintain for the Premises
                             during Normal Business Hours as hereinafter defined
                             an air-conditioning service at a charge to the
                             Tenant as set out in Part II of the Second
                             Schedule;

                                      -23-
<PAGE>

                         (b) Subject to Sub-clause 4.08(c) of this Section and
                             to Sub-clause 6.01(a) of Section VI of this Lease
                             the Landlord shall supply or cause the Manager to
                             supply the Tenant with an air-conditioning service
                             outside Normal Business Hours as specified
                             hereunder upon request being made by the Tenant to
                             the Landlord. The cost of such additional hours of
                             air-conditioning service, including the cost of
                             running the necessary air-conditioning plant and
                             equipment, is currently HKS180.00 per hour for each
                             floor comprised in the Premises (subject to
                             reasonable change as determined by the Landlord and
                             notified to the Tenant from time to time) and shall
                             be paid on demand by the Tenant to the Landlord as
                             additional rent.

Observance of       4.07 To observe and perform all the covenants and conditions
the Head Lease      of the Head Lease and on the lessee's part to be observed
                    and performed, so far as they relate to the remaining parts
                    of the Building other than the Premises, or so far as the
                    Tenant is not liable for such performance under this Lease.

Rights Reserved     4.08 It is hereby agreed and expressly confirmed that the
to the Landlord     following rights are excepted and reserved to the Head
and the Manager     Landlord, the Landlord, the Manager and their respective
                    successors and assigns and all persons having the like right
                    throughout the Term:-

                    (a)  the right of free and uninterrupted passage and running
                         of water, soil, gas, drainage, electricity and all
                         other services or supplies through such sewers,
                         watercourses, conduits, pipes, wires, cables and ducts
                         as are now or may hereafter be in, on or

                                      -24-
<PAGE>

                         under the Premises and serving or capable of serving
                         the Building or any adjoining or neighbouring property
                         TOGETHER WITH the right to enter upon the Premises to
                         inspect repair replace or maintain any such sewers,
                         watercourses, conduits, pipes, wires, cables and ducts
                         Provided That the exercise of this right shall be in a
                         manner that is reasonable in all the circumstances;

                    (b)  the full and free right and liberty to enter upon the
                         Premises in the circumstances in which the agreements
                         by the Tenant contained in these presents permit such
                         entry and in particular but without prejudice to the
                         generality of the foregoing the right to enter into and
                         upon the Premises at all times by prior reasonable
                         notice to the Tenant for the purpose of obtaining
                         access to and egress from any machinery or switch rooms
                         or the like remaining under the control of the Head
                         Landlord, the Landlord or the Manager and located on
                         any of the floors of the Building on which any portion
                         of the Premises is situated;

                    (c)  the right from time to time on giving prior reasonable
                         notice to the Tenant (such notice not to be required in
                         case of emergency or breakdown) and causing as little
                         inconvenience to the Tenant as reasonably possible to
                         suspend the air-conditioning system, lifts, escalators
                         (if any), electric power, water supply and any other
                         building services provided in or serving the Building
                         for the purpose of servicing, maintaining, repairing,
                         renewing, improving or replacing the same and any of
                         them Provided however that (except in case of
                         unavoidable breakdown or emergency which puts or
                         requires all the lifts servicing the Premises to be put
                         out of action simultaneously) at least one of the lifts
                         serving the Premises shall be maintained in operation
                         in all times.

                                      -25-
<PAGE>

                                    SECTION V

                          RESTRICTIONS AND PROHIBITIONS

               5. The Tenant agrees with the Landlord and undertakes:-

Installation   5.01  (a) Not to make or permit or suffer to be made any
and                      alterations in or additions to the Premises or to
Alterations              the sprinkler system, electrical wiring
                         installations, air-conditioning ducting lighting
                         fixtures or other Landlord's fixtures or to install
                         any plant apparatus or machinery (other than normal
                         office machinery) therein without first having
                         obtained the written consent of the Landlord (such
                         consent shall not be unreasonably withheld or
                         delayed);

                    (b)  Not to place on any part of the Premises any object of
                         any kind including any safe of a weight in excess of
                         the maximum floor loading capacity of the Premises;

                    (c)  Not to install any air-conditioning plant or equipment
                         of any kind on or within or at any part of the Premises
                         without the prior consent of the Landlord in writing
                         (such consent shall not be unreasonably withheld or
                         delayed) AND the Tenant shall comply with the
                         reasonable directions and instructions of the Landlord
                         regarding installation and shall at its own expense be
                         responsible for their periodic inspection maintenance
                         and repair and for the replacement of defective wiring
                         and the Tenant shall be strictly liable for any damage
                         caused by the installation operation defect or removal
                         of such units;

                                      -26-
<PAGE>

                    (d)  Not to make or permit or suffer to be made any
                         alterations in or additions to the mechanical or
                         electrical installations in the Building nor to install
                         or permit or suffer to be installed any equipment,
                         apparatus or machinery which exceeds the loading of the
                         electrical installations in the Building nor to install
                         or permit or suffer to be installed any equipment,
                         apparatus or machinery which exceeds the loading of the
                         electrical main or wiring or which consumes electricity
                         not metered through the Tenant's separate meter;

                    (e)  Not to make or permit or suffer to be made any
                         alterations to any installation or fixture so as to
                         affect or be likely to affect the supply of water,
                         electricity or other utility or service to or in the
                         Building.

Injury to Walls     5.02 Not to cut maim or injure or permit or suffer to be cut
or Floors           maimed or injured any doors windows window frames walls
                    beams slabs structural members raised floors or other part
                    of the fabric of the Premises or any of the plumbing or
                    sanitary or air conditioning apparatus or installations
                    included therein or lay or use any floor covering or do
                    anything which may damage or penetrate the raised flooring
                    or slab without the prior written consent of the Landlord
                    (such consent shall not be unreasonably withheld or delayed
                    where the structure of the Premises is not affected).

No Alterations      5.03 Not to affix anything or paint or make any
To Exterior         alteration whatsoever to the exterior of the Premises.

Obstructions to     5.04 Not to block up, darken or obstruct or obscure any of
Outside Windows     the windows or lights belonging to the Premises.

                                      -27-
<PAGE>

Not Erect Gates     5.05 Not without the prior written consent of the Landlord
or Grilles          to erect or install doors, gates, grilles, shutters or other
                    similar installation whatsoever whether temporary or
                    permanent at the doorway or entrance to the Premises or at
                    any of the fire exits therefrom or erect any such door or
                    grille or shutter or gate that might in any way contravene
                    the regulations from time to time in force of the Fire
                    Services Department or other competent authority concerned,
                    nor in any other respect to contravene the said regulations.

 Noise              5.06 Not to cause or produce or suffer or permit to be
                    produced on or in the Premises any sound or noise (including
                    sound produced by broadcasting from Television, Radio and
                    any apparatus or instrument capable of producing or
                    reproducing music and sound) or any vibration or resonance
                    or other form of disturbance or other acts or things in or
                    on the Premises which is or are or may be or become a
                    nuisance or annoyance to the tenants or occupiers of
                    adjacent or neighbouring premises within the Building or in
                    any other part of Taikoo Place or elsewhere.

Signs               5.07 Not without the prior written approval of the Landlord
                    to exhibit and display within or on the exterior of the
                    Premises any writing sign signboard or other device whether
                    illuminated or not which may be visible from outside the
                    Premises nor without the Landlord's prior written consent to
                    affix any writing sign signboard or other device in at or
                    above any Common Area, lobby, landings or corridors of the
                    Building provided that notwithstanding any provision to the
                    contrary herein, the Tenant shall have the right to display
                    (a) two signs within the interior of each floor of the
                    Premises and (b) signs (one strip per floor of the Premises)
                    showing the name(s) of the occupant(s) of the Premises at
                    the Directory Board at the main lobby of the Building.

Auction Sales       5.08 Not to conduct or permit any auction fire bankruptcy
                    close out or similar sale of things or properties of any
                    kind to take place on the Premises.

                                      -28-
<PAGE>

Illegal or          5.09 Not to use or cause permit or suffer to be used any
 Immoral Use        part of the Premises for gambling or for any illegal immoral
                    or improper purposes or in any way so as to cause nuisance
                    annoyance inconvenience or damage or danger to the Landlord
                    or the tenants or occupiers of adjacent or neighbouring
                    premises.

Sleeping or         5.10 Not to use or permit the Premises or any part thereof
Domestic Use        to be used as sleeping quarters or as domestic premises
                    within the meaning of any ordinance for the time being in
                    force or allow any person to remain on the Premises
                    overnight without first obtaining the Landlord's permission
                    in writing for so doing.

Storage of          5.11 Not to use the Premises for the manufacture of goods or
Merchandise and     merchandise or for the storage of goods or merchandise other
Hazardous Goods     than in small quantities consistent with the nature of the
                    Tenant's trade or business by way of samples and exhibits
                    nor to keep or store or cause or permit or suffer to be kept
                    or stored thereat any arms or ammunition, gun-powder,
                    salt-petre, petroleum, liquified petroleum gas, butane gas,
                    kerosene or other explosive or dangerous hazardous or
                    prohibited goods within the meaning of the Dangerous Goods
                    Ordinance (Cap. 295) and the regulations made thereunder or
                    any Statutory modification or re-enactment thereof from time
                    to time in force.

User                5.12 Not to use the Premises for any purpose other than the
                    purpose specified in the Third Schedule and in particular
                    but without prejudice to the generality of the foregoing not
                    to use the Premises for the purpose of a Buddhist hall or
                    temple or for the performance of the ceremony known as Ta
                    Chai or for any similar ceremony or for any other religious
                    purpose or the performance of any religious ceremony.

                                      -29-
<PAGE>

Obstructions in     5.13 Not to place or leave or suffer or permit to be placed
Passages            or left by any contractor employee invitee or licensee of
                    the Tenant any boxes furniture articles or rubbish in the
                    entrance or any of the staircases passages or landings of
                    the Building used in common with other tenants or the
                    Landlord or otherwise encumber the same and the Landlord
                    shall be entitled without notice and at the Tenant's expense
                    to remove and dispose of as it sees fit any such material
                    aforesaid and the Landlord shall not thereby incur any
                    liability to the Tenant or to any person whomsoever and the
                    Tenant shall indemnify the Landlord against all losses
                    claims damages or expenses of and against the Landlord in
                    respect thereof.

Parking &           5.14 Not to park any vehicle in or obstruct or otherwise use
Loading             or permit any vehicle to be parked in or be obstructed or
                    otherwise used by any employee agent or licensee of the
                    Tenant any of those areas of the Building allocated to
                    parking or for the movement of or access for vehicles or
                    designated as loading/unloading areas other than in
                    accordance with the Building Rules and the Carpark Rules
                    made from time to time by the Manager under the Head Lease
                    and the Regulations made from time to time by the Landlord.

Deliveries          5.15 Not without the prior written consent of the Landlord
and use of          to take delivery to the Premises of furniture or other large
Passenger Lifts     objects during Normal Business Hours as hereinafter defined
                    (except by the service lifts in the Building) and not to
                    cause or suffer or permit passenger lifts to be used for
                    delivery purposes at any time or load or permit or suffer to
                    he loaded into any service lift or passenger lift in the
                    Building a weight greater than such lift is designed or
                    permitted to carry.

                                      -30-
<PAGE>

Preparation of      5.16 Not to cook or prepare or permit or suffer to be cooked
food and            or prepared any food (except for small quantities that may
prevention of       be for consumption or testing by the Tenant's employees or
Odours              customers Provided that the Tenant shall first apply for
                    appropriate licenses for such purposes from the relevant
                    government authorities as may be required by law) or permit
                    any offensive or unusual odours to be produced upon or
                    emanate from the Premises.

Not to Misuse       5.17 Not to use or permit or suffer to be used any lavatory
Lavatories          facilities whether shared with other tenants or occupiers of
                    the Building or reserved exclusively for the use of the
                    Tenant for any purpose other than that for which they are
                    intended and not to throw or permit or suffer to be thrown
                    into any W.C. pan, urinal, basin sink or other lavatory
                    fitting any foreign or deleterious substance of any kind and
                    to pay to the Landlord on demand the cost of any breakage,
                    blockage or damage resulting from a breach of this
                    provision.

Animals, pets       5.18 Not to keep or permit or suffer to be kept any animals
and                 or pets inside the Premises and to take all such steps and
infestation         precautions to the reasonable satisfaction of the Landlord
                    as shall be necessary to prevent the Premises or any part
                    thereof from becoming infested by termites rats mice roaches
                    or any other pests or vermin and for the better observance
                    hereof the Landlord may require the Tenant to employ at the
                    Tenant's cost such pest extermination contractors as the
                    Landlord may approve (which approval shall not be
                    unreasonably withheld or delayed).

No Touting          5.19 Not to tout or solicit or procure or permit any touting
                    or soliciting for business or the distribution of any
                    pamphlets notices or advertising matter outside the Premises
                    or anywhere within the Building by any of the Tenant's
                    servants agents licensees or permitted sub-tenants.

                                      -31-
<PAGE>

Breach of           5.20 Not to commit any breach of the provisions of the
Government          Government Lease or Conditions under which the Development
Lease or            is held from the Government or of the Head Lease or of the
Conditions or       Deed of Mutual Covenant (if any) or any Sub-Deed of Mutual
Deed of Mutual      Covenants affecting the Building and/or the Development and
Covenants           to indemnify the Landlord against the consequences of any
                    such breach.

Breach of           5.21 Not to cause suffer or permit to be done any act or
Insurance           thing whereby the policy or policies of insurance on the
Policy              Premises against damage by fire or liability to third
                    parties for the time being subsisting may become void or
                    voidable or whereby the rate of premium or premia thereon
                    may be increased and to repay to the Landlord on demand all
                    sums paid by the Landlord by way of increased premium or
                    premia thereon and all expenses incurred by the Landlord in
                    and about any renewal of such policy or policies arising
                    from or rendered necessary by such breach.

Alienation          5.22 The Tenant shall not assign underlet or otherwise part
                    with the possession of the Premises or any part thereof in
                    any way whether by way of sub-letting lending sharing or
                    other means whereby any person or persons not a party to
                    this Lease obtains the use or possession of the Premises or
                    any part thereof irrespective of whether any rental or other
                    consideration is given for such use or possession and in the
                    event of any such transfer sub-letting sharing assignment
                    or parting with the possession of the Premises (whether for
                    monetary consideration or not) this Lease shall absolutely
                    determine and the Tenant shall forthwith vacate the Premises
                    on notice to that effect from the Landlord. The Tenancy
                    shall be personal to the Tenant named in the First Schedule
                    to this Lease and without in any way limiting the generality
                    of the foregoing the following acts and events shall unless
                    approved in writing by the Landlord be deemed to be breaches
                    of this Clause:-

                                      -32-
<PAGE>

                         (a) In the case of a tenant which is a partnership
                             the taking in of one or more new partners whether
                             on the death or retirement of an existing partner
                             or otherwise;

                         (b) In the case of a tenant who is an individual
                             (including a sole surviving partner of a
                             partnership tenant) the death insanity or
                             disability of that individual to the intent that no
                             right to use possess occupy or enjoy the Premises
                             or any part thereof shall vest in the executors
                             administrators personal representative next of kin
                             trustee or committee of any such individual;

                         (c) In the case of a tenant which is a corporation
                             any takeover, amalgamation or voluntary liquidation
                             thereof:

                         (d) The giving by the Tenant of a Power of Attorney
                             or similar authority whereby the donee of the Power
                             obtains the right to use possess occupy or enjoy
                             the Premises or any part thereof or does in fact
                             use possess occupy or enjoy the same;

                         (e) The change of the Tenant's business name

                         PROVIDED that the sharing of the Premises or any
                         part (s) thereof as Licensee(s) only with any one
                         or more company or companies which is/are and
                         remain(s) at all times a Related Company of the
                         Tenant (as hereinafter defined) shall not be a
                         breach of this clause provided that the Tenant
                         provides full particulars beforehand to the
                         Landlord of such sharing and of the Related Company
                         of the Tenant concerned and provided that such
                         sharing of occupation is terminated forthwith in
                         the event that such company ceases to be a Related
                         Company of the Tenant as so defined.

                                      -33-
<PAGE>

Advertising of      5.23 Not to erect upon the Premises, the Building or any
 Premises           part thereof any sign or display advertising the Premises or
                    any part thereof as being available for letting or
                    sub-letting or issue any pamphlet publicity or advertisement
                    in any form whatsoever with regard to any proposed letting
                    or sub-letting of the Premises.

Not to commit       5.24 Not to do omit suffer or permit in relation to the
breach of Head      Premises anything in contravention of any of the lessee's
Lease               covenants and other provisions in the Head Lease contained
                    or any act or thing which would or might cause the Landlord
                    to be in breach of the Head Lease.

                                   SECTION VI
                                   EXCLUSIONS

                    6.01 IT IS HEREBY FURTHER EXPRESSLY AGREED AND DECLARED that
                    the Landlord shall not in any circumstances (other than
                    those arising from its own gross negligence or wilful
                    default or that of its servants contractors agents or
                    licensees) be liable to the Tenant or any other person
                    whomsoever:-

Lifts, Air-         (a)  In respect of any loss of profit or of business or loss
conditioning,            of life or loss, injury or damage to person or property
Utilities                or for any disruption or inconvenience caused to or
                         suffered or sustained by the Tenant or any other person
                         caused by or through or in any way owing to or arising
                         out of or connected with any defect in or breakdown or
                         suspension of service of the lifts air-conditioning
                         system, electric power or water supplies, or any other
                         building service provided in or serving the Building,
                         or

                                      -34-
<PAGE>

Fire and            (b)  In respect of any loss of profit or of business or
overflow of              loss of life or loss injury or damage to person or
water                    property or for any disruption or inconvenience caused
                         to or suffered or sustained by the Tenant or any other
                         person caused by or through or in any way owing to or
                         arising out of or connected with any escape of fumes
                         smoke fire or any other substance or thing or the
                         overflow of water from anywhere within the Building or
                         any part of the Development or in any way attributable
                         to fire storm tempest flood Act of God or other
                         inevitable accident, or

Security            (c)  For the security or safekeeping of the Premises or any
                         contents therein and in particular but without
                         prejudice to the generality of the foregoing the
                         provision by the Landlord or the Manager or watchmen
                         and caretakers shall not create any obligation on the
                         part of the Landlord or the Manager as to the security
                         of the Premises or any contents therein and the
                         responsibility for the safety of the Premises and the
                         contents thereof shall at all times rest with the
                         Tenant.

                                   SECTION VII
                               SUSPENSION OF RENT

Suspension of       7.01 If the Premises or the Building or any part thereof
Rent in case of     shall at any time during the Term be destroyed or damaged or
fire etc.           become inaccessible owing to fire water storm typhoon
                    defective construction white ants earthquake subsidence of
                    the ground or any calamity beyond the control of the
                    Landlord or the Tenant so as to render the Premises or any
                    part thereof unfit for commercial use or inaccessible and
                    the policy or policies of insurance for such risk effected
                    by the Landlord shall not have been vitiated or payment of
                    the policy moneys refused in whole or in part in consequence
                    of any act or default of the Tenant or if at any time during
                    the continuance of this tenancy the Premises shall be
                    condemned as a dangerous

                                      -35-
<PAGE>

                    structure or a demolition order or closing order shall
                    become operative in respect of the Premises or any part
                    thereof then the rent and other charges hereby reserved or a
                    fair proportion thereof according to the nature and extent
                    of the damage sustained or order made shall be suspended,
                    rent and other charges paid in advance in respect of the
                    current month being refunded, until the Premises shall again
                    be rendered accessible and fit for commercial use PROVIDED
                    THAT in circumstances when the whole or substantially the
                    whole of the Premises have been rendered inaccessible or
                    unfit for commercial use and should the Premises not have
                    been reinstated in the meantime either the Landlord or the
                    Tenant may at any time after two months from the occurrence
                    of such damage or destruction or order give to the other of
                    them notice in writing to determine this Lease and thereupon
                    the same and everything herein contained shall cease and be
                    void as from the date of the occurrence of such destruction
                    or damage or order or of the Premises or any part thereof
                    becoming inaccessible or unfit for commercial use but
                    without prejudice to the rights and remedies of either party
                    against the other in respect of any antecedent claim or
                    breach of the agreements stipulations terms and conditions
                    herein contained or of the Landlord in respect of the rent
                    payable hereunder prior to the coming into effect of the
                    suspension.

                                  SECTION VIII
                                     DEFAULT

                    8. It is hereby expressly agreed and declared as follows:-

Default             8.01 If the rent and/or the Air-conditioning Charges or
                    Management Charges or any other moneys payable hereunder or
                    any part thereof shall be in arrears for fifteen (15) days
                    after the same shall have become payable (whether formally
                    demanded or not) or if there shall be

                                      -36-
<PAGE>

                    any breach or non-performance of any of the stipulations
                    conditions or agreements herein contained and on the part of
                    the Tenant to be observed or performed or if the Tenant
                    shall stop or suspend payment of its debts or be unable to
                    or admit inability to pay its debts as they fall due or
                    enter into any scheme of arrangement with its creditors or
                    have an encumbrancer take possession of any of its assets or
                    have a receiving order made against it or in such
                    circumstances as aforesaid fail to satisfy any judgement
                    that may be given in any action against it after final
                    appeal or go into liquidation (save for the purposes of
                    amalgamation or reconstruction) or if the Tenant shall
                    suffer execution to be levied upon the Premises (except upon
                    such part thereof which has been sublet with the Landlord's
                    consent) or otherwise on the Tenant's goods or if in such
                    circumstances as aforesaid the Tenant shall suspend or cease
                    or threaten to suspend or cease to carry out its business or
                    should any event occur or proceeding be taken with respect
                    to the Tenant in any jurisdiction to which the tenant is
                    subject which has an effect equivalent or similar to any of
                    the events or circumstances described above then and in any
                    such case it shall be lawful for the Landlord at any time
                    thereafter to re-enter on and upon the Premises or any part
                    thereof in the name of the whole and thereupon this Lease
                    shall absolutely determine but without prejudice to any
                    right of action or non-observance or non-performance by the
                    Tenant of any of the terms of this Lease. A written notice
                    served by the Landlord on the Tenant in manner hereinafter
                    provided to the effect that the Landlord thereby exercises
                    the power of determination and/or re-entry hereinbefore
                    contained shall be a full and sufficient exercise of such
                    power without physical entry on the part of the Landlord
                    notwithstanding any statutory or common law provision to the
                    contrary. All costs and expenses including legal costs
                    incurred by the Landlord in demanding and enforcing payment
                    of the rent and other charges payable hereunder (if the
                    Landlord elects to demand) and in exercising its rights
                    and/or remedies or in attempting to do so shall be paid by
                    the Tenant and shall be recoverable from the Tenant as a
                    debt.

                                      -37-
<PAGE>

 Interest           8.02 Notwithstanding anything herein contained in the event
                    of default in payment of rent or other monies payable by the
                    Tenant hereunder (whether formally demanded or not) the
                    Tenant shall pay to the Landlord on demand daily interest on
                    all such sums outstanding at the rate of 3% above the prime
                    lending rate of the Hongkong and Shanghai Banking
                    Corporation Limited from time to time calculated from the
                    date on which the same shall be due for payment. (in
                    accordance with the provisions contained in that behalf
                    herein) until the date of payment provided that the demand
                    and/or receipt by the Landlord of interest pursuant to this
                    Clause shall be without prejudice to and shall not affect
                    the right of the Landlord to exercise any other right or
                    remedy hereof (including but without prejudice to the
                    generality of the foregoing the right of re-entry)
                    exercisable under the terms of this Lease.

Acceptance of       8.03 The acceptance of any rent by the Landlord shall not be
Rent                deemed to operate as a waiver by the Landlord of any right
                    to proceed against the Tenant in respect of any breach
                    non-observance or non-performance by the Tenant of any of
                    the agreements stipulations terms and conditions herein
                    contained and on the part of the Tenant to be observed and
                    performed.

                       Without prejudice to the other rights of the Landlord, if
                    the Tenant shall during the Term default in payment of any
                    of the Rent or other sums payable by the Tenant hereunder
                    for more than three (3) times, the Tenant shall be deemed to
                    have persistently failed to pay the Rent on its due date
                    causing administrative inconvenience or nuisance to the
                    Landlord and the Landlord shall be entitled to terminate
                    the Agreement forthwith. On the exercise of the Landlord's
                    right of termination under this Agreement, the Landlord
                    shall have the right, if this Agreement shall have been
                    registered in the Land Registry, to register at the Land
                    Registry an instrument signed by the Landlord alone to
                    terminate this Agreement and this sub-clause shall not
                    prevent the Landlord from recovering

                                      -38-
<PAGE>

                    in addition to interest, other amounts or loss suffered by
                    the Landlord by reason of the Tenant's breach. Time for
                    payment by the Tenant of any money payable hereunder shall
                    be of the essence of this Agreement in every respect.

Acts of Employees   8.04 For the purpose of these presents any act default
Invitees and        neglect or omission of any guest visitor servant contractor
Licenses            employee agent invitee or licensee of the Tenant shall be
                    deemed to be the act default neglect or omission of the
                    Tenant.

Distraint           8.05 For the purposes of Part III of the Landlord and Tenant
                    (Consolidation) Ordinance (Chapter 7) and of these presents,
                    the rent payable in respect of the Premises shall be and be
                    deemed to be in arrears if not paid in advance at the times
                    and in the manner hereinbefore provided for payment thereof.

Exercise of         8.06 A written notice served by the Landlord on the Tenant
Right of Re-        in manner hereinafter mentioned to the effect that the
Entry               Landlord thereby exercises the power of re-entry herein
                    contained shall be a full and sufficient exercise of such
                    power without actual entry on the part of the Landlord.

[For Cash deposit only]

                                    SECTION IX

                                     DEPOSIT

Deposit             9.01 The Tenant shall on the signing hereof deposit with the
                    Landlord in cash the sum or sums specified in paragraph (1)
                    of Part IV of the Second Schedule ("the Deposit") to secure
                    the due observance and performance by the Tenant of the
                    agreements stipulations terms and conditions herein
                    contained and on the part of the Tenant to be observed and
                    performed which Deposit shall be held by the Landlord
                    throughout the currency of this Lease free of any interest
                    to the Tenant with the right for the

                                      -39-
<PAGE>

                    Landlord (without prejudice to any other right or remedy
                    hereunder) to deduct therefrom the amount of any rent rates
                    and other charges payable hereunder and any costs expenses
                    loss or damage sustained by the Landlord as the result of
                    any non-observance or non-performance by the Tenant of any
                    of the agreements, stipulations, obligations or conditions.
                    In the event of any deduction being made by the Landlord
                    from the Deposit in accordance herewith during the currency
                    of this Lease the Tenant shall forthwith on demand by the
                    Landlord make a further deposit equal to the amount so
                    deducted and failure by the Tenant so to do shall entitle
                    the Landlord forthwith to re-enter upon the Premises and to
                    determine this Lease as hereinbefore provided.

Increase of         9.02 The amount of the cash deposit stipulated in Clause
Deposit             9.01 shall be increased, following each and any review in
                    rent to market rent or increase in Air-Conditioning Charges
                    and/or Management Charges, so that the total amount of the
                    Deposit shall be for a sum equal to (i) [ ] months' rent at
                    the rent payable after the review in question. (iii) [ ]
                    months' Air-conditioning Charges at the rate at that time
                    payable by the Tenant hereunder and (iii) [ ] months'
                    Management Charges at the rate at that time payable by the
                    Tenant hereunder.

Repayment of        9.03 Subject as aforesaid the Deposit and any further
Deposit             deposits paid shall be refunded to the Tenant by the
                    Landlord without interest within thirty days after the
                    expiration or sooner determination of this Lease and
                    delivery of vacant possession to the Landlord and after
                    settlement of the last outstanding claim by the Landlord
                    against the Tenant for any arrears of rent rates and other
                    charges and for any breach non-observance or non-
                    performance of any of the agreements stipulations terms and
                    conditions herein contained and on the part of the Tenant to
                    be observed or performed whichever shall be the later

                                      -40-
<PAGE>

Transfer of         9.04 The parties hereto agree that in the event of the
Deposit             Landlord assigning or transferring the ownership of the
                    Premises or the Building of which the Premises forms part to
                    any person ("the New Owner") prior to the termination of the
                    Term of this Lease subject to and with the benefit of this
                    Lease, the Landlord shall be at liberty to transfer the
                    Deposit paid by the Tenant under the Lease (less any
                    deduction which the Landlord may make according to the terms
                    of this Lease and the said rental deposit or the balance
                    thereof after the said deduction shall hereinafter be
                    referred to as "the Rental Deposit") to the New Owner and in
                    that event the Tenant shall waive all claims against the
                    Landlord for the refund of the Rental Deposit but nothing
                    herein provided shall prejudice or affect the right of the
                    Tenant to claim against the New Owner for refund of the same
                    AND a written notice sent by the Landlord or the Landlord's
                    solicitors by ordinary post to the Tenant to the address
                    stated herein notifying the change of ownership of the
                    Premises shall be conclusive evidence that the Rental
                    Deposit has been transferred to the New Owner unless the
                    contrary intention is expressed in the said notice.

[Bank Guarantee]
                                   SECTION IX

                                     DEPOSIT

Deposit             9.01 The Tenant shall on the signing hereof provide the
                    Landlord with a bank guarantee for the sum specified in
                    paragraph (1) of Part IV of the Second Schedule ("the Bank
                    Guarantee") to secure the due observance and performance by
                    the Tenant of the agreements stipulations terms and
                    conditions herein contained and on the part of the Tenant to
                    be observed and performed which Bank Guarantee shall be held
                    by the Landlord throughout the currency of this Lease free
                    of any interest to the Tenant

                                      -41-
<PAGE>

                    with the right for the Landlord (without prejudice to any
                    other right or remedy hereunder) to enforce the Bank
                    Guarantee for payment of the amount of any rent rates and
                    other charges payable hereunder and any costs expenses loss
                    or damage sustained by the Landlord as the result of any
                    non-observance or non-performance by the Tenant of any of
                    the agreements, stipulations, obligations or conditions. In
                    the event the Bank Guarantee being enforced by the Landlord
                    in accordance herewith during the currency of this Lease the
                    Tenant shall forthwith on demand by the Landlord provide a
                    further bank guarantee equal to the amount so enforced and
                    failure by the Tenant so to do shall entitle the Landlord
                    forthwith to re-enter upon the Premises and to determine
                    this Lease as hereinbefore provided.

Increase of         9.02 The extent of the amount of the Bank Guarantee
Deposit             stipulated in Clause 9.01 shall be increased, following each
                    and any review in rent to market rent or increase in
                    Air-conditioning Charges and/or Management Charges, so that
                    the total extent of the Bank Guarantee shall be for a sum
                    equal to (i) [ ] months' rent at the rent payable after the
                    review in question. (ii) [ ] months' Air-conditioning
                    Charges at the rate at that time payable by the Tenant
                    hereunder and (iii) [ ] months' Management Charges at the
                    rate at that time payable by the Tenant hereunder.

Cancellation of     9.03 Subject as aforesaid the Bank Guarantee and any further
guarantee           bank guarantees or supplements provided shall be returned to
                    the Tenant for cancellation by the Landlord without interest
                    within sixty days after the expiration or sooner
                    determination of this Lease and delivery of vacant
                    possession to the Landlord and after settlement of the last
                    outstanding claim by the Landlord against the Tenant for any
                    arrears of rent rates and other charges and for any breach
                    non-observance or non-performance of any of the agreements
                    stipulations terms and conditions herein contained and on
                    the part of the Tenant to be observed or performed whichever
                    shall be the later.

                                      -42-
<PAGE>

Issue of            9.04 The parties hereto agree that in the event of the
replacement         Landlord assigning or transferring the ownership of the
guarantee           Premises or the Building of which the Premises forms part to
                    any person ("the New Owner") prior to the termination of the
                    Term of this Lease subject to and with the benefit of this
                    Lease, the Landlord shall be at liberty to transfer/assign
                    the benefits of the Bank Guarantee provided by the Tenant to
                    the New Owner but in the event the Bank Guarantee is not
                    transferrable nor assignable, the Tenant shall provide a new
                    bank guarantee to the New Owner in replacement of the Bank
                    Guarantee if so requested by the Landlord. The aforesaid
                    transfer shall be subject to the right of the Landlord to
                    enforce the Bank Guarantee under the terms of this Lease and
                    in the event of transfer or assignment as aforesaid, the
                    Tenant shall waive all claims against the Landlord for the
                    return of the Bank Guarantee if it has been transferred or
                    assigned as aforesaid but nothing herein provided shall
                    prejudice or affect the right of the Tenant to claim against
                    the New Owner for return of the same AND a written notice
                    sent by the Landlord or the Landlord's solicitors by
                    ordinary post to the Tenant to the address stated herein
                    notifying the change of ownership of the Premises shall be
                    conclusive evidence that the Bank Guarantee has been
                    transferred (if it has not been replaced) to the New Owner
                    unless the contrary intention is expressed in the said
                    notice.

                                      -43-
<PAGE>

[Cash Deposit and Bank Guarantee]

                                    SECTION IX

                                     DEPOSIT

Cash Deposit        9.01 The Tenant shall on the signing hereof deposit with the
                    Landlord in cash the sum or sums specified in paragraph (1)
                    of Part IV of the Second Schedule ("the Cash Deposit") and
                    provide to the Landlord a bank Guarantee for such amount
                    specified in paragraph ( 2 ) of Part IV of the Second
                    Schedule ("the Bank Guarantee") (the Cash deposit and the
                    Bank Guarantee are collectively referred to as "the
                    Deposit") to secure the due observance and performance by
                    the Tenant of the agreements stipulations terms and
                    conditions herein contained and on the part of the Tenant to
                    be observed and performed which Deposit shall be held by the
                    Landlord throughout the currency of this Lease free of any
                    interest to the Tenant with the right for the Landlord
                    (without prejudice to any other right or remedy hereunder)
                    to deduct from the Cash Deposit the amount of and/or to
                    enforce the Bank Guarantee for payment of any rent rates and
                    other charges payable hereunder and any costs expenses loss
                    or damage sustained by the Landlord as the result of any
                    non-observance or non-performance by the Tenant of any of
                    the agreements, stipulations, obligations or conditions. In
                    the event of any deduction being made by the Landlord from
                    the Cash Deposit and/or the Bank Guarantee being enforced by
                    the Landlord in accordance herewith during the currency of
                    this Lease the Tenant shall forthwith on demand by the
                    Landlord make a further deposit equal to the amount so
                    deducted and/or to provide a further bank guarantee equal to
                    the amount so enforced and failure by the Tenant so to do
                    shall entitle the Landlord forthwith to re-enter upon the
                    Premises and to determine this Lease as hereinbefore
                    provided.

                                      -44-
<PAGE>

Increase of         9.02 The amount of the Cash Deposit and the extent of the
Deposit             Bank Guarantee stipulated in Clause 9.01 shall be increased,
                    following each and any review in rent to market rent or
                    increase in Air-conditioning Charges and/or Management
                    Charges, so that the total amount of the Cash Deposit and
                    the extent of the Bank Guarantee shall be for a sum equal to
                    (i) [three months'] rent at the rent payable after the
                    review in question. (ii) [three months'] Air-conditioning
                    Charges at the rate at that time payable by the Tenant
                    hereunder and (iii) [three months'] Management Charges at
                    the rate at that time payable by the Tenant hereunder.

Repayment of        9.03 Subject as aforesaid, (i) the Cash Deposit and any
Deposit             further cash deposits paid shall be refunded and the Bank
                    Guarantee and any further bank guarantees and supplements
                    provided shall be returned to the Tenant by the Landlord
                    without interest within thirty days for Cash Deposits and
                    within sixty days for Bank Guarantee after the expiration or
                    sooner determination of this Lease and delivery of vacant
                    possession to the Landlord and after settlement of the last
                    outstanding claim by the Landlord against the Tenant for any
                    arrears of rent rates and other charges and for any breach
                    non-observance or non-performance of any of the agreements
                    stipulations terms and conditions herein contained and on
                    the part of the Tenant to be observed or performed whichever
                    shall be the later.

Transfer of         9.04 The parties hereto agree that in the event of the
Deposit             Landlord assigning or transferring the ownership of the
                    Premises or the Building of which the Premises forms part to
                    any person ("the New Owner") prior to the termination of the
                    Term of this Lease subject to and with the benefit of this
                    Lease, the Landlord shall be at liberty to transfer the Cash
                    Deposit paid and transfer/assign the

                                      -45-
<PAGE>

                    benefits of the Bank Guarantee provided by the Tenant to the
                    New Owner but in the event the Bank Guarantee is not
                    transferrable nor assignable, the Tenant shall provide a new
                    bank guarantee to the New Owner in replacement of the Bank
                    Guarantee if so requested by the Landlord. The aforesaid
                    transfer or assignment shall be subject to (i) any deduction
                    which the Landlord may make according to the terms of this
                    Lease and the said rental deposit or the balance thereof
                    after the said deduction shall hereinafter be referred to as
                    "the Rental Deposit" and/or (ii) the Landlord's right to
                    enforce the Bank Guarantee in accordance with the terms of
                    this Lease and in the event of transfer or assignment as
                    aforesaid, the Tenant shall waive all claims against the
                    Landlord for the refund of the Rental Deposit and the return
                    of the Bank Guarantee if the Bank Guarantee has been
                    transferred or assigned as aforesaid but nothing herein
                    provided shall prejudice or affect the right of the Tenant
                    to claim against the New Owner for refund or return of the
                    same AND a written notice sent by the Landlord or the
                    Landlord's solicitors by ordinary post to the Tenant to the
                    address stated herein notifying the change of ownership of
                    the Premises shall be conclusive evidence that the Rental
                    Deposit has been transferred and the Bank Guarantee has been
                    assigned (if it has not been replaced) to the New Owner
                    unless the contrary intention is expressed in the said
                    notice.

                                   SECTION X

                                  REGULATIONS

Introduction of     10.01 The Landlord shall be entitled from time to time
Regulations         and by notice in writing to the Tenant to make introduce
                    and subsequently amend adopt or abolish if necessary such
                    Regulations as it may reasonably consider necessary for
                    the proper operation and maintenance of the Building.

                                      -46-
<PAGE>

Conflict            10.02 Such Regulations shall be supplementary to the terms
                    and conditions contained in this Lease and shall not in any
                    way derogate from such terms and conditions. In the event of
                    conflict between such Regulations and the terms and
                    conditions of this Lease the terms and conditions of this
                    Lease shall prevail.

Exclusion of        10.03 The Landlord shall not be liable for any loss or
Liability           damage howsoever caused or arising from any non-enforcement
                    of the Regulations or non-observance thereof by any person.

                                   SECTION XI

                        INTERPRETATION AND MISCELLANEOUS

Marginal Notes,     11.01 The Marginal Notes, Headings and Index are intended
Headings and        for guidance only and do not form a part of this Lease nor
Index               shall any of the provisions of this Lease be construed or
                    interpreted by reference thereto or in any way affected or
                    limited thereby.

Definitions         11.02 In this Lease the following expressions whenever used
                    shall (save where the context otherwise requires) have the
                    following meanings:-

                    "the Building" means that part of the two commercial/office
                    towers constructed as part of the Development known as PCCW
                    Tower of which particulars are contained in Part II of the
                    First Schedule hereto.

                                      -47-
<PAGE>

                    "the Development" means the development comprising two
                    office/commercial towers with car-parking and other
                    facilities erected on some part or parts of the piece or
                    parcel of land at Taikoo Place, Quarry Bay, Hong Kong know
                    and registered at the Land Registry as SECTION S AND THE
                    REMAINING PORTION OF QUARRY BAY MARINE LOT NO. 1 comprising
                    both the tower block now know as "Dorset House" and the
                    Building and the podium on which the same are constructed.

                    "the Manager" means the Manager from time to time of the
                    Development appointed pursuant to the provisions of the Head
                    Lease.

                    "Normal Business Hours" means the hours other than on
                    Sundays and Public Holidays, between 8.00 a.m. and 7.00 p.m.
                    on each Monday to Friday and between 8.00 a.m. and 2.00 p.m.
                    on each Saturday which is not a Public Holiday.

                    "Related Company" means and any other entity:
                    (a) not less than 10% of whose voting shares or securities;
                        or
                    (b) not less than 10% of the composition of whose broad of
                        directors; or
                    (c) not less than 10% of whose issued share capital or
                        ownership interest;
                    are now or hereafter owned or controlled directly or
                    indirectly by.

Gender              11.03 In this Lease unless the context otherwise requires
                    words importing the singular number shall include the plural
                    number and vice versa and words importing a gender shall
                    include every gender and references to persons include
                    bodies corporate or unincorporate.

Lettable Floor      11.04 For the purposes of Special Conditions set out in the
Area                Fourth Schedule hereto, the lettable floor area of the
                    Premises shall be deemed to be square feet.

                                      -48-
<PAGE>

Name of             11.05 The Landlord reserves the right to name the Building
Building            with any such name or style as it in its sole discretion may
                    determine and at any time and from time to time to change,
                    alter, substitute or abandon any such name without thereby
                    becoming liable to compensate the Tenant for any loss
                    expense or inconvenience caused to the Tenant as a
                    consequence thereof provided that the Landlord shall give
                    the Tenant and the Postal and other relevant Government
                    Authorities not less than three months' notice of its
                    intention so to do.

Alterations to      11.06 The Landlord reserves the right from time to time to
the Building        improve extend or add to or reduce the Building or in any
                    manner whatsoever to alter or deal with the Building (other
                    than the Premises) without being liable to the Tenant in
                    respect thereof Provided always that such improvements and
                    alterations shall not affect the area of the Premises and in
                    exercising such right the Landlord will endeavour to cause
                    as little inconvenience to the Tenant as is practicable in
                    the circumstances and the Tenant shall not make any claim
                    against the Landlord for any inconvenience caused.

Condonation not     11.07 No condoning, excusing or overlooking by the Landlord
a Waiver            of any default, breach or non-observance or non-performance
                    by the Tenant at any time or times of any of the agreements
                    stipulations terms and conditions herein contained shall
                    operate as a waiver of the Landlord's rights hereunder in
                    respect of any continuing or subsequent default, breach or
                    non-observance or non-performance or so as to defeat or
                    affect in any way the rights and remedies of the Landlord
                    hereunder in respect of any such continuing or subsequent
                    default or breach and no waiver by the Landlord shall be
                    inferred from or implied by anything done or omitted by the
                    Landlord, unless expressed in writing and signed by the
                    Landlord. Any consent given by the Landlord shall operate as
                    a consent only for the particular matter to which it relates

                                      -49-
<PAGE>

                    and shall in no way be considered as a waiver or release of
                    any of the provisions hereof nor shall it be construed as
                    dispensing with the necessity of obtaining the specific
                    written consent of the Landlord in the future, unless
                    expressly so provided.

Letting Notices     11.08 During the three months immediately before the
and Entry           expiration or sooner determination of the Term the Landlord
                    shall be at liberty to affix and maintain without
                    interference upon any external part of the Premises a notice
                    stating that the Premises are to be let and such other
                    information in connection therewith as the Landlord shall
                    reasonably require.

Service of          11.09 Any notice required to be served on the Tenant shall
Notices             be sufficiently served if delivered or despatched by
                    registered post to or left at the Premises. Any notice
                    required to be served on the Landlord shall be sufficiently
                    served if delivered or despatched by registered post to its
                    principal place of business from time to time. A notice sent
                    by registered post shall be deemed to be given at the time
                    and date of posting.

Stamp Duty and      11.10 Each of the parties hereto shall bear its own legal
Costs               costs in relation to the preparation approval and execution
                    of this Lease. The stamp duty hereon and Land Registry fees
                    (if any) shall be borne by the Landlord and the Tenant in
                    equal shares.

Deed of Mutual      11.11 The Tenant shall observe and comply with and perform
Covenant            all covenants terms and provisions in any Deed of Mutual
                    Covenant and Management Agreement now or at any future time
                    in force relating to the Building so far as they relate to
                    the premises and shall indemnify the Landlord against the
                    breach non-observance or non-performance thereof provided
                    however that such documents shall not contain any covenants
                    or conditions expressed to be binding upon the owner or
                    occupier or any tenant of any

                                      -50-
<PAGE>

                    portion of the Building which shall be incompatible with or
                    place any unreasonable restriction upon the proper use of
                    the Premises by the Tenant for the purposes of its
                    legitimate business as described in the Third Schedule and
                    shall not derogate from any of the rights and privileges
                    granted to the Tenant by virtue of the provisions of this
                    Lease.

No Key Money        11.12 The Tenant hereby expressly declares that for the
                    grant of the Term no key money or premium or construction
                    money or other consideration otherwise than the rent and
                    other payments herein expressly reserved and expressed to be
                    payable has been paid or will be payable to the Landlord or
                    to any person whomsoever.

Entire              11.13 This Lease sets out the full agreement between the
Agreement           parties. No warranties or representatives express or implied
                    of any kind other than those set out herein (if any) are or
                    have been made or given by the Landlord or by anybody on his
                    behalf and if any such warranties or representations express
                    or implied have been made, the same are withdrawn or deemed
                    to have been withdrawn immediately before the execution of
                    this Lease.

                                   SECTION XII

                               SPECIAL CONDITIONS

Special             12. The parties hereto further agree that they shall
Conditions          respectively be bound by and entitled to the benefit of the
                    Special Conditions set forth in the Fourth Schedule. All the
                    schedules to this Lease shall form part of this Lease.
                    Should there be any conflicts or inconsistencies between the
                    terms and conditions in the Fourth Schedule hereto and that
                    of and in other parts of this Lease, the terms and
                    conditions in the Fourth Schedule shall prevail.

                    IN WITNESS whereof the parties have caused this document to
                    be executed the day and year first above written.

                                      -51-
<PAGE>

                      THE FIRST SCHEDULE ABOVE REFERRED TO
                      ------------------------------------

                                     PART I
                                     ------

LANDLORD              :  PARTNER LINK INVESTMENTS LIMITED

PRINCIPAL PLACE       :  39th Floor, PCCW Tower, Taikoo Place,
OF BUSINESS              979 King's Road, Quarry Bay, Hong Kong

TENANT                :

PLACE OF INCORPORATION:

REGISTERED OFFICE     :

                                     PART II
                                     -------

THE BUILDING          :  The multi-storeyed commercial/office building
                         erected as part of the Development erected on
                         Section S and The Remaining Portion of Quarry
                         Bay Marine Lot No. 1 and known as:
                                      PCCW TOWER
                                      Taikoo Place,
                                      979 King's Road,
                                      Quarry Bay,
                                      Hong Kong.

THE PREMISES          :  All Those     th Floor of the Building which for
                         the purposes of identification only are shown
                         and coloured Pink on the th Floor Plan
                         hereto annexed.

                                    PART III
                                    --------

TERM                  :  A term of    Years commencing on the        day of
                                   200  and expiring on the              day of
                         200 .

                                      -52-
<PAGE>

                                     PART IV
                                     -------

RENT FREE  PERIOD      : Notwithstanding  anything  to the  contrary  herein,  a
                         rent free  period of ( ) months from the commencement
                         of the Term shall be given during which rent free
                         period the Tenant

                        (a) shall not be required to pay rent;

                        (b) but shall be obliged to pay rates, Air-
                             Conditioning Charges and Management Charges and
                             other outgoings payable by the Tenant in manner
                             hereinafter mentioned.

                     THE SECOND SCHEDULE ABOVE REFERRED TO
                     -------------------------------------

                                     PART I
                                     ------

                                      RENT

For the period of the Term the rent shall be Hong Kong Dollars
Only  (HKS    ) per calendar month.

                                     PART II
                                     -------

                    PARTICULARS OF AIR-CONDITIONING CHARGES

The Air-conditioning Charge that will be payable with effect from the
commencement of the Term for air-conditioning supplied to the Premises during
Normal Business Hours will be HK$ per month (subject to review).

                                    PART III
                                    --------

                               MANAGEMENT CHARGES

The Management Charge that will be payable with effect from the commencement of
the Term as a due proportion of the cost to the Landlord of providing the
management services to the Common Areas and services of the Development will be
HK$                   per month (subject to review).

                                      -53-
<PAGE>

                                     PART IV
                                     -------

                                     DEPOSIT

[For Cash Deposit only]
(1)  The amount of the deposit that shall be paid to the Landlord in cash on the
     signing hereof in accordance with Clause 9.01 of Section IX shall be in the
     sum of HK$       , equivalent to           months' rent, air-conditioning
     charge and management charge.

[For Bank Guarantee only]
(1)  A bank guarantee for the sum of HONG KONG DOLLARS                      ONLY
     (HKS                ) equivalent to [                       (   ) months']
     rent and air-conditioning charge and management charge shall be by way of
     a bank guarantee issued by a licensed bank in Hong Kong to secure the due
     performance observance and compliance of the terms and conditions of this
     Lease. The bank issuing the bank guarantee shall be approved by the
     Landlord (which approval shall not be unreasonably withheld or delayed).
     The Bank Guarantee shall be issued and produced to the Landlord upon the
     signing of this Lease or the delivery of vacant possession of the Premises
     to the Tenant by the Landlord, whichever date shall be the earlier.

[For Cash Deposit and Bank Guarantee]
     Total Deposit payable under this Lease shall be an amount equivalent to [ ]
     months' rent, air-conditioning charge and management charge payable in the
     following manner:-

(a)  A cash rental deposit for the sum of HONG KONG DOLLARS ONLY (HK$ )
     equivalent to [ ( )] months' rent, air- conditioning charge and management
     charge; and

(b)  A bank guarantee for the sum of HONG KONG DOLLARS ONLY (HKS ) equivalent to
     [ ( )] months' rent, air- conditioning charge and management charge shall
     be by way of a bank guarantee issued by a licensed bank in Hong Kong to
     secure the due performance observance and compliance of the terms and
     conditions of this Lease. The bank issuing the bank guarantee shall be
     approved by the Landlord (which approval shall not be unreasonably withheld
     or delayed). The Bank Guarantee shall be issued and produced to the
     Landlord upon the signing of this Lease or the delivery of vacant
     possession of the

                                      -54-
<PAGE>

     Premises to the Tenant by the Landlord, whichever date shall be the
     earlier.

                      THE THIRD SCHEDULE ABOVE REFERRED TO
                      ------------------------------------

                                      USER

The Tenant will use the Premises for commercial purposes only and for no
other purpose whatsoever.

                      THE FOURTH SCHEDULE ABOVE REFERRED TO
                      -------------------------------------

                               SPECIAL CONDITIONS

1.    HANDING OVER OF POSSESSION

Vacant possession of the Premises shall be given by the Landlord to the
Tenant on the date of commencement of the Term.

Possession of the Premises shall be handed over by the Landlord to the Tenant in
the "as is" condition with the following fixtures and fittings:

(a)  Fully fitted suspended ceilings light boxes, air conditioning grills,
     diffusers, ducting, sprinkler system, grid and tiles.

(b)  A raised floor system incorporating floor tiles and the underfloor power
     grid.

(c)  The voice/data cable, subject to the Tenant and Landlord agreeing a fair
     purchase price. If no agreement can be reached, the voice/data cable shall
     be left in situ at no cost to the Tenant. However, the Tenant is allowed to
     install their own structuring cabling system, but will be required to
     remove all its installation at the end or sooner determination of the
     tenancy, if so required by Landlord.

(d)  All pantries in an "as is" condition with the exception of the moveable
     fittings. The Tenant is not required to reinstate the pantries fixture
     except the plumbing installations, water boiler and drinking water system
     at the end or sooner determination of the tenancy.

                                      -55-
<PAGE>

(e)  Blinds around the windows.

(f)  The power cable up to the MCB box in the room of the tenancy area shall be
     set up at tenant's cost.

2.   OPTION TO RENEW

2.1  If the Tenant shall be desirous of renewing this Lease for a renewed term
     of three 3 years ["the Renewed Term") from the date of expiration of the
     original Term created by this Lease ("the Expiry Date") and shall not later
     than 6 months before the Expiry Date give to the Landlord notice in writing
     of its desire and provided that there shall at that time and at the time of
     the Expiry Date be no outstanding or existing breach or non-observance or
     non-performance of any of the agreements, stipulations, terms or conditions
     herein contained and on the part of the Tenant to be observed and
     performed, the Landlord shall at the expense of the Tenant grant to the
     Tenant a renewal of this Lease for the Renewed Term from the Expiry Date at
     the current market rental for the Premises as at the Expiry Date to be
     determined in accordance with the provisions of Clause 2.2 of this Fourth
     Schedule, but otherwise subject to the same terms, covenants, conditions
     and provisions as are herein contained with the exception of the amount of
     the Air-conditioning Charges and Management Charges payable, the amount of
     the [Deposit/Cash Deposit and Bank Guarantee/Bank Guarantee], the rent free
     period and this Fourth Schedule, but incorporating in place of this Fourth
     Schedule a new Fourth Schedule containing an option for renewal for one
     further term of three (3) years in the terms same as the provisions of
     Clause 2.2 of this Fourth Schedule.

2.2  The following provisions shall apply in relation to the determination
     of the current market rental for the Premises at the Expiry Date:-

                                      -56-
<PAGE>

     (a)  Current market rental shall subject to the provisions of sub-clause
          (d) of this Clause 2.2 mean the current market rental for the Premises
          without making any allowance to reflect or compensate the Tenant for
          the absence of any rent free period or contribution to fitting out
          works or other allowance which might then be the practice in open
          market lettings for a Landlord to make. Such a current market rental
          shall be that which would be payable after the expiry of any such rent
          free or concessionary rent period and after receipt of any such
          contribution or other allowances all of which shall be entirely
          disregarded in any calculation of current market rental.

     (b)  If agreement is reached between the Landlord and the Tenant as to the
          rent to be payable throughout the Renewed Term ("the New Rent") such
          agreement shall be in writing signed by both parties and in such case
          the rent payable during the Renewed Term shall be the New Rent as so
          agreed.

     (c)  If such an agreement has not been made two ( 2 ) months before the
          commencement of the Renewed Term either the Landlord or the Tenant may
          serve a notice upon the other calling for an independent surveyor and
          valuer ("the Surveyor") to be appointed to determine the New Rent. The
          Surveyor may be appointed by agreement between the Landlord and the
          Tenant or In default of such agreement within one month before the
          commencement of the Renewed Term the Surveyor may be appointed at the
          request of either of the parties by the President for the time being
          of the Hong Kong Institute of Surveyors. The Surveyor so appointed
          shall give a written decision with reasons and such decision as to
          what shall be the New Rent

                                      -57-
<PAGE>

          shall (subject to sub-clause (a) of this Clause 2.2) be conclusive and
          binding on the parties hereto.

     (d)  In determining the New Rent the Surveyor shall act as an expert and
          not as an arbitrator and shall take into account the open market rent
          for other whole floor office accommodation elsewhere in the
          Development and/or in similar office buildings in Hong Kong having
          attributes comparable to those of the Building obtainable at the time
          of commencement of the Renewed Term on the following assumptions that
          at that date :-

          (i)  the Premises are fitted out and equipped and fit for immediate
               occupation and use complete with floor and wall coverings, false
               ceilings, raised floors, air-conditioning throughout and
               electrical reticulation and other landlord's finishes fixtures
               and equipment all of a standard commensurate with a high class
               modern office building in Hong Kong and that no work which has
               been carried out thereon by the Tenant or its predecessors in
               title has diminished the rental value of the Premises and that in
               case the Premises have been destroyed or damaged, they have been
               fully reinstated and restored;

          (ii) the Premises are available for letting by a willing landlord to a
               willing tenant without a premium but with vacant possession;

         (iii) that the covenants herein contained on the part of the Tenant
               have been fully performed and observed;

    but disregarding :-

                                      -58-
<PAGE>

          (iv) any effect on rent of the fact that the Tenant has been in
               occupation of the Premises;

          (v)  any goodwill attached to the Premises by reason of the carrying
               on thereat of the business of the Tenant;

          (vi) any effect on rental value of the Premises attributable to any
               special improvement to the Premises or any part thereof carried
               out by the Tenant with the Landlord's consent where required
               (otherwise than in pursuance of an obligation of the Tenant)
               including any special improvements made by the Landlord at the
               expense of the Tenant prior to the commencement or during the
               continuance of the Term;

         (vii) any suspension of rent under Clause 7.01 of this Lease;

     (e)  The Surveyor shall afford to each of the parties an opportunity to
          make representations to him.

     (f)  If the Surveyor shall die delay or become unwilling or incapable of
          acting the President for the time being of the Hong Kong Institute of
          Surveyors or the person acting on his behalf may by writing discharge
          the Surveyor and appoint another in his place.

     (g)  If the New Rent shall not have been determined before the commencement
          of the Renewed Term, then pending determination of the New Rent that
          shall be payable in respect of the Renewed Term, the Tenant shall
          continue to pay on account of the New Rent the rent was payable
          immediately before the beginning of

                                      -59-
<PAGE>

          the Renewed Term and within fourteen (14) days of the determination of
          the New Rent, the Tenant shall pay to the Landlord the difference
          between the rent actually paid by the Tenant during the period pending
          determination as aforesaid and the New Rent payable for the period
          pending determination plus interest on the difference between the old
          rent and the New Rent at the prime lending rate from time to time of
          the Hongkong and Shanghai Banking Corporation Limited from the
          commencement of the Renewed Term until the date of payment and in the
          event of the New Rent being less than the rent actually paid the
          Landlord shall refund to Tenant the difference between the New Rent
          and the rental actually paid by the Tenant during the period pending
          determination plus an interest as aforesaid.

     (h)  The costs and expenses of the Surveyor including the cost of his
          appointment shall be borne by the Landlord and the Tenant in equal
          shares. All other costs and expenses incurred by the Landlord or the
          Tenant in respect of or in connection with any rent review shall be
          borne by themselves separately.

2.3  The Air-conditioning Charges and Management Charges payable by the Tenant
     in respect of the Renewed Term shall initially be those payable under this
     Lease immediately at the Expiry Date, but shall be subject to the same
     provisions for revisions as contained in Clause 2.1 of this Lease.

2.4  The amount of the deposit to be maintained during the Renewed Term,
     pursuant to Clause 9.01 of this Lease shall be a sum equal to (i) one
     month's revised rent payable in respect of the Premises during the Renewed
     Term; (ii) one month's Air-conditioning Charges at the rate from time to
     time payable by the Tenant during the Renewed Term and

                                      -60-
<PAGE>

     (iii) one month's Management Charges at the rate from time to time payable
     by the Tenant during the Renewed Term.

2.5  The Landlord and the Tenant shall enter into a new Lease in respect of a
     Renewed Term, the revised rent, the revised [deposit/cash deposit and bank
     guarantee/bank guarantee] and the other terms and conditions determined
     pursuant to this Clause 2. The Stamp Duty and the Land Registry
     registration fee payable on such new Lease shall be borne by the Landlord
     and the Tenant in equal share. Each of the Landlord and the Tenant shall
     pay its own legal costs of and incidental to the Lease and its counterpart.

                                      -61-
<PAGE>

 The Landlord                           )
                                        )
 SEALED with the Common Seal of         )
                                        )
 PARTNER LINK INVESTMENTS LIMITED       )
                                        )
 and SIGNED by                          )
                                        )
                                        )
                                        )
 in the presence of:-                   )

 SEALED with the Common Seal of         )
                                        )
 and SIGNED by                          )
                                        )
 in the presence of:-                   )
                                        )

RECEIVED the day and year first above written                )
                                                             )
                                                             )
the sum of HONG KONG DOLLARS                                 ) HK$
                                                             ) ===
                                                        ONLY )
                                                             )
being the [Deposit/Cash Deposit1 payable by the              )
                                                             )
Tenant hereunder on signing hereof in accordance with        )
                                                             )
Section IX Clause 9.01 hereof and Part IV of the             )
                                                             )
Second Schedule hereto.                                      )

                                      -62-
<PAGE>

IN WITNESS the parties hereto have caused these presents to be duly executed the
day and year first above written.

SEALED with the Common Seal of                  )
Richly Leader Limited and                       )
SIGNED by                                       )
                                                )
director(s)/person(s) duly authorized by its    )
board of directors whose signature(s) is/are    )
verified by/in the presence of:                 1

SEALED with the Common Seal of                  )
Pacific Century Paramount Real Estate           )
Limited and SIGNED by                           )
                                                )
director(s)/person(s) duly authorized by its    )
board of directors whose signature(s)is/are     )
verified by/in the presence of:                 )

                                      -63-
<PAGE>

                          Dated the     day of       200
                          ------------------------------

                             RICHLY LEADER LIMITED

                                      and

                            PACIFIC CENTURY PARAMOUNT

                           REAL ESTATE COMPANY LIMITED

                               DEED OF APPOINTMENT
                                OF LEASING AGENT
                                   AND MANAGER

                               WOO, KWAN, LEE & LO
                              Solicitors & Notaries
                         Room 2801, Sun Hung Kai Centre,
                                30 Harbour Road,
                               Wanchai, Hong Kong.

                               (19-11-2004)(final)
                        Our Ref: SHK/HFM/LYF/CH/R4R305021

<PAGE>

                      Dated the 21st day of December 2004

                        PARTNER LINK INVESTMENTS LIMITED

                                       And

                              RICHLY LEADER LIMITED

                    ***************************************

                         Agreement for Sale and Purchase

                    ***************************************

                                               WOO, KWAN, LEE & LO,
                                               Solicitors & Notaries
                                          Room 2801, Sun Hung Kai Centre,
                                                 30 Harbour Road,
                                                Wanchai, Hong Kong.

                                          Ref.: SHK/HFM/LYF/CH/R4R305021
                                                 19.11.04 (final)
<PAGE>

                                                                     Appendix II
                                                                     -----------

THIS DEED is made this                             day of

BETWEEN PARTNER LINK INVESTMENTS LIMITED a company incorporated under the laws
of the British Virgin Islands with its registered office situate at P.O. Box
No.957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin
Islands (hereinafter called "the Vendor") of the first part; IPSWICH HOLDINGS
LIMITED a company incorporated in the British Virgin Islands whose registered
office is situate at [                  ](hereinafter called "the Guarantor")
of the second part And RICHLY LEADER LIMITED a company incorporated in Hong Kong
whose registered office is situate at [ ] (hereinafter called "the Purchaser")
of the third part.

WHEREAS :-

(A) By an Agreement for Sale and Purchase dated [                              ]
and made between the Vendor as vendor and the Purchaser as purchaser ("the
Agreement"), the Vendor agreed to sell and the Purchaser agreed to purchase the
Land and the Premises more particularly described in the Schedule hereto ("the
Property") at a consideration of HK$2,808,000,000 and subject to the terms and
conditions thereof.

(B) It is a term and condition of the Agreement that the parties hereto must
enter into this Deed on completion of the sale and purchase of the Property.

 NOW THIS DEED WITNESSETH as follows:-

1    In this Deed the following words and expressions shall have the following
meanings ascribed to them whenever the context so permits :-

"Agent" shall mean Pacific Century Paramount Real Estate Company Limited which
is a subsidiary of the Guarantor, appointed by the Purchaser at the request of
the Vendor as the Purchaser's sole leasing agent and manager in relation to the
leasing and management of the Property on the terms of the Deed of Appointment.

"Deed of Appointment" shall mean the Deed of Appointment of Leasing Agent and
Manager (in the form set out in Appendix 1 of the Agreement) whereby the
Purchaser appoints the Agent as the Purchaser's sole leasing agent in relation
to the leasing of the Property and appoints the Agent as the manager in relation
to the management of the Property.

"Force Majeure" shall mean the occurrence of fire water storm typhoon defective
construction white ants earthquake subsidence of the ground or any calamity
beyond the control of the Purchaser as Landlord or the Tenant/Licenses so as to
render the Property or any part thereof unfit for commercial use or inaccessible
or the Property or any part thereof shall be condemned as a dangerous structure
or a demolition order or closing order has become operative in respect of the
Property of any part thereof.

"Guaranteed Period" shall mean the period of 5 years commencing from the date
immediately following the date of completion of the sale and purchase of the
Property.

<PAGE>

"Guaranteed Monthly Rental" shall mean HK$13,338,000 per month.

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

"Letting Agreements" shall mean licences, agreements for lease/tenancy and
leases/tenancy agreements or renewal licences, tenancy agreements and leases in
respect of the Property or any part(s) thereof.

"Rents/Fees" shall mean rents licence fees and all sums of money payable under
the Letting Agreements.

"Tenants/Licensees" shall mean tenants or licensees of the Property or any
part(s) thereof.

Words importing the singular number only shall, unless the context otherwise
requires, be deemed to include the plural and vice versa and words importing the
masculine gender only shall, unless the context otherwise requires, be deemed to
include the feminine and neuter genders and vice versa. Words importing persons
shall include firms and corporations.

2.   (1) Subject to the provisions of Clause 6, the Vendor hereby undertakes and
covenants with the Purchaser that, on the date of completion and thereafter on
the first business day of every month during the Guaranteed Period, the Vendor
shall pay the Guaranteed Monthly Rental for that month (apportioned if the
period is less than a month) to the Purchaser by way of a cheque drawn in favour
of the Purchaser or by telegraphic transfer to a bank account in Hong Kong
specified in writing by the Purchaser.

     (2) Ln consideration of the Vendor's undertakings and covenants under
paragraph (1) above, the Purchaser hereby undertakes and covenants with the
Vendor that all Rents/Fees payable during the Guaranteed Period will be paid to
the Vendor.

3. For the avoidance of doubt, (a) the Guaranteed Monthly Rental is payable
irrespective of the actual amount of Rents/Fees and other income received by
the Agent and/or the Vendor from the Tenants/Licensees and the cost and
expenses required to be expended by the Agent and/or the Vendor in respect of
the Property; and (b) if the actual amount of net income referred to in
paragraph (a) above shall be greater than the Guaranteed Monthly Rental, the
Vendor shall be entitled to retain the excess and the Purchaser shall have no
claim against the Vendor whatsoever in respect of such excess.

4.   (1) Except as provided in Clause 4(2), all the expenses payable incurred or
to be incurred for or in respect of the Property during the Guaranteed Period
will be borne by the Vendor and/or the Agent, including without limitation the
following (irrespective of whether the same should be payable by the
Tenants/Licensees under the Letting Agreements) :-

     (a)  all management expenses to be incurred for the management of the
          Property, air-conditioning charges and other outgoings in respect of
          the

                                       2
<PAGE>

          Property including management fees and other sums payable to the
          Manager under the Lease and including goods and services tax and
          other similar turnover tax levied or chargeable on the Rents/Fees
          payable by the Tenants/Licensees under the Letting Agreements; and

     (b)  all expenses, costs, outgoings and disbursements incurred by the Agent
          in performance of its obligations and in exercise of its powers under
          the Deed of Appointment, which include but are not limited to all
          advertising and promotion fees, professional fees, commissions payable
          to estate agents, costs and expenses for repairing and maintaining the
          Property in tenantable repair and condition, reinstatement costs for
          the disabled toilets (save and except those costs and expenses of a
          capital or non-recurring nature, expenditure of works required by any
          order or notice issued on or after the date of the Agreement from any
          government department or other competent authority, property tax,
          profit tax, goods and services tax and other similar tax (levied or
          chargeable on the Guaranteed Monthly Rental, if any), premium payable
          on the insurance policy (if any) which shall be borne by the
          Purchaser), legal costs and stamp duty payable for the negotiation,
          preparation, execution and enforcement of all Letting Agreements.

     (2) The Purchaser shall be responsible for payment of any expenditure of a
capital or non-recurring nature, any expenditure of works required by any order
or notice issued on or after the date of the Agreement from any government
department or other competent authority, property tax, profit tax, goods and
services tax and other similar tax (levied or chargeable on the Guaranteed
Monthly Rental, if any), premium payable on the insurance policy (if any).

5. It is an essential condition of this Deed that the Deed of Appointment shall
be executed by the Purchaser in favour of the Agent upon the execution of this
Deed thereby empowering the Agent inter alia, to do such acts and things in
relation to the leasing of the Property on the terms therein contained including
but not limited to demand, collect, receive and recover from all present and
future Tenants/Licensees of the Property the Rents/Fees from time to time and to
account to the Vendor all such Rents/Fees actually received by the Agent in
accordance with the terms of this Deed.

6.1 The Purchaser shall take out business interruption or loss of income
insurance in respect of the Property ("BI Policy") with a reputable insurance
company acceptable to the Guarantor (the "Insurer") effective from the date of
this Deed for the Insured Amount for a disruption period of at least 12 months
and on such other terms and conditions approved by the Guarantor, including but
not limited to a condition that the policy may not be cancelled, modified or
restricted without the prior written consent of the Guarantor. In this Clause,
"Insured Amount" means the product of the Market Rent and 544,146; and "Market
Rent" means, for each 12 month period commencing on the date of this Deed, the
aggregate of the average open market rent and management fee, air-conditioning
charges and other sums payable by tenants per square foot per month for the
Property prevailing on the first day of that period as determined by an
independent firm of qualified surveyors in Hong Kong. The surveyors shall be
jointly instructed by the Vendor and the Purchaser who shall bear the costs of
the surveyors in

                                       3
<PAGE>

equal shares. Provided that the Insured Amount for the first 12 month period
commencing on the date of this Deed is agreed to be HK$13,168,333.

6.2 The Purchaser shall duly pay all premiums and other sums payable and take
all necessary steps to keep the BI Policy in full force and effect and shall
promptly deliver to the Vendor copies of all premium payment receipts and other
notices or information relating to the BI Policy. The Purchaser shall not,
without the prior written consent of the Vendor, waive, release, settle,
compromise or abandon any claim under the BI Policy.

6.3 On the occurrence of any of the following events or circumstances, namely:

          (a)  the Property or any part thereof at any time during the
               Guaranteed Period being damaged or destroyed by Force Majeure so
               as to be unfit for occupation and use such that under the terms
               of the Letting Agreements the Rent/Fees thereby reserved or a
               fair proportion thereof according to the nature and extent of the
               damage sustained is suspended; or

          (b)  the Property or any part thereof at any time during the
               Guaranteed Period being damaged or destroyed by Force Majeure so
               as to be incapable of being let out

     (i)  the Purchaser shall forthwith make a claim under the BI Policy and
          instruct the Insurer to pay the insurance proceeds to the Vendor in
          full or, if the proceeds were paid to the Purchaser, the Purchaser
          shall hold the same on trust for the Vendor and promptly pay the same
          over to the Vendor in full;

     (ii) if for any reason the Vendor does not receive the insurance proceeds
          for the loss of income for a particular month within the next 4
          months, the Purchaser shall pay to the Vendor an amount equal to such
          insurance proceeds within 14 days and, for this purpose, the Purchaser
          hereby irrevocably authorize the Vendor to deduct such sum from the
          Guaranteed Monthly Rental next due and payable to the Purchaser
          provided that the Purchaser shall not be under any obligation to pay
          over insurance proceeds or to pay to the Vendor an amount equal to
          such insurance proceeds if the BI Policy is vitiated or rendered
          invalid or if payment of the policy moneys thereunder is refused as a
          result of any act or default of the Agent; and

    (iii) the Vendor shall continue to pay the Guaranteed Monthly Rental to the
          Purchaser in full notwithstanding the occurrence of the events or
          circumstances stated above for so long as the BI Policy remains in
          full force and effect (unless the BI Policy is vitiated or rendered
          invalid or if payment of the policy moneys thereunder is refused as a
          result of any act or default of the Agent) and subject only to the
          deduction (if applicable) referred to in paragraph (ii) above.

                                       4
<PAGE>

6.4 Any substantial building and/or renovation works to the Property or any part
thereof ("Substantial Works") shall require the joint approval of the Vendor and
the Purchaser. If Substantial Works are required (whether initiated by the
Purchaser or required by applicable law or relevant governmental authorities),
the Vendor and the Purchaser shall jointly appoint an independent firm of
qualified surveyors in Hong Kong to assess the loss of rental as a result of
such Substantial Works (the "Rental Loss") and the Vendor shall be entitled to
deduct the Rental Loss from the Guaranteed Monthly Rental next due and payable
following the assessment. The assessment of the surveyors shall be final and
binding on the parties and the costs of the surveyor shall be borne by the
Vendor and the Purchaser in equal shares.

7. Save with the prior written consent of the Vendor and the Purchaser (such
consents not to be unreasonably withheld or delayed), the Vendor shall procure
that the Agent shall not carry out any substantial building or renovation works
to the Property or any part thereof.

8. This Deed shall be a continuing undertaking for the Guaranteed Period unless
earlier terminated in any of the following events:- (i) on the termination by
the Purchaser (as the Owner under the Deed of Appointment) of the appointment of
the Agent under Clause 15 (a) of the Deed of Appointment or (ii) upon TMW Asia
Property Fund I GmbH & Co., KG. ceasing to be the ultimate beneficial owner of
at least 50% of the entire issued share capital of the Purchaser, or (iii) the
Purchaser ceasing to be the legal and/or beneficial owner of the Property, and
calculation of the amount payable by the Vendor to the Purchaser under Clause 2
shall be pro-rated to the date of expiry of the Guaranteed Period or the date of
termination, whichever is the earlier.

9. The last installment of the Guaranteed Monthly Rental shall be payable on the
last day of the Guaranteed Period or on the date on which this Deed is
terminated, whichever is the earlier, after deducting any sum provided in Clause
6 (if applicable). The Vendor shall provide an apportionment account to the
Purchaser on or before the date of payment of the last instalment of the
Guaranteed Monthly Rental.

10. (1) In consideration of the Purchaser entering into the Agreement and this
Deed with the Vendor, the Guarantor hereby :-

     (a)  guarantees to the Purchaser the due and punctual performance and
          observance by the Vendor of its obligations, commitments and
          undertakings under and/or pursuant to this Deed;

     (b)  indemnifies the Purchaser against all and any actions, proceedings,
          claims, liabilities, losses, damages, costs and expenses which the
          Purchaser may suffer or incur as a result of or in relation to any
          breach or default by the Vendor of its obligations, commitments or
          undertakings under or pursuant to this Deed.

     (2) If and whenever the Vendor defaults for any reason whatsoever in the
performance of any of its obligation or liability undertaken or expressed to be
undertaken by it under or pursuant to this Deed, the Guarantor shall forthwith
upon written demand from the Purchaser perform (or procure performance of) and
satisfy (or procure the satisfaction of) the obligation or liability in regard
to which such default has been made in the manner prescribed by this Deed and so
that the same benefits shall be

                                       5
<PAGE>

conferred on the Purchaser as it would have received if such obligation or
liability had been duly performed and satisfied by the Vendor.

     (3) As a separate and independent stipulation, the Guarantor agrees that
any obligation expressed to be undertaken by the Vendor (including, without
limitation, any moneys expressed to be payable under this Deed) which may not be
enforceable against or recoverable from the Vendor by reason of any legal
limitation, disability or incapacity on or of the Vendor or any other fact or
circumstance shall nevertheless be enforceable against and recoverable from the
Guarantor as though the same had been incurred by the Guarantor and the
Guarantor was the sole or principal obligor in respect thereof and shall be
performed or paid or procured to be performed and paid by the Guarantor on
written demand from Purchaser.

     (4) The obligations of the Guarantor under this Deed are and will remain in
full force and effect by way of continuing security until all obligations,
commitments, undertakings, warranties and indemnities under this Deed shall have
been performed or satisfied and no sum remains payable by the Vendor under or
pursuant to this Deed.

     (5) The Guarantor shall not be discharged, nor shall its liabilities be
affected, by anything, which would not discharge it or affect its liability if
it were the sole principal debtor including, any time, indulgence, waiver or
consent at any time given to the Vendor or any other person; any written
amendment to any provision of this Deed (unless without consent of the
Guarantor) ,the making or absence of any demand on the Vendor or any other
person for payment, the enforcement or absence of enforcement of this Deed
against the Vendor, the insolvency, winding-up, amalgamation, reconstruction or
reorganisation of the Vendor (or the commencement of any of the foregoing), the
illegality, invalidity or unenforceability of or any defect in any provision of
this Deed or any of the obligations of the Vendor, or by reason of any other
dealing, matter or thing which, but for the provisions of this Clause 10(5),
could or might operate to affect or discharge all or any part of the obligations
and liabilities of the Guarantor hereunder.

11. No failure or delay on the part of the Vendor or the Purchaser to exercise
any power, right or remedy under this Deed shall operate as a waiver thereof,
nor shall any single or partial exercise by the Vendor or the Purchaser of any
power, right or remedy preclude any other or further exercise thereof or the
exercise of any other power, right or remedy. The remedies provided in this Deed
are cumulative and are not exclusive of any remedies provided by law.

12. No assurance, security or payment which may be avoided under any enactment
relating to bankruptcy or winding up and no release, settlement or discharge
which may have been given or made on the faith of any such assurance, security
or payment shall prejudice or affect the rights of the Vendor or the Purchaser
to recover from the other party or from the Guarantor to the full extent of this
Deed.

13. This document is to be returnable to the Vendor for cancellation when all
obligations, commitments, undertakings, warranties and indemnities under this
Deed shall have been performed or satisfied and no sum remains payable by the
Vendor under or pursuant to this Deed.

14. This Deed is personal to the Purchaser and neither the benefit nor the

                                       6
<PAGE>

obligations hereof shall be assigned by the Purchaser provided that the
Purchaser may assign its rights and benefits under this Deed in favour of the
mortgagees from time to time of the Property and the mortgagees of the Purchaser
may also assign the rights and benefits of this Deed when it exercises the power
of sale to the subsequent purchaser but not further or otherwise.

15. If the Purchaser terminates the appointment of the Agent pursuant to Clause
15(c) of the Deed of Appointment, the Guarantor shall nominate three companies
(which may be subsidiaries of the Guarantor) to act as the agent of the
Purchaser for the remainder of the Guaranteed Period on the same terms and
conditions as the Deed of Appointment. The Purchaser may in its discretion
appoint one of the companies nominated by the Guarantor or such other company as
the Purchaser may consider appropriate to be the replacement agent provided that
if the Purchaser elects to appoint a company not nominated by the Guarantor then
the Vendor and the Guarantor shall forthwith cease to have any further
obligations under this Deed.

16. This Deed shall be governed by and construed in accordance with the laws of
Hong Kong and the parties hereto agree to submit to the non-exclusive
jurisdiction of the courts of Hong Kong.

17. The Vendor hereby expressly excepts and reserves unto itself the right,
after the Guaranteed Period, at its own costs and expense to claim from the
Tenants/Licensees of the Property any arrears of rent and other monies due and
owing under the Letting Agreements up to and inclusive of the date of expiry of
the Guaranteed Period and all damages in respect of any breach of the Letting
Agreements before expiry of the Guaranteed Period. The Purchaser shall give all
reasonable assistance to the Vendor to recover such arrears of rent and other
monies from the Tenants/Licensees on condition that the Vendor pays all costs
and expenses in connection with such recovery. The obligations of the Purchaser
contained in this Clause shall remain effective notwithstanding the expiry of
the Guaranteed Period. In the event the Tenants/Licensees shall settle and pay
to the Purchaser any arrears of rent (which accrued on or before the date of
expiry of the Guaranteed Period) the Purchaser shall account and refund to the
Vendor such arrears of rent collected by the Purchaser within days of receipt.

                                       7
<PAGE>

                                    SCHEDULE
                                    --------

                                    The Land
                                    --------

ALL THAT Portion of the Remaining Portion of Quarry Bay Marine Lot No.1 as shown
coloured Red on Plan 1 annexed to the Lease (as defined in the Agreement)

                                  The Premises
                                  ------------

ALL THOSE 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. I:

(1)  All 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 an Agreement for Lease dated
     21st May 1992 and registered in the Land Registry by Memorial No.5342490 as
     supplemented by a Supplemental Agreement dated 13th December 2000 and
     registered in the Land Registry by Memorial No.8276621 and the Lease dated
     13th December 2000 and registered in the Land Registry by Memorial
     No.8276622 as rectified by a Deed of Rectification and Confirmation dated
     12th March 2001 and registered in the Land Registry by Memorial No8340656
     issued pursuant thereto (the Lease Memorial No8340656 as so rectified "the
     Lease"); and

2)   All 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)  All 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

HELD for the residue of the term created under the Lease.

                                       8
<PAGE>

IN WITNESS the parties hereto have caused these presents to be duly executed the
day and year first above written.

SEALED with the Common Seal of                    )
PARTNER LINK INVESTMENTS                          )
LIMITED and SIGNED by                             )
                                                  )
director(s)/person(s) duly authorized by its      )
board of directors whose signature(s) is/are      )
verified by/in the presence of:                   )

SEALED with the Common Seal of                    )
RICHLY LEADER LIMITED and                         )
SIGNED by                                         )
                                                  )
director(s)/person(s) duly authorized by its      )
board of directors whose signature(s) is/are      )
verified by/in the presence of:                   )

SEALED with the Common Seal of                    )
IPSWICH HOLDINGS LIMITED Pad                      )
SIGNED by                                         )
                                                  )
director(s)/person(s) duly authorized by its      )
board of directors whose signature(s) is/are      )
verified by/in the presence of:                   )

<PAGE>

                Dated the         day of                    200
                ------------------------------------------------

                        PARTNER LINK INVESTMENTS LIMITED

                                      and
                             RICHLY LEADER LIMITED

                                      and

                            IPSWICH HOLDINGS LIMITED

                              --------------------
                                      DEED

                                       OF

                                RENTAL GUARANTEE
                              -------------------

                               WOO, KWAN, LEE & LO
                             Solicitors & Notaries
                         Room 2801, Sun Hung Kai Centre,
                                30 Harbour Road,
                               Wanchai, Hong Kong.

                              (19-1 1-2004)(final)
                        Our Ref: SHK/KFM/LYF/CH/R4R305021

<PAGE>

                      Dated the 21st day of December 2004

                        PARTNER LINK INVESTMENTS LIMITED

                                       And

                              RICHLY LEADER LIMITED

                    ***************************************

                         Agreement for Sale and Purchase

                    ***************************************

                                               WOO, KWAN, LEE & LO,
                                               Solicitors & Notaries
                                          Room 2801, Sun Hung Kai Centre,
                                                 30 Harbour Road,
                                                Wanchai, Hong Kong.

                                          Ref.: SHK/HFM/LYF/CH/R4R305021
                                                 19.11.04 (final)Exhibit 4(ss)

Dated: 19 January 2005                                            EXECUTION COPY

Subscription Agreement

between
PCCW Limited
as Company

China Netcom Group Corporation (BVI) Limited

as Subscriber

and

China Network Communications Group Corporation
(GRAPHIC OMITTED)

as China Netcom

relating to

shares in the capital of PCCW Limited

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

<PAGE>

                                    CONTENTS

1. Definitions and Interpretation .............................................1

2. Agreement to Subscribe .....................................................4

3. Conditions of the Subscription .............................................5

4. Completion of the Subscription .............................................6

5. Representations, Warranties and Undertakings of the Company ................9

6. Representations, Warranties and Undertakings of the Subscriber
   and China Netcom ..........................................................11

7. The Group's operations in the PRC .........................................15

8. Certain Company Undertakings ..............................................16

9. Guarantee .................................................................25

10. No "acting in concert" ...................................................26

11. Confidentiality ..........................................................26

12. Announcements ............................................................27

13. Notices ..................................................................28

14. Waiver of Immunity .......................................................29

15. Law and Arbitration ......................................................30

16. Contracts (Rights of Third Parties) Act 1999 .............................30

17. Provisions Relating to this Agreement ....................................30

SCHEDULE 1 : THE COMPANY WARRANTIES ..........................................33

SCHEDULE 2 : LIMITATIONS ON THE COMPANY'S LIABILITY ..........................36

<PAGE>

--------------------------------------------------------------------------------

THIS AGREEMENT is dated 19 January 2005 and made

BETWEEN:

(1)  PCCW LIMITED, (the "Company"), a company incorporated in Hong Kong with
     limited liability and whose registered office is at 39th Floor, PCCW Tower,
     TaiKoo Place, 979 King's Road, Quarry Bay, Hong Kong;

(2)  CHINA NETCOM GROUP CORPORATION (BVI) LIMITED, (the "Subscriber"), a company
     incorporated in the British Virgin Islands and whose registered office is
     at P.O. Box 3140, Wickhams Cay 1, Road Town, Tortola, British Virgin
     Islands (Business registration number 341457); and

(3)  CHINA NETWORK COMMUNICATIONS GROUP CORPORATION (GRAPHIC OMITTED), ("China
     Netcom"), a state-owned enterprise established under the laws of the
     People's Republic of China and whose registered office is at No.1 Beihuan
     Donglu, Beijing Development Area, Beijing 100176, PRC.

Background:

(A)  At the date of this Agreement, the Company has an authorised share capital
     of HK$1,600,000,000 divided into 6,400,000,000 Shares, of which
     5,374,287,061 Shares have been issued and are fully paid up.

(B)  All of the issued Shares are currently listed on the Stock Exchange.

(C)  The Company has agreed to issue and the Subscriber has agreed to subscribe
     for the Subscription Shares on the terms and subject to the conditions set
     out in this Agreement.

(D)  China Netcom has agreed to guarantee the obligations of the Subscriber
     under this Agreement.

THE PARTIES AGREE THAT:

1.   Definitions and Interpretation

1.1  Definitions

     In this Agreement (including the recitals above), the following expressions
     shall, unless the context requires otherwise, have the following meanings:

     "Articles" means the Articles of Association of the Company;

     "associate" has the meaning ascribed to it in the Listing Rules;

     "Authority" means any competent governmental, administrative, supervisory,
     regulatory, judicial, determinative, disciplinary, enforcement or tax
     raising body, authority, agency, board, department, court or tribunal of
     any jurisdiction and whether supranational, national, regional or local;

     "Board" means the board of directors of the Company;

                                       1
<PAGE>

     "Broadcasting Ordinance" means the Broadcasting Ordinance (Chapter 562 of
     the Laws of Hong Kong);

     "Business Day" means any day (excluding a Saturday) on which banks
     generally are open for business in Hong Kong;

     "CNC Group" means China Netcom and its Subsidiaries and "member of the CNC
     Group" shall be construed accordingly;

     "CNC HK" means China Netcom Group Corporation (Hong Kong) Limited, a
     Subsidiary of China Netcom, the shares of which are listed on the Stock
     Exchange;

     "Completion Date" means the second Business Day after the date upon which
     the last of the Conditions (except such Conditions which are expressed to
     be satisfied on or as at the Completion Date) has been satisfied or, where
     applicable, waived provided that it shall be a date no later than 15 June
     2005, or such other time and/or date as the Parties may agree in writing;

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

     "Company Warranties" means the representations and warranties to be given
     by the Company set out in Schedule 1;

     "Conditions" means the conditions to completion of the Subscription set out
     in Clause 3.1;

     "Data Room" means the copy documents relating to the affairs of the Group
     to which the Subscriber has been afforded access and which are listed in
     the index to the Data Room provided to the Subscriber;

     "Disclosure Letter" means the letter dated the date hereof written and
     delivered by or on behalf of the Company to the Subscriber;

     "Disqualified Person" means a person who is, or who is considered by the
     Broadcasting Authority of Hong Kong to constitute, a "disqualified person"
     within the meaning of the Broadcasting Ordinance;

     "Encumbrances" means liens, charges and encumbrances, claims, options and
     third party rights;

     "Group" means the Company and its Subsidiaries and the expression "member
     of the Group" shall be construed accordingly;

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

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

     "Listing Rules" means the Rules Governing the Listing of Securities on the
     Stock Exchange and the expression "Listing Rule" shall be construed
     accordingly;

     "Parties" means the named parties to this Agreement and their respective
     successors and permitted assigns and the expression "Party" shall be
     construed accordingly;

                                       2
<PAGE>

     "PRC" means the People's Republic of China excluding Hong Kong, the Macau
     Special Administrative Region of the People's Republic of China and Taiwan;

     "PRC Business Development Committee" shall have the meaning ascribed
     thereto in clause 7.1;

     "PRC Operations" shall have the meaning ascribed thereto in clause 7.1;

     "Principal Officer" means a person who is, or is considered by the
     Broadcasting Authority of Hong Kong to constitute, a "principal officer"
     within the meaning of the Broadcasting Ordinance;

     "Proceedings" means any legal action or proceedings, including arbitration,
     in connection with this Agreement;

     "SFC" means the Securities and Futures Commission of Hong Kong;

     "SFO" means the Securities and Futures Ordinance (Chapter 571 of the Laws
     of Hong Kong);

     "Shares" means shares of HK$0.25 each in the capital of the Company;

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

     "Subscription" means the subscription by the Subscriber for the
     Subscription Shares on the terms and subject to the conditions set out in
     this Agreement;

     "Subscription Announcement" means the press announcement in agreed form to
     be issued jointly by the Company and China Netcom in substantially such
     form immediately following the execution of this Agreement (or with such
     amendments as agreed by the Parties or as may be required by the SFC and/or
     the Stock Exchange);

     "Subscription Price" means HK$5.90 per Subscription Share;

     "Subscription Shares" means 1,343,571,766 new Shares;

     "Subsidiary" has the same meaning as in Section 2 of the Companies
     Ordinance as at the date hereof;

     "Substantial Shareholders" means Pacific Century Regional Developments
     Limited, Pacific Century Group Holdings Limited and Pacific Century
     Diversified Limited and "Substantial Shareholder" means any one of them;

     "Substantial Shareholders Anti-Dilution Agreements" means the agreements
     dated the date hereof entered into between the Company and each Substantial
     Shareholder and pursuant to which each Substantial Shareholder has been
     granted anti-dilution rights substantially similar to those rights to be
     granted to the Subscriber pursuant to clause 8.5 of this Agreement (subject
     in each case to approval by the shareholders of the Company as referred to
     in clause 3.1(A) below);

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

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

                                       3
<PAGE>

1.2  Construction and Certain References

     In this Agreement:

     (A)  any reference to a document being "in agreed form" means in the form
          of the document or the draft thereof signed for identification on
          behalf of the Parties (and such other parties as may be relevant) with
          (in the case of a draft) such alterations (if any) as may be agreed
          between the Parties (and such other parties as may be relevant);

     (B)  references to the singular shall include the plural and vice versa and
          references to the masculine, the feminine and the neuter shall include
          each other such gender;

     (C)  "person" includes any individual, partnership, body corporate,
          corporation sole or aggregate, state or agency of a state, and any
          unincorporated association or organisation, in each case whether or
          not having separate legal personality;

     (D)  "company" includes any body corporate, wherever incorporated or
          existing;

     (E)  references to recitals, clauses, sub-clauses and schedules are
          references to the recitals, clauses and sub-clauses of, and schedules
          to, this Agreement;

     (F)  (save as otherwise expressly stated herein), references to any
          statute, statutory provision, Listing Rule or rule of the Takeovers
          Code includes a reference to that statute, statutory provision,
          Listing Rule or rule of the Takeovers Code as from time to time,
          amended, extended or re-enacted;

     (G)  all references in this Agreement in relation to any time, date or
          period shall mean Hong Kong time;

     (H)  words introduced by the word "other" shall not be given a restrictive
          meaning because they are preceded by words referring to a particular
          class of acts, matters or things; and

     (I)  general words shall not be given a restrictive meaning because they
          are followed by words which are particular examples of the acts,
          matters or things covered by the general words and the word
          "including" shall be construed without limitation.

1.3  Headings

     Headings are inserted for convenience only and shall not affect the
     interpretation of this Agreement.

2.   Agreement to Subscribe

2.1  Subscription

     The Subscriber agrees to subscribe for, and the Company agrees to issue,
     the Subscription Shares at the Subscription Price, free from Encumbrances
     on the terms and subject to the conditions set out in this Agreement.

                                       4
<PAGE>

2.2  Subscription Shares

     The Company agrees that the Subscription Shares will, when fully paid, rank
     pari passu in all respects with the other Shares in issue or to be issued
     by the Company on or prior to the Completion Date with the right to all
     dividends and other distributions declared or resolved to be paid at any
     time on or after the date of allotment.

3.   Conditions of the Subscription

3.1  Conditions

     Completion of the Subscription is conditional upon:

     (A)  the passing by the shareholders of the Company (being such
          shareholders as are allowed to vote under the Listing Rules or
          permitted by the Stock Exchange to vote) at an extraordinary general
          meeting of the Company of a resolution in agreed form (or with such
          changes as are required by the Stock Exchange or the SFC) to:

          (1)  increase the authorised share capital of the Company to
               HK$2,500,000,000 comprising of 10,000,000,000 Shares;

          (2)  grant to the directors of the Company a specific mandate to
               allot, issue and deal with the Subscription Shares; and

          (3)  approve the anti-dilution rights granted in favour of China
               Netcom contained in clause 8.5 below and the anti-dilution rights
               granted in favour of each of the Substantial Shareholders
               pursuant to the Substantial Shareholders Anti- Dilution
               Agreements;

     (B)  (1) listing of and permission to deal in all the Subscription Shares
              being granted by the Listing Committee of the Stock Exchange; and

          (2)  the listing and permission referred to in Condition 3.1(B)(1) not
               subsequently being revoked prior to the Completion Date;

     (C)  delivery by the Subscriber to the Company on the Completion Date of a
          legal opinion from British Virgin Islands counsel relating to, among
          other things, the capacity and authority of the Subscriber to enter
          into this Agreement and perform its obligations hereunder, such
          opinion to be in form and substance satisfactory to the Company;

     (D)  delivery by China Netcom to the Company on the Completion Date of a
          legal opinion from PRC counsel relating to, among other things, the
          capacity and authority of China Netcom to enter into this Agreement
          and perform its obligations hereunder and the governmental, regulatory
          or similar consents required from any Authority of the PRC required by
          the Subscriber and/or China Netcom to enter into, and to perform their
          respective obligations under this Agreement, such opinion to be in
          form and substance satisfactory to the Company;

     (E)  the obtaining by China Netcom of such consent or approval of a PRC
          governmental body or regulatory authority as is required for China
          Netcom and the Subscriber to enter into and perform their obligations
          under this Agreement; and

                                       5
<PAGE>

     (F)  none of the Company Warranties being found to be, or no event
          occurring or matter arising which renders any of the Company
          Warranties, untrue or incorrect in any material respect on and as at
          the Completion Date (and, but without prejudice to any other rights of
          any of the Parties under this Agreement, for the purposes of this
          sub-clause, a Company Warranty will be deemed to be untrue or
          incorrect in a material respect if the liability of the Company from
          the resulting claim would be in excess of US$100 million).

3.2  Fulfilment

     (A)  The Subscriber and China Netcom shall use their reasonable endeavours
          to procure the fulfilment of the Conditions in clauses 3.1(C), 3.1(D)
          and 3.1(E), and in the case of the Condition in clause 3.1(E), shall
          notify the Company immediately upon the satisfaction thereof.

     (B)  The Company shall use its reasonable endeavours to procure the
          fulfilment of the Condition in clauses 3.1(A) and 3.1(B).

     (C)  The Company, China Netcom and the Subscriber shall each use its
          respective reasonable endeavours to procure the fulfilment of the
          Condition in clause 3.1(A) and in particular shall furnish such
          information, supply such documents, give such undertakings and do all
          such acts and things as may reasonably be required by each other, the
          SFC, the Stock Exchange and/or any Authority in connection with the
          fulfilment of such Conditions.

     (D)  Should any Party become aware of anything which will or is reasonably
          likely to prevent any of the Conditions from being satisfied, it shall
          forthwith disclose the same to the others.

3.3  Non-Fulfilment

     (A)  The Condition in clause 3.1(F) may be waived by the Subscriber. The
          Conditions in clauses 3.1(C) and 3.1(D) may be waived by the Company.

     (B)  If the Conditions (except such Conditions which are expressed to be
          satisfied on or as at the Completion Date) are not each fulfilled or
          waived in writing by the relevant Party on or before 13 June 2005 or
          such later date as may be agreed between the Company and the
          Subscriber, this Agreement shall terminate and none of the Parties
          will have any claim against the other for costs, damages, compensation
          or otherwise save for any antecedent breach (including, for the
          avoidance of doubt, any breach of clauses 3.2 or 6).

4.   Completion of the Subscription

4.1  Company's Obligations

     Subject to the fulfilment of the Conditions and subject to the performance
     by the Subscriber of its obligations under clause 4.2, completion of the
     Subscription shall take place at the offices of the Company (or at such
     other place as may be agreed upon in writing by the Parties) on the
     Completion Date, at which time the Company shall:

     (A)  allot and issue to the Subscriber the Subscription Shares and shall
          promptly thereafter register the Subscriber as a member of the Company
          and shall cause to

                                       6
<PAGE>

          be delivered to the Subscriber definitive certificates of title in
          respect thereof in the name of the Subscriber in board lots (as nearly
          as practicable);

     (B)  procure that the following appointments be made, effective on the
          Completion Date:

          (1)  Mr. Zhang Chunjiang, Dr. Tian Suning and Dr. Fan Xingcha as
               members of the Board;

          (2)  Dr. Tian Suning as an additional deputy chairman of the Board;
               and

          (3)  each of the persons named in the left column below as a member of
               the committee referred to in the right column opposite his/her
               name:

               Dr. Tian Suning         The Executive Committee

               Dr. Fan Xingcha         The Finance and Management Committee

               Dr. Tian Suning         The Remuneration Committee

               Mr. Zhang Chunjiang     The Nomination Committee

               Mr. Zhang Chunjiang     The Regulatory Compliance Committee

               Dr. Tian Suning and
               Dr. Fan Xingcha         PRC Business Development Committee

     (C)  procure a resolution of the Board to be passed confirming the
          Company's intention that it shall, during the 18 month period
          commencing on the Completion Date, explore opportunities for expanding
          the PRC Operations and that, subject to satisfaction of the Group's
          capital investment approval procedures and the identification of
          appropriate investment opportunities, it presently intends to seek to
          invest up to HK$5 billion in expanding its PRC Operations;

     (D)  deliver to the Subscriber certified copies of the resolution passed by
          the Shareholders of the Company pursuant to clause 3.1(A);

     (E)  deliver to the Subscriber certified copies of the resolutions of the
          directors of the Company (or a committee) allotting the Subscription
          Shares pursuant to clause 4.1(A), making the appointments pursuant to
          clause 4.1(B) and confirming the Company's intentions in relation to
          the expansion of the PRC Operations pursuant to clause 4.1(C);

     (F)  deliver to the Subscriber a certificate in agreed form confirming,
          amongst other things, that there has been no material adverse change
          since 30 September 2004 and a letter from the Company in agreed form
          confirming the intention to reduce the number of directors on the
          Board; and

     (G)  deliver a certified true copy of the permission from the Listing
          Committee of the Stock Exchange referred to in clause 3.1(C).

                                       7
<PAGE>

4.2  Subscriber's Obligations

     At completion of the Subscription the Subscriber shall make or procure the
     making of payment to the Company, in same day cleared funds, of the
     aggregate Subscription Price of the Subscription Shares, to the bank
     account nominated for that purpose by the Company not less than three
     Business Days prior to the Completion Date, or in such other manner as may
     be agreed in writing between the Parties.

4.3  Failure to Complete

     If the provisions of clause 4.2 are not complied with by the Subscriber,
     the Company may defer completion of the Subscription to a date determined
     at the Company's sole discretion or terminate this Agreement without
     liability of any kind and without prejudice to any rights the Company has
     against any other Party in respect of any antecedent breach of this
     Agreement.

4.4  Alternate Subscriber

     (A)  Provided that the Subscriber gives written notice in accordance with
          clause 4.4(B), the Subscriber shall be entitled to assign all (but not
          part only) of its rights in and to this Agreement (including the right
          to subscribe for and be issued and allotted the Subscription Shares at
          completion of the Subscription and the rights and benefit of and to
          the Company Warranties) to a company which is wholly-owned by the
          Subscriber (the "Alternate Subscriber"), provided that:

          (1)  at completion of the Subscription the Alternate Subscriber is a
               wholly-owned subsidiary of the Subscriber and an indirect
               wholly-owned subsidiary of China Netcom;

          (2)  on or before the Completion Date, the Alternate Subscriber enters
               into and delivers to China Netcom and to the Company an agreement
               in a form satisfactory to the Company undertaking to comply with
               the obligations of the Subscriber under this Agreement (including
               giving representations and warranties relating to itself similar
               to those contained in clause 6 of their Agreement relating to the
               Subscriber);

          (3)  the legal opinion referred to in clause 3.1(C) and (D) shall also
               relate to the Alternate Subscriber and the agreement referred to
               in paragraph (2) above; and

          (4)  the Subscriber shall remain liable for any breach by it of this
               Agreement prior to such assignment, and shall remain bound to
               perform and comply with all its covenants, undertakings and
               obligations under this Agreement.

     (B)  If the Subscriber intends to assign its rights and interest in and to
          this Agreement pursuant to clause 4.4(A), the Subscriber shall notify
          the Company in writing of its intention to do so not less than five
          Business Days prior to the Completion Date. For the avoidance of
          doubt, the Subscriber shall not be entitled to assign, transfer or
          otherwise dispose of all or any of its obligations under this
          Agreement. If the Subscription Shares are issued and allotted to an
          Alternate Subscriber pursuant to this clause, the references to the
          "Subscriber" in clauses 4.1, 6.3(B), 8.5(M), 8.7(A) and 8.7(B) shall
          be deemed thereafter to refer to the "Alternate Subscriber", and
          references to "Subscriber" in clause 6.4 shall be deemed to refer to
          both the Subscriber and Alternate Subscriber.

                                       8
<PAGE>

5.   Representations, Warranties and Undertakings of the Company

5.1  Representations and Warranties of the Company

     (A)  The Company hereby warrants and represents, to and for the benefit of
          the Subscriber in the terms of the Company Warranties set out in
          Schedule 1, subject to the provisions of this Agreement and in
          particular the exclusions and limitations in Schedule 2.

     (B)  The Company Warranties are given subject to facts and matters
          disclosed in or by this Agreement, the Disclosure Letter and every
          document contained in the Data Room and the Subscriber shall
          accordingly have no claim in respect of any of the Company Warranties
          in relation to any fact or matter so disclosed.

     (C)  Any matter which would be or give rise to a breach of any of the
          Non-Accounts Warranties but for an express exclusion from, or
          qualification or limitation to, the terms of such Non-Accounts
          Warranty (whether such exclusion, qualification or limitation is in
          respect of the awareness of the Company, materiality, or any other
          matter) shall be deemed not to be or give rise to a breach of any of
          the Accounts Warranties. For this purpose, the "Accounts Warranties"
          are the Company Warranties set out in paragraphs 2, 3 and 13 of
          Schedule 1 and the "Non-Accounts Warranties" are all the Company
          Warranties other than the Accounts Warranties.

     (D)  Each of China Netcom and the Subscriber acknowledges that it has not
          been induced to enter into this Agreement by, and that it does not in
          connection with this Agreement or its subject matter rely on, any
          representation, warranty, promise or assurance by the Company or any
          other person save for those contained in this Agreement. Each of China
          Netcom and the Subscriber agrees that it shall have no right or remedy
          in respect of, and shall not in connection with any claim arising in
          relation to this Agreement or its subject matter, plead or assert the
          making or existence of, any representation, warranty, promise or
          assurance by the Company or its directors, employees, advisers or any
          other person save for those herein contained. Neither China Netcom nor
          the Subscriber shall have any right to rescind or terminate this
          Agreement and the only remedy of China Netcom and the Subscriber shall
          be damages for breach of this Agreement.

     (E)  The Subscriber shall be entitled to claim both before and after
          completion of the Subscription that any of the Company Warranties has
          or had been breached or is or was misleading and, without limitation,
          to claim under any covenant even if the Subscriber and/or China Netcom
          knew or could have discovered on or before Completion that the Company
          Warranty in question had been breached or was misleading and
          Completion shall not in any way constitute a waiver of any of the
          Subscriber's rights. Notwithstanding the preceding sentence, each of
          China Netcom and the Subscriber warrants and undertakes to the Company
          that, at the time of entering into this Agreement, neither China
          Netcom nor the Subscriber is aware of any facts or circumstances which
          will or may entitle the Subscriber to make a claim under any of the
          Company Warranties.

     (F)  The Subscriber and China Netcom acknowledge that neither the Company
          nor any of its directors, shareholders, employees or advisers owes to
          the Subscriber or China Netcom any duty of care in relation to the
          subject matter of this Agreement or any matter connected with it.
          Nothing in this sub-clause shall restrict or impair the rights of the
          Subscriber and/or China Netcom under this Agreement, or in the

                                       9
<PAGE>

          event of fraud by any of the Company or any of its directors,
          shareholders, employees or advisers.

     (G)  The Company makes no representation or warranty to the Subscriber as
          to the completeness, truth or accuracy of the matters disclosed in the
          Disclosure Letter or in the Data Room other than the 2003 Accounts,
          the 30 September Accounts and the Previous Announcements (as such
          terms are defined in Schedule 1 and in respect of which the warranties
          in paragraphs 2, 3 and 4 of Schedule 1 apply) provided always that
          nothing in this sub-clause (G) shall exclude or limit any claim under
          or in respect of the Company Warranties.

     (H)  Notwithstanding any provision in this Agreement to the contrary,
          nothing in this clause 5.1 shall exclude or affect any right or remedy
          available to the Subscriber (or, if relevant, China Netcom) in respect
          of fraud. China Netcom and the Subscriber acknowledges that their
          legal advisers have explained to each of them the effect of this
          clause 5.1 and Schedule 2.

     (I)  The Company undertakes to disclose in writing to the Subscriber
          anything which will be or is reasonably likely to be a breach of any
          of the Company Warranties on and as at the Completion Date promptly
          after such thing comes to its notice both prior to and on the
          Completion Date. The Company agrees to promptly provide such
          information as may be reasonably requested by the Subscriber, from the
          date hereof until the Completion Date, in order to enable the
          Subscriber to assess whether a breach of the Company Warranty will
          occur on the Completion Date.

     (J)  Each of the Company Warranties shall be construed as a separate and
          independent warranty and shall not be limited or restricted by
          reference to or inference from the terms of any other Company Warranty
          or any other term of this Agreement.

     (K)  The Subscriber agrees and acknowledges that the Company will not be
          liable for any claim for any breach of the Company Warranties if and
          to the extent that the claim results from any act or circumstance
          which is carried out or arises as a result of the entering into of, or
          the performance by the Company of its obligations under, this
          Agreement.

5.2  Period

     Save as expressly provided otherwise, the representations and warranties
     set out in Schedule 1 are given as at the date hereof and shall be deemed
     to be repeated by the Company on the Completion Date as if given or made on
     such date, with reference in each case to the facts and circumstances then
     subsisting.

5.3  Claims against parties other than the Company

     Each of China Netcom and the Subscriber agrees and undertakes that (save in
     respect of fraud) it has no rights against and shall not make any claim
     against any Subsidiary of the Company or any present or former employee,
     director, shareholder, agent, officer or adviser of any member of the Group
     in connection with this Agreement or its subject matter.

                                       10
<PAGE>

6.   Representations, Warranties and Undertakings of the Subscriber and China
     Netcom

6.1  Subscriber/China Netcom Warranties

     The Subscriber (in relation to itself only) and China Netcom each hereby
     undertakes, represents and warrants to the Company as follows:

     (A)  As at the date of this Agreement it has (subject to the obtaining by
          China Netcom of the approval of the PRC State Council), and on the
          Completion Date it will have, the full right, power and authority to
          enter into, and to perform its obligations under, this Agreement and
          this Agreement constitutes its legal, valid and binding obligations
          enforceable in accordance with its terms.

     (B)  As at the date of this Agreement it has (subject to the obtaining by
          China Netcom of the approval of the PRC State Council), and on the
          Completion Date it will have, obtained all governmental, regulatory
          or similar consents required from any Authority, authorities,
          approvals and permissions required to enter into, and to perform its
          obligations under, this Agreement and there are no regulatory or
          administrative obstacles to the remittance of the Subscription monies
          to the Company in Hong Kong in accordance with the terms of this
          Agreement.

     (C)  China Netcom is the legal and beneficial owner of the whole of the
          issued share capital of the Subscriber, and the Subscriber is the
          legal and beneficial owner of all the issued shares in CNC HK held by
          the CNC Group.

     (D)  The execution, delivery and performance by it of this Agreement does
          not and will not result in a material breach of any provision in its
          memorandum or articles of association or other constitutional
          documents.

     (E)  No order has been made and no resolution has been passed for the
          winding up of the Subscriber or China Netcom (as the case may be) or
          for a provisional liquidator to be appointed in respect of it and no
          petition has been presented and no meeting has been convened for the
          purposes of winding up the Subscriber or China Netcom (as the case
          may be).

     (F)  No administration order has been made and no petition for such an
          order has been presented in respect of the Subscriber or China Netcom
          (as the case may be).

     (G)  No receiver (which expression shall include an administrative
          receiver) has been appointed in respect of the Subscriber or China
          Netcom (as the case may be).

     (H)  It is not insolvent or unable to pay its debts and has not stopped
          paying its debts as they fall due.

     (I)  No event analogous to any described in paragraphs (E) to (H) has
          occurred in or outside the PRC with respect to the Subscriber or
          China Netcom (as the case may be).

     (J)  All statements of fact relating to the CNC Group contained in the
          Subscription Announcement are true and accurate in all material
          respects and not misleading in any material respect in the form and
          context in which they appear, all expressions of opinion, intention
          or expectation contained therein (which are stated to be held or
          expressed by any member of the CNC Group) are made on reasonable
          grounds and are truly and honestly held by the directors of the
          relevant member of CNC

                                       11
<PAGE>

          Group and are fairly based, and there are no other facts relating to
          the CNC Group omitted the omission of which makes any such statement
          or expression in the Subscription Announcement misleading in any
          material respect or which are or can reasonably be expected to be
          material in the context of the Subscription.

     (K)  Under the laws of the PRC, neither China Netcom nor any of its
          properties, assets or revenues are entitled to any right of immunity
          on the grounds of sovereignty from any legal action, suit or
          proceedings, from set-off or counter claim, from the jurisdiction of
          any court or arbitral tribunal, from service of process, from
          attachment prior to or in aid of execution of judgment or arbitral
          award, or from other legal process or proceedings for the giving of
          any relief or for the enforcement of any judgment or arbitral award.

     (L)  None of China Netcom, the Subscriber, and none of their respective
          directors (or equivalent) or Principal Officers, is a Disqualified
          Person.

6.2  Repetition of Subscriber/China Netcom Warranties, etc

     (A)  The representations and warranties set out in clause 6.1 are given as
          at the date hereof and shall be deemed to be repeated by the
          Subscriber and China Netcom on the Completion Date as if given or made
          on such date, with reference in each case to the facts and
          circumstances then subsisting.

     (B)  Each of China Netcom and the Subscriber undertakes to disclose in
          writing to the Company anything which will be or is reasonably likely
          to be a breach of any of the representations and warranties set out in
          clause 6.1 on and as at the Completion Date promptly after such thing
          comes to its notice both prior to and on the Completion Date. Each of
          China Netcom and the Subscriber agrees promptly to provide such
          information as may be reasonably requested by the Company, from the
          date hereof until the Completion Date, in order to enable the Company
          to assess whether a breach of any representations and warranties set
          out in clause 6.1 will occur on the Completion Date.

6.3  Other Undertakings of Subscriber and China Netcom

     (A)  Each of the Subscriber and China Netcom undertakes that it will, both
          prior to and following the Completion Date, furnish such information,
          supply such documents, give such undertakings and do all such acts and
          things as may reasonably be required by the Company to:

          (1)  facilitate the satisfaction of the Conditions;

          (2)  facilitate the obtaining by the Group of all consents, approvals
               and confirmations that may be required from any Authority in
               connection with this Agreement; and/or

          (3)  enable the Company to perform its obligations under this
               Agreement.

     (B)  China Netcom undertakes that it will remain at all times the direct or
          indirect holder of the entire issued share capital of the Subscriber
          provided that China Netcom may dispose to one or more third parties of
          not more than an aggregate of 25 per cent. (25%) of its direct or
          indirect interest in the issued share capital of the Subscriber
          provided that:

                                       12
<PAGE>

          (1)  any relevant third party which acquires an interest in the
               Subscriber ("Subscriber Investor") is not a Disqualified Person;
               and

          (2)  China Netcom will, after such disposal, retain voting control of
               the Subscriber and will also retain the direct or indirect right
               to appoint a majority of the board of directors of the
               Subscriber; and

          (3)  none of the Subscriber Investors shall have any right or
               understanding or arrangement (whether formal or informal) to
               nominate any person as a director of the Company.

6.4  Matters relating to the Broadcasting Ordinance

     General obligation - directors and Principal Officers of the Company/
     Subscriber

     (A)  China Netcom undertakes that it will not nominate any person who is a
          Disqualified Person as a director or Principal Officer of the Company.
          Each of China Netcom and the Subscriber undertakes that it will not
          nominate or appoint any person who is a Disqualified Person as a
          director or Principal Officer of the Subscriber.

     Certain proposed changes

     (B)  If:

          (1)  China Netcom proposes to nominate any person to replace any of
               the appointments made under clause 4.1(B); or

          (2)  China Netcom or the Subscriber proposes any change to the
               directors or Principal Officers of the Subscriber; or

          (3)  China Netcom or the Subscriber proposes to introduce a Subscriber
               Investor or if either of them proposes any change, or is aware of
               any proposed change, in the shareholders of the Subscriber and
               their respective interests in the Subscriber,

          China Netcom and the Subscriber shall promptly provide such
          information as the Company may reasonably request to enable the
          Company to deal with such issues (if any) as may arise in connection
          with the Broadcasting Ordinance and/or the Group's licences issued
          under the Broadcasting Ordinance.

     (C)  If the Company reasonably considers that a "disqualified person" issue
          will arise under the Broadcasting Ordinance as a result of any of the
          proposals referred to in clause 6.4(B)(1) to (3), the Company is not
          obliged to procure that China Netcom's proposed replacement Board
          nominee(s) is/are appointed (notwithstanding clause 8.6, but without
          prejudice to China Netcom's rights under clause 8.6 to nominate
          another person as a replacement Board nominee and to the Company's
          obligations thereunder in respect of such other nominee), and China
          Netcom and the Subscriber shall not make or permit to occur any of the
          changes referred to in clause 6.4(B)(2) and/or (3), until all
          information concerning such nominee(s) or Subscriber Investor(s) (as
          applicable) as is required by the Broadcasting Authority and the Chief
          Executive in Council has been provided to them, and the Broadcasting
          Authority and the Chief Executive in Council have confirmed in writing
          that the relevant person(s) (or, if applicable, the Subscriber
          Investor(s)) is/are not Disqualified Person(s).

                                       13
<PAGE>

     Changes in circumstances resulting in Disqualified Person issues

     (D)  If at any time any of:

          (1)  China Netcom;

          (2)  the Subscriber;

          (3)  the directors (or equivalent) or Principal Officers of China
               Netcom or of the Subscriber;

          (4)  the persons nominated by China Netcom as directors of the
               Company;

          (5)  a Subscriber Investor; or

          (6)  the persons nominated by a Subscriber Investor as directors of
               the Subscriber,

          is or becomes a Disqualified Person, or is reasonably considered by
          the Company, China Netcom or the Subscriber to be a "disqualified
          person" within the meaning of the Broadcasting Ordinance, the Company,
          China Netcom or the Subscriber (as applicable) shall immediately
          notify the others in writing of such issue (which notice shall set out
          reasonable details of the reasons why such person is or is reasonably
          considered to be a "disqualified person"). China Netcom shall assist
          and facilitate the Company in seeking such consents, approvals and
          confirmations as may be required from the Broadcasting Authority, the
          Chief Executive in Council or otherwise in connection with the
          Broadcasting Ordinance. China Netcom shall promptly provide such
          information as the Company may reasonably request to enable the
          Company to deal with such issues (if any) as may arise in connection
          with the Broadcasting Ordinance and/or the Group's licences issued
          under the Broadcasting Ordinance.

     (E)  Notwithstanding any provision in this Agreement to the contrary:

          (1)  if any person nominated by China Netcom as director of the
               Company is or becomes a Disqualified Person, and if requested by
               the Company so to do, China Netcom shall immediately procure his
               removal from office as a director of the Company;

          (2)  if a Subscriber Investor is or becomes a Disqualified Person, and
               if requested by the Company so to do, China Netcom shall
               immediately use all reasonable endeavours to procure that such
               third party ceases to be so interested; and

          (3)  if a person nominated by a Subscriber Investor as a director of
               the Subscriber is or becomes a Disqualified Person, China Netcom
               shall immediately procure that such person ceases to hold such
               office.

     (F)  China Netcom shall provide such information as the Company may from
          time to time reasonably request to ascertain whether (1) any director
          (or equivalent) or Principal Officer of any member of the CNC Group or
          (2) any person nominated by China Netcom as a director of the Company
          is or may be a "disqualified person" within the meaning of the
          Broadcasting Ordinance.

                                       14
<PAGE>

7.   The Group's operations in the PRC

7.1  PRC Business Development Committee

     (A)  On the Completion Date, a committee, to be called the "PRC Business
          Development Committee", shall be formed. The terms of reference of the
          PRC Business Development Committee shall include, as a principal
          function of such committee, advising on possible opportunities for the
          expansion of the Group's operations in the PRC ("PRC Operations")
          (including the potential investment of up to HK$5 billion and the
          investment fund of US$50-100 million referred to in clause 7.1(B)) and
          monitoring the use of funds allocated and approved by the Board or
          relevant committee in relation to opportunities approved by the Board
          or relevant committee in connection with the expansion of the Group's
          PRC Operations. The PRC Business Development Committee shall have four
          members, two of whom shall be members of the Board nominated by China
          Netcom. Except as determined by the Board from time to time, all
          decisions of the PRC Business Development Committee shall require the
          unanimous vote and approval of all members of such committee.

     (B)  The Company undertakes that, as soon as practicable after the
          Completion Date (and in any event within three months of the
          Completion Date), it will establish a separate investment fund with an
          initial capital investment by the Company as the founder of the fund
          of US$100 million, or such lesser amount above US$50 million as the
          Company may determine (and such investment shall be part of the HK$5
          billion referred to in clause 4.1(C)) and seek third party investors
          to contribute additional capital with a view to increasing the size of
          the fund to up to US$300 million. The investment objectives of the
          fund will be value added telecommunications services and operations in
          the PRC. The investment fund shall have its own investment guidelines
          and approval procedures (determined by the Board or relevant committee
          at the time of establishing the fund). Two members of the PRC Business
          Development Committee (of which only one shall be a member of the
          Board nominated by China Netcom) will be given responsi bility for
          establishing the investment fund and managing it thereafter in
          accordance with the applicable investment guidelines and approval
          procedures, together with such other managers as they shall recommend
          to the Board or relevant committee for approval.

7.2  Co-Group Managing Director

     (A)  If at any time after the Completion Date the Group's PRC Operations
          constitute a substantial part of the Group's operations, and for as
          long as such PRC Operations remain a substantial part of the Group's
          operations, China Netcom shall have the right to nominate a person who
          is for the time being a director of the Company and has the requisite
          qualifications and experience, as "Co-Group Managing Director", whose
          appointment shall be subject to the approval of the Board. In the
          event that the Board declines to appoint a director of the Company
          nominated by China Netcom on the grounds that such director does not
          have the requisite qualifications and experience, China Netcom may
          nominate another director of the Company as Co-Group Managing
          Director, whose appointment shall also be subject to the approval of
          the Board. The Co-Group Managing Director shall be in addition to such
          other managing director(s) of the Group as may be in office at the
          time and from time to time.

                                       15
<PAGE>

     (B)  For the purpose of clause 7.2(A), the PRC Operations shall be deemed
          to constitute a substantial part of the Group's Operations if:

          (1)  at any time during the twelve months commencing from the
               Completion Date, the PRC Business Development Committee (referred
               to in clause 7.1) resolves that the PRC Operations have become a
               substantial part of the Group's Operations; or

          (2)  the PRC Business Development Committee does not so resolve within
               the twelve months commencing from the Completion Date, and if at
               any time after such period China Netcom determines that the PRC
               Operations have become a substantial part of the Group's
               Operations.

7.3  Cessation

     The provisions of clauses 7.1 and 7.2 shall cease to be of any effect upon
     the earlier of:

     (A)  the Subscriber at any time ceasing to hold at least ten per cent.
          (10%) of the total issued share capital of the Company; and

     (B)  China Netcom ceasing to hold, directly or indirectly, at least 75% of
          the issued share capital of the Subscriber or China Netcom otherwise
          being in material breach of clause 6.3(B).

8.   Certain Company Undertakings

8.1  China Netcom's Obligations to CNC HK

     (A)  For so long as the CNC HK Non-Competition Agreement remains in effect,
          if the Company or any member of the Group proposes to establish,
          engage or be directly or indirectly interested in carrying on a
          Proposed Business, the Company shall, before doing so or agreeing to
          do so, inform China Netcom by notice in writing (a "Notice"), setting
          out the principal details of the Proposed Business. Upon receipt of
          such Notice (and any other relevant details which China Netcom may
          reasonably request), China Netcom and the Company shall discuss the
          Proposed Business. China Netcom shall, within 15 days of the giving of
          the Notice ("15 Day Period"), inform the Company in writing of its
          views as to whether or not the Proposed Business will or is reasonably
          likely to be considered to constitute a CNC HK Competing Business.

     (B)  If, within the 15 Day Period, China Netcom notifies the Company in
          writing that the Proposed Business will or is reasonably likely to be
          considered to constitute a CNC HK Competing Business, China Netcom and
          the Company shall immediately consult in good faith with a view to (1)
          determining to what extent and in what manner the Proposed Business
          constitutes or might constitute a CNC HK Competing Business, (2)
          determining to what extent it would be possible for the Proposed
          Business to be structured so that it or part of it does not constitute
          a CNC HK Competing Business, and (3) assisting China Netcom to seek
          the consent of CNC HK to the extent required under the CNC HK
          Non-Competition Agreement or to the extent such consent has not
          already been given in writing. The parties acknowledge that the
          purpose of this clause is to enable due and careful consideration to
          be given to the nature and extent of the obligations of China Netcom
          under the CNC HK Non-Competition Agreement, and to afford China Netcom
          an opportunity to comply fully with its obligations thereunder.

                                       16
<PAGE>

     (C)  For the purpose of this clause 8.1:

          (1)  "CNC HK Competing Business" means a business that falls within
               the meaning of paragraphs 3 and 4 of clause 1 of the CNC HK
               Non-Competition Agreement;

          (2)  "CNC HK Non-Competition Agreement" means the non-competition
               agreement dated 6 September 2004 made between, amongst others,
               China Netcom and CNC HK; and

          (3)  "Proposed Business" means a business which the PRC Business
               Development Committee considers will or may be in direct or
               indirect competition with the business of CNC HK or any of its
               Subsidiaries.

     (D)  Notwithstanding clause 8.1 (A), the Company and any member of the
          Group may hold or be interested in securities in another body
          corporate if such securities are listed on a recognised stock exchange
          and confer not more than ten per cent. (10%) of the votes which could
          normally be cast at a general meeting of the body corporate.

     (E)  For the avoidance of doubt, this clause 8.1 shall not:-

          (1)  prevent or delay the Company or any member of the Group from
               commencing or continuing any negotiations in relation to any
               business opportunity (whether or not such business opportunity
               constitutes or may constitute a CNC HK Competing Business); or

          (2)  prevent the Company or any member of the Group from entering into
               any contract or other arrangement in relation to any business
               opportunity (whether or not such business opportunity constitutes
               or may constitute a CNC HK Competing Business), provided that:

               (a)  if China Netcom gives notice in writing within the 15 Day
                    Period that the Proposed Business will or is reasonably
                    likely to be considered to constitute a CNC HK Competing
                    Business, the Company or the relevant member of the Group
                    does not do so within 30 days of the giving by China Netcom
                    of such notice; and

               (b)  if China Netcom gives notice in writing within the 15 Day
                    Period of its view that Proposed Business will not be
                    considered to constitute a CNC HK Competing Business, or if
                    China Netcom does not give a response to the Notice, the
                    Company or the relevant member of the Group does not do so
                    within the 15 Day Period.

8.2  Arrangements with CNC HK Competitor

     (A)  If the Company or any member of the Group either (i) intends to pursue
          or develop a business opportunity, or (ii) is offered an opportunity
          to participate in a business opportunity, in each case with any entity
          which is the holder of a licence currently required for the provision
          of basic fixed-line telecommunications services in the PRC (or a
          member of a group of which another member is the holder of such a
          licence) relating to (a) the establishment of a new joint venture
          (whether equity, co- operative or other profit sharing arrangement in
          the nature of a joint venture) to exploit a business opportunity
          within the PRC or (b) the sale by the Group of any

                                       17
<PAGE>

          business or assets constituting a business in the PRC (in each case, a
          "Relevant Opportunity"), the Company shall, before doing so or
          agreeing to do so, inform China Netcom by notice in writing (a "JV
          Notice") provided that:

          (1)  in the case of the establishment of a new joint venture, this
               clause 8.2 shall only apply if such joint venture (whether
               equity, co-operative or other profit sharing arrangement in the
               nature of a joint venture) (i) relates to basic fixed line
               telecommunications services as currently provided in the PRC and
               is considered in good faith by China Netcom (after having
               considered the details of the Relevant Opportunity submitted to
               it) to be of a strategic nature to the Group and/or involves an
               initial capital investment or commitment by the Group in excess
               of US$100 million; or (ii) relates to any non-regulated services
               which involves an initial capital investment or commitment by the
               Group in excess of US$100 million;

          (2)  in the case of a sale by the Group of any business or assets
               constituting a business in the PRC, this clause 8.2 shall only
               apply if such business or assets constituting a business is
               considered in good faith by China Netcom (after having considered
               the details of the Relevant Opportunity submitted to it) to be of
               a strategic business or a strategic business opportunity in the
               PRC;

          (3)  the provisions of clause 8.2 shall be subject to and limited by
               any pre- emption or other contractually binding obligations of
               the Company or the relevant member of the Group; and

          (4)  nothing in this clause 8.2 is intended to relate to contracts or
               arrangements in the ordinary course of business.

     (B)  The JV Notice shall outline the principal details of the Relevant
          Opportunity (whether contemplated by a member of the Group, or offered
          by the relevant third party) and invite China Netcom to notify the
          Company in writing within 30 days after the date on which the JV
          Notice is given (the "Exercise Period") whether (i) it (or a
          Subsidiary of China Netcom) wishes to be involved in the Relevant
          Opportunity or, (ii) where the Relevant Opportunity arises as a result
          of an offer or invitation from a third party of an opportunity to
          participate in a business opportunity, whether it (or a Subsidiary of
          China Netcom) wishes and is able to offer a similar business
          opportunity to the Group.

     (C)  If, within the Exercise Period, China Netcom notifies the Company in
          writing that it (or a Subsidiary of China Netcom) wishes to be
          involved in the Relevant Opportunity (or, as applicable, wishes and is
          able to offer a similar business opportunity to the Group), the
          Company will, or will procure that the relevant member of the Group
          (as the case may be) will, in good faith on an expeditious basis,
          enter into discussions and negotiations with China Netcom in relation
          to the Relevant Opportunity with a view to entering into a joint
          venture agreement or other binding arrangement, or (in the case of a
          sale referred to in clause 8.2(A)(2)) a sale and purchase agreement
          for the sale of the relevant business to China Netcom (or a Subsidiary
          of China Netcom), as soon as practicable.

     (D)  If:

          (1)  within the Exercise Period China Netcom notifies the Company in
               writing that neither it nor any of its Subsidiaries wishes to be
               involved in the Relevant

                                       18
<PAGE>

               Opportunity (or, as applicable, does not wish and/or is unable to
               offer a similar business opportunity to the Group), or

          (2)  China Netcom otherwise fails to notify the Company in writing
               within the Exercise Period as to whether or not it (or a
               Subsidiary of China Netcom) wishes to be involved in the Relevant
               Opportunity (or, as applicable, whether or not it (or a
               Subsidiary of China Netcom) wishes and is able to offer a similar
               business opportunity to the Group); or

          (3)  China Netcom having served notice pursuant to sub-clause (C), no
               heads of terms, letter of intent or similar outline of principal
               commercial terms (in each case whether binding or non-binding) is
               entered into between any member of the Group and China Netcom (or
               a Subsidiary of China Netcom) within 30 days from the date on
               which it served such notice,

          any member of the Group may enter into a joint venture agreement
          and/or other binding arrangement (including agreements relating to the
          sale of the relevant business) with a third party in relation to the
          Relevant Opportunity provided that such arrangement is on
          substantially the same terms as those set out in the JV Notice.

8.3  Existing Businesses

     Notwithstanding clause 8.2 and any other provision of this Agreement, the
     Group may continue to be interested and involved in its existing
     businesses, and may continue to make such further investments in, and to
     further develop and expand, its existing businesses, in each case as the
     Board may consider appropriate from time to time.

8.4  Non-disposal of certain assets

     (A)  The Company shall not without the written consent of China Netcom
          (such consent not to be unreasonably withheld or delayed) sell or
          dispose of more than ten per cent. (10%) of the Group's voting
          interest in PCCW-HKT Telephone Limited and 25 per cent. (25%) of the
          Group's voting interest in PCCW VOD Limited (other than in connection
          with a bona fide reorganisation, amalgamation or scheme of arrangement
          relating to the Group).

     (B)  The Company shall not, prior to the date falling 60 days after the
          Completion Date and without the written consent of China Netcom (such
          consent not to be unreasonably withheld or delayed), sell or dispose
          of any of its shareholding in Pacific Century Premium Developments
          Limited (other than in connection with a bona fide reorganisation,
          amalgamation or scheme of arrangement relating to the Group).
          Notwithstanding the foregoing, China Netcom shall not withhold or
          delay its consent if any such proposed sale or disposal has in good
          faith been determined by the Board to be in the best interests of the
          Company and the reasons for such determination have been provided to
          China Netcom in reasonable detail.

     (C)  Where the Group is considering any disposal of assets which does not
          fall under clause 8.4(A) or 8.4(B) but such disposal will require a
          circular to be issued by the Company to it shareholders under the
          Listing Rules, the members of the Board nominated by China Netcom
          shall be consulted in advance.

                                       19
<PAGE>

8.5  Anti-dilution

     General Anti-dilution

     (A)  Subject to clause 8.5(G), the Company will not without the prior
          written consent of China Netcom (such consent not to be unreasonably
          withheld or delayed) in the period from the date of this Agreement to
          the Completion Date issue any new Shares, any securities convertible
          into or exchangeable into Shares or any warrants or other rights to
          subscribe for Shares ("Relevant Securities").

     (B)  Subject to clauses 8.5(G) to 8.5(J), if the Company proposes,
          following the Completion Date, to issue any Relevant Securities, the
          Company shall notify China Netcom in writing of such proposal (an
          "Issue Notice"). The Issue Notice shall specify the number and type of
          Relevant Securities to be offered by the Company and the material
          terms of the proposed offer (including the proposed price per security
          to be paid by the proposed third party purchaser(s)).

     (C)  China Netcom shall have the right to purchase any number of the
          Relevant Securities which are the subject of the Issue Notice up to
          such number as shall represent the Pro Rata Share (as defined in
          clause 8.5(K)(2)) of the Relevant Securities, upon the same terms and
          conditions set forth in the Issue Notice, by giving written notice to
          the Company of the exercise of this right within ten Business Days of
          the giving of the Issue Notice. A notice given by China Netcom
          pursuant to this clause shall be irrevocable. If such notice is not
          given or deemed not to have been given by China Netcom within such ten
          Business Days, China Netcom shall be deemed to have elected not to
          exercise its rights under this clause 8.5(C).

     (D)  [Intentionally left blank]

     (E)  The completion of China Netcom's purchase of Relevant Securities
          pursuant to clause 8.5(C) shall occur either simultaneously with the
          completion of the offering of Relevant Securities or at such other
          time and place as shall be mutually agreed by the Company and China
          Netcom. At such completion, China Netcom shall deliver the aggregate
          purchase price for the Relevant Securities to be purchased by China
          Netcom pursuant to clause 8.5(C) against the Company's delivery of
          certificates representing the Relevant Securities to be issued to
          China Netcom pursuant to clause 8.5(C).

     (F)  Any Shares issued to China Netcom pursuant to clauses 8.5(B) to (E)
          shall be issued on the same terms as Shares are issued to any proposed
          third party purchaser, such terms being set out in the Issue Notice.

     Options, convertibles, etc

     (G)  The provisions of clauses 8.5(A) to 8.5(F) shall not apply to:

          (1)  the grant of any options, or the issue of any Relevant Securities
               pursuant to the exercise of share options granted (whether prior
               to or after the date of this Agreement), pursuant to any share
               option scheme of the Company in effect from time to time; or

          (2)  the issue of any Relevant Securities pursuant to any share
               incentive scheme operated by the Group from time to time; or

                                       20
<PAGE>

          (3)  the issue of any Relevant Securities pursuant to the terms of any
               bonds or other securities issued at any time by any member of the
               Group which are convertible or exchangeable into Shares, or the
               issue of any Relevant Securities as a result of the exercise of
               warrants or other rights to subscribe for Shares.

          For the avoidance of doubt, the anti-dilution right in clauses 8.5(B)
          to 8.5(E) will apply in respect of issues of securities that are
          convertible or exchangeable into Shares and in respect of issues of
          warrants or other rights to subscribe for Shares at the time of issue
          of those convertible or exchangeable securities or warrants or other
          rights to subscribe (as the case may be) save in the case of a
          Pro-Rata Offering or a Non-Cash Issuance (as defined in clauses
          8.5(H)(1) and 8.5(I)(1) respectively).

     Rights issues, open offers, bonus/capitalisation issues etc

     (H)  The provisions of clause 8.5(B) to 8.5(F) shall not apply to the issue
          of any Relevant Securities pursuant to:

          (1)  an offer of Relevant Securities open for a period fixed by the
               Board to holders of Shares on the register of members on a fixed
               record date in proportion to their then holdings of Shares
               (subject to such exclusions or other arrangements as the Board
               may deem necessary or expedient in relation to fractional
               entitlements or having regard to any restrictions or obligations
               under the laws of, or the requirements of any recognised
               regulatory body or any stock exchange in any territory outside
               Hong Kong) ("Pro-Rata Offering"); or

          (2)  an issue of Shares credited as fully paid to holders of Shares
               (including, without limitation, Shares paid up out of
               distributable profits or reserves and/or share premium account
               issued in lieu of the whole or any part of a cash dividend and
               free distributions or bonus issue of Shares).

     Consideration shares, top-up placings and subscriptions etc

     (I)  If following the Completion Date, the Company proposes to issue any
          Relevant Securities ("Relevant New Issue"):

          (1)  for non-cash consideration, credited as fully paid (including,
               without limitation, an issue of Relevant Securities as
               consideration for the acquisition of any interest in a company,
               business or other asset but excluding any issue of Relevant
               Securities as contemplated in clauses 8.5(G) and 8.5(H)) ("Non-
               Cash Issuance"); or

          (2)  in connection with a placing and "top-up" subscription of
               Relevant Securities,

          clause 8.5(J) shall apply (and for the avoidance of doubt, clauses
          8.5(B) to 8.5(F) shall not apply).

     (J)  The following provisions shall apply in the event of a Relevant New
          Issue:

          (1)  If the Company proposes to effect a Relevant New Issue, the
               Company shall notify China Netcom in writing of such proposal
               ("Relevant New Issue Notice").

                                       21
<PAGE>

          (2)  The Relevant New Issue Notice shall specify the number and (if
               relevant) the type of Relevant Securities to be issued or
               proposed to be issued by the Company and the material terms of
               the Relevant New Issue (including the proposed price per security
               ("Relevant Price")).

          (3)  China Netcom shall have the right to purchase or subscribe for
               such proportion as it may wish of the Relevant Number of new
               Relevant Securities at the Relevant Price by giving written
               notice to the Company of the exercise of this right within three
               Business Days of the giving of the Relevant New Issue Notice.
               China Netcom and the Company acknowledge that the "Relevant
               Number" will only be ascertainable after the three Business Day
               period, and that the actual Relevant Number will be set out in
               the notice to be given by the Company to China Netcom pursuant to
               clause 8.5(J)(5). A notice given by China Netcom pursuant to this
               clause 8.5(J)(3) shall be irrevocable. If such notice has not
               been given or deemed to have been given by China Netcom within
               such three Business Days, China Netcom shall be deemed to have
               elected not to exercise its rights under this clause 8.5(J)(3).

          (4)  [Intentionally left blank]

          (5)  If China Netcom shall give notice to the Company pursuant to, and
               in accordance with, clause 8.5(J)(3), the Company shall not later
               than three Business Days after expiry of the three Business Day
               period referred to in clause 8.5(J)(3) notify China Netcom in
               writing of the Relevant Number of new Relevant Securities which
               it is to purchase and the total consideration due for such
               securities. The completion of China Netcom's purchase of Relevant
               Securities pursuant to this clause 8.5(J) shall occur either
               simultaneously with the completion of the Relevant New Issue or,
               in the case of a placing and top-up subscription referred to in
               clause 8.5(I)(2), at the time of completion of the top-up
               subscription, or at such other time and place as shall be
               mutually agreed by the Company and China Netcom. At such
               completion, China Netcom shall deliver the aggregate purchase
               price for the Relevant Securities to be purchased by China Netcom
               pursuant to this clause 8.5(J) against the Company's delivery of
               certificates representing the Relevant Securities to be issued
               to China Netcom pursuant to this clause 8.5(J).

          (6)  In the case of a Non-cash Issuance, the Relevant Price shall be
               based on the value of the Relevant Securities or the
               consideration as stated in the agreements relating to Non-Cash
               Issuance. If such value or consideration is not stated, the
               Relevant Price shall be such amount as may be agreed between the
               Company and China Netcom or, in default of agreement, the average
               closing price of Shares on the Stock Exchange on the fifteen
               trading days prior to the date on which binding agreements
               relating to the Relevant New Issue were executed or, if earlier,
               the date on which the Relevant New Issue was announced by the
               Company in accordance with its obligations under the Listing
               Rules.

          (7)  For the avoidance of doubt, nothing in clause 8.5(J)(1) to (6)
               shall delay, impede or obstruct the completion of a Relevant New
               Issue.

     General Provisions

    (K)   For the purposes of this clause 8.5:

                                       22
<PAGE>

          (1)  "Other Anti-Dilution Issues" means the Relevant Securities to be
               issued as a result of the Relevant New Issue to other
               shareholders of the Company pursuant to anti-dilution rights
               substantially similar to those contained in this clause 8.5;

          (2)  "Pro Rata Share" shall mean the following ratio (measured as at
               the date of the relevant Issue Notice):

                        A
                       ---
                        B

               where:

               "A" is the number of Shares in which China Netcom is interested
               or deemed to be interested for the purposes of Part XV of the
               SFO, excluding Shares in which China Netcom has become interested
               other than pursuant to clause 2 or this clause 8.5 and excluding
               also any interests or deemed interests arising from Relevant
               Securities other than Shares; and

               "B" is the total number of Shares then in issue;

          (3)  "Relevant Number" shall mean:

               (a)  in the case of an issue of Shares, the number of Shares
                    required to be issued to China Netcom such that the Relevant
                    Ratio of China Netcom's interest or deemed interest under
                    Part XV of the SFO (whether notified or not) in the issued
                    Share capital of the Company will not be reduced as a result
                    of the Relevant New Issue and the Other Anti-Dilution
                    Issues; and

               (b)  in the case of an issue of Relevant Securities other than
                    Shares, the number of Relevant Securities which represents
                    the Relevant Ratio of the total number of such Relevant
                    Securities to be issued pursuant to the Relevant New Issue
                    and the Other Anti-Dilution Issues;

          (4)  "Relevant Ratio" shall mean the following ratio (measured as at
               the date of the relative Relevant New Issue Notice):

                        X
                       ---
                        Y
               where:

               "X" is the number of Shares in which China Netcom is interested
               or deemed to be interested for the purposes of Part XV of the
               SFO, excluding Shares in which China Netcom has become interested
               other than pursuant to clause 2 or this clause 8.5 and excluding
               also any interests or deemed interests arising from Relevant
               Securities other than Shares; and

               "Y" is the total number of Shares then in issue (excluding, for
               the avoidance of doubt, Shares issued under the Relevant New
               Issue and the Other Anti-Dilution Issues);

                                       23
<PAGE>

          (5)  for the purposes of sub-clauses (2) and (4) above and to avoid
               doubt, where China Netcom is interested or deemed interested in
               the Same Shares (as defined below) pursuant to Part XV of the
               SFO, the number of such Same Shares shall not be aggregated with
               the number of Shares in which China Netcom is or would already be
               interested or deemed interested pursuant to Part XV of the SFO.
               "Same Shares" shall mean Shares in which "associated
               corporations" (as defined in Part XV of the SFO) (other than the
               Subscriber) of China Netcom are interested or deemed interested
               pursuant to Part XV of the SFO.

     (L)  [Intentionally left blank]

     (M)  China Netcom shall be entitled to purchase Relevant Securities under
          this clause 8.5 directly or through the Subscriber, and the provisions
          of this clause 8.5 shall be construed accordingly.

     (N)  China Netcom acknowledges and agrees that its exercise of the rights
          in this clause 8.5 shall in all cases be subject to all applicable
          laws and regulations including the Listing Rules and the Takeovers
          Code (including, where applicable, any requirement to obtain the
          approval of the shareholders of the Company).

     (O)  The provisions of clauses 8.5(B) to 8.5(N) are conditional on the
          satisfaction of the Condition in clause 3.1(A).

8.6  Replacement of Directors

     China Netcom shall be entitled to nominate persons from time to time to
     replace any of the appointments made under clause 4.1(B) and the Company
     shall use its best endeavours to procure such new appointments to be made
     as soon as practicable. If any of the persons appointed as a member of the
     Board pursuant to clause 4.1(B)(1) or this clause 8.6, as the case may be,
     is employed by the Company as an executive or officer, such person shall be
     appointed as an executive director of the Company.

8.7  Cessation

     (A)  The provisions of this clause 8 (except clause 8.5 (Anti-dilution) and
          this clause 8.7) shall cease to be of any effect on the earlier of:

          (1)  the Subscriber at any time ceasing to hold at least ten per cent.
               (10%) of the total issued share capital of the Company; and

          (2)  China Netcom ceasing to hold, directly or indirectly, at least
               75% of the issued share capital of the Subscriber or China Netcom
               otherwise being in material breach of clause 6.3(B).

     (B)  The provisions of clause 8.5 (Anti-dilution)) shall cease to be of any
          effect on the earlier of:

          (1)  the third anniversary of the Completion Date;

          (2)  the Subscriber at any time ceasing to hold at least 15 per cent.
               (15%) of the total issued share capital of the Company; and

                                       24
<PAGE>

          (3)  China Netcom ceasing to hold, directly or indirectly, at least
               75% of the issued share capital of the Subscriber or China Netcom
               otherwise being in material breach of clause 6.3(B).

9.   Guarantee

9.1  Guarantee Obligations

     In consideration of the Company entering into this Agreement at the request
     of China Netcom (as China Netcom hereby acknowledges), China Netcom shall
     as primary obligations of it:

     (A)  procure that the Subscriber shall duly observe and perform all its
          obligations owed to the Company under this Agreement or any other
          agreement entered pursuant or ancillary hereto;

     (B)  if and whenever the Subscriber shall be in default in the payment when
          due of any amount payable to the Company under this Agreement or any
          other agreement entered into pursuant or ancillary hereto and within
          two Business Days after being given notice to that effect by the
          Company, pay to the Company all amounts then so payable by the
          Subscriber to the Company as though China Netcom instead of the
          Subscriber was expressed to be the principal debtor; and

     (C)  indemnify the Company against all costs and expenses (including legal
          fees) which the Company may pay or incur in collecting any amount
          payable by the Subscriber or China Netcom and referred to in clause
          9.1(B).

9.2  Indemnity

     Any amount not paid by the Subscriber and not recoverable from China Netcom
     on the basis of a guarantee (whether because of any legal limitation,
     disability or incapacity on the part of the Subscriber or any other matter
     or thing whether known to the Company or not) shall nevertheless be
     recoverable from China Netcom on the basis of an indemnity.

9.3  Indulgence etc.

     (A)  China Netcom acknowledges that its liability under this clause 9 shall
          not be discharged or affected in any way by time being given to the
          Subscriber or by any other indulgence or concession being granted to
          the Subscriber or by any other act, omission, dealing, matter or thing
          whatsoever (including without limitation any change in the
          constitution of the Subscriber or China Netcom, any amendment to this
          Agreement or any such other agreement entered pursuant or ancillary
          hereto or the liquidation, dissolution, reconstruction or amalgamation
          of the Subscriber or China Netcom or the illegality or
          unenforceability of this Agreement or such other agreement) which but
          for this provision might operate to release China Netcom from its
          obligations under this clause 9.

     (B)  China Netcom agrees that its liability under this clause 9 shall not
          be discharged or affected in any way by the assignment (if any) by the
          Subscriber of its rights in this Agreement to the Alternate Subscriber
          under clause 4.4.

                                       25
<PAGE>

9.4  Continuing Guarantee

     The guarantee contained in this clause 9 is a continuing guarantee and
     shall remain in full force and effect until all obligations of the
     Subscriber hereby guaranteed have been discharged in full. It is in
     addition to and shall not prejudice nor be prejudiced by any other
     guarantee, indemnity or other security or right against any third party
     which the Company may have for the due performance of the obligations
     concerned.

10.  No "acting in concert"

10.1 Nothing in this Agreement nor any action taken or proposed to be taken by
     the Subscriber, China Netcom and/or the Company under or in connection with
     this Agreement is intended to result in the Subscriber and/or China Netcom
     "acting in concert" (as defined in the Takeovers Code) with the Substantial
     Shareholders (or vice versa).

10.2 The Company and China Netcom agree that if at any time any Substantial
     Shareholder, the Subscriber or China Netcom (collectively, "Relevant
     Shareholders") considers that anything in or in connection with this
     Agreement, or any of the actions or proposed actions of any of the Relevant
     Shareholders, mean that the Subscriber and/or China Netcom are or will be
     "acting in concert" (as defined in the Takeovers Code) with the Substantial
     Shareholders (or vice versa) ("Concert Party Issue"), it shall notify the
     other Relevant Shareholders of the Concert Party Issue (including
     reasonable details of the issue and reasons for its concern), and each of
     China Netcom, the Subscriber and the Company agrees that:

     (A)  it will consult with each other and with the Substantial Shareholders
          on a timely basis and in good faith to discuss whether the proposed
          action or actions can be undertaken in a manner or to an extent that
          will not have such a result; and

     (B)  no action will be taken by it until the Concert Party Issue, together
          with the proposed action(s) (if any), have been resolved to the
          satisfaction of each of the Relevant Shareholders PROVIDED THAT if the
          SFC confirms that any of China Netcom or any of the Substantial
          Shareholders shall not itself or themselves be under an obligation to
          make a mandatory general offer for the shares in the Company not held
          by them (or parties acting in concert with them) (regardless of
          whether any of the other Relevant Shareholders may be under such an
          obligation), then the relevant Concert Party Issue shall be deemed for
          the purposes of this provision to have been resolved to the
          satisfaction of that or those Relevant Shareholders.

11.  Confidentiality

11.1 Confidentiality

     Subject to clauses 11.2, 11.3 and 12, each Party:-

     (A)  shall treat as strictly confidential the provisions of this Agreement
          and the process of their negotiation and all information about the
          other Parties obtained or received by it as a result of entering into
          or performing its obligations under this Agreement ("Confidential
          Information"); and

     (B)  shall not, except with the prior written consent of the other Party
          (which shall not be unreasonably withheld or delayed and the Company
          shall only require the consent of one of China Netcom of the
          Subscriber), make use of (save for the purposes of

                                       26
<PAGE>

          performing its obligations under this Agreement) or disclose to any
          person any Confidential Information.

11.2 Permitted disclosure or use

     Clause 11.1 shall not apply if and to the extent that the Party using or
     disclosing Confidential Information can demonstrate that:

     (A)  such disclosure is to a Substantial Shareholder or a company
          controlled by a Substantial Shareholder or under common control with a
          Substantial Shareholder (a "Related Party)

     (B)  such disclosure is required by law or by any supervisory, regulatory
          or governmental body having jurisdiction over it or a Related Party
          (including the Stock Exchange, the SFC, the Singapore Stock Exchange
          and the PRC State Council) and whether or not the requirement has the
          force of law; or

     (C)  such disclosure is to its professional advisers in relation to the
          negotiation, entry into or performance of this Agreement or any matter
          arising out of the same; or

     (D)  such disclosure is required to facilitate the satisfaction of any of
          the Conditions; or

     (E)  such disclosure is required in order to facilitate any assignment or
          proposed assignment of the whole or any part of the rights or benefits
          under this Agreement which is permitted by clause 17.7; or

     (F)  in the case of disclosure or use, the Confidential Information
          concerned was lawfully in its possession (as evidenced by written
          records) prior to its being obtained or received as described in
          clause 11.1(A); or

     (G)  in the case of disclosure or use, the Confidential Information
          concerned has come into the public domain other than through its fault
          or the fault of any person to whom such Confidential Information has
          been disclosed in accordance with clause 11.1(B).

11.3 Continuance of restrictions

     The restrictions contained in this clause 11 shall continue without limit
     of time.

12.  Announcements

12.1 Restrictions

     Subject to clause 12.2, no Party to this Agreement shall make any
     announcement or issue any communication concerning the provisions or
     subject matter of this Agreement or containing any information about the
     other Parties without the prior written approval of the other (which shall
     not be unreasonably withheld or delayed and the Company shall only require
     the consent of one of China Netcom or the Subscriber).

12.2 Permitted announcements

     Clause 12.1 shall not apply:

     (A)  to the Subscription Announcement; and

                                       27
<PAGE>

     (B)  if and to the extent that any announcement is required by law or by
          any supervisory, regulatory or governmental body having jurisdiction
          over it (including the Stock Exchange and the SFC), and whether or not
          the requirement has the force of law and provided that any such
          announcement shall be made only after consultation with the other
          Parties.

13.  Notices

     (A)  Any notice (which term shall in this clause include any other
          communication) required to be given under this Agreement or in
          connection with the matters contemplated by it shall, except where
          otherwise specifically provided, be in writing in the English
          language.

     (B)  Any such notice shall be addressed as provided in sub-clause (C) and
          may be:

          (1)  personally delivered, in which case it shall be deemed to have
               been given upon delivery at the relevant address; or

          (2)  if within Hong Kong, sent by pre-paid post, in which case it
               shall be deemed to have been given two Business Days after the
               date of posting; or

          (3)  if from or to any place outside Hong Kong, sent by pre-paid
               airmail, in which case it shall be deemed to have been given
               seven Business Days after the date of posting; or

          (4)  sent by facsimile, in which case it shall be deemed to have been
               given when despatched, subject to confirmation of uninterrupted
               transmission by a transmission report provided that any notice
               despatched by facsimile after 5:00 p.m. on any day shall be
               deemed to have been received at 9:00 a.m. on the next Business
               Day.

     (C)  The addresses and other details of the Parties referred to in
          sub-clause (B) are, subject to sub-clause (C):

          If to the Company, to:

          PCCW Limited

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

          Facsimile:     +852 2962 5725

          Attention:     The Company Secretary

          If to the Subscriber, to:

          China Netcom Group Corporation (BVI) Limited

          59/F, Bank of China Tower,
          1 Garden Road,
          Hong Kong

                                       28
<PAGE>

          Facsimile: +852 3108 3823

          Attention: Wang Chuanbao

          If to China Netcom, to:

          China Network Communications Group Corporation (GRAPHIC OMITTED)

          59/F, Bank of China Tower,
          1 Garden Road,
          Hong Kong

          Facsimile: +852 3108 3823

          Attention: Head of Business Development

     (D)  Any Party may notify the other Parties of any change to the address or
          any of the other details specified in sub-clause (C), provided that
          such notification shall only be effective on the date specified in
          such notice or five Business Days after the notice is given, whichever
          is later.

14.  Waiver of Immunity

14.1 Immunity

     It is acknowledged that the status of China Netcom in the PRC may afford
     it certain protections and immunities not available to entities wholly
     independent of any state body in the PRC and China Netcom has therefore
     agreed to waive such protections and immunities as set out below.

14.2 Waiver

     China Netcom irrevocably and unconditionally agrees with the Company that
     in respect of any Proceedings brought against China Netcom or its assets by
     the Company in relation to this Agreement or any other agreement entered
     into pursuant to or as a result of this Agreement:

     (A)  no immunity from those proceedings (including, without limitation,
          suit, attachment prior to judgement, other attachment, the obtaining
          of any judgement, execution or other enforcement, or the enforcement
          and execution of any award rendered by an arbitral tribunal
          constituted pursuant to this Agreement) will be claimed by or on
          behalf of itself or with respect to its assets;

     (B)  China Netcom shall (and hereby) waives any such right of immunity
          which it or its assets now has or may subsequently acquire; and

     (C)  China Netcom consents generally in respect of any such proceedings to
          the giving of any relief or the issue of any process in connection
          with those proceedings, including, without limitation, the making,
          enforcement or execution against any assets whatsoever (irrespective
          of its use or intended use) of any order or judgement which may be
          made or given in those proceedings or of any award rendered by an
          arbitral tribunal constituted pursuant to this Agreement.

                                       29
<PAGE>

15.  Law and Arbitration

15.1 Law

     This Agreement shall be governed by and construed in accordance with the
     laws of England for the time being in force.

15.2 Arbitration

     (A)  Any dispute, controversy or claim arising out of or in connection with
          this Agreement, including any question regarding its existence,
          validity or termination, shall be referred to and finally resolved by
          arbitration under the LCIA Rules, which Rules are deemed to be
          incorporated by reference into this clause. The arbitration commission
          shall be the LCIA.

     (B)  The number of arbitrators shall be three.

     (C)  The seat of the arbitration shall be London.

     (D)  The language to be used in the arbitral proceedings shall be English.

     (E)  By agreeing to arbitration pursuant to this clause, the Parties waive
          irrevocably their right to any form of appeal, review or recourse to
          any state court or other judicial authority, insofar as such waiver
          may validly be made. In particular, no Party may apply to the court to
          determine any question of law arising in the course of the arbitration
          pursuant to section 45 of the Arbitration Act 1996 or otherwise, and
          no Party may appeal to the court on a question of law arising out of
          an award made in the arbitration pursuant to section 69 of the
          Arbitration Act 1996 or otherwise.

     (F)  The Parties shall have the right to seek interim injunctive relief
          from a court of competent jurisdiction, both before and after the
          arbitrators have been appointed, at any time up until the arbitrators
          have made the final award.

16.  Contracts (Rights of Third Parties) Act 1999

16.1 Subject to clause 16.2, no person who is not for the time being a Party to
     this Agreement shall have any right under the Contracts (Rights of Third
     Parties) Act 1999 to enforce any term of this Agreement.

16.2 Each of the persons referred to in clauses 5.1(F) and 5.3 shall be entitled
     to enforce the benefits conferred on him by such clauses, provided that the
     consent of such persons shall not be required for the variation or
     termination of this Agreement.

17.  Provisions Relating to this Agreement

17.1 Counterparts

     This Agreement may be executed in any number of counterparts, which shall
     together constitute one Agreement. Any Party may enter into this Agreement
     by signing any such counterpart.

                                       30
<PAGE>

17.2 Whole agreement

     (A)  This Agreement, together with any documents referred to in it,
          constitutes the whole agreement between the Parties relating to its
          subject matter and supersedes and extinguishes any prior drafts,
          agreements, and undertakings, whether in writing or oral, relating to
          such subject matter, except to the extent that the same are repeated
          in this Agreement.

     (B)  Each of the Parties acknowledges that it has not been induced to enter
          into this Agreement by any representation, warranty, promise or
          assurance by any of the others or any other person save for those
          contained in this Agreement.

17.3 Variations

     No variation of this Agreement shall be effective unless made in writing
     and signed by each of the Parties.

17.4 Further assurance

     At any time after the Completion Date every Party hereto shall, at the
     request of any other Party and at such requesting Party's cost, execute or
     procure the execution of such documents and do or procure the doing of such
     acts and things as the requesting Party may reasonably require for the
     purpose of vesting in the requesting Party or its permitted assignees the
     full benefit of all its rights in this Agreement.

17.5 Costs

     Each Party shall bear its own costs arising out of or in connection with
     the preparation, negotiation and implementation of this Agreement. Any
     capital duty or fees payable to the Stock Exchange in relation to the
     Subscription shall be borne by the Company.

17.6 Time Of The Essence

     Any time, date or period mentioned in this Agreement may be extended by
     written agreement between the Parties but otherwise and except as
     expressly provided, as regards any time, date or period originally fixed
     or any date or period so extended as aforesaid, time shall be of the
     essence.

17.7 Agreement Binding and Assignment

     This Agreement shall be binding on and enure for the benefit of each
     Party's respective successors and permitted assigns. No Party shall assign
     any of its rights under this Agreement (all of which shall be incapable of
     assignment) or purport to do so without the prior written consent of the
     other Parties.

17.8 Waiver

     No failure or delay by any Party in exercising any right, power or remedy
     under this Agreement shall operate as a waiver thereof, nor shall any
     single or partial exercise of the same preclude any further exercise
     thereof or the exercise of any other right, power or remedy. Without
     limiting the foregoing, no waiver by any Party of any breach of any
     provision hereof shall be deemed to be a waiver of any subsequent breach of
     that or any other provision hereof.

                                       31
<PAGE>

17.9 Invalidity and Severance

     If any provision of this Agreement shall be held to be illegal, void,
     invalid or unenforceable under the laws of any jurisdiction, the legality,
     validity and enforceability of the remainder of this Agreement in that
     jurisdiction shall not be affected, and the legality, validity and
     enforceability of the whole of this Agreement in any other jurisdiction
     shall not be affected.

AS WITNESS the hands of the duly authorised representatives of the Parties on
the day and year first before written.

SIGNED by LI TZAR KAI, RICHARD     )
for and on behalf of               )
PCCW LIMITED                       )
in the presence of:                )

SIGNED by ZHANG CHUNJIANG          )
for and on behalf of               )
CHINA NETCOM GROUP                 )
CORPORATION (BVI) LIMITED          )
in the presence of:                )

SIGNED by ZHANG CHUNJIANG          )
for and on behalf of               )
CHINA NETWORK COMMUNICATIONS       )
GROUP CORPORATION                  )
in the presence of:                )

                                       32
<PAGE>

SCHEDULE 1: THE COMPANY WARRANTIES

The Company hereby represents and warrants to the Subscriber that:

1.   Subscription Announcement: All statements of fact contained in the
     Subscription Announcement (other than statements relating to the CNC Group
     or any member of the CNC Group) are true and accurate in all material
     respects and not misleading in any material respect in the form and context
     in which they appear, all expressions of opinion, intention or expectation
     contained therein (which are stated to be held or expressed by the Company)
     are made on reasonable grounds and are truly and honestly held by the
     directors of the Company and are fairly based and there are no other facts
     relating to the Company omitted the omission of which makes any such
     statement or expression in the Subscription Announcement misleading in any
     material respect or which are or can reasonably be expected to be material
     in the context of the Subscription.

2.   2003 Accounts: The consolidated balance sheet of the Group as at 31
     December 2003 and the consolidated income statement, the consolidated cash
     flow statement and the consolidated statement of changes in equity of the
     Group for the financial year ended on that date (including the notes
     thereto) as set out in the annual report and accounts of the Group for the
     year ended on 31 December 2003 (the "2003 Accounts") together gave a true
     and fair view of the state of affairs of the Group as at 31 December 2003
     and of the profits or losses, cash flows and changes in equity of the Group
     for the financial year ended on that date and were prepared on the basis
     set out therein.

3.   30 September Accounts: The unaudited consolidated results of the Group for
     the nine months ended 30 September 2004 published on 2 November 2004 (the
     "30 September Accounts") were carefully prepared in accordance with
     accounting policies consistent with those used in preparing the 2003
     Accounts and fairly reflect the results of operations for such nine months.

4.   Previous Announcements: All statements of fact contained in all
     announcements and circulars to shareholders made by or on behalf of the
     Company pursuant to the Listing Rules since 31 December 2003 to the date of
     this Agreement, except any announcement relating to the financial results
     of the Group (including without limitation any interim or financial results
     announcement), ("Previous Announcements") were true and accurate in all
     material respects as at the respective dates of such Previous Announcements
     and not misleading in any material respect. All expressions of opinion or
     intention contained in the Previous Announcements were made on reasonable
     grounds and were truly and honestly held by the directors of the Company
     and there were no other facts known to the directors of the Company the
     omission of which would make any such statement or expression in any of the
     Previous Announcements misleading in any material respect in the context in
     which the Previous Announcements were made and as at the respective dates
     of such Previous Announcements.

5.   Conduct of business: Save as disclosed in the Subscription Announcement or
     any public disclosures made by the Company prior to the date of this
     Agreement ("Previous Disclosures"), since 30 September 2004, the business
     of the Group has been carried on in the ordinary and normal course; no
     contracts or commitments of an unusual or unduly onerous nature have been
     entered into by any member of the Group; and there has been no material
     depletion in the net assets of the Group taken as a whole.

6.   Licences: The Group has obtained all material licences (including
     telecommunications and broadcasting licences) necessary to enable it to
     operate the material parts of its

                                       33
<PAGE>

     business as at the date of this Agreement, and each of those licences are
     valid and subsisting and, so far as the Company is aware, there are no
     facts or circumstances existing by reason of any breach by the licencees
     why any of such licences will not be renewed on their expiry. So far as the
     Company is aware, there are no governmental or regulatory investigations or
     proceedings which have been initiated prior to the date of this Agreement
     and have been notified in writing to any member of the Group and which are
     reasonably likely to have a material adverse effect on the business,
     prospects, assets, financial condition, or results of operations of the
     Group taken as a whole.

7.   No litigation: Save as disclosed in the Previous Disclosures, no member of
     the Group is a defendant in any litigation, arbitration or governmental
     proceeding which can reasonably be expected to have or have had during the
     twelve months preceding the date hereof a material adverse effect on the
     financial or trading position or prospects of the Group or which is
     material for disclosure in the context of the Subscription and no such
     litigation, arbitration or proceeding is threatened or pending; nor, to the
     best of the knowledge, information and belief of the directors of the
     Company, are there any circumstances which can reasonably be expected to
     give rise to any such litigation, arbitration or proceeding.

8.   Indebtedness and obligations: No circumstances or events have arisen or
     occurred or so far as the Company is aware are likely to arise or occur
     such that any person is (or would, with the giving of notice and/or lapse
     of time and/or fulfilment of any condition and/or the making of any
     determination, become) entitled to repayment of any material indebtedness
     prior to its due date for payment by any member of the Group, or to take
     any step to enforce any security for any such indebtedness of any member of
     the Group and no person to whom any indebtedness for borrowed money of any
     member of the Group which is payable on demand is owed has demanded or
     threatened to demand repayment of the same; no member of the Group is party
     to or under any obligation which is material and is of an unusual or unduly
     onerous nature; neither this Agreement nor the Subscription will constitute
     or give rise to a breach of or default under any agreement or other
     arrangement to which the Company or any other member of the Group is party
     or give rise to any rights of any third party in respect of any assets of
     the Group.

9.   Corporate power and consents: The Company has power under its
     constitutional documents to permit its entry into this Agreement and the
     Subscription in the manner set out herein and this Agreement (and its
     performance) has been duly authorised (such authorisation remaining in full
     force and effect), executed and delivered by, and constitutes legal, valid
     and binding obligations of the Company enforceable in accordance with its
     terms except as such enforceability may be limited under applicable
     bankruptcy, insolvency, fraudulent transfer, reorganisations or similar
     laws of general applicability relating to or affecting creditors rights and
     to general equitable principles; subject to satisfaction of the Conditions,
     there is no authorisation, consent, approval or notification required for
     the purposes of or as a consequence of the Subscription either from
     governmental, regulatory or other public bodies (including, without
     limitation, the Stock Exchange) or authorities or courts or from the
     respective sh areholders of the Company or from any third party pursuant to
     any contractual or other arrangement to which the Company or any other
     member of the Group is party; the Subscription and the compliance by the
     Company with all of the provisions of this Agreement will not conflict with
     or result in a material breach or violation of any of the terms or
     provisions of, or constitute a material default under, any agreement or
     instrument to which it is a party or by which it is bound or to which any
     of its property or assets is subject and will not contravene any law or
     regulation applicable to, or any order of any court or governmental agency
     with jurisdiction over the Company or any member of the Group, or any of
     their respective assets or properties.

                                       34
<PAGE>

10.  Subscription Shares: Upon completion of this Agreement, the Subscription
     Shares will be duly and validly authorised and issued and, when fully paid
     up, will rank pari passu in all respects with the other issued Shares.

11.  Stock Exchange and general compliance: The Company is not in material
     breach of any rules, regulations or requirements of the Stock Exchange, and
     the Company has complied in all material respects with all other applicable
     rules, regulations and other requirements material or relevant to the
     transactions contemplated by this Agreement as are required to be complied
     with at the date hereof.

12.  Incorporation and share capital: The Company has been duly incorporated and
     is validly existing under the laws of the jurisdiction of its incorporation
     with full corporate power and authority to conduct its business and the
     information contained in Recitals (A) and (B) to this Agreement is true and
     accurate; without limiting the foregoing, except for the Subscription or
     pursuant to the convertible securities listed below (the "Convertibles") or
     as specified in the Previous Disclosures, no person has any outstanding
     warrant, option, pre-emptive right or any other right of any description to
     require Shares to be allotted or issued by the Company. The Convertibles
     are: US$54,000,000 5% Mandatory Convertible Notes due 2005 issued by the
     Company - 28 June 2002, the US$450,000,000 1% Guaranteed Convertible Bonds
     due 2007 issued by PCCW Capital No.2 Limited and guaranteed by the Company
     and PCCW-HKT Telephone Limited and the US$1,100,000,000 3.5% Guaranteed
     Convertible Bonds due 2005 issued by PCCW Capital Limited and guaranteed by
     the Company - 6 December 2000. The terms and conditions attached to each of
     the Convertibles at the time of their original issue have not been amended
     or adjusted in any material manner which would affect the number of Shares
     to be issued on conversion.

13.  Certificate: The information and matters set out in the certificate
     referred to in clause 4.1(F), when issued, are true and accurate in all
     material respects.

                                       35
<PAGE>

               SCHEDULE 2: LIMITATIONS ON THE COMPANY'S LIABILITY

1.   Relevant Claims

     In this schedule, "Relevant Claim" means any claim under this Agreement.

2.   Financial Limits

2.1  Aggregate limit

     The aggregate liability of the Company under this Agreement, including the
     Company Warranties, shall be limited to US$350 million.

2.2  Thresholds

     The Company shall not be liable in respect of a Relevant Claim unless:

     (A)  the liability of the Company in respect of that Relevant Claim (and
          all other Relevant Claims arising out of or related to the same or
          similar subject matter) exceeds US$5 million;

     (B)  the aggregate liability of the Company in respect of all Relevant
          Claims in respect of the representations and warranties contained in
          paragraphs 2 (2003 Accounts), 3 (30 September Accounts) and 13
          (Certificate) of Schedule 1 exceeds US$20 million, in which case the
          Company shall be liable for the whole amount and not merely the excess
          over US$20 million; and

     (C)  the aggregate liability of the Company in respect of all Relevant
          Claims (other than in respect of the representations and warranties
          contained in paragraphs 2 (2003 Accounts), 3 (30 September Accounts)
          and 13 (Certificate) of Schedule 1) exceeds US$50 million (when
          aggregated with all Relevant Claims in respect of the representations
          and warranties contained in paragraphs 2 (2003 Accounts), 3 (30
          September Accounts) and 13 (Certificate) of Schedule 1, if
          applicable), in which case the Company shall be liable for the whole
          amount and not merely the excess over US$50 million.

3.   Time limits

     The Company shall have no liability in respect of any Relevant Claim in
     respect of a breach of the Company Warranties unless the Subscriber shall
     have given notice in writing to the Company of such claim specifying (in
     reasonable detail) the matter which gives rise to the claim, the nature of
     the claim and the amount claimed in respect thereof not later than 18
     months after the date of this Agreement (or, if later, 2 months after the
     date on which the audited consolidated financial statements of the Group
     covering the year ended 31 December, 2005 are published).

4.   No duplication of recovery

     The Subscriber shall not be entitled to recover damages or otherwise obtain
     reimbursement or restitution more than once in respect of the same loss.

                                       36
<PAGE>

5.   Legislation

     The Company will not be liable for any claim to the extent that the claim
     results from any act, matter, omission, transaction or circumstance which
     would not have occurred but for any legislation not in force at the date of
     this agreement, or any change of any law or administrative practice of any
     governmental agency including any legislation or change which takes place
     retrospectively.

6.   Insurance

     The Company will not be liable for any claim for breach of the Company
     Warranties unless the Subscriber has first made a claim under any insurance
     cover held by the Subscriber which may cover such claim and only then after
     that claim is denied whole or in part by the relevant insurer and if the
     Subscriber has still incurred some damage or loss will the Company be
     liable for any claims under the terms of this Agreement for that damage or
     loss. For the avoidance of doubt, the preceding sentence is not intended to
     impose any obligation on the Subscriber to take out any insurance cover in
     addition to that which it holds at the date of this Agreement.

7.   Impact of Tax

     In calculating the liability of the Company for a breach of Company
     Warranty, any tax benefit or reduction received by the Subscriber as a
     result of the loss or damage arising from that breach shall be taken into
     account.

8.   Consequential and Indirect Loss

     The Subscriber may not claim for any indirect or consequential loss.

                                       37

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