Document:

EXHIBIT 4(nn)

                      [Letterhead of JPMorgan Chase Bank]

                 LMA TRADE CONFIRMATION (DISTRESSED/BANK DEBT)

To   Buyer                         Date: 17 June 2004

Name: PCCW Limited and Telstra Corporation limited

Attention: Alex Arena and John Allerton

Fax No: (see below)

Tel No:(see below)

We are pleased to confirm the following transaction, subject to the Standard
Terms and Conditions for Distressed Trade Transactions of the Loan Market
Association ("LMA") (as amended as set out in the form attached), which are
incorporated herein by reference.

1.   Trade Date: 17 June 2004 (or such later date as a Deed
     of Release is signed between the Seller and the Buyer
     (among others))

2.   Settlement Date:

     18 June 2004, unless otherwise extended by mutual consent
     of the Buyer and the Seller

3. Seller: JPMorgan Chase Bank

     As agent for:
     Australia and New Zealand Banking Group
     Limited
     Barclays Bank PLC
     Citibank, N.A., Hong Kong Branch
     Cooperatieve Centrale Raiffeisen -
       Boerenleenbank B.A., Hong Kong
       Branch
     Credit Suisse First Boston, Melbourne
     Branch The Hongkong and Shanghai Banking
     Corporation Limited
     JPMorgan Chase Bank
     UFJ Bank Limited, Hong Kong Branch
     Merrill Lynch JPNDC, Incorporated
     Citigroup Financial Products Inc. (together,
     the "Financiers")

4.   Buyer: PCCW Limited and Telstra Corporation Limited

     As principals

5.   Details of Credit Agreement and Traded
     Portion:

     Date Signed:12 January 2001 as amended
     and restated on 15 April
     2003

     Borrower(s): Reach Finance
     Limited

     Guarantor(s):Reach Ltd., Reach Networks
     Hong Kong Limited, Reach Networks
     Australia Pty Limited, Reach Global
     Networks Limited, Reach Global Services
     Limited, Reach International Holdings
     Limited, Reach Networks KK and Reach
     Global Holdings
     Limited

     Agent Bank: JPMorgan Chase Bank

     Security: |X|No

     Total Facility Amount: US$1,200,000,000

     Governing Law: English
     Law

     Original  Lender:   |X|Yes,   except  for
     Merrill  Lynch  JPNDC,   Incorporated  and
     Citigroup Financial Products Inc.

     Additional Information:

     Nature: Term

     Contractual Margin: 2.5 % per annum
     through 31 December 2007, 3.5% per
     annum from 1 January 2008 if the total

<PAGE>

     principal outstanding at that date is more
     than USD900m.

     Final Maturity: 31 December 2010

     Traded Portion of Commitment: 100%

     Percentage of Amount Owing: 100%

6.   Pricing:

     Purchase Price: US$310,923,506.66
     (inclusive of accrued interest and of all fees,
     costs and other amounts payable)

7.   Accrued Interest:

     |X|  Settled Without Accrued Interest

     |_|  Trades Flat (accrued interest to Buyer)

     |_|  Other

8.   Transfer Costs: Recordation and Transfer
     fee: N/A

     Stamp duties and other applicable transfer
     taxes and any costs attributable to transfer
     of security: N/A

9.   Form of Purchase:

     |X|  Transfer Certificate in form prescribed
          by Credit Agreement

10.  Transaction Documentation:

     To be prepared by: |X| Seller

11.  Credit Documentation to be provided:

     |X| No

12.  Process Agents:

     Buyer:    |X| Yes |_| No

     Seller:   |X| Yes |_| No

     If yes, details of process agent:

     PCCW Limited

     Name:           Simmlaw Services Limited

     Address: CityPoint, One Ropemaker Street

                              London EC2Y 9SS

     Telstra Corporation Limited

     Name: Telstra Corporation Limited

     Address:                   London Office

     the Financiers and Lead Arrangers
     mentioned below (acting through their
     agent, JPMorgan Chase)

     Name:                     JPMorgan Chase

     Address:                   London Office

13.  Other Terms of Trade:

          |X|  This transaction is subject to the
               granting of any third party consents
               required under the terms of the Credit
               Agreement, or otherwise by law

          |X|  This transaction shall also be subject to
               (1) the execution of a Deed of Release
               in the form attached; and (2) the
               payment in full of the Payment due by
               the Buyer under it

14.  Seller's USD Account Payment Details:

     As per Schedule 4 of the Credit Agreement

Please sign and return this letter to the attention of the contact person
mentioned below by on or before 8 p.m. on Thursday 17 June 2004 at the fax
number mentioned below.

If you have any questions, please contact Ryan Lee of JPMorgan Chase at (852)
2800 1916 (tel no.).
                                       2
<PAGE>
<TABLE>
<S>                                                         <C>

SELLER                                                  BUYER

JPMorgan Chase (as facility agent of and acting in      PCCW Limited
accordance with the instructions of the Financiers
under the Credit Agreement, being Australia and New     Contact Person:  Alex Arena
Zealand Banking Group Limited; Barclays Bank PLC;
Citibank, N.A., Hong Kong Branch; Cooperatieve          Fax No.: +852 2962 5725
Centrale Raiffeisen - Boerenleenbank B.A., Hong Kong
Branch; Credit Suisse First Boston, Melbourne Branch;   Phone No.: +852 2883 6615
The Hongkong and Shanghai Banking Corporation
Limited; JPMorgan Chase Bank; UFJ Bank Limited, Hong
Kong Branch; Merrill Lynch JPNDC,  Incorporated;
Citigroup Financial Products Inc)                       By:

Contact Person: Ryan Lee                                Name:

Fax No.: (852) 2836 9672                                Title:

Phone No.: (852) 2800 5143                              Date:

                                                        And

By:                                                     Telstra Corporation Limited

Name:                                                   Contact Person:  John Allerton

Title:                                                  Fax No.: +61 3 9632 3215

Date:                                                   Phone No.: +61 3 9634 6431

                                                        By:

                                                        Name:

                                                        Title:

                                                        Date:
</TABLE>

                                       3
<PAGE>

                        LOAN MARKET ASSOCIATION ("LMA")

                  STANDARD TERMS AND CONDITIONS FOR DISTRESSED
                     TRADE TRANSACTIONS (BANK DEBT/CLAIMS)

1.       Applicability of Conditions and Interpretation

         These Conditions shall apply to a distressed trade transaction in
         respect of which they are incorporated by reference.

         For the purpose of construing these Conditions in relation to a
         transaction to which they apply (the "transaction"):

         "Agents" means any facility, security or other agent, trustee,
         representative or co-ordinator under the Credit Documents and "Agent"
         shall be construed accordingly;

         "Agent's Expenses" means any costs, liabilities, losses, claims,
         damages and expenses incurred by, and any indemnification of, any
         Agent or any person being a member of a steering committee, a
         co-ordinator or otherwise involved in any standstill or other
         arrangement in relation to the Borrowers for which such Agent or
         person has recourse under the Credit Documents to the Seller but only
         to the extent attributable to or applicable by reference to the
         Purchased Assets or the Purchased Obligations;

         "Agreed Terms" means the terms agreed between the Buyer and the Seller
         in relation to the transaction, as evidenced by the Confirmation;

         "Buyer Warranties" means the warranties, representations and
         indemnities made by, and the covenants and agreements of, the Buyer in
         the Agreed Terms;

         "Confirmation" means the confirmation executed and delivered by the
         Seller and the Buyer in relation to the transaction;

         "Credit Agreement" means the credit agreement to which the transaction
         relates;

         "Credit Documentation" means the Credit Agreement, together with all
         schedules and appendices thereto, any amendments or variations thereto
         and all ancillary guarantee, security, intercreditor and restructuring
         documentation;

         "Group" means, in respect of any person, such person and each of its
         holding companies and subsidiaries and each subsidiary of each of its
         holding companies (as each such term is defined in the Companies Act
         1985 as from time to time amended or re-enacted);

         "Non-Cash Distribution" means any note, debenture or other financial
         instrument, non-cash asset or right, whether debt, equity or
         otherwise, issued in satisfaction or purported satisfaction of any
         obligation of an Obligor to make any payment with respect to any
         interest or fees payable in respect of the Traded Portion or any part
         thereof;

                                       1
<PAGE>

         "Obligor" means the Borrower and each other Obligor as defined in the
         Credit Documentation;

         "Other Party" means the counterparty to a transaction which is not the
         Responsible Party;

         "Predecessor-in-Title" means any of the Seller's predecessor-in-title
         to the Purchased Assets or the Purchased Obligations or any part
         thereof;

         "Predecessor Transfer Agreements" means all transfer agreements under
         which (a) the Seller and (b) any of the Seller's Predecessors-in-Title
         acquired the Purchased Assets or any part thereof;

         "Purchased Assets" means the advances, claims and other rights
         included in the Traded Portion of the Seller's participation under or
         in respect of the Credit Documentation, together with and subject to
         the obligations and liabilities of the Seller attributable to such
         Traded Portion (together with corresponding rights under any ancillary
         guarantee or security) but excluding (a) the Retained Rights and (b)
         if the Seller is an Agent, any of the Seller's rights as Agent;
         Provided that if the Agreed Terms provide for the assignment to the
         Buyer of the Seller's right, title, interest and benefit in, to and
         under the agreements pursuant to which the Seller derives title to the
         Traded Portion from the original lender of record, the Purchased
         Assets shall additionally include the Retained Rights;

         "Purchased Obligations" means all of the obligations under the Credit
         Documents expressly assumed or to be assumed by the Purchaser from the
         Settlement Date in accordance with the provisions of the Transaction
         Documentation including without limitation the obligations of the
         Seller with respect to the Traded Portion but excluding the Retained
         Obligations;

         "Responsible Party" means either the party responsible for preparing
         the Confirmation as agreed between the Seller and Buyer on the Trade
         Date or the party responsible for preparing the Transaction
         Documentation as specified in the Confirmation, as the context may
         require;

         "Retained Obligations" means, save as otherwise provided in the Agreed
         Terms, all obligations of the Seller under the Credit Documentation
         and the Predecessor Transfer Agreements that (a) relate to facts,
         events or circumstances arising or occurring before the Settlement
         Date, (b) relate to a breach of any of the Seller Warranties, (c)
         arise out of the Seller's bad faith, gross negligence or wilful
         misconduct, (d) do not relate to the Purchased Assets or (e) if the
         Seller is an Agent, are attributable to the Seller's obligations as
         Agent;

        "Retained Rights" means:

         (i)      all of the Seller's rights and claims against any employee,
                  agent or professional adviser to the extent that such rights
                  relate to the Seller's purchase of the Traded Portion or its
                  sale under the Confirmation; and

                                       2
<PAGE>

         (ii)     all of the Seller's rights, title, interest and benefit in,
                  to and under the Predecessor Transfer Agreements.

         "Seller Warranties" means the warranties, representations and
         indemnities made by, and the covenants and agreements of, the Seller
         in the Agreed Terms;

         "Transaction Documentation" means the documentation required to
         implement the transaction (being the agreed Form of Purchase, the
         Confirmation and the Agreed Terms) and, "Transaction Document" shall
         be construed accordingly.

Other capitalised terms used in these Conditions shall have the meaning given
to them in the Confirmation.

In the case of any inconsistency between the Agreed Terms of the transaction
and these Conditions, the Agreed Terms shall prevail.

2.       Contract Point

         A binding contract for the sale or participation by the Seller to the
Buyer of the Purchased Assets shall come into effect between the Seller and the
Buyer on the Trade Date and shall be documented and completed in accordance
with Conditions 6, 7 and 8. The Seller and the Buyer acknowledge that events
occurring subsequent to the Trade Date shall not relieve the parties of their
obligations under the Confirmation.

3.       Confirmation

        The Seller and the Buyer shall agree the terms of and duly complete and
sign a form of Confirmation on the Trade Date. By execution of a Confirmation
any party acting as agent for other parties shall thereby represent and warrant
that in entering into the Confirmation it is acting as agent for and in
accordance with the instructions from all such parties.

4.       Conditionality

         A transaction is subject to any conditions specified in the Agreed
Terms and, subject to the next following sentence, the parties undertake with
each other to use all reasonable endeavours to ensure that such conditions are
duly fulfilled. Unless otherwise specified in the Agreed Terms or the Deed of
Release, the Seller shall use all reasonable endeavours to obtain any required
consents in connection with the transaction.

If, nevertheless, one or more of such conditions remains unfulfilled on the
proposed Settlement Date, the Settlement Date shall be postponed for such
period or periods as the parties may agree during which the parties shall use
all reasonable endeavours to ensure fulfilment of the condition and/or shall
consider in good faith whether or not there is an alternative means, acceptable
to both parties, whereby the substance of the transaction can be implemented
(but neither party shall be obliged to act in a way which it considers to be
prejudicial to its position). If no postponement, or no further postponement,
or no such alternative, is agreed the transaction shall be cancelled and
neither party shall have any further liability to the other except that if any
amounts have already been paid under the transaction by either party to the
other they shall promptly be refunded.

                                       3
<PAGE>

5.       Due Diligence

         It shall be assumed that the Buyer shall have satisfied itself as to
the creditworthiness of each Obligor and acceptability of the transaction prior
to the Trade Date, and the transaction shall not be conditional upon this.

6.       Transaction Documentation

         The Responsible Party shall execute the Transaction Documentation on
the agreed basis and, subject to any relevant conditions specified in the
Agreed Terms, shall deliver it to the Other Party on the Trade Date.

7.       Insolvency Proceedings

         Where insolvency proceedings involving one or more Obligors have been
commenced as at the Trade Date the Seller shall use all reasonable endeavours
to provide the Buyer within ten business days after the Trade Date copies of
any existing proofs of debt or other claims which have been submitted by or on
behalf of the Seller.

8.       Settlement Date and Payment

         Subject to the Agreed Terms, the transaction shall be settled on the
Settlement Date by the taking of all necessary action to complete the
transaction.

If for any reason, a transaction settles after the specified Settlement Date
then, for the purpose of allocating interest and fees under these Conditions,
the Settlement Date shall be construed to be the date of actual settlement of
the transaction.

The action necessary to complete a transaction shall include the payment for
the Purchased Assets on the Settlement Date.

9.       Settlement Amount

         The amount payable for the Purchased Assets shall be equal to the
Purchase Price (as specified in the Agreed Terms).

10.      Interest Payments and Fees

         All interest, and all fees which are expressed to accrue by reference
to time elapsed, are based on contractual rates, as set forth in the Credit
Agreement.

Any interest or fees accrued up to but excluding the Settlement Date shall be
for the account of the Seller, and payment of the Purchase Price shall be in
full and final settlement thereof.

All payments made under this Condition 12 shall be made free and clear of any
deduction or withholding save for such deduction or withholding as may be
required to be made from such payments by any law, regulation or practice.

11.      Breakfunding

                                       4
<PAGE>

         Unless the Agreed Terms otherwise provide, no breakfunding
compensation shall be paid for settlement of a transaction on a day other than
an interest payment date in respect of the Purchased Assets.

12.      Agent's Expenses

         The Seller shall be responsible for and shall promptly pay any Agent's
Expenses incurred or arising under or in connection with the Credit Documents
and shall, without limiting the generality of the foregoing, promptly pay on
demand such Agent's Expenses attributable to the Purchased Assets or Purchased
Obligations which have accrued on or prior to the Settlement Date but have not
yet been billed or invoiced.

The Buyer shall have no liability for any Agent's Expenses.

13.      Transfer Costs

         The Seller shall pay any recordation, processing, transfer or similar
fee payable to the Agents under the Credit Documentation in connection with the
transaction to the Agents on the date upon which such fee is payable under the
Credit Documentation.

Stamp duties and other applicable transfer taxes and any costs attributable to
the discharge and release of security are payable by the Seller.

14.      Costs and Expenses

         Each of the Buyer and the Seller shall bear its respective
out-of-pocket costs and expenses (including legal expenses) in connection with
any transaction.

15.      Principal/Agency Status

         Each of the Buyer and the Seller shall indicate whether it is acting
as a principal or an agent in the transaction. A Buyer or Seller that holds
itself out as a "principal" is directly liable for the completion of the
transaction.

        However, a Buyer or Seller that indicates its status as an agent does
represent to the counterparty its authority to bind its principal(s) to the
transaction (which principal(s) shall be bound as if it/they were named as
"Buyer" or "Seller" as the case may be) and shall provide the counterparty with
evidence of that authority if requested to do so.

                                       5
<PAGE>

16.      Non-reliance and Independent Investigation

         Each party acknowledges to the other that it is a sophisticated Buyer
or Seller (as the case may be) with respect to the transaction and has such
information as it deems appropriate under the circumstances (however obtained),
concerning for example the business and financial condition of the obligor(s)
under the Credit Agreement, to make an informed decision regarding the
transaction. Each of the Buyer and the Seller hereby agrees that it has
independently made its own analysis and decision to enter into the transaction,
based on such information as it has deemed appropriate under the circumstances,
and without reliance on the other party (except for reliance on any express
representation made by the other party in the Agreed Terms or pursuant to these
Conditions).

In addition, and except only as otherwise specified in the Agreed Terms, the
Seller does not make, and the Buyer does not rely upon, any representation,
warranty or condition (express or implied) about, and the Seller shall have no
liability or responsibility to the Buyer for, the effectiveness, validity or
enforceability of the Credit Documentation, or other documentation delivered by
the Seller to the Buyer, or any of the terms, covenants or conditions contained
in the Credit Documentation or other documentation, or any non-performance by
any party to it, or the financial condition of any Obligor under the Credit
Documentation.

The Seller notifies the Buyer and the Buyer acknowledges that, except as
otherwise specified in the Agreed Terms:

         (i)      the Seller shall have no obligation to repurchase or
                  reacquire all or any part of the Purchased Assets from the
                  Buyer or to support any losses directly or indirectly
                  sustained or incurred by the Buyer for any reason whatsoever,
                  including the non-performance by any Obligor under the Credit
                  Documentation of its obligations thereunder; and

         (ii)     any rescheduling or renegotiation of the Purchased Assets
                  shall be for the account of, and the responsibility of, the
                  Buyer, who will be subject to the rescheduled or renegotiated
                  terms.

Each of the Buyer and Seller acknowledges that the other may possess material
information not known to it. Each agrees that the other shall have no liability
with respect to the non-disclosure of any such information except to the extent
that such information renders inaccurate an express representation made
pursuant to the Agreed Terms or these Conditions by the party possessing such
information.

17.      Representations and Undertakings

         Each of the Buyer and the Seller as of the Trade Date and the
Settlement Date represents and undertakes to the other that:

         (i)      it is duly organised and validly existing under the laws of
                  the jurisdiction in which it is incorporated;

                                       6
<PAGE>

         (ii)     it has the power to enter into the transaction and to execute
                  and deliver the Confirmation and the Transaction
                  Documentation;

         (iii)    its obligations in relation to the transaction constitute
                  legal, valid, binding and enforceable obligations (subject to
                  applicable bankruptcy, reorganisation, insolvency, moratorium
                  or similar laws affecting creditors' rights generally and
                  subject, as to enforceability, to equitable principles of
                  general application);

         (iv)     in the case of the Buyer only, it will not use any
                  information received by it from the Seller in relation to the
                  Obligors, or the Purchased Assets for any unlawful purpose or
                  in breach of any confidentiality agreement entered into by it
                  in connection with the transaction; and

         (v)      no broker, finder or other person acting pursuant to the
                  instructions of one party is entitled to any broker's fee or
                  other commission in connection with the transaction for which
                  the other party may be responsible.

All express representations made by the parties pursuant to the Agreed Terms
and these Conditions shall survive the execution and delivery of the
Transaction Documentation and consummation of the transactions contemplated
therein.

18.      Default and Indemnities

        The Seller shall indemnify, defend and hold the Buyer and its officers,
directors and employees and agents harmless from and against any liability,
claim, cost, loss, damage or expense (including, without limitation, reasonable
legal fees and disbursements and VAT thereon), or judgments which they (or any
of them) incur or suffer as a result of:

         (i)      the Seller's breach of any of the provisions of the Agreed
                  Terms or the Transaction Documentation; or

         (ii)     the Seller's breach of any of the Seller Warranties.

         The Buyer shall indemnify, defend and hold the Seller and its
respective officers, directors, employees and agents harmless from and against
any liability, claim, cost, loss, damage or expense (including, without
limitation, reasonable legal fees and disbursements and VAT thereon) or
judgments which they (or any of them) incur or suffer as a result of:

         (i)      the breach by the Buyer of any of the provisions of the
                  Agreed Terms; or

         (ii)     the breach of the Buyer Warranties by the Buyer.

         Each indemnity in the Agreed Terms is a continuing obligation,
separate and independent from the other obligations of the parties and survives
termination of the Transaction and it is not necessary for a party to incur
expense or make payment before enforcing a right of indemnity conferred by the
Agreed Terms Provided that no party thereto shall be obliged to indemnify any
other party to the Agreed Terms if the loss of the indemnified party is due to
the negligence or wilful misconduct of such other party.

                                       7
<PAGE>

19.      Confidentiality

         Both parties shall maintain the confidentiality of the terms of the
transaction in accordance with the terms of the confidentiality agreement
entered into between the parties in the Deed of Release referred to in the
Confirmation.

20.      Tax

         The Buyer acknowledges that it is responsible for making its own
independent tax analysis of the Credit Documentation and the transaction.

21.      Set-off

         Either party may (but is not obliged to) set off any amount due and
payable by the other party under the transaction against any such amounts due
and payable by it to the other party thereunder. The party exercising its
rights under this provision may effect such currency exchanges as it considers
necessary to implement the set off.

22.      Further Assurance

         Each of the parties agrees, at its own expense, to take any further
action and to execute any further documents and/or instruments as the other may
reasonably request to give effect to the transaction.

23.      Assignment

        Unless the Agreed Terms provide that the Purchased Assets shall include
        the Retained Rights, neither the Seller nor the Buyer may assign the
        benefit of all or any part of its rights against the other party under
        the Agreed Terms or the Transaction Documentation in respect of the
        transaction without the prior written consent of the other (such
        consent not to be unreasonably withheld or delayed).

24.      Third Party Rights

        A person who is not a party to the Confirmation or other Transaction
        Document (which, for the avoidance of doubt, does not include the Deed
        of Release) has no right under the Contracts (Rights of Third Parties)
        Act 1999 to enforce or to enjoy the benefit of any term of the
        Confirmation or other Transaction Document.

25.      Governing Law and Jurisdiction

        The transaction, the Agreed Terms and these Conditions shall be
        governed by and construed in accordance with the laws of England, and
        the parties submit to the non-exclusive jurisdiction of the English
        courts.

        The Seller and the Buyer each irrevocably appoints (and shall
        irrevocably appoint in the Transaction Documentation) the person
        described as its process agent (if any) in the Agreed Terms to receive
        on its behalf service of any action, suit or other proceedings in
        connection with the transaction, the Agreed Terms or these Conditions.
        If any person appointed as process agent ceases to act for any reason
        the appointing party

                                       8
<PAGE>

         shall notify the other party and shall promptly appoint another person
         incorporated within England and Wales to act as its process agent.

26.      Execution in Counterparts and by Fax

        Any Confirmation, confidentiality agreement or other Transaction
        Document may be executed in any number of counterparts and by different
        parties thereto on separate counterparts each of which, when executed
        and delivered, shall constitute an original, but all the counterparts
        shall together constitute but one and the same instrument.

        Transmission by fax of an executed counterpart of a Confirmation,
        confidentiality agreement or any other Transaction Document shall be
        deemed to constitute due and sufficient delivery of such counterpart.
        The Buyer and the Seller shall deliver to each other an original
        counterpart of the Transaction Documents (and, upon the request of
        either party, the Confirmation, confidentiality agreement or any other
        document) promptly after delivery by fax.

                                       9EXHIBIT 4(oo)

Mallesons Stephen Jaques

Shareholder Term Loan Facility Agreement

Dated 12 January 2001

Reach Finance Limited ("Borrower")
Reach Ltd. ("REACH")
Reach Networks Hong Kong Limited
Reach Networks Australia Pty Limited
Reach Global Networks Limited
Reach Global Services Limited
Reach International Holdings Limited
Reach Global Holdings Limited
Reach Networks KK ("Initial Guarantors")
Telstra Corporation Limited ("Telstra")
PCCW Limited ("PCCW")

Mallesons Stephen Jaques
Level 28
Rialto
525 Collins Street
Melbourne   Vic   3000
Australia
T +61 3 9643 4000
F +61 3 9643 5999
DX 101 Melbourne
www.mallesons.com
AJMG:NPC

<PAGE>

Shareholder Term Loan Facility Agreement
Contents

1        The Facilities                                                       4

2        Using the Facilities                                                 4

3        Interest                                                             4

4        Repaying and prepaying                                               6

5        Payments                                                             8

6        [intentionally left blank]                                           9

7        [intentionally left blank]                                           9

8        Withholding tax                                                      9

9        Increased costs                                                     11

10       Illegality                                                          12

11       Representations and warranties                                      13

12       Undertakings                                                        14

13       Default                                                             16

14       Costs and indemnities                                               17

15       Interest on overdue amounts                                         21

16       Guarantee and indemnity                                             21

17       [intentionally left blank]                                          26

18       [intentionally left blank]                                          26

19       [intentionally left blank]                                          26

20       [intentionally left blank]                                          26

21       [intentionally left blank]                                          26

                                                                               i
<PAGE>

22       [intentionally left blank]                                          26

23       [intentionally left blank]                                          26

24       [intentionally left blank]                                          26

25       [intentionally left blank]                                          26

26       [intentionally left blank]                                          26

27       Relationships between parties                                       27

28       Dealing with interests                                              27

29       Notices                                                             28

30       General

31       Interpretation                                                      34

Schedule 1 - New Guarantor documentation (clause 16.12)                      48

Schedule 2 - [intentionally left blank]                                      50

Schedule 3 - [intentionally left blank]                                      51

Schedule 4 - Payment details (clause 5.4)                                    52

Schedule 5 - Form of New Guarantor Deed Poll (clause 16.12)                  53

Schedule 6 - [intentionally left blank]                                      55

Schedule 7 - [intentionally left blank]                                      56

Schedule 8 - [intentionally left blank]                                      57

Schedule 9 - [intentionally left blank]                                      58

Schedule 10 - [intentionally left blank]                                     59

                                                                              ii
<PAGE>

Shareholder Term Loan Facility Agreement
Details

Interpretation - Definitions are at the end of this agreement before the
                 schedules.
--------------------------------------------------------------------------------
Parties                The Borrower, REACH, Initial Guarantors, Telstra and
                       PCCW, each as described below.
--------------------------------------------------------------------------------
Borrower               Name                  Reach Finance Limited (formerly
                                             known as Capital Next Limited)

                       Incorporated in       Hong Kong

                       Address               20th Floor
                                             Telecom House
                                             3 Gloucester Road
                                             Wanchai
                                             Hong Kong

                       Fax                   (1) +852 2519 3371
                                             (2) +852 2824 0518

                       Telephone             +852 2883 6180

                       Attention             (1) Finance Director
                                             (2) General Counsel
--------------------------------------------------------------------------------
REACH                  Name                  Reach Ltd. (formerly known as Joint
                                             Venture (Bermuda) No 1 Limited)

                       Incorporated in       Bermuda

                       Address               Clarendon House
                                             2 Church Street
                                             PO Box HM666
                                             Hamilton HM CX
                                             Bermuda

                       Fax                   (1) +1 441 292 4720
                                             (2) +852 2824 0518

                       Telephone             +1 441 295 1422

                       Attention             (1) Company Secretary
                                             (2) General Counsel
--------------------------------------------------------------------------------
Initial Guarantors                           REACH
                                             Reach Networks Hong Kong Limited
                                             Reach Networks Australia Pty
                                             Limited
                                             Reach Global Networks Limited
                                             Reach Global Services Limited

                                                                              1
<PAGE>

                                             Reach International Holdings
                                             Limited
                                             Reach Global Holdings Limited
                                             Reach Networks KK
--------------------------------------------------------------------------------
Financiers             See end of these Details
--------------------------------------------------------------------------------
Obligor                The Borrower, each Guarantor and each Chargor.
--------------------------------------------------------------------------------
Facilities             The Telstra Facility and the PCCW Facility.
--------------------------------------------------------------------------------
Telstra Facility       Description          A term loan facility provided by
                                            Telstra.

                       Telstra Facility     US$600,000,000 on the Effective Date
                       Limit                (as reduced by the amount of any
                                            repayment or prepayment under clause
                                            4 ("Repaying and prepaying")).

                       Maturity date        The Final Maturity Date.
--------------------------------------------------------------------------------
PCCW Facility          Description          A term loan facility provided by
                                            PCCW.

                       PCCW Facility Limit  US$600,000,000 on the Effective Date
                                            (as reduced by the amount of any
                                            repayment or prepayment under clause
                                            4 ("Repaying and prepaying")).

                       Maturity date        The Final Maturity Date.
--------------------------------------------------------------------------------
Repayment / Final      Drawings are repayable on 31 December 2010 (the Final
Maturity Date           Maturity Date).
--------------------------------------------------------------------------------

Interest Rate          LIBOR plus Margin.
--------------------------------------------------------------------------------
Interest Periods       1, 2 or 3 months or another period as agreed by the
                       Financiers.
--------------------------------------------------------------------------------
Margin                 2.5 per cent. per annum or such increased percentage
                       as provided in clause 3.7 ("Increased Margin").
--------------------------------------------------------------------------------
Transaction            o        this agreement (as amended and restated)
Documents
                       o        the CPP Agreement

                       o        the Working Capital Facility Agreement

                       o        the Security Documents

                       o        any New Guarantor Deed Poll or other guarantee
                                entered into under clause 16.12 ("Becoming a New
                                Guarantor")
--------------------------------------------------------------------------------
Reference Banks        JPMorgan Chase Bank

                                                                              2
<PAGE>

                       Barclays Bank PLC

                       Citibank, N.A. Hong Kong Branch

                       UFJ Bank Limited, Hong Kong Branch

                       The Hongkong and Shanghai Banking Corporation Limited
--------------------------------------------------------------------------------
Process Agent's        Simmlaw Services Limited
address (clause        Simmons & Simmons
30.24)                 City Point
                       One Ropemaker Street
                       London   EC2Y 9SS
                       ENGLAND
--------------------------------------------------------------------------------
Governing law          English law
--------------------------------------------------------------------------------
Date of agreement      12 January 2001
---------------------- ---------------------------------------------------------
Financiers
--------------------------------------------------------------------------------
Telstra                Name                  Telstra Corporation Limited

                       Address               Level 41
                                             242 Exhibition Street
                                             Melbourne VIC 3000
                                             Australia

                       Fax                   +61 3 9632 3215

                       Telephone             +61 3 9634 6431

                       Attention             Company Secretary
--------------------------------------------------------------------------------
PCCW                   Name                  PCCW Limited

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

                       Fax                   +852 2962 5725

                       Telephone             +852 2883 6615

                       Attention             Company Secretary
--------------------------------------------------------------------------------

                                                                              3
<PAGE>

Shareholder Term Loan Facility Agreement
General Terms

Interpretation - Definitions are at the end of this agreement before the
schedules.

The Facility

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

1         The Facilities

1.1       Outstanding Facilities

          Each Financier has acquired half of the total debt under this
          agreement. The first Interest Period after the Effective Date starts
          on the Effective Date and is of one month.

1.2       Maximum accommodation

          The maximum total amount of financial accommodation available to the
          Borrower under a Facility is an amount equal to the Facility Limit for
          that Facility.

-------------------------------------------------------------------------------
2         Using the Facilities

          As at the Effective Date, the Borrower has fully used each Facility
          and the original terms for drawing down have been deleted accordingly.

-------------------------------------------------------------------------------
3         Interest

3.1       Interest charges

          The Borrower agrees to pay interest on each Drawing for each of its
          Interest Periods at the applicable Interest Rate (or, where
          applicable, the rate of interest determined under clause 3.5
          ("Substitution period and Interest Rate") or 3.6 ("Alternative
          rate")). Interest:

          (a)       accrues daily from (and including) the first day of an
                    Interest Period to (but excluding) the last day of the
                    Interest Period; and

          (b)       is payable on each Interest Payment Date; and

          (c)       is  calculated  on actual  days  elapsed  and a year of 360
                    days.

3.2       Notification of Interest Period

          Each Interest Period is (subject to clause 3.3 ("When Interest
          Periods begin and end")) a period notified by the Borrower to the
          Financiers by 11.00am on the fourth Business Day before the last day
          of the current Interest Period. However, in each case, the specified
          period must be one that is set out in the Details. If the Borrower
          does not give correct notice, the subsequent Interest

                                                                              4
<PAGE>

          Period is the same length as the Interest Period which immediately
          precedes it (or it is the period until the Final Maturity Date, if
          that is shorter than the preceding Interest Period) unless it is a
          period of more than 3 months, then such subsequent Interest Period
          shall be 3 months.

          The Borrower may, in its notification relating to an Interest Period
          mentioned in the above paragraph, elect that the Drawing to which
          that Interest Period relates shall at the beginning of that Interest
          Period be split into 2 amounts provided that each amount shall be
          specified in that notification but shall be of a minimum amount of
          US$10,000,000. Each amount shall be deemed to be a separate Drawing.
          However, an Interest Period which would otherwise end after the Final
          Maturity Date ends on the Final Maturity Date.

3.3       When Interest Periods begin and end

          Each Interest Period begins on the day when the preceding Interest
          Period for the Drawing ends. An Interest Period which would otherwise
          end on a day which is not a Business Day ends on the next Business
          Day (unless that day falls in the following month, in which case the
          Interest Period ends on the previous Business Day).

3.4       Market disruption

          If, in relation to any Drawing:

          (a)       LIBOR for an Interest Period is to be determined by
                    reference to Reference Banks and at or about the time at
                    which the rate is to be set for the relevant Interest
                    Period, none or only one of the Reference Banks supplies a
                    rate for the purpose of determining LIBOR for that Interest
                    Period; or

          (b)       before close of business in London on the date on which
                    LIBOR is to be set for an Interest Period the Financiers
                    agree that the cost to each of them of obtaining matching
                    deposit in the London interbank market would be in excess
                    of LIBOR for that Interest Period, then:

                    (i)       the Financier must promptly notify the Borrower
                              of that event; and

                    (ii)      clause 3.5 ("Substitution period and Interest
                              Rate") applies to the Drawing.

3.5       Substitution period and Interest Rate

          If clause 3.4 ("Market disruption") applies:

          (a)       the duration of the relevant Interest Period for the
                    Drawing is one month (subject to clause 3.3 ("When Interest
                    Periods begin and end")); and

          (b)       the rate of interest on each Drawing for the Interest
                    Period is (subject to any agreement reached under clause
                    3.6 ("Alternative rate")) is the rate per annum which is
                    the sum of:

                                                                              5
<PAGE>

                    (i)       the Margin; and

                    (ii)      [intentionally left blank]

                    (iii)     the rate per annum notified to the Borrower by
                              the Financiers as soon as reasonably practicable
                              and in any event before the last day of that
                              Interest Period to be the rate which expresses as
                              a percentage rate per annum the cost to the
                              Financiers of funding, from whatever sources they
                              may reasonably select, that Drawing during that
                              Interest Period.

3.6       Alternative rate

          If clause 3.4 ("Market  disruption")  occurs in relation to a Drawing
          and the Borrower so requires,  the  Financiers  and the Borrower must
          enter into  negotiations (for a period of not more than 30 days) with
          a view to agreeing a substitute  basis for  determining  the rates of
          interest  from time to time  applicable to Drawings.  Any  substitute
          basis  that is agreed  only  takes  effect  and binds the  parties if
          approved by each Financier.

3.7       Increased Margin

          With effect from and  including 1 January  2008 and unless the amount
          of the  outstanding  Drawings has been reduced to  US$900,000,000  or
          less, the Margin shall be increased to 3.5 per cent. per annum.

-------------------------------------------------------------------------------
4         Repaying and prepaying

4.1       Repayment of Drawings

          The Borrower agrees to repay all Drawings on the Final Maturity Date.

4.2       Payments  must be in  Proportion

          Subject to clause 4.9 ("Mandatory prepayment - CPP Agreement"), any
          payment, repayment or prepayment under a Facility requires the
          relevant Obligor to pay, repay or prepay an amount under the other
          Facility so that the total payment is divided between the Financiers
          into amounts that are equal to each Financier's Proportion of the
          total amount to be paid, repaid or prepaid at the time immediately
          before the payment is made.

          The Financiers acknowledge that their Proportions may not be equal if
          a  Financier  requires  an  Obligor  to make  payments  under the CPP
          Agreement in accordance with clause 4.9 ("Mandatory  prepayment - CPP
          Agreement").

4.3       Financiers to ensure payments in Proportion

          Each Financier  agrees that if it receives any amount in respect of a
          Facility which is more than it would have received if the payment had
          been made in the correct  Proportion for each Financier in accordance
          with clause 4.2, that Financier must immediately pay an amount to the
          other Financier so that the other Financier  receives the amount that
          it should  have  received if the payment had been made in the correct
          Proportion for each Financier.

                                                                              6
<PAGE>

          The Obligors agree that any amount paid to a Financier under this
          clause 4.3:

          (a)       increases the Amount Owing for the Financier that makes the
                    payment; and

          (b)       decreases the Amount Owing for the Financier that receives
                    the payment,

          by the amount of the payment.

4.4       Prepayment of Drawings - no Break Costs

          The Borrower may prepay all or part of a Drawing at any time without
          premium or penalty and without the payment of Break Costs, as
          follows:

          (a)       the prepayment amount must be at least US$2,000,000 and a
                    whole multiple of US$1,000,000; and

          (b)       the Borrower must notify the proposed prepayment to the
                    Financiers by 11.00am on the tenth day before the date of
                    the prepayment. Once given, a notice of prepayment is
                    irrevocable and the Borrower is obliged to prepay in
                    accordance with the notice; and

          (c)       the prepayment must be made on the last day of an Interest
                    Period for the Drawing.

          Prepayments are to be applied to reduce the principal amount of the
          Drawings.

4.5       Prepayment of Drawings - with Break Costs

          The Borrower may prepay all or part of a Drawing at any time (but may
          incur Break Costs - see clause 14.2 ("Indemnity")), as follows:

          (a)       the prepayment amount must be at least US$2,000,000 and a
                    whole multiple of US$1,000,000; and

          (b)       the Borrower must notify the proposed prepayment to the
                    Financiers by 11.00am on the tenth day before the date of
                    the prepayment. Once given, a notice of prepayment is
                    irrevocable and the Borrower is obliged to prepay in
                    accordance with the notice.

          Prepayments are to be applied to reduce the principal amount of the
          Drawings.

4.6       [intentionally left blank]

4.7       [intentionally left blank]

4.8       [intentionally left blank]

4.9       Mandatory Prepayment - CPP Agreement

          If the CPP Agreement requires an Obligor to make a payment to either
          of the Financiers under that agreement in repayment or prepayment of
          the Drawings

                                                                              7
<PAGE>

          under a Facility, the relevant Obligor must make the payment required
          in repayment or prepayment of the Drawings under the relevant
          Facility. The Financiers agree that nothing in this agreement
          prevents an Obligor from making a payment to either of the Financiers
          that is not in accordance with each Financier's Proportion of the
          Drawings if that payment is required under the CPP Agreement.

4.10      Prepayment and Facility Limit

          The relevant Facility Limit is reduced by all amounts repaid or
          prepaid. Amounts prepaid are not available for redrawing.

--------------------------------------------------------------------------------
5         Payments

5.1       Manner of payment

          Despite any other provision of a Transaction Document, the Obligor
          agrees to make payments (including by way of reimbursement) under
          each Transaction Document:

          (a)       on the due date (or, if that is not a Business Day, on the
                    next Business Day unless that day falls in the following
                    month or after the Final Maturity Date, in which event, on
                    the previous Business Day); and

          (b)       not later than 11.00am in the place for receipt of payment;
                    and

          (c)       in US Dollars in immediately available funds; and

          (d)       in full without set-off or counterclaim, and without any
                    deduction in respect of Taxes unless (in the case of a
                    deduction in respect of Taxes) required by law and subject
                    to and in accordance with clause 8 ("Withholding tax"); and

          (e)       to each Financier by payment into the account nominated by
                    that Financier, or by payment that Financier otherwise
                    directs.

          If a Financier directs the Obligor to pay a particular party or in a
          particular manner, the Obligor is taken to have satisfied its
          obligation to that Financier by paying in accordance with the
          direction.

5.2       Currency of payment

          The Obligor waives any right it has in any jurisdiction to pay an
          amount other than in the currency in which it is due. However, if a
          Financier receives an amount in a currency other than that in which it
          is due:

          (a)       it may convert the amount received into the due currency
                    (even though it may be necessary to convert through a third
                    currency to do so) on the day and at the rates (including
                    spot rate, same day value rate or value tomorrow rate) as it
                    reasonably considers appropriate in accordance with its
                    customary business practices and may deduct:

                    (i)       its usual levied Costs in connection with the
                              conversion; and

                                                                               8
<PAGE>

                    (ii)      other third party Costs it incurs in connection
                              with the conversion; and

          (b)       the Obligor satisfies its obligation to pay in the due
                    currency only to the extent of the amount of the due
                    currency obtained from the conversion after deducting the
                    Costs of the conversion.

5.3       Total Amount Owing

          The Borrower agrees to pay the Total Amount Owing on the Final
          Maturity Date under this agreement.

5.4       Payment details

          The payment details for payments to each Financier are set out in
          schedule 4 ("Payment details"), subject to any amendment to those
          details by notice from a Financier to the other parties.

--------------------------------------------------------------------------------
6         [intentionally left blank]

7         [intentionally left blank]

8         Withholding tax

8.1       Payments by Obligor

          If a law requires the Obligor to withhold or deduct an amount in
          respect of Taxes from a payment under any Transaction Document such
          that the Financier would not actually receive on the due date the full
          amount provided for under the Transaction Document, then:

          (a)       the Obligor agrees to withhold or deduct the amount for the
                    Taxes (and any further withholding or deduction required by
                    law to be made in respect of any further payment due under
                    paragraph (c) below); and

          (b)       the Obligor agrees to pay an amount equal to the amount
                    withheld or deducted to the relevant authority in accordance
                    with applicable law and give the original receipts to the
                    relevant Financier; and

          (c)       if the amount deducted is in respect of Accountable Taxes,
                    the amount payable is increased so that, after making the
                    withholding or deduction and further withholding or
                    deductions applicable to additional amounts payable under
                    this clause, that Financier is entitled to receive and
                    retain (at the time the payment is due) the amount it would
                    have received if no deductions had been required.

8.2       Tax indemnity

          The Borrower must (within three Business Days of demand) pay to any
          Protected Party an amount equal to the loss, liability or cost which
          that

                                                                               9
<PAGE>

          Protected Party determines will be or has been (directly or
          indirectly) suffered for or on account of Taxes by that Protected
          Party. However:

          (a)       this clause 8.2 does not apply with respect to any Taxes
                    assessed on a Protected Party:

                    (i)       under the law of the jurisdiction in which that
                              Protected Party is incorporated or, if different,
                              the jurisdiction (or jurisdictions) in which that
                              Protected Party is treated as resident for tax
                              purposes; or

                    (ii)      under the law of the jurisdiction in which that
                              Protected Party's office through which it will
                              perform its obligations under this agreement is
                              located in respect of amounts received or
                              receivable in that jurisdiction,

                    if those Taxes are imposed on or calculated by reference to
                    the net income received or receivable (but not any sum
                    deemed to be received or receivable) by that Protected
                    Party; and

          (b)       a Protected Party making, or intending to make a claim under
                    this clause 8.2 must promptly notify the Borrower of the
                    event which will give, or has given rise to the claim; and

          (c)       a Protected Party must, on receiving a payment from the
                    Borrower under this clause 8.2, notify the other Financier.

8.3       Tax credit

          This clause 8.3 applies if:

          (a)       the Obligor complies with clause 8.1(c) ("Payments by
                    Obligor"); or

          (b)       the Borrower complies with clause 8.2 ("Tax indemnity");

          and, as a result, the Financier determines that it has obtained and
          retained a tax credit, tax rebate or similar benefit for any tax
          payable by it which is attributable to the increased amount paid to
          the relevant Financier.

          In that case, the Financier agrees to reimburse to the Obligor an
          amount equal to the amount that the Financier determines to be the
          proportion of the credit, rebate or benefit as will leave the
          Financier (after the reimbursement) in no worse position than it would
          have been in had no increase been required under clause 8.1(c) or 8.2.

8.4       Indirect Tax

          All consideration expressed to be payable under a Transaction Document
          by any Obligor to a Financier is exclusive of any Indirect Tax.

          If any Indirect Tax is chargeable on any supply made by a Financier to
          an Obligor in connection with a Transaction Document, that Obligor
          must pay to the Financier (in addition to and at the same time as
          paying the consideration, or if the Financier is required to pay that
          Indirect tax earlier, upon

                                                                              10
<PAGE>

          presentation of a tax invoice for that amount) an amount equal to the
          amount of the Indirect Tax.

          Where a Transaction Document requires an Obligor to reimburse a
          Financier for any costs or expenses, that Obligor must also at the
          same time pay and indemnify the Financier against all Indirect Tax
          incurred by that Financier in connection with the costs or expenses
          that the Financier reasonably determines that it is not entitled to
          credit or repayment for the Indirect Tax.

--------------------------------------------------------------------------------
9         Increased costs

9.1       Compensation

          The Borrower agrees to compensate a Financier within three Business
          Days of demand if the Financier determines that:

          (a)       a Directive, or change in Directive, in either case applying
                    for the first time after the date of this agreement; or

          (b)       a change in a Directive's interpretation or administration
                    by an authority after the date of this agreement; or

          (c)       compliance by the Financier or any of its Related Entities
                    with any such Directive, changed Directive or changed
                    interpretation or administration

          directly or indirectly:

                    (i)       increases the cost of the Facility to the
                              Financier or any of its Related Entities which
                              cost is attributable to the Financier having
                              entered into or funded or performed its
                              obligations, or agreed to fund or perform its
                              obligations, under any Transaction Document; or

                    (ii)      reduces any amount received or receivable by the
                              Financier or any of its Related Entities, or its
                              effective return, in connection with the Facility;
                              or

                    (iii)     reduces the Financier's (or Related Entity's)
                              return on capital allocated to a Facility, or its
                              overall return on capital.

          In this clause 9.1, a reference to a Directive does not include a
          Directive imposing or changing the basis of a Tax on the overall net
          income of the Financier or any of its Related Entities.

          Compensation need not be in the form of a lump sum and may be demanded
          as a series of payments.

          The amount of compensation is the amount of (in the case of (i)) any
          increase in cost or additional cost or (in the case of (ii) or (iii))
          the reduction.

          Any demand under this clause 9.1 is to be made by the Financier
          affected.

                                                                              11
<PAGE>

9.2       Substantiating costs

          If a Financier makes a demand under clause 9.1 ("Compensation"), that
          Financier agrees to give the Borrower reasonably detailed calculations
          showing how the amount demanded has been ascertained. However, nothing
          in this clause 9.2 obliges the Financier to provide details of its
          business or tax affairs which it considers in good faith to be
          confidential.

--------------------------------------------------------------------------------
10        Illegality

10.1      Financier's right to suspend or cancel

          This clause 10 applies if a Financier determines that it has become or
          will become illegal for the Financier to fund, provide, or continue to
          fund or provide, financial accommodation under the Transaction
          Documents or to otherwise perform any of its obligations under them.
          In these circumstances, the Financier, by giving a notice to the
          Borrower, may suspend or cancel some or all of that Financier's
          obligations under the Transaction Documents as indicated in the
          notice.

10.2      Extent and duration

          The suspension or cancellation:

          (a)       must apply only to the extent necessary to avoid the
                    illegality; and

          (b)       in the case of suspension, may continue only for so long as
                    the illegality continues.

10.3      Notice requiring payment

          The affected Financier, by giving a notice to the Borrower, may
          require prepayment of all or any part of any affected Drawing and
          interest accrued on that part as specified in the notice. The Borrower
          agrees to pay the amount specified within 30 Business Days after
          receiving the notice.

10.4      Financier to seek alternative funding method

          If a notice is given under clause 10.3 ("Notice requiring payment"),
          then the relevant Financier agrees to use reasonable endeavours for a
          period of 30 days to make the relevant financial accommodation
          available by some alternative means . However:

          (a)       this clause 10.4 does not in any way limit the obligations
                    of the Obligor under the Transaction Documents; and

          (b)       the Borrower indemnifies the Financier for all costs and
                    expenses reasonably incurred by it as a result of steps or
                    actions taken by it under this clause 10.4; and

          (c)       the Financier is not obliged to take any step or action
                    under this clause 10.4 if, in the reasonable opinion of the
                    Financier, to do so might be prejudicial to it.

                                                                              12
<PAGE>

--------------------------------------------------------------------------------
11        Representations and warranties

11.1      Representations and warranties

          Each of REACH and the Borrower represents and warrants that:

          (a)       (incorporation and existence) each member of the REACH Group
                    has been incorporated in accordance with the laws of its
                    place of incorporation, is validly existing under those laws
                    and has power and authority to carry on its business as it
                    is now being conducted; and

          (b)       (power) each Obligor has power to enter into the Transaction
                    Documents to which it is a party and comply with its
                    obligations under them; and

          (c)       (no contravention or exceeding power) the Transaction
                    Documents and the transactions under them which involve an
                    Obligor do not contravene any Obligor's constituent
                    documents (if any) or contravene in a material respect any
                    law or obligation by which any Obligor is bound or to which
                    any Obligor's assets are subject which in any case would or
                    would be reasonably likely to have a Material Adverse
                    Effect, or cause a limitation on any Obligor's powers or the
                    powers of any Obligor's directors to be exceeded; and

          (d)       (authorisations) each Obligor has in full force and effect
                    the material authorisations necessary for it to enter into
                    the Transaction Documents to which it is a party, to comply
                    with its obligations and exercise its rights under them and
                    to allow them to be enforced; and

          (e)       (consents) each member of the REACH Group has obtained all
                    business and other consents of a material nature necessary
                    for the conduct of its business; and

          (f)       (validity of obligations) each Obligor's obligations under
                    the Transaction Documents are valid and binding and are
                    enforceable against it in accordance with their terms
                    subject to any applicable bankruptcy, insolvency,
                    reorganisation, liquidation or other similar laws or
                    regulations affecting creditor's rights generally and the
                    general principles of equity or of the kinds referred to in
                    the legal opinions reasonably required by the Financiers in
                    connection with the Security Documents; and

          (g)       [intentionally left blank]

          (h)       (solvency) each member of the REACH Group is not Insolvent;
                    and

          (i)       (not a trustee) no Obligor enters into any Transaction
                    Document as trustee of any trust or settlement; and

          (j)       (ownership of property) each member of the REACH Group has
                    title to all property held by it free from any Security
                    Interest, other than any Permitted Security Interest; and

          (k)       [intentionally left blank]

                                                                              13
<PAGE>

          (l)       (Event of Default) no Event of Default or Potential Event of
                    Default has occurred and continues unremedied; and

          (m)       [intentionally left blank]

          (n)       (no Material Adverse Effect) no event or circumstance has
                    occurred or arisen since the date of the most recent
                    Financial Statements given to the Financiers which has had
                    or would be reasonably likely to have a Material Adverse
                    Effect, save for any event or circumstance which has
                    specifically been waived by the Financiers as an event or
                    circumstance which has had or would be reasonably likely to
                    have a Material Adverse Effect; and

          (o)       [intentionally left blank]

          (p)       (ranking) each Obligor's payment obligations under the
                    Transaction Documents rank at least equally with the claims
                    of all its other unsecured and unsubordinated obligations,
                    except obligations mandatorily preferred by law; and

          (q)       (governing law) the choice of English law as the governing
                    law of this agreement will be recognised and enforced in its
                    jurisdiction of incorporation; and

          (r)       (security interest) subject to any qualifications in any
                    legal opinion given to the Financiers in connection
                    therewith, each Security Document creates (or, once entered
                    into, will create) in favour of the Financiers the Security
                    Interest which it is expressed to create with the ranking
                    and priority it is expressed to have; and

          (s)       (title) each Obligor has legal title to, and is the sole
                    beneficial owner of, the assets subject to the Security
                    Interest created by it pursuant to any Security Document,
                    free from all Security Interest except the Security Interest
                    created pursuant to, or permitted by, the Transaction
                    Documents.

11.2      Repetition of representations and warranties

          The representations and warranties set out in clause 11.1 are taken to
          be also made on the last day of each Interest Period by reference to
          the facts and circumstances then existing.

--------------------------------------------------------------------------------
12        Undertakings

12.1      Positive undertakings

          Each of REACH and the Borrower undertakes (unless the Financiers
          otherwise consent):

          (a)       [intentionally left blank]

          (b)       [intentionally left blank]

                                                                              14
<PAGE>

          (c)       [intentionally left blank]

          (d)       [intentionally left blank]

          (e)       [intentionally left blank]

          (f)       [intentionally left blank]

          (g)       (status certificates) whenever reasonably requested by a
                    Financier in accordance with this agreement, to give the
                    Financiers a certificate signed by the chief financial
                    officer of REACH which states (as at the date to which the
                    Financial Statements were prepared):

                    (i)       whether an Event of Default continues unremedied;
                              and

                    (ii)      whether clause 16.11 ("New Guarantors") is
                              complied with; and

          (h)       [intentionally left blank]

          (i)       [intentionally left blank]

          (j)       [intentionally left blank]

          (k)       (New Guarantor) to give to the Financiers prompt written
                    notification of any member of the REACH Group which is
                    required to become a New Guarantor pursuant to clause 16.11
                    ("New Guarantor"); and

          (l)       [intentionally left blank]

          (m)       [intentionally left blank]

          (n)       (maintain authorisations) to obtain, renew on time and
                    comply with the terms of each material authorisation
                    necessary for each Obligor to enter into the Transaction
                    Documents to which it is a party, to comply with its
                    obligations and exercise its rights under them and to allow
                    them to be enforced; and

          (o)       (compliance with laws) to ensure that each member of the
                    REACH Group complies with all laws to which it may be
                    subject, if failure to do so would give rise to a Material
                    Adverse Effect or result in the creation of a Permitted
                    Security Interest; and

          (p)       (notify defaults) if an Event of Default or Potential Event
                    of Default occurs, to notify each Financier giving details
                    of the event and any step taken or proposed to remedy it;
                    and

          (q)       (ranking of obligations) to ensure that each Obligor's
                    payment obligations under the Transaction Documents rank and
                    will at all times rank at least equally with all its other
                    unsecured and unsubordinated obligations except obligations
                    mandatorily preferred by law; and

                                                                              15
<PAGE>

          (r)       [intentionally left blank]

          (s)       (Borrower shareholding) to ensure that, at all times, REACH
                    holds as legal and beneficial owner, all of the issued share
                    capital of the Borrower; and

          (t)       (Security Documents) to procure the cooperation of the
                    relevant Obligor with the Financiers and their lawyers in
                    relation to registrations, filings, stampings and issue of
                    legal opinions reasonably required by the Financiers in
                    connection with the Security Documents.

12.2      [intentionally left blank]

12.3      Negative undertakings

          Each of REACH and the Borrower undertakes not to, and will ensure that
          each member of the REACH Group does not (unless the Financiers
          otherwise consent):

          (a)       (no Security Interests) create a Security Interest or allow
                    one to exist on the whole or any part of its present or
                    future property other than any Permitted Security Interest;
                    and

          (b)       (no disposal) dispose of (or agree to dispose of) all or a
                    part of its assets (either in a single transaction or in a
                    series of transactions whether related or not and whether
                    voluntarily or involuntarily) except for Permitted
                    Disposals; and

          (c)       (change business) do anything which will result in a
                    material change to the nature of the Core Business.

--------------------------------------------------------------------------------
13        Default

13.1      Events of Default

          Each of the following is an Event of Default:

          (a)       (non-payment - Transaction Document) the Obligor does not
                    pay on the due date for payment any amount payable by it
                    under any Transaction Document in the manner required under
                    it unless the non-payment is caused by an administrative
                    error and payment is made within three Business Days of the
                    due date for payment; or

          (b)       (non-compliance with Security Document obligations) the
                    relevant Obligor does not comply with any obligation under
                    clause 12.1(t) ("Security Documents"); or

          (c)       (non-compliance with other obligations) the Obligor does not
                    comply with any other obligation under any Transaction
                    Document unless, if in the opinion of the Financiers (as
                    confirmed by a notice

                                                                              16
<PAGE>

                    from each of them to the Borrower) the non-compliance can be
                    remedied and, written evidence has been produced to the
                    reasonable satisfaction of the Financiers that the
                    non-compliance will be remedied and, the Obligor remedies
                    the non-compliance within 21 days after notice from the
                    Financiers; or

          (d)       (cross default) any indebtedness in respect of Borrowed
                    Money of any member of the REACH Group for amounts totalling
                    more than US$20,000,000 in aggregate is not paid when due or
                    within any originally applicable grace period or becomes
                    prematurely payable as a result of an event of default
                    (however described); or

          (e)       (enforcement against assets) distress is levied, or a
                    judgment or order is enforced, against a member of the REACH
                    Group or any of its assets for amounts totalling more than
                    US$20,000,000 in aggregate and is not discharged or stayed
                    within 30 days (or any shorter period as may be required by
                    relevant legislation); or

          (f)       (Security Interest enforceable) any Security Interest is
                    enforced against any property of any Obligor, or, unless it
                    is discharged within 21 days, against any other member of
                    the REACH Group provided that in each case the amount being
                    secured by that Security Interest equals to or is more than
                    US$10,000,000; or

          (g)       (incorrect representation or warranty) a representation or
                    warranty made by the Obligor, in connection with a
                    Transaction Document is found to have been incorrect or
                    misleading in a material respect when made; or

          (h)       (Insolvency) a member of the REACH Group becomes Insolvent
                    or any corporate action, legal proceedings or other
                    procedure or steps are taken for the Insolvency of any
                    member of the REACH Group, except any action, proceedings,
                    procedure or step which is:

                    (i)       taken by a person other than a member of the REACH
                              Group; and

                    (ii)      vexatious or frivolous and discharged within 60
                              days of its commencement; or

          (i)       (voidable Transaction Document) a Transaction Document or a
                    transaction in connection with it is or becomes (or is
                    claimed by an Obligor to be) wholly or partly void, voidable
                    or unenforceable or does not have (or is claimed by an
                    Obligor, not to have) the priority the Financiers intended
                    it to have; or

          (j)       (unlawfulness or repudiation) it is or becomes unlawful for
                    an Obligor to perform any of its material obligations under
                    this agreement or an Obligor repudiates this agreement; or

          (k)       (Material Adverse Effect) a change occurs in respect of the
                    REACH Group which has or will have a Material Adverse
                    Effect; or

                                                                              17
<PAGE>

          (l)       (Security) any Security Document, once executed, ceases to
                    be in full force and effect and does not create in favour of
                    the Financiers the Security which it is expressed to create
                    with the ranking and priority it is expressed to have
                    (subject to any qualification in any legal opinion given to
                    the Financiers in connection therewith).

13.2      Consequences of default

          If an Event of Default occurs:

          (a)       in relation to REACH, the Borrower or a Material Subsidiary;
                    or

          (b)       in relation to a member of the REACH Group that is not a
                    Material Subsidiary and the occurrence of the Event of
                    Default has or will have a Material Adverse Effect,

                    then the Financiers may declare at any time by notice to the
                    Borrower that:

          (c)       an amount equal to the Total Amount Owing is either:

                    (i)       payable on demand; or

                    (ii)      immediately due for payment (whereupon the same
                              shall be due and payable together with accrued
                              interest thereon); and

          (d)       the Financiers' obligations specified in the notice are
                    terminated.

          The Financiers agree that they may only make a declaration under this
          clause 13.2 if they are unanimous in their agreement to do so. The
          making of either declaration gives immediate effect to its provisions.

--------------------------------------------------------------------------------
14        Costs and indemnities

14.1      What the Borrower agrees to pay

          The Borrower agrees to pay or reimburse (subject to any agreed cap):

          (a)       the reasonable Costs of each Financier in connection with:

                    (i)       [intentionally left blank]

                    (ii)      [intentionally left blank]

                    (iii)     giving and considering consents, waivers,
                              variations, amendments, discharges and releases
                              and producing title documents; and

                    (iv)      [intentionally left blank]

                    (v)       reasonable legal expenses incurred in connection
                              with opinions issued in respect of any Security
                              Document,

                    including the reasonable legal expenses of each Financier
                    incurred in instructing or obtaining advice from their
                    counsel; and

                                                                              18
<PAGE>

          (b)       the Costs of each Financier in otherwise acting in
                    connection with the Transaction Documents, such as
                    exercising, enforcing or preserving rights (or considering
                    doing so), or doing anything in connection with any enquiry
                    by an authority involving a member of the REACH Group; and

          (c)       Taxes and fees (including registration fees) and fines and
                    penalties in respect of fees paid, or that a Financier
                    reasonably believes are payable, in connection with any
                    Transaction Document or a payment or receipt or any other
                    transaction contemplated by any Transaction Document.
                    However, the Borrower need not pay a fine or penalty in
                    connection with Taxes or fees to the extent that it has
                    placed the Financier in sufficient cleared funds for the
                    Financier to be able to pay the Taxes or fees by the due
                    date.

          The Borrower agrees to pay amounts due under this clause on demand
          from the relevant Financier.

          The Financiers may debit any of these amounts to the Borrower's
          account before asking the Borrower to pay.

          These amounts are not payable to the extent that they are due to the
          wilful misconduct or gross negligence of the Financier.

14.2      Indemnity

          The Borrower indemnifies each Financier against any liability or loss
          arising from, and any Costs (including Break Costs) incurred in
          connection with:

          (a)       financial accommodation requested under a Transaction
                    Document not being provided in accordance with the request
                    for any reason except default or negligence of the
                    Financier; or

          (b)       financial accommodation under a Transaction Document being
                    repaid, discharged or made payable other than at its
                    maturity or on the last day of the relevant Interest Period
                    relating to that accommodation; or

          (c)       an Event of Default; or

          (d)       investigating any event which it reasonably believes is an
                    Event of Default or Potential Event of Default (but only if,
                    following that investigation, it is determined that an Event
                    of Default or Potential Event of Default had occurred).

          The Borrower agrees to pay amounts due under this indemnity on demand
          from the affected Financier.

14.3      Items included in loss, liability and Costs

          The Borrower agrees that:

          (a)       the Costs referred to in clause 14.1 ("What the Borrower
                    agrees to pay"), and the liability, loss or Costs referred
                    to in clause 14.2

                                                                              19
<PAGE>

                    ("Indemnity"), include reasonable legal Costs in accordance
                    with any written agreement as to legal costs (whether or not
                    the Borrower is a party to that agreement) or, if no
                    agreement, on whichever is the higher of a full indemnity
                    basis or solicitor and own client basis; and

          (b)       the Costs referred to in clause 14.1(a) and (b) ("What the
                    Borrower agrees to pay") include those paid, or that the
                    relevant Financier reasonably believes are payable, to
                    persons engaged by the relevant Financier in connection with
                    the Transaction Documents (such as consultants); and

          (c)       loss or liability and any Costs in any indemnity under the
                    Transaction Documents may include "Break Costs".

          The loss, liability or Cost of a Financier to be indemnified under
          clause 14.2(b) includes, without limitation, Break Costs of that
          Financier relating to the Drawing or amount in question. Each
          Financier must, as soon as reasonably practicable after demand by the
          Borrower, provide a certificate confirming that the amount of its
          Break Costs for any Interest Period in which they accrue.

14.4      Payment of third party losses

          The Borrower agrees to pay on demand from a Financier an amount equal
          to any liability or loss and any Costs of the kind referred to in
          clause 14.2 ("Indemnity") suffered or incurred by any employee,
          officer, agent or contractor of the Financier in relation to the
          Transaction Documents.

14.5      Currency conversion on judgment debt

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

          (a)       making or filing a claim or proof against the Obligor;

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

          the Obligor indemnifies each Financier to whom that Sum is due against
          any cost, loss or liability arising out of or as a result of the
          conversion including any discrepancy between:

                    (i)       the rate of exchange used to convert that Sum from
                              the First Currency into the Second Currency; and

                    (ii)      the rate or rates of exchange available to that
                              person at the time of its receipt of that Sum.

          The Borrower agrees to pay amounts due under this indemnity on demand
          from the affected Financier.

                                                                              20
<PAGE>

--------------------------------------------------------------------------------
15        Interest on overdue amounts

15.1      Obligation to pay

          If the Obligor does not pay any amount under a Transaction Document on
          the due date for payment, the Obligor agrees to pay interest on that
          amount at the Default Rate. The interest accrues daily from (and
          including) the due date to (but excluding) the date of actual payment
          and is calculated on actual days elapsed and a year of 360 days.

          The Obligor agrees to pay interest under this clause on demand from
          the Financiers.

15.2      Compounding

          Interest payable under clause 15.1 ("Obligation to pay") which is not
          paid when due for payment will be added to the overdue amount on the
          last day of each Interest Period applicable to the overdue amount but
          will remain immediately due and payable. Interest is payable on the
          increased overdue amount at the Default Rate in the manner set out in
          clause 15.1 ("Obligation to pay").

15.3      Interest following judgment

          If a liability of an Obligor becomes merged in a judgment, that
          Obligor agrees to pay interest on the amount of that liability as an
          independent obligation. This interest:

          (a)       accrues daily from (and including) the date the liability
                    becomes due for payment both before and after the judgment
                    up to (but excluding) the date the liability is paid; and

          (b)       is calculated at the judgment rate or the Default Rate
                    (whichever is higher).

          Clause 15.1 ("Obligation to pay") and clause 15.2 ("Compounding")
          apply (with necessary changes) to this interest.

--------------------------------------------------------------------------------
16        Guarantee and indemnity

16.1      Consideration

          Each Guarantor acknowledges incurring obligations and giving rights
          under this Guarantee for valuable consideration received from the
          Financiers.

16.2      Guarantee

          Each Guarantor unconditionally and irrevocably guarantees payment to
          each Financier of the Guaranteed Money and (in the case of REACH only)
          punctual performance by the Borrower of all of its obligations under
          the Transaction Documents. If the Borrower does not pay the Guaranteed
          Money in accordance with the Transaction Documents, then each
          Guarantor agrees to pay the Guaranteed Money on demand from the
          Financiers. A demand

                                                                              21
<PAGE>

          may be made at any time and from time to time and whether or not the
          Financiers have made demand on the Borrower or any other person or
          proceeded against or enforced any other rights or security against or
          claimed payment from any person. Each Guarantor waives any right which
          it may have of first requiring any Financier to take any action
          specified in the previous sentence before making a demand against that
          Guarantor and this waiver applies irrespective of any law or any
          provisions of a Transaction Document to the contrary.

16.3      Nature of guarantee

          The guarantee in clause 16.2 ("Guarantee") is a continuing obligation
          despite any intervening payment, settlement or other thing and extends
          to all of the Guaranteed Money.

16.4      Indemnity

          Each Guarantor indemnifies each Financier against any liability or
          loss arising, and any Costs they suffer or incur if the obligation
          guaranteed is or becomes unenforceable, invalid or illegal.

          Each Guarantor agrees to pay amounts due under this indemnity on
          demand from the Financiers. A demand may be made at any time and from
          time to time and whether or not the Financiers have made demand on the
          Borrower or any other person or proceeded against or enforced any
          other rights or security against or claimed payment from any person.
          Each Guarantor waives any right which it may have of first requiring
          any Financier to do any of them before making a demand against it and
          this waiver applies irrespective of any law or any provisions of a
          Transaction Document to the contrary. The amount recoverable must not
          exceed the amount the Financier would have otherwise been entitled to
          recover.

16.5      Reinstatement of rights

          If any payment by any Guarantor or any discharge given by a Financier
          (whether in respect of the obligations of that Guarantor or any
          security for those obligations or otherwise) is avoided or reduced as
          a result of insolvency or any similar event:

          (a)       the liability of that Guarantor continues as if the payment,
                    discharge, avoidance or reduction had not occurred; and

          (b)       each Financier is entitled to recover the value or amount of
                    that security or payment from that Guarantor, as if the
                    payment, discharge, avoidance or reduction had not occurred.

16.6      Rights of the Financiers are protected

          Rights given to a Financier under this Guarantee (and each Guarantor's
          liabilities under it) are not affected by any act or omission by the
          Financier or any other person or by anything else that might otherwise
          affect them under law or otherwise, including:

                                                                              22
<PAGE>

          (a)       the fact that they vary or novate any arrangement under
                    which the Guaranteed Money is expressed to be owing, such as
                    by increasing the Facility Limit, extending the term or
                    substituting a Financier; or

          (b)       the fact that they release the Borrower or any other person
                    or give it a concession, such as more time to pay; or

          (c)       the fact that the Borrower or an Obligor opens an account
                    with them; or

          (d)       the fact that they release any person who gives a guarantee
                    or indemnity in connection with any Obligor's obligations;
                    or

          (e)       the fact that a person becomes a Guarantor after the date of
                    this agreement (including under clause 16.12 ("Becoming a
                    New Guarantor")); or

          (f)       the fact that the obligations of any person who guarantees
                    any of the Borrower's obligations (including under this
                    Guarantee) may not be enforceable or any unenforceability,
                    illegality or invalidity of any obligation of any person
                    under any Transaction Document or any other document or
                    security; or

          (g)       the fact that any person who was intended to guarantee any
                    of the Borrower's obligations does not do so or does not do
                    so effectively; or

          (h)       the Insolvency of any person including a Guarantor or the
                    Borrower; or

          (i)       changes in the membership, name or business of any person;
                    or

          (j)       the fact that a person who is a co-surety or co-indemnifier
                    for payment of the Guaranteed Money is discharged under an
                    agreement or by operation of law; or

          (k)       the taking, variation, compromise, exchange, renewal or
                    release of, or refusal or neglect to perfect, take up or
                    enforce, any rights against, or security over assets of, any
                    Obligor or other person or any non-presentation or
                    non-observance of any formality or other requirement in
                    respect of any instrument or any failure to realise the full
                    value of any security; or

          (l)       any incapacity or lack of power, authority or legal
                    personality of or dissolution or change in the members or
                    status or an Obligor or any other person.

16.7      No merger

          This Guarantee does not merge with or adversely affect, and is not
          adversely affected by, any of the following:

          (a)       any other guarantee, indemnity, security or other right or
                    remedy to which the Financier is entitled; or

                                                                              23
<PAGE>

          (b)       a judgment which the Financier obtains against any Guarantor
                    in connection with the Guaranteed Money or any other amount
                    payable under this Guarantee.

          The Financier may still exercise rights under this Guarantee as well
          as under the judgment, other guarantee, indemnity, security, or other
          right or remedy.

16.8      Extent of Guarantor's obligations

          Each Guarantor is liable for all the obligations under this clause 16
          both individually and jointly with any one or more of the Guarantors.

16.9      Guarantor's rights are suspended

          As long as any of the Guaranteed Money remains unpaid, no Guarantor
          may, without the Financiers' consent:

          (a)       reduce its liability under this Guarantee by claiming that
                    it or the Borrower or any other person has a right of
                    set-off or counterclaim against the Financier; or

          (b)       exercise any right to claim to be entitled to or otherwise
                    take the benefit (in whole or part and whether by way of
                    subrogation or otherwise) of any rights of any Financier
                    under the Transaction Documents or any other guarantee,
                    indemnity or security given in connection with the
                    Guaranteed Money or any Obligor's obligations under the
                    Transaction Documents any other amount payable under this
                    Guarantee; or

          (c)       claim an amount from the Borrower, or another guarantor of
                    the Guaranteed Money (including a person who has signed this
                    agreement as a "Guarantor"), under a right of indemnity; or

          (d)       claim an amount in the Insolvency of the Borrower or of
                    another guarantor of the Guaranteed Money (including a
                    person who has signed this agreement as a "Guarantor").

16.10     Suspense account

          A Financier may place in an interest-bearing suspense account any
          payment it receives from any Guarantor (and any net interest on that
          payment after tax) for as long as it reasonably thinks prudent and
          may, but need not, apply the payment or net interest towards
          satisfying the Guaranteed Money or any other obligations of that
          Guarantor under the Transaction Documents.

16.11     New Guarantors

          In relation to any member of the REACH Group which is not REACH, the
          Borrower or an Initial Guarantor, if it becomes a Material Subsidiary
          or if its indebtedness exceeds, or in the case of paragraph (a) below,
          on its incurring further indebtedness, would exceed:

          (a)       in respect of Borrowed Money, an aggregate principal amount
                    of US$5,000,000; or

                                                                              24
<PAGE>

          (b)       in respect of any other indebtedness of the kind which is
                    included in the consolidated Financial Statements of the
                    REACH Group delivered in accordance with this agreement as
                    "accounts payable, including trade and other creditors and
                    accruals", an aggregate principal amount of US$50,000,000,

          then, unless the Financiers agree otherwise, each Obligor agrees to
          ensure that the person (to the extent legally permissible where that
          person becomes a New Guarantor under paragraph (b) above) becomes a
          New Guarantor in accordance with clause 16.12 ("Becoming a New
          Guarantor"):

                    (i)       in the case of any person which would exceed the
                              threshold in paragraph (a) above by incurring
                              further indebtedness for Borrowed Money on or
                              before the date of that person incurring the
                              indebtedness for Borrowed Money;

                    (ii)      otherwise, in the case of any person which becomes
                              a Material Subsidiary or whose indebtedness
                              exceeds the threshold in paragraph (b) above,
                              within 30 days of the Borrower or REACH becoming
                              aware of the event (being a date no later than the
                              date on which the relevant Financial Statements
                              disclosing the event are required to be delivered
                              under this agreement or a longer period agreed by
                              the Financiers); and

                    (iii)     in any other circumstances, within a reasonable
                              time.

16.12     Becoming a New Guarantor

          A member of the REACH Group must become a New Guarantor by becoming a
          party to this agreement as a Guarantor (after the date of this
          agreement) by signing and delivering to each Financier a deed poll
          (substantially in the form of schedule 5 ("Form of New Guarantor Deed
          Poll")), giving the Financiers the documentation referred to in
          paragraphs 1, 2, 3, 4, 5, 6, 7 and 8 of schedule 1 ("New Guarantor
          documentation") in relation to it and doing any other thing the
          Financiers reasonably requests to ensure the enforceability of that
          member's obligations as a Guarantor; or executing any other guarantee
          document in a form agreed with the Financiers (but no more onerous to
          the New Guarantor than this Guarantee) giving the Financiers the
          documentation referred to in paragraphs 1, 2, 3, 4, 5, 6, 7 and 8 of
          schedule 1 ("New Guarantor documentation") in relation to it and doing
          any other thing the Financiers reasonably request to ensure the
          enforceability of that member's obligations as a Guarantor (and
          references in this agreement to the "Guarantee" will include that
          guarantee document).

          Unless the Financiers agree otherwise, a New Guarantor must also,
          immediately upon executing the New Guarantor Deed Poll:

          (a)       execute a floating charge agreement (in substantially the
                    same form as the existing Floating Charges or in any other
                    form reasonably satisfactory to the Financers) or if a
                    floating charge is not recognised or applicable in any
                    relevant jurisdiction, another form of security agreed by
                    the Financiers (acting reasonably); cooperate with the

                                                                              25
<PAGE>

                    Financiers and their lawyers in relation to any legal
                    opinion which the Financiers may reasonably require to be
                    issued in connection with that security document; and comply
                    with undertakings contained in that security document
                    (including the making of the necessary registrations to
                    ensure the enforceability of the security conferred by that
                    security document); and

          (b)       procure the execution of a share charge agreement (in
                    substantially the same form as the existing Share Charges or
                    in any other form reasonably satisfactory to the Financers)
                    or if a share charge is not recognised or applicable in any
                    relevant jurisdiction, another form of security agreed by
                    the Financiers (acting reasonably) by its shareholder(s) who
                    will thereby become a Chargor, the cooperation of its
                    shareholder(s) with the Financiers and their lawyers in
                    relation to any legal opinion which the Financiers may
                    reasonably require to be issued in connection with that
                    security document and the compliance of its shareholder(s)
                    with all undertakings by the Chargor under that security
                    document (including the delivery of the documents and the
                    making of the necessary registrations to ensure the
                    enforceability of the security conferred by that security
                    document).

--------------------------------------------------------------------------------
17        [intentionally left blank]

18        [intentionally left blank]

19        [intentionally left blank]

20        [intentionally left blank]

21        [intentionally left blank]

22        [intentionally left blank]

23        [intentionally left blank]

24        [intentionally left blank]

25        [intentionally left blank]

26        [intentionally left blank]

                                                                              26
<PAGE>

--------------------------------------------------------------------------------
27        Relationships between parties

27.1      [intentionally left blank]

27.2      Financiers not responsible for Obligors' conduct

          No Financier has any responsibility to the Obligors or to the other
          Financier for any Obligor's compliance or non-compliance with the
          Transaction Documents.

27.3      Financier's obligations several

          The obligations of each Financier under the Transaction Documents are
          several. A failure by a Financier to perform its obligations under the
          Transaction Documents does not affect the obligations of the Obligor.
          No Financier is liable for the failure by any other Financier to
          perform its obligations.

27.4      Financiers' rights several

          Subject to clause 27.5 ("Financiers agree to exercise rights
          jointly"), the rights of each Financier are several. Any debt arising
          under the Transaction Documents at any time from the Obligor to any of
          the other parties to this agreement is a separate and independent
          debt.

27.5      Financiers agree to exercise rights jointly

          Despite clause 27.4 ("Financiers' rights several), the Financiers
          agree that:

          (a)       neither of the Financiers may exercise any right or
                    discretion under or in connection with the Transaction
                    Documents without the other Financer's consent; and

          (b)       all actions that a Financier may take under or in connection
                    with the Transaction Documents must be exercised jointly
                    with the other Financier.

--------------------------------------------------------------------------------
28        Dealing with interests

28.1      No dealing by Obligor

          The Obligor may not assign or otherwise deal with its rights under any
          Transaction Document or allow any interest in them to arise or be
          varied, in each case, without the Financiers' consent.

28.2      Dealings by Financier

          Subject to clauses 28.2(b) and 28.3 ("Dealings by Financiers require
          consent"):

          (a)       a Financier may assign, novate, transfer or otherwise deal
                    with its rights and obligations under this agreement after
                    consultation with the Borrower, except that:

                                                                              27
<PAGE>

                    (i)       consultation with the Borrower is not required if
                              all or any part of the Financier's right and
                              obligations are assigned, transferred or novated
                              to any Related Entity of the Financier; and

                    (ii)      the Borrower is not obliged to pay any amounts
                              payable to or for the account of the assignee or
                              transferee of the Financier under clause 8
                              ("Withholding tax") or clause 9 ("Increased
                              costs") if those amounts were payable at the time
                              of the assignment, novation or transfer, the
                              assignee or transferee was aware of those amounts
                              and the amounts would not have been payable if the
                              assignment, novation or transfer had not been
                              made; and

          (b)       a Financier may, after consultation with the Borrower,
                    assign, transfer, sub-participate or otherwise deal with all
                    or any part of its benefit under this agreement to any
                    Related Entity, trustee of a trust or a corporate vehicle
                    established for the purposes of securitisation, so long as
                    the Financier remains the lender of record in respect of
                    this agreement; and

          (c)       a Financier may disclose to any assignee, transferee or
                    sub-participator under this clause 28.2 any information in
                    relation to the Transaction Documents or in relation to the
                    Obligor or the REACH Group (including the existence of or
                    contents of any Transaction Document, any transactions
                    contemplated by the Transaction Documents and the existence
                    and content of any discussions in connection with the
                    Transaction Documents) as that person reasonably requires
                    without the Obligor's consent or the need to provide any
                    notice to the Borrower.

28.3      Dealings by Financiers require consent

          Despite clause 28.2 ("Dealings by Financiers"), the Financiers agree
          that neither Financer may deal with its rights and obligations under
          this agreement or any of the other Transaction Documents without the
          other Financier's consent.

--------------------------------------------------------------------------------
29        Notices

29.1      Form

          Unless expressly stated otherwise in the Transaction Document, all
          notices, certificates, consents, approvals, waivers and other
          communications in connection with that Transaction Document must be in
          writing, signed by an Authorised Officer of the sender and marked for
          attention as set out or referred to in the Details on the relevant
          Transfer Certificate or, if the recipient has notified otherwise,
          marked for attention in the way last notified.

29.2      Delivery

          They must be:

                                                                              28
<PAGE>

          (a)       left at the address set out or referred to in the Details;
                    or

          (b)       sent by prepaid post (airmail, if appropriate) to the
                    address set out or referred to in the Details; or

          (c)       sent by fax to the fax number set out or referred to in the
                    Details.

          However, if the intended recipient has notified a changed postal
          address or changed fax number, then the communication must be to that
          address or number.

29.3      When effective

          They take effect from the time they are received unless a later time
          is specified in them.

29.4      Deemed receipt - postal

          If sent by post, they are taken to be received three days after
          posting (or seven days after posting if sent to or from a place
          outside Hong Kong).

29.5      Deemed receipt - fax

          If sent by fax, they are taken to be received at the time shown if
          entirely legible in the transmission report as the time that the whole
          fax was sent.

29.6      Deemed receipt - general

          Despite clauses 29.4 ("Deemed receipt - postal") and 29.5 ("Deemed
          receipt - fax"), if they are received after 5.00 pm in a place of
          receipt or on a non-Business Day, they are taken to be received at
          9.00 am on the next Business Day.

29.7      Notices to Financiers

          Any communication or document to be made or delivered to a Financier,
          as the case may be, will be effective only when actually received by
          it and then only if it is marked for the attention of the department
          or officer set out in the Details (or any substitute department or
          officer as it specifies for this purpose).

29.8      Notices to and from Obligors

          (a)       All notices from or to the Obligor must be sent to each
                    Financier.

          (b)       Any communication or document made or delivered to the
                    Borrower in accordance with this clause is taken to have
                    been made or delivered to each Obligor.

29.9      English language

          (a)       Any notice given under or in connection with any Transaction
                    Document must be in English.

                                                                              29
<PAGE>

          (b)       All other documents provided under or in connection with any
                    Transaction Document must be:

                    (i)       in English; or

                    (ii)      if not in English, and if required by a Financier,
                              accompanied by a certified English translation
                              and, in this case, the English translation
                              prevails unless the document is a constitutional,
                              statutory or other official document.

29.10     Waiver of notice period

          The Financiers may waive a period of notice required to be given by a
          Borrower to them under this agreement.

--------------------------------------------------------------------------------
30        General

30.1      Application to Transaction Documents

          If anything in this clause 30 ("General") is inconsistent with a
          provision in another Transaction Document, then the provision in the
          other Transaction Document prevails for the purposes of that
          Transaction Document.

30.2      Prompt performance

          If a Transaction Document specifies when the Obligor agrees to perform
          an obligation, the Obligor agrees to perform it by the time specified.
          The Obligor agrees to perform all other obligations promptly.

30.3      Consents

          The Obligor agrees to comply with all conditions in any consent a
          Financier gives in connection with a Transaction Document.

30.4      Certificates

          A Financier may give the Obligor a certificate about an amount payable
          or other matter in connection with a Transaction Document. The
          certificate is sufficient evidence of the amount or matter, unless it
          is proved to be incorrect.

30.5      Set-off

          At any time after the Financiers have made a declaration under clause
          13.2(c)(ii), a Financier may set-off any matured obligation owed by
          that Financier to the Obligor against any matured obligation owed by
          the Obligor to that Financier under the Transaction Documents,
          regardless of the place of payment, booking branch or currency of the
          matured obligation.

                                                                              30
<PAGE>

30.6      Discretion in exercising rights

          A Financier may exercise a right or remedy or give or refuse its
          consent under a Transaction Document in any way it considers
          appropriate (including by imposing conditions).

30.7      Partial exercising of rights

          If a Financier does not exercise a right or remedy under a Transaction
          Document in whole or in part or at a given time the Financier may
          still exercise it later.

30.8      No liability for loss

          A Financier is not liable for loss caused by the exercise or attempted
          exercise of, failure to exercise, or delay in exercising, a right or
          remedy under a Transaction Document.

30.9      Conflict of interest

          A Financier's rights and remedies under any Transaction Document may
          be exercised even if this involves a conflict of duty or the Financier
          has a personal interest in their exercise.

30.10     Remedies cumulative

          The rights and remedies of the Financier under any Transaction
          Document are in addition to other rights and remedies given by law
          independently of the Transaction Document.

30.11     Indemnities

          Any indemnity in a Transaction Document is a continuing obligation,
          independent of the Obligor's other obligations under that Transaction
          Document and continues after the Transaction Document ends. It is not
          necessary for the Financier to incur expense or make payment before
          enforcing a right of indemnity under a Transaction Document.

30.12     Rights and obligations are unaffected

          Rights given to the Financier under a Transaction Document and the
          Obligor's liabilities under it are not affected by anything which
          might otherwise affect them at law.

30.13     Inconsistent law

          To the extent permitted by law, each Transaction Document prevails to
          the extent it is inconsistent with any law.

30.14     Partial invalidity

          If, at any time, any provision of the Transaction Documents is or
          becomes illegal, invalid or unenforceable in any respect under any law
          of any jurisdiction, neither the legality, validity or enforceability
          of the remaining

                                                                              31
<PAGE>

          provisions nor the legality, validity or enforceability of the
          provision under the law of any other jurisdiction will be affected or
          impaired.

30.15     Supervening legislation

          Any present or future legislation which operates to vary the
          obligations of the Obligor in connection with a Transaction Document
          with the result that the Financier's rights, powers or remedies are
          adversely affected (including by way of delay or postponement) is
          excluded except to the extent that its exclusion is prohibited or
          rendered ineffective by law.

30.16     Time of the essence

          Time is of the essence in any Transaction Document in respect of an
          obligation of the Obligor to pay money.

30.17     Variation and waiver

          A provision of a Transaction Document, or right created under it, may
          not be waived or varied except in writing signed by the party or
          parties to be bound.

30.18     Confidentiality

          Each party agrees not to disclose information provided under or in
          connection with any Transaction Document by any other party (including
          the existence of or contents of any Transaction Document, any
          transactions contemplated by the Transaction Documents and the
          existence and content of any discussions in connection with the
          Transaction Documents except:

          (a)       to officers, employees, legal and other advisers and
                    auditors of the Obligor or a Financier and its Related
                    Entities to the extent they require to know such information
                    for the due performance of their duties; or

          (b)       to any party to this agreement or any Related Entity of any
                    party to this agreement, provided the recipient agrees to
                    act consistently with this clause 30.18; or

          (c)       with the consent of the party who provided the information
                    (such consent not to be unreasonably withheld); or

          (d)       as required by any law, stock exchange or prudential or
                    other authority to whom financial institutions are required
                    to provide further information; or

          (e)       as expressly permitted under the Transaction Documents; or

          (f)       to the extent such information is in the public domain
                    through no failure on the part of any person to preserve
                    confidentiality.

          Each party consents to disclosures made in accordance with this clause
          30.18.

                                                                              32
<PAGE>

30.19     Further steps

          The Obligor agrees to do anything the Financiers ask (such as
          obtaining consents, signing and producing documents and getting
          documents completed and signed):

          (a)       to bind the Obligor and any other person intended to be
                    bound under the Transaction Documents; and

          (b)       to show whether the Obligor is complying with the
                    Transaction Documents.

30.20     Counterparts

          This agreement may consist of a number of copies, each signed by one
          or more parties to the agreement. If so, the signed copies are treated
          as making up the one document.

30.21     Accounts

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

30.22     Applicable law

          Each Transaction Document is governed by the law in force in the place
          specified in the Details (or if another law is specified in the
          Transaction Document, then by that law).

30.23     Serving documents

          Without preventing any other method of service, any document in a
          court action may be served on a party by being delivered to or left at
          that party's address for service of notices under clause 29
          ("Notices").

30.24     Serving of process

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

          (a)       irrevocably appoints Simmlaw Services Limited as its agent
                    for service of process in relation to any proceedings before
                    the English courts in connection with any Transaction
                    Document; and

          (b)       agrees that failure by a process agent to notify the Obligor
                    of the process will not invalidate the proceedings
                    concerned.

30.25     Jurisdiction of English courts

          The parties agree that:

          (a)       the courts of England have exclusive jurisdiction to settle
                    any dispute arising out of or in connection with this
                    agreement (including a

                                                                              33
<PAGE>

                    dispute regarding the existence, validity or termination of
                    this agreement) (a "Dispute");

          (b)       the courts of England are the most appropriate and
                    convenient courts to settle Disputes and accordingly no
                    party will argue to the contrary; and

          (c)       this clause is for the benefit of each Financier only and
                    does not prevent any Financier from taking proceedings
                    relating to a Dispute in any other courts with jurisdiction.
                    To the extent allowed by law, each Financier may take
                    concurrent proceedings in any number of jurisdictions.

30.26     Third party rights

          A person who is not, or has not become, a party to this agreement has
          no rights under the Contracts (Rights of Third Parties) Act 1999 (UK)
          to enforce any term of this agreement.

--------------------------------------------------------------------------------
31        Interpretation

31.1      Definitions

          These meanings apply unless the contrary intention appears:

          Accountable Taxes means Taxes imposed by a Relevant Country other than
          those imposed on, or calculated having regard to, the net income of a
          Financier.

          Amendment and Restatement Agreement means the agreement of that name
          dated on or about 16 June 2004 between the parties to this agreement.

          Amount Owing means, at any time for a Financier, the total of all
          amounts which are then due for payment, or which will or may become
          due for payment, in connection with any Transaction Document
          (including transactions in connection with them) to that Financier.

          Authorisation means an authorisation, consent, approval, resolution,
          licence, exemption, filing, notarisation or registration.

          Authorised Officer means:

          (a)       in the case of a Financier, a director or secretary of the
                    Financier or an officer of that party whose title contains
                    the word "president", "vice-president", "director", "chief",
                    "head", "counsel" or "manager", or a person performing the
                    functions of any of them, or any other person appointed by
                    that party as an Authorised Officer for the purposes of the
                    Transaction Documents; and

          (b)       in the case of the Obligor, a person appointed by the
                    Obligor as an Authorised Officer for the purposes of the
                    Transaction Documents and in respect of which each Financier
                    has received a certificate signed by a director or secretary
                    of the Obligor setting out the name

                                                                              34
<PAGE>

                    and signature of the person and confirming the person's
                    authority to act as an Authorised Officer.

          Borrowed Money means (without duplication) any indebtedness (other
          than indebtedness owing to another member of the REACH Group and, for
          the avoidance of doubt, any indebtedness owing under the CPP
          Agreement) for or in respect of:

          (a)      any moneys borrowed;

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

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

          (d)      the amount of any liability in respect of any lease or hire
                   purchase contract which would, in accordance with applicable
                   generally accepted accounting principles be treated as a
                   finance or capital lease;

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

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

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

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

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

          Borrower means REACH Finance Limited (formerly known as Capital Next
          Limited).

          Break Costs means, in relation to a Financier, the amount (if any) by
          which:

          (a)      the interest which the Financier should have received for
                   the period from the date of receipt of all or any part of
                   its participation in a Drawing to the last day of the
                   current Interest Period in respect of that Drawing, had the
                   principal amount been paid on the last day of that Interest
                   Period

          exceeds

          (b)      the amount which that Financier would be able to obtain by
                   placing an amount equal to the principal amount received by
                   it on deposit with a leading bank in the London interbank
                   market for a period starting on the Business day following
                   receipt or recovery and ending on the last day of the
                   current Interest Period.

                                                                              35
<PAGE>

          Business Day means a day (not being a Saturday, Sunday or public
          holiday) on which banks are open for general banking business in
          Australia, Hong Kong, London and New York.

          Chargor means each of:

          (a)      REACH;

          (b)      Reach Global Networks Limited;

          (c)      Reach Networks Australia Pty Limited; and

          (d)      Reach Networks Hong Kong Limited,

          and any other person who becomes a Chargor under clause 16.12(c).

          Control of an entity (the "controlled entity") means the capacity of
          one or more entities together to direct the decision-making of the
          board of directors of the controlled entity in relation to the
          financial and operating policies of the controlled entity.

          Core Business means in relation to the REACH Group taken as a whole,
          the global supply of a telecommunications service that provides
          capacity and connectivity for the carriage of telecommunications
          traffic as contemplated in the Shareholders Agreement.

          Costs includes costs, charges and expenses, including those incurred
          in connection with advisers.

          CPP Agreement means the Capacity Pre-Prepayment Agreement dated 15
          April 2003 between PCCW, Telstra, REACH Global Services Limited,
          REACH, REACH Networks Hong Kong Limited and PCCW-HKT (as amended on
          the Effective Date).

          Default Rate means the Interest Rate plus 1% per annum.

          For the purpose of this definition, the Interest Rate is calculated as
          if the overdue amount is a Drawing with Interest Periods of 3 months
          (or another period chosen from time to time by the Financiers) with
          the first Interest Period starting on and including the due date.

          Details means the section of this agreement headed "Details".

          Directive means a treaty, a law, a rule, a regulation, an official
          directive or request or a guideline having the force of law, and an
          official directive, request, guideline or policy with which financiers
          generally (or financiers in the relevant jurisdiction generally)
          comply, of any government, intergovernmental or supra-national body,
          agency, department or regulatory, self-regulating or other authority
          or organisation (including without limitation, a requirement or
          request relating to the maintenance of capital or any other request or
          requirement of a central bank or other regulatory body).

          Drawing means a drawdown made or to be made under the Facility or the
          outstanding principal amount of a drawdown made under the Facility.

                                                                              36
<PAGE>

          Effective Date means the date on which the Financiers notify the
          Borrower that they have each received each of the items set out in the
          schedule ("Conditions precedent") to the Amendment and Restatement
          Agreement in form and substance satisfactory to them.

          Event of Default means an event so described in clause 13 ("Default").

          Facility means each of the :

          (a)      Telstra Facility; and

          (b)      PCCW Facility,

          made available under this agreement and Facilities means both of them.

          Facility Limit means:

          (a)      for Telstra, the Telstra Facility Limit; and

          (b)      for PCCW, the PCCW Facility Limit,

          and Facility Limits means both of them.

          Final Maturity Date means 31 December 2010.

          Financier means any person so described in the Details.

          Financial Statements means:

          (a)      a profit and loss statement; and

          (b)      a balance sheet; and

          (c)      a statement of cash flows,

          together with any notes to those documents and a directors'
          declaration and other information as required under applicable law and
          any other information necessary to give a true and fair view of the
          financial condition of the relevant person.

          Financial Year in respect of the Borrower, REACH or the REACH Group
          means each period of a year ending on 31 December each year.

          First Amendment and Restatement Agreement means the agreement dated 15
          April 2003 between, among others, the Borrower, REACH and the Banks.

          Floating Charge means each floating charge agreement executed by:

          (a)      REACH;

          (b)      Reach Global Networks Limited;

          (c)      Reach Networks Australia Limited; and

          (d)      Reach Networks Hong Kong Limited,

                                                                              37
<PAGE>

          in favour of the Financiers, as well as any floating charge agreement
          (or other security document) executed under clause 16.12(b).

          Guarantee means the guarantee and indemnity in clause 16 ("Guarantee
          and indemnity").

          Guaranteed Money means, at any time, all amounts then due for payment
          or which will or may become due for payment or which remain unpaid by
          an Obligor in connection with the Transaction Documents (including
          transactions in connection with them).

          Without limiting this definition, it includes amounts then due for
          payment or which will or may become due for payment or which remain
          unpaid to a Financier in its capacity as an assignee because it has
          taken an assignment of a Transaction Document, and whether or not:

          (a)      the Guarantor (or any other Obligor) was aware of the
                   assignment or consented to it; or

          (b)      the assigned obligation was secured before the assignment; or

          (c)      the assignment takes place before, at the same time as or
                   after the Transaction Document is executed.

          Guarantor means any Initial Guarantor and each New Guarantor under
          clause 16.12 ("Becoming a New Guarantor").

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

          Initial Guarantor means REACH and each person so described in the
          Details.

          Indirect Tax means any goods and services tax, consumption tax, value
          added tax or any tax of a similar nature.

          A person is Insolvent if:

          (a)      an order is made or an effective resolution has been passed
                   for it to be wound up, or dissolved without winding-up
                   (otherwise than for the purposes of reconstruction or
                   amalgamation);

          (b)      a receiver, receiver manager, judicial manager, liquidator,
                   provisional liquidator, official manager, administrator,
                   trustee or like official has been appointed over the whole
                   or any material part of its undertaking or property;

          (c)      any distress, execution, sequestration or other similar
                   process has been levied or enforced upon or sued out against
                   the whole or any material part of its property and has
                   remained undischarged for a continuous period of more than
                   30 days;

          (d)      it has made an assignment for the benefit of creditors
                   (including a class of creditors) generally;

                                                                              38
<PAGE>

          (e)      it is subject to any arrangement, assignment, moratorium or
                   composition, protected from creditors under any statute or
                   dissolved (in each case, other than to carry out a
                   reconstruction or amalgamation while solvent on terms
                   approved in writing by the Financiers);

          (f)      it is unable or admits inability to pay its debts as they
                   fall due, suspends making payments on any of its debts or,
                   by reason of actual or anticipated financial difficulties,
                   commences negotiations with its creditors generally to
                   reschedule any or all of its indebtedness; or

          (g)      a situation substantially analogous to any of (a) to (f)
                   exists in connection with the person under the law of any
                   jurisdiction.

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

          Interest Period means each period selected in accordance with clause 3
          ("Interest") or applicable in accordance with the definition of
          Default Rate.

          Interest Rate means for Drawings, the interest rate set out in the
          Details.

          LIBOR means, with respect to any Drawing for any Interest Period:

          (a)      the rate per annum (rounded upwards, if necessary, to the
                   nearest four decimal places) equal to the official fixing
                   rate by the British Banker Association for USD conducted
                   each day at 11.00am (London time) which appear on the page
                   of the Reuters Monitor Money Rates Service (or, if not
                   available, a successor or substitute page or service
                   selected by the Financiers after consultation with the
                   Borrower) which displays London interbank offered rates for
                   the currency of the Drawing (being current "LIBOR01" for
                   US$) for the Interest Period (or any period which may, in
                   the Financiers' reasonable opinion, be comparable to the
                   Interest Period) as of 11:00a.m. London time on the
                   quotation date for the Interest Period (or a comparable
                   period, as the case may be); or

          (b)      if that rate is not available at that time for any reason,
                   the rate per annum (rounded upwards, if necessary, to the
                   fourth decimal point) equal to the arithmetic mean of the
                   rates at which deposits for a maturity comparable to the
                   Interest Period are offered by the Reference Banks to prime
                   banks in the London interbank market (as notified to the
                   Financiers) in immediately available funds and in the
                   currency of the Drawing at approximately 11.00 am, London
                   time on the quotation date for that Interest Period.

                   For the purposes of this definition:

                    (i)       the "quotation date" for an Interest Period is the
                              day on which quotations would ordinarily be given
                              by prime banks in the London interbank market for
                              deposits in the relevant currency for delivery on
                              the first day of that Interest Period, except, if,
                              for the period, quotations would ordinarily be
                              given on more than one date, the "quotation date"
                              for that period is the last of those dates; and

                                                                              39
<PAGE>

                   (ii)      if a Reference Bank fails to supply the Financiers
                             with a quotation required of it, the relevant rate
                             for which the quotation was required must be
                             determined from those quotations which are
                             supplied to the Financiers by other Reference
                             Banks (unless only one Reference Bank supplies a
                             quotation).

          Margin is as described in the Details.

          Material Adverse Effect means:

          (a)       a material adverse effect on the business, assets or
                    financial condition of the REACH Group taken as a whole
                    unless a substantial cause of such effect is a deterioration
                    or failure of the industry of providing connectivity
                    services for the carriage of telecommunications traffic;

          (b)       a material adverse effect on the ability of an Obligor to
                    perform fully and punctually its payment obligations under
                    this agreement unless a substantial cause of such effect is
                    a deterioration or failure of the industry of providing
                    connectivity services for the carriage of telecommunications
                    traffic; or

          (c)       a material adverse effect on the validity, legality or
                    enforceability of any Security Interest created or to be
                    created pursuant to the Security Documents or on the
                    priority and ranking of any of that Security Interest.

          Material Subsidiary means from time to time each member of the REACH
          Group whose share of the book value of the tangible assets or the
          gross revenues of the REACH Group exceeds 10% of the consolidated
          tangible assets or gross revenues of the REACH Group, as specified in
          the most recent consolidated Financial Statements of the REACH Group
          from time to time.

          New Guarantor means any person that becomes a Guarantor under clause
          16.12 ("Becoming a New Guarantor").

          New Guarantor Deed Poll means a deed in the form of schedule 5 ("Form
          of New Guarantor Deed Poll") or any other guarantee document executed
          by a New Guarantor under clause 16.12 ("Becoming a New Guarantor").

          Obligor means each of the Borrower and the Guarantors.

          PCCW means the person so described in the Details.

          PCCW Facility means the Facility so described in the Details.

          PCCW Facility Limit has the meaning given to it in the Details.

          PCCW-HKT means PCW-HKT Telephone Limited.

          PCCW Shareholder means Pacific Century Cable Holdings Limited a
          company incorporated in Bermuda and having its principal office at
          Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

                                                                              40
<PAGE>

          Permitted Disposal means any disposal:

          (a)       of assets not required for the operations of the Core
                    Business made on arm's length commercial terms; or

          (b)       of assets in exchange for other assets comparable or
                    superior as to type, value and quality (however, the
                    Financiers need not treat other assets as comparable or
                    superior to the extent that the value of the Borrower's net
                    economic interest free from Permitted Security Interests in
                    the other assets is less than the value of that interest in
                    the assets disposed of); or

          (c)       by the payment of cash, dividends or interest on stock or
                    management charges; or

          (d)       required by law, regulation or licence or by any regulatory
                    body or authority; or

          (e)       of obsolete assets or assets no longer required for the
                    business; or

          (f)       by way of operating leases entered into by a member of the
                    REACH Group as lessor in the ordinary course of the business
                    of the relevant member of the REACH Group or the REACH Group
                    taken as a whole; or

          (g)       by a Guarantor to another Guarantor or to another person who
                    agrees, or who has agreed with the Financiers that it will
                    become a New Guarantor in accordance with this agreement; or

          (h)       not falling within the paragraphs (a) to (g) above (both
                    present and future) so long as the aggregate of the Disposed
                    Value of those assets falling within this paragraph (h) and
                    disposed of by the members of the REACH Group in any
                    Financial Year does not exceed 20% of the book value of the
                    total consolidated tangible assets of the REACH Group as
                    specified in the most recent consolidated Financial
                    Statements of the REACH Group for such Financial Year.

                    For the purpose of this paragraph (h):

                    "Disposed Value" of any asset of any member of the REACH
                    Group means the higher of:

                    (i)       the amount of aggregate consideration (or its
                              value, if in kind) received by the members of the
                              REACH Group for the disposal of the asset, net of
                              costs incurred in respect of the disposal; and

                    (ii)      the book value of the asset.

          Permitted Security Interest means:

          (a)       any lien or right of set-off arising by operation of law and
                    in the normal course of the business of a member of the
                    REACH Group or in respect of Taxes; and

                                                                              41
<PAGE>

          (b)       each Security Interest over or affecting any asset acquired
                    by a member of the REACH Group after the date of this
                    agreement and subject to which the asset is acquired if:

                    (i)       the Security Interest was not created in
                              contemplation of the acquisition of the asset by
                              the relevant member of the REACH Group; and

                    (ii)      the principal amount secured by it immediately
                              before the asset was acquired does not exceed
                              either its then resale value or its original cost
                              and has not been increased in contemplation of, or
                              since the date of, the acquisition of the asset by
                              the relevant member of the REACH Group; and

                    (iii)     the Security Interest is fully discharged and
                              released within six months of the date of
                              acquisition of the asset; and

          (c)       each Security Interest over or affecting any asset of any
                    company which becomes a member of the REACH Group after the
                    date of this agreement created before the company becomes a
                    member of the REACH Group if:

                    (i)       the Security Interest was not created in
                              contemplation of the company becoming a member of
                              the REACH Group; and

                    (ii)      the amount secured by the Security Interest has
                              not been increased in contemplation of the company
                              becoming a member of the REACH Group; and

                    (iii)     the Security Interest is fully discharged and
                              released within six months of the date on which
                              the company becomes a member of the REACH Group;
                              and

                    (iv)      the Security Interest and the transactions
                              relevant to it were created or entered into on
                              arm's length terms; and

          (d)       each Security Interest arising out of rights of
                    consolidation, combination, netting or set-off over any
                    current or deposit accounts with a bank or financial
                    institution, where it is necessary to agree to those rights
                    in connection with any treasury management arrangement
                    operated by a member of the REACH Group; and

          (e)       each Security Interest over assets securing Borrowed Money
                    incurred to finance the costs of acquiring, developing or
                    improving assets where the person providing the Borrowed
                    Money only has recourse to those assets (and, in the case of
                    Security Interests over assets securing Borrowed Money
                    incurred to finance the cost of improving an asset, if the
                    total amount secured by those Security Interests does not
                    exceed US$100,000,000); and

          (f)       any Security Interest replacing, or renewing any Permitted
                    Security Interest and which secures a maximum principal,
                    capital or nominal

                                                                              42
<PAGE>

                    amount not exceeding that so originally secured at the time
                    it is replaced; and

          (g)       any Security Interest disclosed in writing to the Banks
                    pursuant to the terms of schedule 2 of the First Amendment
                    and Restatement Agreement; and

          (h)       any Security Interest arising out of or in connection with a
                    judgment or judicial award which is promptly discharged; and

          (i)       any other Security Interest created in favour of the
                    Financiers, either pursuant to any Floating Charge, any
                    Share Charge or otherwise with the consent of the
                    Financiers; and

          (j)       any other Security Interest over or affecting the assets of
                    the Borrower or a member of the REACH Group not falling in
                    paragraphs (a) to (i) above (both present and future) so
                    long as the aggregate amount secured by all those Security
                    Interests falling under this paragraph (j) and those
                    Security Interests permitted by paragraph (f) which are in
                    replacement or renewal of Security Interests originally
                    permitted under this paragraph (j) from time to time does
                    not exceed 20% of the total consolidated tangible assets of
                    the REACH Group as specified in the most recent consolidated
                    Financial Statements of the REACH Group.

          Potential Event of Default means an event of which the Borrower is
          aware (whether by notice to it by any Financier or not) which, with
          the giving of notice, the expiry of a grace period or making of a
          determination under a Transaction Document or any combination of them,
          would become an Event of Default.

          Proportion means at any time, for a Financier, the proportion which
          the Facility Limit for its Facility bears to the aggregate of the
          Facility Limits.

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

          REACH means REACH Ltd. (formerly known as Joint Venture (Bermuda) No.
          1 Limited), a company incorporated in Bermuda and having its principal
          office at Clarendon House, 2 Church Street, PO Box HM666, Hamilton HM
          CX, Bermuda.

          REACH Group means REACH and its Subsidiaries from time to time.

          Reference Banks means:

          (a)       each of the financial institutions so described in the
                    Details; and

          (b)       any other banks or financial institutions the Borrower and
                    the Financiers from time to time agree to be Reference
                    Banks.

          There must be at least three Reference Banks at any time.

                                                                              43
<PAGE>

          Related Entity of a body corporate is any other body corporate of
          which the first mentioned body corporate is a Subsidiary and any other
          Subsidiary of the second mentioned body corporate (including any
          Subsidiary of the first mentioned body corporate).

          Release Date means the date on which the releases under the Deed of
          Release between the Obligors, the Financiers, JPMorgan Chase Bank and
          others dated on or about the date of this agreement become effective.

          Relevant Country means any country, or political sub-division of one
          or more countries, or any federation or association of countries in
          which the Obligor is either incorporated or is resident or domiciled
          for any tax purpose or in which the Obligor carries on business or
          owns or leases property or from which, or through which, any payment
          under a Transaction Document is made.

          Security Documents means the Floating Charges, the Share Charges, and
          any other security document that may be at any time given as security
          for any of the Total Amount Owing.

          Security Interest means any mortgage, pledge, lien, hypothecation,
          charge, security, encumbrance, assignment or deposit by way of
          security or trust arrangement for the purpose of providing security or
          any arrangement having a similar effect to any of them.

          Share Charge means each share charge agreement executed by:

          (a)       REACH over its shares in the Borrower;

          (b)       REACH over its shares in Reach Global Networks Limited;

          (c)       Reach Global Networks Limited over its shares in Reach
                    Networks Australia Limited; and

          (d)       Reach International Holdings Limited over its shares in
                    Reach Networks Hong Kong Limited,

          in favour of the Financiers, as well as any share charge agreement (or
          other security document) executed under clause 16.12(c).

          Shareholders Agreement means the agreement entitled "IP Backbone
          Company Shareholders Agreement" dated 13 October 2000 between Telstra,
          Telstra Holding, Telstra Shareholder, PCCW, PCCW Shareholder and the
          Borrower.

          An entity is a Subsidiary of another entity if that other entity
          (directly or indirectly):

          (a)       holds a majority of the voting rights in it; or

          (b)       has the right to appoint or remove a majority of its board
                    of directors or equivalent body (or directors or similar
                    officers holding a majority of the voting rights of the
                    board of directors or equivalent body) whether through
                    ownership, contract or otherwise; or

                                                                              44
<PAGE>

          (c)       is entitled to control the exercise of, a majority of the
                    voting rights in it; or

          (d)       if the entity is a Subsidiary of an entity which is itself a
                    Subsidiary of that other entity.

          Taxes means taxes, levies, imposts, charges and duties (including
          stamp and transaction duties) and withholdings imposed by any
          authority together with any related interest, penalties, fines and
          expenses in connection with them.

          Telstra means the person so described in the Details.

          Telstra Facility means the Facility so described in the Details.

          Telstra Facility Limit has the meaning given to it in the Details.

          Telstra Holding means Telstra Holdings Pty Limited (ABN 45 057 808
          938).

          Telstra Shareholder means Telstra Holdings (Bermuda) No. 1 Limited a
          company incorporated in Bermuda and having its principal office at
          Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

          Total Amount Owing means, at any time, the total of all Amounts Owing
          in connection with any Transaction Document (including transactions in
          connection with them).

          Transaction Documents means the documents described as such in the
          Details and any document which the Borrower and the Financiers agree
          in writing to be a Transaction Document.

          US Dollars and US$ means the lawful currency of the United States of
          America.

          Working Capital Facility Agreement means the working capital facility
          agreement dated on or about the date of the Amendment and Restatement
          Agreement between REACH, Telstra and PCCW.

31.2      References to certain general terms

          Unless the contrary intention appears, a reference in a Transaction
          Document to:

          (a)       a group of persons is a reference to any two or more of them
                    jointly and to each of them individually;

          (b)       an agreement, representation or warranty in favour of two or
                    more persons is for the benefit of them jointly and each of
                    them individually;

          (c)       an agreement, representation or warranty by two or more
                    persons binds them jointly and each of them individually,
                    but an agreement, representation or warranty by a Financier
                    binds the Financier individually only;

                                                                              45
<PAGE>

          (d)       anything (including an amount) is a reference to the whole
                    and each part of it;

          (e)       a document (including this agreement) includes any
                    variation, amendment, novation or replacement of it;

          (f)       law means international treaty, common law, principles of
                    equity, and laws made by parliament or competent legislative
                    bodies or organs of government, any international tribunal,
                    board or other authority established under any international
                    treaty subordinate legislation regulation, and rules (and
                    laws made by any international tribunal, board or other
                    authority established under any international treaty or
                    parliament include multi-jurisdictional and regulations and
                    other instruments under them) and consolidations,
                    amendments, re-enactments or replacements of any of them;

          (g)       an accounting term is a reference to that term as it is used
                    in accounting standards under GAAP, or, if not inconsistent
                    with those standards, in accounting principles and practices
                    generally accepted in the United States of America;

          (h)       a time of day is a reference to Hong Kong time;

          (i)       the word "person" includes an individual, a firm, company,
                    corporation, other body corporate, government, authority,
                    state or agency of a state or any association, trust or
                    partnership (whether or not having separate legal
                    personality) of two or more of them;

          (j)       a particular person includes a reference to the person's
                    executors, administrators, successors, substitutes
                    (including persons taking by novation) and assigns;

          (k)       the words "including", "for example" or "such as" when
                    introducing an example, do not limit the meaning of the
                    words to which the example relates to that example or
                    examples of a similar kind;

          (l)       the "equivalent" in any currency (the "first currency") of
                    any amount in another currency (the "second currency") is a
                    reference to the amount in the first currency which could be
                    purchased with that amount in the second currency at the
                    spot rate of exchange at which the Financiers would have
                    been prepared (acting reasonably) and able to purchase that
                    amount in the first currency for the second currency in the
                    London foreign exchange market for value as at the relevant
                    time on the relevant date specified in this agreement (or,
                    where no time and date is specified, for value at the time
                    and on the date as the Financiers may from time to time
                    reasonably determine to be appropriate in the
                    circumstances);

          (m)       "assets" includes present and future properties, revenues
                    and rights of every description;

                                                                              46
<PAGE>

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

          (o)       a "quarter" means each period of 3 months ending on 31
                    March, 30 June, 30 September and 31 December in any
                    Financial Year; and "quarterly" shall be construed
                    accordingly;

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

          (q)       a thing done or to be done in the "ordinary course of
                    business" is a reference to a thing done or to be done in
                    the ordinary course of the Core Business.

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

31.3      Number

          In a Transaction Document, the singular includes the plural and vice
          versa.

31.4      Headings

          In a Transaction Document, headings (including those in brackets at
          the beginning of paragraphs) are for convenience only and do not
          affect the interpretation of the Transaction Document.

EXECUTED as an agreement.

                                                                              47
<PAGE>

Shareholder Term Loan Facility Agreement
Schedules

Schedule 1 - New Guarantor documentation (clause 16.12)

<TABLE>
          Item                                                                  Form

<S>       <C>                                                                   <C>
1.        Memorandum and articles of association (or                            Certified copy
          equivalent) of the relevant Guarantor.

2.        Certificate of registration (or equivalent) of the                    Certified copy
          relevant Guarantor.

3.        Extract of minutes of a meeting of the relevant                       Certified copy
          Guarantor's board of directors (or equivalent) which evidences
          the resolutions:

          (a)   authorising the signing and delivery of the Transaction
                Documents to which the person is a party and the
                observance of obligations under those documents; and

          (b)   appointing Authorised Officers of the person; and

          (c)   which acknowledge that the Transaction Documents to
                which the person is a party will benefit it.

          certified as true and correct and stating that the resolutions
          are in full force and effect and have not been amended or
          revoked.

4.        Extract of the minutes of a meeting of the                            Certified copy
          shareholders (or equivalent) of the relevant
          Guarantor which evidence the resolutions authorising
          the signing and delivery of the Transaction
          Documents to which the person is a party and the
          observance of obligations under those documents
          certified as true and correct and stating that the
          resolutions are in full force and effect and have
          not been amended or revoked.

5.        Each document which evidences any other necessary                     Certified copy
          corporate or other action of the

                                                                                                 48
<PAGE>

          relevant Guarantor in connection
          with the Transaction Documents to which it is a party.

6.        Each authorisation of the relevant Guarantor                          Certified copy
          necessary to enter into the Transaction Documents to which it is
          a party and to comply with obligations under and enforce those
          documents.

7.        Each power of attorney under which a person signs a                   Certified Copy
          Transaction Document for the relevant Guarantor showing
          evidence of stamping and registration (if required).

8.        Certified specimen signature of:                                      Original

          (a)   each Authorised Officer of the relevant Guarantor; and

          (b)   each other person who is authorised to sign a
                Transaction Document for the relevant Guarantor.

                                                                                                 49
</TABLE>
<PAGE>

Shareholder Term Loan Facility Agreement
Schedules

Schedule 2 - [intentionally left blank]

                                                                              50
<PAGE>

Shareholder Term Loan Facility Agreement
Schedules

Schedule 3 - [intentionally left blank]

                                                                              51
<PAGE>

Shareholder Term Loan Facility Agreement
Schedules

Schedule 4 - Payment details (clause 5.4)

Payment details                       Telstra Corporation Limited

                                      Account number: 36215396
                                      Account name: Telstra Corporation Limited
                                      Bank: Citibank N.A.
                                      Branch: New York
                                      Swift Code: CITIUS33
                                      CHIPS/ABA number: CP0008/FW021000089

                                      PCCW Limited

                                      Account number: 000044407
                                      Account name: HSBC, Hong Kong Main Branch
                                      Bank: HSBC Bank USA, New York
                                      Branch: Hong Kong Main Branch
                                      Swift Code: MRMDUUS33
                                      CHIPS/ABA number: 076026
                                      Further credit to: PCCW Limited
                                      Account number: 600 699 466 0001

                                                                              52
<PAGE>

Shareholder Term Loan Facility Agreement
Schedules

Schedule 5 - Form of New Guarantor Deed Poll (clause 16.12)

Deed Poll
--------------------------------------------------------------------------------

New Guarantor          Name:

                       Address:

                       Fax:

                       Telephone:

                       Attention:
--------------------------------------------------------------------------------
Shareholder Term       Shareholder Term Loan Facility Agreement between REACH
Loan Facility          Finance Limited, Telstra, PCCW and others dated
Agreement              12 January 2001.
--------------------------------------------------------------------------------

Governing law of       The same as the Shareholder Term Loan Facility Agreement
this deed poll         described above.

BY THIS DEED POLL the New Guarantor described above, for the benefit of the
parties to the Shareholder Term Loan Facility Agreement described above:

(a)       irrevocably agrees that from the date of this deed poll it is a
          Guarantor; and

(b)       irrevocably agrees to comply with and be bound by all current and
          future obligations of the Guarantor under the Transaction Documents as
          if it were originally party to them as a Guarantor; and

(c)       acknowledges having read a copy of each Transaction Document before
          signing this deed poll; and

(d)       gives, as at the date of this deed poll, all representations and
          warranties on the part of the Guarantor contained in the Transaction
          Documents; and

(e)       acknowledges receiving valuable consideration for this deed poll.

Clause 31 ("Interpretation") of the Shareholder Term Loan Facility Agreement
described above applies to this deed poll as if it was fully set out in this
deed poll.

DATED [          ]

EXECUTED as a deed poll.

                                                                              53
<PAGE>

[insert execution clause for New Guarantor]

                                                                              54
<PAGE>

Shareholder Term Loan Facility Agreement
Schedules

Schedule 6 - [intentionally left blank]

                                                                              55
<PAGE>

Shareholder Term Loan Facility Agreement
Schedules

Schedule 7 - [intentionally left blank]

                                                                              56
<PAGE>

Shareholder Term Loan Facility Agreement
Schedules

Schedule 8 - [intentionally left blank]

                                                                              57
<PAGE>

Shareholder Term Loan Facility Agreement
Schedules

Schedule 9 - [intentionally left blank]

                                                                              58
<PAGE>

Shareholder Term Loan Facility Agreement
Schedules

Schedule 10 - [intentionally left blank]

                                                                              59

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]