09:18 PCCW<00008> - Announcement & Resumption of Trading (4) prevent or delay any member of the Group from continuing any negotiations in relation to any business opportunity or prevent any member of the Group from entering into any contract or other arrangement relating to any business opportunity provided that certain consultation periods are adhered to. Arrangements with China Netcom Competitors The Company has agreed in certain circumstances to discuss with China Netcom opportunities available to it with any entity licensed to provide basic fixed-line telecommunications services in the PRC relating to (1) the establishment of new joint ventures in the PRC in relation to (a) certain basic fixed-line telecommunications services which are considered of a strategic nature to the Group or involve a significant investment by the Group or (b) non-regulated services which involve a significant investment by the Group or (2) the disposal of a strategic business in the PRC. The Company is not bound to enter into any agreement with China Netcom or any member of its group as a preferred partner, and is not precluded from discussing or negotiating with any such competitors, or entering into any agreement or arrangement with them provided that it notifies China Netcom of the opportunity first and enters into good faith discussions with China Netcom if China Netcom expresses an interest in being the Company's partner in the proposed business development or disposal. Certain Non-Disposal Covenants The Company must obtain China Netcom's consent (not to be unreasonably withheld or delayed) if it wishes to dispose of more than 10% of the Group's voting interest in PCCW-HKT Telephone Limited or more than 25% of the Group's voting interest in PCCW VOD Limited. The Company must also obtain China Netcom's consent (not to be unreasonably withheld or delayed) if it wishes to dispose of any of its shareholding in Pacific Century Premium Developments Limited prior to the date falling 60 days after Completion. However, China Netcom has undertaken to give its consent if the Board determines that the proposed sale is in the best interests of the Company. Where the Group is considering any disposal of other assets and such disposal will require a circular to be issued to its Shareholders under the Listing Rules, the Directors nominated by China Netcom must be consulted in advance. Duration of undertakings The Company's ongoing obligations summarised above in the paragraphs headed `Board and Committee Appointments', `PRC Business Development Committee', `Co-Group Managing Director', `China Netcom's Obligations to CNC HK', `Arrangements with China Netcom Competitors', and `Certain Non-Disposal Covenants' will cease to apply in the event that the Subscriber ceases to hold at least 10% of the total issued share capital of the Company or China Netcom ceases to hold, directly or indirectly, at least 75% of the issued share capital of the Subscriber. Guarantee China Netcom has agreed to guarantee the obligations of the Subscriber under the Subscription Agreement. SHAREHOLDERS' AGREEMENTS DATED 19 JANUARY 2005 Parties Each of the PCCW Substantial Shareholders has entered into a shareholders' agreement with China Netcom. Each shareholders' agreement is on similar terms to the other shareholders' agreements. These terms are summarised below. Non-Disposal Undertaking Subject to certain customary exceptions, each PCCW Substantial Shareholder will be subject to (1) an initial lock-in period commencing on the date of the shareholders' agreement and ending on the date of Completion; and (2) a further lock-in period of 12 months from the date of Completion. The further lock-in period is conditional upon Completion. China Netcom may waive the lock-in in whole or in part. Voting Undertaking Conditional on Completion, each PCCW Substantial Shareholder has undertaken to exercise its rights and powers and give all such instructions (including as a Shareholder) to procure, so far as it is able, that the Company's obligations in connection with China Netcom's entitlements to nominate Board members and committee members are complied with from time to time for so long as China Netcom is entitled to exercise such rights in accordance with the Subscription Agreement. PCCW SUBSTANTIAL SHAREHOLDERS ANTI-DILUTION AGREEMENTS DATED 19 JANUARY 2005 Parties Each of the PCCW Substantial Shareholders has entered into an anti-dilution agreement with the Company. Each anti-dilution agreement is on similar terms to the other anti-dilution agreements. These terms (which are also similar to the terms of China Netcom's Anti-Dilution Rights) are summarised below.