F-3/A

As filed with the Securities and Exchange Commission on April 2, 2010

Registration No. 333-164786

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

AMENDMENT NO. 1
to
FORM F-3

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

CITY TELECOM (H.K.) LIMITED

(Exact name of Registrant as specified in its charter)

Hong Kong Special Administrative Region,
The People’s Republic of China	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Level 39, Tower 1, Metroplaza
No. 223 Hing Fong Road
Kwai Chung, New Territories
Hong Kong
Telephone: (852) 3145 6068
(Address and telephone number of Registrant’s principal executive offices)

Mr. Lai Ni Quiaque
12th Floor, Trans Asia Centre
No. 18 Kin Hong Street
Kwai Chung, New Territories
Hong Kong
Telephone: (852) 3145 6068
Facsimile: (852) 2199 8445
(Name, address and telephone number of agent for service)

Copies of all Correspondence to:
Mr. Jeffrey Maddox
Ms. Virginia Tam
Jones Day
29th Floor, Edinburgh Tower
The Landmark
15 Queen’s Road Central
Hong Kong
Telephone: (852) 3189 7318

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.

If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: o

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box: þ

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a registration statement pursuant to General Instruction I.C. or a post effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. o

If this form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. o

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION
DATED APRIL 2, 2010

PROSPECTUS

US$100,000,000
Ordinary Shares
Debt Securities
Warrants
Rights to Purchase Ordinary Shares
Units

     We may offer under this prospectus from time to time, at amounts, prices and on terms to be determined by market conditions at the time we make the offer, our:

• ordinary shares;

• debt securities (including convertible debt securities);

• warrants to purchase debt or equity securities;

• rights to purchase ordinary shares; or

• any combination of the above, separately or as units.

     This prospectus may not be used to sell our securities unless accompanied by a prospectus supplement. Before you invest in our securities, you should carefully read both this prospectus and the prospectus supplement related to the offering of the securities.

     Our American depositary shares are listed on The Nasdaq Global Market (“Nasdaq”) under the symbol “CTEL.” Our ordinary shares are listed on The Stock Exchange of Hong Kong Limited (“HKSE”) under the number “1137.” On March 31, 2010, the last reported sale price of our American depositary shares on Nasdaq was US$16.07 per share and the last reported sale price of our ordinary shares on the HKSE was HK$6.21 per share. We have not yet determined whether any of the other securities that may be offered by this prospectus will be listed on any exchange, inter-dealer quotation system or over-the-counter market. If we decide to seek listing of any such securities, a prospectus supplement relating to those securities will disclose the exchange, quotation system or market on which the securities will be listed.

     If we sell securities through agents or underwriters, we will include their names and the fees, commissions and discounts they will receive, as well as the net proceeds to us, in the applicable prospectus supplement.

     The securities offered hereby involve a high degree of risk. See “Risk Factors” on page 6.

     None of the U.S. Securities and Exchange Commission, the Hong Kong Securities and Futures Commission or any state securities commission have approved or disapproved of these securities or passed upon the adequacy, completeness or accuracy of this prospectus. Any representation to the contrary is a criminal offense under the laws of the United States and the laws of Hong Kong.

The date of this prospectus is                     , 2010

TABLE OF CONTENTS

	Page
PROSPECTUS SUMMARY		1
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS		5
RISK FACTORS		6
RATIO OF EARNINGS TO FIXED CHARGES		7
CAPITALIZATION		7
PRICE RANGE OF ORDINARY SHARES		8
USE OF PROCEEDS		9
DILUTION		10
DESCRIPTION OF SHARE CAPITAL		11
DESCRIPTION OF DEBT SECURITIES		21
DESCRIPTION OF WARRANTS		28
DESCRIPTION OF RIGHTS TO PURCHASE ORDINARY SHARES		29
DESCRIPTION OF UNITS		30
PLAN OF DISTRIBUTION		31
DIVIDEND POLICY		33
OFFERING EXPENSES		34
MATERIAL CHANGES		35
LEGAL MATTERS		36
EXPERTS		37
WHERE YOU CAN FIND MORE INFORMATION		38
INCORPORATION OF INFORMATION BY REFERENCE		39
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS		II-1
SIGNATURES		II-5
EXHIBIT INDEX		II-7
EX-4.4
EX-5.1
EX-5.2
EX-12.1
EX-23.1

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PROSPECTUS SUMMARY

          This is a summary of our business and this offering. For a more complete understanding of our business and this offering, you should read the entire prospectus and the documents incorporated by reference.

Company Overview

Principal Activities

          We are a Hong Kong-based provider of residential and corporate fixed telecommunications network and international telecommunications services. We specialize in the residential mass market and small-to-medium corporate and enterprise market segments. The majority of our revenues are derived from business conducted in Hong Kong.

          We derive our revenues from two business segments: FTNS and IDD. A breakdown of our revenues is as follows:

	For the year ended August 31,
	2008		2009
	HK$			HK$
Revenue	(Amounts in thousands)
FTNS business		1,011,038		1,230,880
IDD business		291,943		247,359
Total operating revenue		1,302,981		1,478,239

• FTNS business. Our FTNS business involves the provision of fixed telecommunications network services through our self-owned Next Generation Network. Such services include the following:

• high-speed broadband Internet access services at symmetric upstream and downstream access speeds of 25 Mbps to 1000 Mbps;

• fixed line local telephony services using VoIP technology;

• pay television services consisting of more than 80 channels, including self-produced news, children’s programming, international drama, movies and documentary and local interest programming, using our IP platform; and

• corporate data services, including the provision of dedicated bandwidth to corporate customers.

As of August 31, 2009, we had a total of approximately 943,000 subscriptions for our fixed telecommunications network services, consisting of 391,000 broadband Internet access, 382,000 local VoIP and 170,000 IP-TV services subscriptions.

• IDD business. Our IDD business involves the provision of international telecommunications services. Such services include direct dial services, international calling cards and mobile call forwarding services in Hong Kong and Canada. As of August 31, 2009, the customer base for our total international telecommunications services consisted of approximately 2.4 million registered accounts.

Strategy and Competitive Strengths

          Our strategy is to market multiple fixed telecommunications network services by capitalizing on the new in-building blockwiring we have done on a mass scale for our Next Generation Network, which is described below, and will focus on growing

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our market share, increasing our network coverage and introducing new services through our IP platform. We believe that our success will continue to depend on our ability to capitalize on our focus on the residential mass and small-to-medium corporate and enterprise market segments, our leading-edge Next Generation Network, and our first mover advantage in the fixed line telecommunications market, which have a high entry barrier.

          We believe that our demonstrated success is primarily due to our ability to capitalize on the following key strengths:

• Focus on the Residential Mass and Small-To-Medium Corporate and Enterprise Market Segments. We focus on offering high-bandwidth services to the residential mass and small-to-medium enterprise markets in Hong Kong, which we believe have significant growth potential. We price our services attractively on a value-for-bandwidth basis and at the same time offer bandwidth advantages over comparable service offerings by our competitors. Our IP-TV services focus on the residential mass market by providing Chinese-language content that targets the Chinese-speaking population of Hong Kong. We have also strengthened our English language content over the past year to increase our competitiveness by adding National Geographic, AXN, Bloomberg and other channels. Our focus on the residential mass and small-to-medium corporate and enterprise markets has enabled us to quickly grow our subscription base, and we believe this will help us to increase sales of our services.

• Leading-Edge Next Generation Network. We believe our self-owned Next Generation Network, a fiber-based backbone, gives us an inherent cost and performance advantage over our competitors. The high capacity of this network has enabled us to offer a suite of services on a single IP network platform. This IP platform is highly scalable, enabling us to offer broadband Internet access, local VoIP, IP-TV and corporate data services over a single network. It is also capable of providing up to 1,000 Mbps symmetric broadband Internet access.

• First Mover Advantage and High Barriers to Entry. Despite the intense competition in the Hong Kong telecommunications industry, the inherent characteristics of the fixed line telecommunications market create a high entry barrier. Accordingly, we believe that our Next Generation Network’s current coverage of 1.6 million residential homes pass, substantially all in densely populated areas, gives us a first mover advantage over our competitors. Competitors who want to replicate our business model to provide a full coverage network that includes remote and difficult-to-reach areas of Hong Kong may encounter technological difficulties. Attempting to deploy Metro Ethernet technology in such locations would significantly increase costs and completion time of such a network. While other telecommunications operators may lay their own fiber, we believe some would encounter significant in-building bottlenecks when attempting to complete an end-to-end network. This is because a majority of Hong Kong’s residential properties have limited space for in-building wiring leading to subscribers’ residences, making it difficult for new entrants to replicate our end-to-end network build. We can increase or decrease the capacity of our Next Generation Network between 100Mbps to 1,000Mbps logarithmically and without adding to the network’s physical infrastructure, something our competitors using legacy telephone lines cannot accomplish with existing technology.

Recent Developments

          Update on Fixed Mobile Interconnection Charge

          On November 25, 2009, the Hong Kong Telecommunications Authority (“TA”) issued a Preliminary Analysis (the “2009 PA”) in relation to the 2008 Determination (see note 2(c) to our consolidated financial statements) for mobile interconnection charges. TA invited HKBN and the mobile operators covered by the 2008 Determination to make representations in relation to the 2009 PA on or before December 25, 2009. As of March 29, 2010, the 2008 Determination is still in process.

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          Buyback of 10-year Senior Notes (the “Notes”)

          Between September 1, 2009 and December 15, 2009, we repurchased Notes with a cumulative principal value of US$1.5 million (equivalent to HK$11.6 million) in the open market. The total consideration paid including accrued interest was approximately US$1.6 million (equivalent to HK$12.1 million). The loss on extinguishment was approximately US$41,000 (equivalent to HK$318,000) which is expected to be recorded in the consolidated income statement for the year ending August 31, 2010. The principal value of the Notes outstanding after the repurchases was US$19,863,000 (equivalent to HK$153,948,000).

          Redemption of Notes

          On December 30, 2009, we gave a notice of redemption to the holders of the Notes. Pursuant to the relevant notice, we redeemed on February 1, 2010 all of the then-outstanding Notes at a redemption price equal to 104.375% of the principal amount plus accrued and unpaid interest. After these redemptions, no Notes remain outstanding.

          Domestic Free Television Program Service Licence application

          On December 31, 2009, we submitted to the Hong Kong Broadcasting Authority an application for the Domestic Free Television Programme Service Licence to provide free television programme services in Hong Kong. We currently estimate a maximum cumulative investment at HK$210 million will be required before reaching positive free cash flow.

The Offering

          This prospectus is part of a registration statement on Form F-3 that we filed with the Securities and Exchange Commission utilizing a “shelf” registration process. Under this process, we may sell any combination of the securities described in this prospectus in one or more offerings in amounts, at prices and on other terms to be determined at the time of the offering. This prospectus provides you with a general description of the securities we may offer. Each time we offer to sell securities under this prospectus, we will provide a prospectus supplement containing specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. To the extent that any information we provide in a prospectus supplement is inconsistent with information in this prospectus, the information in the prospectus supplement will modify or supersede this prospectus. You should read both this prospectus and any prospectus supplement together with the additional information described under the headings “Where You Can Find More Information” and “Incorporation of Information by Reference.”

Use of Defined and Technical Terms

          Except as otherwise indicated by the context, references in this Form F-3 to:

• “Hong Kong Companies Ordinance” are to Chapter 32 of the laws of Hong Kong;

• “City Telecom,” the “Company,” “we,” “US” or “our” are to City Telecom (H.K.) Limited;

• “fiscal year” or “fiscal” are to the Company’s fiscal year ended August 31 for the year referenced;

• “FTNS business” are to our business segment in which we provide fixed telecommunications network services, including dial up and broadband Internet access services, local VoIP services, IP-TV services and corporate data services;

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• “Group” are to the Company and its subsidiaries;

• “HKBN” are to Hong Kong Broadband Network Limited, a wholly owned subsidiary of the Company;

• “HKFRSs” are to Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants;

• “IDD business” are to our business segment in which we provide international telecommunications services, including international long distance call services;

• “IFRSs” are to International Financial Reporting Standards, as issued by the International Accounting Standards Board;

• “IP-TV services” are to pay-television services through Internet Protocol; and

• “Mbps” are mega-bytes per second

• “VoIP” are to Voice over Internet Protocol.

Currency Translation

          We publish our consolidated financial statements in Hong Kong dollars. In this Form F-3, references to “Hong Kong dollars” or “HK$” are to the currency of Hong Kong, and references to “U.S. dollars” or “US$” are to the currency of the United States. This Form F-3 contains translations of Hong Kong dollar amounts into U.S. dollar amounts, solely for your convenience. Unless otherwise indicated, the translations have been made at US$1.00 = HK$7.7505, which was the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on August 31, 2009. On March 26, 2010 the exchange rate was US$1.00 = HK$7.7620. You should not construe these translations as representations that the Hong Kong dollar amounts actually represent such U.S. dollar amounts or could have been or could be converted into U.S. dollars at the rates indicated or at any other rates.

Corporate Information

          We were incorporated on May 19, 1992 under the Hong Kong Companies Ordinance and are a limited liability company. Our registered office is located at Level 39, Tower 1, Metroplaza, No. 223 Hing Fong Road, Kwai Chung, New Territories, Hong Kong, telephone (852) 3145-6888. Our agent for U.S. federal securities laws purposes is CT Corporation System, 111 Eighth Avenue, New York, NY 10011.

          Investor inquiries should be directed to us at the address and telephone number of our registered office set forth above. Our website is http://www.ctihk.com. The information contained on our website does not form a part of this prospectus.

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CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

          Various statements incorporated by reference or contained in this prospectus discuss our future expectations, contain projections of our results of operations or financial condition, and include other forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended. You should not unduly rely on forward-looking statements contained or incorporated by reference in this prospectus. Our actual results and performance may differ materially from those expressed in such forward-looking statements. Forward-looking statements that express our beliefs, plans, objectives, assumptions, future events or performance may involve estimates, assumptions, risks and uncertainties. Such risks and uncertainties are discussed in this prospectus under the heading “Risk Factors”, and in our other filings with the Securities and Exchange Commission. You should read and interpret any forward-looking statements together with these documents. Forward-looking statements often, although not always, include words or phrases such as the following: “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “expect,” “intends,” “plans,” “projection” and “outlook.” These statements are based on management’s assumptions and beliefs in light of the information currently available to us.

          Any forward-looking statement speaks only as of the date on which that statement is made. We will not update, and expressly disclaim any obligation to update, any forward-looking statement to reflect events or circumstances that occur after the date on which such statement is made.

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RISK FACTORS

          An investment in our securities is speculative and involves a high degree of risk. Therefore, you should not invest in our securities unless you are able to bear a loss of your entire investment. You should carefully consider the factors set forth under the heading “Item 3. Key Information—D. Risk Factors” in our most recently filed annual report on Form 20-F, as amended, which is incorporated in this prospectus by reference, as updated by our subsequent filings under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and, if applicable, in any accompanying prospectus supplement before investing in any securities that may be offered pursuant to this prospectus.

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RATIO OF EARNINGS TO FIXED CHARGES

     Our ratio of earnings to fixed charges for the three fiscal years ended August 31, 2005, 2006 and 2007 in accordance with HKFRS, and for the two fiscal years ended August 31, 2008 and 2009 in accordance with IFRS, were as follows:

Fiscal Year Ended August 31,
2005		2006		2007		2008		2009
	*		*		1.35		2.44		5.56

* Earnings for the fiscal years ended August 31, 2005 and 2006 were inadequate to cover fixed charges by HK$170,221,000 and HK$149,306,000 respectively.

CAPITALIZATION

     The following table sets forth our capitalization as of August 31, 2009 on an actual basis.

	Actual
	HK$		US$
	(in thousands)
8.75% senior notes due 2015		165,563		21,363
Shareholders’ equity
Common stock (2,000,000,000 ordinary shares authorized; 664,179,970 ordinary shares issued; 1,335,820,030 ordinary shares outstanding)		66,418		8,570
Share Premium		681,208		87,892
Reserves		480,901		62,047
Total shareholders’ equity		1,228,527		158,509
Total Capitalization		1,394,090		179,872

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PRICE RANGE OF ORDINARY SHARES

          Our American depositary shares are listed on Nasdaq under the symbol “CTEL” and our ordinary shares are listed on the HKSE under the number “1137.”

          The following table sets forth, for the periods indicated, the high and low reported closing prices of our American depositary shares listed on Nasdaq and our ordinary shares listed on the HKSE:

	Nasdaq				HKSE
Period	High (US$)		Low (US$)		High (HK$)		Low (HK$)
March 2010 (through March 31, 2010)		16.07		11.35		6.21		4.61
February 2010		12.58		10.39		4.88		4.11
January 2010		13.03		10.15		5.03		3.80
December 2009		10.30		8.80		3.95		3.35
November 2009		10.00		6.61		3.92		2.50
October 2009		7.75		6.75		2.88		2.55
Second quarter 2010		13.03		8.80		5.03		3.35
First quarter 2010		10.00		5.29		3.92		2.03
Fourth quarter 2009		5.24		4.01		2.07		1.60
Third quarter 2009		4.44		2.00		1.72		0.85
Second quarter 2009		2.85		2.22		1.16		0.84
First quarter 2009		4.72		1.92		1.75		0.75
Fourth quarter 2008		5.24		4.37		2.03		1.65
Third quarter 2008		5.75		4.25		2.08		1.62
Second quarter 2008		6.47		4.36		2.43		1.67
First quarter 2008		10.75		4.75		3.66		1.90
Fiscal 2009		5.24		1.92		2.07		0.75
Fiscal 2008		10.75		4.25		3.66		1.62
Fiscal 2007		5.83		1.40		2.20		0.60
Fiscal 2006		2.44		1.37		0.92		0.55
Fiscal 2005		4.75		1.97		1.83		0.79

          On March 31, 2010, the last reported closing price of our American depositary shares on Nasdaq was US$15.87 per share and the last reported closing price of our ordinary shares on the HKSE was HK$6.21 per share.

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USE OF PROCEEDS

          Unless we state otherwise in a prospectus supplement, we will use the net proceeds from the sale of securities under this prospectus for general corporate purposes. From time to time, we may evaluate the possibility of acquiring businesses, products, equipment, tools and technologies, and we may use a portion of the proceeds as consideration for acquisitions. Until we use net proceeds for these purposes, we may invest them in interest-bearing securities.

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DILUTION

          We will set forth in a prospectus supplement the following information regarding any material dilution of the equity interests of investors purchasing securities in an offering under this prospectus:

• the net tangible book value per share of our equity securities before and after the offering;

• the amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers in the offering; and

• the amount of the immediate dilution from the public offering price which will be absorbed by such purchasers.

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DESCRIPTION OF SHARE CAPITAL

Ordinary Shares

          Described below is a summary of certain information relating to our ordinary shares. This includes brief summaries of certain provisions of our Memorandum and Articles of Association, as currently in effect, and where relevant to the description of our ordinary shares, the Companies Ordinance (Chapter 32 of the laws of Hong Kong) (the “Companies Ordinance”). As this is a summary, it does not contain all the information that may be important to you. You should therefore read our full Memorandum and Articles of Association, filed as exhibit 3.1 to this Form F-3, if you would like additional or more detailed information.

General

          City Telecom was incorporated in Hong Kong on May 19, 1992 under the Companies Ordinance. Clause 3 of the Memorandum of Association states that the Company’s objects are to carry on the business of telecommunications services in addition to various other related and unrelated business activities.

          Our ordinary shares have been listed under the number “1137” on The Stock Exchange of Hong Kong Limited, or the HKSE, since August 4, 1997. Our American depositary shares, each representing 20 ordinary shares, have been listed under the symbol “CTEL” on Nasdaq since November 3, 1999. Our 10-year senior notes were listed under the ISIN codes of US178677AA87 and USY16599AA30 on the Singapore Exchange Securities Trading Limited, or SGX-ST, on January 24, 2005. The 10-year senior notes were subsequently exchanged for registered notes with ISIN code US178677AB60 pursuant to a registration statement under the U.S. Securities Act of 1933 on June 24, 2005.

          As of March 29, 2010, we had an authorized share capital of HK$200,000,000 consisting of 2,000,000,000 ordinary shares each with a par value of HK$0.10 per share and 684,059,650 shares issued as of March 29, 2010.

          As of March 29, 2010, there were 13 registered holders of 3,701,933 American depositary shares in the United States, consisting of 10.85% of our outstanding shares.

Dividends

          Unless the relevant provisions of the Companies Ordinance require otherwise, we may by ordinary resolution (being a resolution passed by a majority of our shareholders who attend and vote at a meeting of shareholders) from time to time declare dividends, but no dividend shall exceed the amount recommended by our board of directors. Our Articles contain provisions on apportioning dividends where ordinary shares are not or were not fully paid for during the period covered by the dividend.

          Unless the relevant provisions of the Companies Ordinance require otherwise, our board of directors may pay such interim dividends as appears to them to be justified by our financial position and pay any dividend payable at a fixed rate at intervals decided upon by our board of directors, whatever our financial position, if the board of directors feels that this payment is justified.

          In respect of any dividend proposed to be paid or declared by our board of directors or by us in a general meeting, our board of directors may further propose and announce prior to or at the same time as the payment or declaration of such dividend either that:

1)	Such dividend be made in whole or in part in the form of an allotment of shares to the shareholders, credited as being fully paid. However, all the shareholders entitled to receive these new ordinary shares will also be entitled to choose to receive the dividend (or a part of it) in cash and not shares; or
2)	The shareholders entitled to such dividend are entitled to elect to receive an allotment of shares, credited as fully paid in stead of the whole or that part of the cash dividend as the board of directors

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may decide upon.

          Any general meeting declaring a dividend may, upon the recommendation of our board of directors, by ordinary resolutions, direct that the dividend shall be met, wholly or partly, by the distribution of our assets.

          Any dividend not claimed by a shareholder after a period of six years from the date when it was first due to be paid shall be forfeited and shall revert to us. The payment by our board of directors of any unclaimed dividend, interest or other sum payable on or in respect of an ordinary share into a separate account shall not make us responsible as a trustee for such sums.

Annual and extraordinary general meeting of shareholders

          The Companies Ordinance requires our board of directors to hold an annual general meeting of our shareholders once every year and not more than 15 months after our previous annual general meeting. The annual general meeting and any other general meeting of our shareholder held for the passing of a special resolution (being a resolution passed by not less than 75% of those votes cast by the shareholders who attend and vote at a general meeting) should be convened by not less than 21 clear days’ notice in writing. The notice shall specify the place, date and time of meeting and the general nature of the business to be transacted. An annual general meeting may be called by not less than 20 clear business days’ notice if it is agreed by all shareholders entitled to attend and vote at the meeting. The business of the annual general meeting will include:

(a)	the declaration and sanctioning of dividends;
(b)	the consideration and adoption of the accounts, balance sheet and reports of the directors and auditors and other documents required to be attached to the financial statements;
(c)	the appointment of directors in place of those retiring (by rotation or otherwise);
(d)	the appointment of auditors; and
(e)	the fixing of, or the determining of the method of fixing, the remuneration of the directors and of the auditors.

          Our board of directors may convene an extraordinary general meeting (which is any general meeting of the shareholders other than the annual general meeting) whenever it thinks fit and must do so upon the request in writing of shareholders holding not less than one-twentieth of our paid-up capital carrying the right to vote at a general meeting. All extraordinary general meetings (other than those convened for the passing of a special resolution referred to above) should be convened by not less than 10 clear business days’ notice in writing. Extraordinary general meetings may be called by less than 10 clear business days’ notice by a majority in number of the shareholders having the right to attend and vote at the meeting, being a majority together holding not less than 95% in nominal value of the shares giving that right.

          Except as otherwise provided by our Articles, two shareholders present in person or by proxy and entitled to vote shall be a quorum for all purposes. Whilst no business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business, the absence of a quorum shall not preclude the choice or appointment of a chairman which shall not be treated as part of the business of the meeting.

          The Nasdaq marketplace rules also provide that a foreign private issuer such as ourselves may be granted an exemption from such requirements under such rules to have an annual meeting if it follows the practice of its home country.

Restrictions on ownership of shares

          There are no restrictions, either pursuant to our Articles or to the laws of Hong Kong, on the rights of non-residents of Hong Kong or foreign persons to hold or exercise voting rights with respect to our ordinary shares.

Voting rights

          Any decisions that are made by the shareholders in a general meeting require the passing of either an ordinary or a special resolution at such meeting. The type of resolution required to be passed depends upon the provisions of the Companies Ordinance and our Articles as certain matters may only be decided by the passing of a

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special resolution.

          Unless any shares have special terms as to voting, on a show of hands every shareholder who is present in person at a general meeting, shall have one vote irrespective of the number of shares he holds and on a poll every shareholder who is present in person or by proxy shall have one vote for every share of which he is the holder. Our Articles set out the circumstances in which a poll can be demanded.

          Pursuant to Rule 13.39(4) of the Listing Rules of the HKSE which became effective on January 1, 2009, any votes of the shareholders at a general meeting must be taken by poll.

          Any shareholder that is a recognized clearing house within the meaning of the Securities and Futures Ordinance of Hong Kong may authorize such person or persons as it thinks fit to act as its representative (or representatives) at any general meeting or at any separate meeting of any class of shareholders (if relevant). However, if more than one person is authorized, the authorization must specify the number and class of shares in respect of which each person is in fact authorized. The authorized person will be entitled to exercise the same power on behalf of the recognized clearing house as that clearing house (or its nominees) could exercise if it were an individual shareholder of the Company.

Issue / Transfer of shares

          Under the Companies Ordinance, our board of directors may, without the prior approval of the shareholders, offer to issue new shares to existing shareholders in proportion to their current shareholdings. Our board of directors may not issue new shares in any other way without the prior approval of the shareholders. Any such approval given in a general meeting shall continue in force until the earlier of: (1) the conclusion of the next annual general meeting; or (2) the expiration of the period within which the next annual general meeting is required by law to be held; or (3) when revoked or varied by an ordinary resolution of the shareholders in a general meeting. Where such shareholders’ approval is given, subject to the Listing Rules and any conditions attached to such approval, our unissued shares may be at the disposal of our board of directors, which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times and for such consideration and upon such terms and conditions as the directors may decide.

          Subject to the provisions of our Articles, any shareholder may transfer all or any of his shares by an instrument of transfer in the usual or common form or in such other form as our board of directors may accept and may approve. Such instrument may be signed by hand or, if the buyer or seller is a clearing house or its nominee(s), signed by hand or by a machine imprinted signature or by such other manner as our board of directors may approve from time to time.

          The instrument of transfer of a share shall be executed by or on behalf of both the buyer and the seller of that share provided that our board of directors may dispense with the signing of the instrument of transfer by the buyer in any case which it thinks fit in its discretion to do so. Except as provided in the paragraph above, our board of directors may also decide, either generally or in any particular case, upon request by either the buyer or seller of shares to accept mechanically signed transfers. The seller shall be deemed to remain the holder of the share until the name of the buyer is entered into our register in respect of that share. All instruments of transfer, when registered, may be retained by us. Nothing in our Articles prevents our board of directors from recognizing a renunciation of the allotment or provisional allotment of any share by the person to whom the shares were to be allotted in favor of some other person.

          Our board of directors may in its absolute discretion and without giving any reason, decline to register any transfer of any share which is not a fully paid share.

          Our board of directors may also decline to register any transfer unless:

(a) the instrument of transfer, duly stamped, is lodged with us accompanied by the certificate for the shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the seller to make the transfer;

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(b)	such fee, not more than the maximum amount allowed by The Stock Exchange of Hong Kong Limited from time to time, as our board of directors may from time to time require is paid to us in respect of it;
(c)	the instrument of transfer is in respect of only one class of share;
(d)	in the case of a transfer of a share jointly held by two or more holders, the number of joint holders to whom the share is to be transferred does not exceed four; and
(e)	the shares concerned are free of any lien in favor of us.

          If our board of directors declines to register a transfer of any share, it shall, within two months after the date on which the instrument of transfer was lodged, send to the buyer notice of the refusal.

Shareholders

          In accordance with our Articles, only persons who are registered in our register of members are recognized by us as shareholders and absolute owners of the shares. The register of members may be closed by our board of directors at such times and for such periods as it may from time to time decide by giving notice by advertisement in a newspaper circulating generally in Hong Kong, but the register shall be closed in any year for more than 30 days (excluding Sundays and public holidays) unless extended by ordinary resolution.

American Depositary Shares

          The Bank of New York Mellon, as depositary, will execute and deliver the American Depositary Receipts, or ADRs. Each ADR is a certificate evidencing a specific number of American Depositary Shares, also referred to as ADSs. Each ADS represents 20 ordinary shares (or a right to receive 20 ordinary shares) deposited with The Hongkong and Shanghai Banking Corporation Limited, as the custodian for the depositary. Each ADS will also represent any other securities, cash or other property which may be held by the depositary. The depositary’s office at which the ADRs will be administered is located at 101 Barclay Street, New York, New York 10286.

          Our ADSs may be held either directly (by having an ADR registered in the holder’s name) or indirectly through a broker or other financial institution. If our ADSs are held directly, the holder of the ADS is an ADR holder. This description assumes you hold our ADSs directly. If you hold our ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of ADR holders described in this section and should consult with your broker or financial institution to find out what those procedures are.

          Holders of our ADRs will have certain rights. A deposit agreement among us, the depositary and our ADR holders sets out ADR holder rights as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADRs. We will not treat our ADR holders as shareholders, and our ADR holders will not have shareholder rights. (For a description of our shareholders’ rights, see “Description of Share Capital — Ordinary Shares”). The depositary will be the holder of the shares underlying our ADRs.

          The following is a summary of the material provisions of the deposit agreement. Because it is a summary, it does not contain all the information that may be important to you. For more complete information, our ADR holders should read the entire deposit agreement and the form of ADR.

Dividends and Other Distributions

How will our ADR holders receive dividends and other distributions on the ordinary shares?

          The depositary has agreed to pay to our ADR holders the cash dividends or other distributions it or the custodian receives on shares or other deposited securities, after deducting its fees and expenses. Our ADR holders will receive these distributions in proportion to the number of ordinary shares their ADSs represent.

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          Cash. The depositary will convert any cash dividend or other cash distribution we pay on the ordinary shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any government approval is needed and cannot be obtained, the deposit agreement allows the depositary to distribute the foreign currency only to those ADR holders to whom it is possible to do so. It will hold the foreign currency it cannot convert for the account of the ADR holders who have not been paid. It will not invest the foreign currency and it will not be liable for any interest.

          Before making a distribution, the depositary will deduct any withholding taxes that must be paid. It will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when the depositary cannot convert the foreign currency, our ADR holders may lose some of the value of the distribution.

          Ordinary Shares. The depositary may distribute additional ADSs representing any ordinary shares we distribute as a dividend or free distribution in proportion to the number of ADSs representing the underlying ordinary shares. The depositary will only distribute whole ADSs. It will sell shares which would require it to deliver a fractional ADS and distribute the net proceeds in the same way as it does with cash. If the depositary does not distribute additional ADSs, the outstanding ADSs will also represent the new shares. Before making a distribution, the depositary will deduct any withholding taxes and fees that must be paid.

          After consultation with us, if the depositary makes rights available to our ADR holders, upon instruction from our ADR holders, it will exercise the rights and purchase the shares on behalf of our ADR holders. The depositary will then deposit the shares and issue American depositary shares to our ADR holders. It will exercise rights if our ADR holders pay it the exercise price and any other charges the rights require ADR holders to pay.

          U.S. securities laws may restrict the sale, deposit, cancellation, and transfer of the American depositary shares issued after exercise of rights. For example, ADR holders may not be able to trade the American depositary shares freely in the United States. In this case, the depositary may issue the American depositary shares under a separate deposit agreement which will contain the same provisions as the deposit agreement, except for changes needed to put the restrictions in place.

          Rights to receive additional shares. If we offer holders of our securities any rights to subscribe for additional shares or any other rights, the depositary, after consulting with us, may make these rights available to our ADR holders. If the depositary decides it is not legal and practical to make the rights available but that it is practical to sell the rights, the depositary will use reasonable efforts to sell the rights and distribute the proceeds in the same way as it does with cash. The depositary will allow rights that are not distributed or sold to lapse. In that case, our ADR holders will receive no value for them.

          The depositary will not offer the rights unless both the rights and the securities to which the rights relate are exempt from registration under the Securities Act or are registered under the Securities Act. If the depositary makes rights available to our ADR holders, it will exercise the rights and purchase the ordinary shares at the request of and on each ADR holder’s behalf if our ADR holders pay it the exercise price and any other charges the rights require our ADR holders to pay. The depositary will then deposit the ordinary shares and deliver ADSs to our ADR holders.

          United States securities laws may restrict transfers and cancellation of the ADSs represented by shares purchased upon exercise of rights. For example, our ADR holders may not be able to trade these ADSs freely in the United States. In this case, the depositary may deliver restricted depositary shares that have the same terms as the ADRs described in this section except for changes needed to put the necessary restrictions in place.

          Other Distributions. The depositary will send to our ADR holders anything else we distribute on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, the depositary has a choice. It may decide to sell what we distributed and distribute the net proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case ADSs will also represent the newly distributed property. However, the depositary is not required to distribute any securities (other than ADSs) to our ADR holders unless it receives satisfactory evidence from us that it is legal to make that distribution.

          The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADR holders. We have no obligation to register ADSs, ordinary shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADRs, shares, rights or anything else to ADR holders. (See “Risk Factors”). This means that our ADR holders may not receive the distributions we make on our shares or any value for them if it is illegal or impractical for us to make them available to them.

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Deposit, Withdrawal and Cancellation

How are ADRs issued?

          The depositary will deliver ADRs if ordinary shares or evidence of rights to receive ordinary shares are deposited with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will register the appropriate number of ADSs in the names requested and will deliver the ADRs at its office to the persons requested.

How do ADR holders cancel ADRs and obtain ordinary shares?

          Our ADR holders may turn in their ADRs at the depositary’s office in order to withdraw the securities represented by the ADR. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will deliver the ordinary shares and any other deposited securities underlying the ADR to the ADR holder or a person he, she or it designates at the office of the custodian. Or, at the ADR holder’s request, risk and expense, the depositary will deliver the deposited securities at its office, if feasible.

Voting Rights

How do our ADR holders vote?

          Our ADR holders may instruct the depositary to vote the ordinary shares underlying their ADRs. Otherwise, our ADR holders will not be able to exercise their right to vote unless they withdraw the ordinary shares. However, our ADR holders may not know about the meeting enough in advance to withdraw the ordinary shares.

          If we ask for our ADR holders’ instructions, the depositary will notify our ADR holders of the upcoming vote and arrange to deliver our voting materials and form of notice to them. The materials will (1) describe the matters to be voted on and contain such information as is contained in the notice from us, (2) include a statement that the ADR holders on a specified record date will be entitled to direct the depositary to vote the shares or other deposited securities underlying the ADRs, subject to applicable law and our Constitution, and (3) explain how our ADR holders may instruct the depositary to vote the ordinary shares or other deposited securities underlying their ADSs as they direct. For instructions to be valid, the depositary must receive them on or before the date specified. The depositary will try, as far as practical, subject to applicable law and the provisions of the depositary agreement and the depositary’s operating documents, to vote or to have its agents vote the ordinary shares or other deposited securities as our ADR holders instruct. The depositary shall not vote or attempt to exercise the right to vote other than in accordance with the instructions of the ADR holders. We cannot assure our ADR holders that they will receive the voting materials in time to ensure that they can instruct the depositary to vote their ordinary shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that our ADR holders may not be able to exercise their right to vote and there may be nothing they can do if their ordinary shares are not voted as they requested.

Fees and Expenses

Persons depositing ordinary shares or ADR holders must pay:	For:
US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	•   Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property
US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	•    Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
US$0.02 (or less) per ADS	•   Any cash distribution to our ADR holders

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Persons depositing shares or ADR holders must pay:	For:
A fee equivalent to the fee that would be payable if securities distributed to our ADR holders had been ordinary shares and the ordinary shares had been deposited for issuance of ADSs	•    Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADR holders
Registration or transfer fees	•   Transfer and registration of ordinary shares on our ordinary share register to or from the name of the depositary or its agent when our ADR holders deposit or withdraw ordinary shares
Expenses of the depositary in converting foreign currency to U.S. dollars	•   Whenever the depositary or the custodian receives foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the depositary be converted on a reasonable basis into U.S. dollars and the resulting U.S. dollars transferred to the United States
Expenses of the depositary	•   Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement)
Taxes and other governmental charges the depositary or the custodian have to pay on any ADR or ordinary share underlying an ADR, for example, stock transfer taxes, stamp duty or withholding taxes
Any charges incurred by the depositary or its agents for servicing the deposited securities

If we:	Then:
•   Reclassify, split up or consolidate any of the deposited securities	The cash, ordinary shares or other securities received by the depositary will become deposited securities. Each ADS will automatically represent its equal share of the new deposited securities.
•   Distribute securities on the ordinary shares that are not distributed to our ADR holders •   Recapitalize, reorganize, merge, liquidate, sell all or substantially all of our assets, or take any similar action	The depositary may, and will if we ask it to, distribute some or all of the cash, ordinary shares or other securities it received. It may also deliver new ADRs or ask our ADR holders to surrender their outstanding ADRs in exchange for new ADRs identifying new deposited securities.

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Payment of Taxes

          The ADR holder is required to pay all taxes and other governmental charges that may be payable in respect of any their ADSs, or the shares or other securities underlying their ADSs. The depositary may refuse to effect a transfer of any ADRs or refuse to effect the withdrawal of any securities underlying the ADRs while any such taxes and charges are outstanding. The depositary may deduct the amount of any taxes owed from any payments to our ADR holders. It may also sell deposited securities, by public or private sale, to pay any taxes owed. Our ADR holders will remain liable if the proceeds of the sale are not enough to pay the taxes. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to our ADR holders any proceeds, or send to our ADR holders any property, remaining after it has paid the taxes.

Reclassifications, Recapitalizations and Mergers

	If we:	Then:
•	Change the nominal or par value of our shares;	The cash, shares or other securities received by the depositary will become deposited securities. Each ADS will automatically represent its equal share of the new deposited securities; and The depositary may, and will if we ask it to, distribute some or all of the cash, shares or other securities it received. It may also issue new ADSs or ask you to surrender your outstanding ADSs in exchange for new ADSs, identifying the new deposited securities.
•	Reclassify, split up or consolidate any of the deposited securities;
•	Distribute securities on the shares that are not distributed to you; or
•	Recapitalize, reorganize, merge, liquidate, implement the mandatory exchange, sell all or substantially all of its assets, or take any similar action

Amendment and Termination

How may the deposit agreement be amended?

          We may agree with the depositary to amend the deposit agreement and the ADRs without the consent of our ADR holders for any reason which we deem desirable. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, or prejudices a substantial right of ADR holders, it will not become effective for outstanding ADRs until 30 days after the depositary notifies ADR holders of the amendment. At the time an amendment becomes effective, our ADR holders are considered, by continuing to hold their ADRs, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended. In no event will an amendment impair the right of ADR holders to surrender and withdraw the underlying securities, except in order to comply with the applicable law.

How may the deposit agreement be terminated?

          The depositary will terminate the deposit agreement if we ask it to do so by notifying our ADR holders at least 90 days before termination. The depositary may also terminate the deposit agreement if the depositary has notified us that it would like to resign and we have not appointed a successor depositary within 90 days.

          After termination, the depositary and its agents will do the following under the deposit agreement but nothing else: collect distributions on the deposited securities, sell rights and other property, and deliver shares and other deposited securities upon cancellation of ADRs. At any time after the expiration of one year from the date of termination, the depositary may sell any remaining deposited securities by public or private sale. After that, the depositary will hold the money it received on the sale, as well as any other cash it is holding under the deposit agreement for the pro rata benefit of the ADR holders that have not surrendered their ADRs. It will not invest the money and has no liability for interest. The depositary’s only obligations after the sale of the deposited securities will be to account for the money and other cash. After termination our only obligations will be to indemnify the depositary and to pay fees and expenses of the depositary that we agreed to pay.

Limitations on Obligations and Liability

Limits on our Obligations and the Obligations of the Depositary; Limits on Liability to Holders of ADRs

          The deposit agreement expressly limits our obligations and the obligations of the depositary. It also limits our liability and the liability of the depositary. We and the depositary:

• are only obligated to take the actions specifically set forth in the deposit agreement without negligence or bad faith;

• are not liable if either of us is prevented or delayed by law or circumstances beyond our control from performing our obligations under the deposit agreement;

• are not liable if either of us exercises discretion permitted under the deposit agreement;

• have no obligation to become involved in a lawsuit or other proceeding related to the ADRs or the

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	deposit agreement on behalf any of our ADR holders or on behalf of any other party;
•	are not liable for any action or non-action in reliance on the advice of or information from legal counsel, accountants, any person presenting shares for deposit, any ADR holders or any other person believed in good faith to be competent to give such information;
•	are not liable for any acts or omissions made by a successor depositary; and
•	are not responsible for a failure to carry out any instructions for the depositary to vote the ADSs.

          In the deposit agreement, we agree to indemnify the depositary for acting as depositary, except for losses caused by the depositary’s own negligence or bad faith, and the depositary agrees to indemnify us for losses resulting from its negligence or bad faith.

Requirements for Depositary Actions

          Before the depositary will deliver or register a transfer of an ADR, make a distribution on an ADR, or permit withdrawal of ordinary shares, the depositary may require:

• payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any ordinary shares or other deposited securities;

• satisfactory proof of the identity and genuineness of any signature or other information it deems necessary;

• delivery of the certificates that we may specify to the depositary to assure compliance with the Securities Act; and

• compliance with laws and regulations, from time to time, consistent with the deposit agreement, including presentation of transfer documents.

          The depositary may refuse to deliver ADRs or register transfers of ADRs generally when the transfer books of the depositary or our transfer books are closed or at any time if the depositary or we think it advisable to do so.

Right of our ADR holders to Receive the Ordinary Shares Underlying their ADRs

          Our ADR holders have the right to cancel their ADRs and withdraw the underlying ordinary shares at any time except:

• When temporary delays arise because: (i) the depositary has closed its transfer books or we have closed our transfer books; (ii) the transfer of ordinary shares is blocked to permit voting at a shareholders’ meeting; or (iii) we are paying a dividend on our shares.

• When ADR holders seeking to withdraw ordinary shares owe money to pay fees, taxes and similar charges.

• When it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADRs or to the withdrawal of ordinary shares or other deposited securities.

          This right of withdrawal may not be limited by any other provision of the deposit agreement.

Pre-release of ADRs

          The deposit agreement permits the depositary to deliver ADRs before deposit of the underlying ordinary shares. This is called a pre-release of the ADR. The depositary may also deliver shares upon cancellation of pre-released ADRs (even if the ADRs are cancelled before the pre-release transaction has been closed out). A pre-release is closed out as soon as the underlying shares are delivered to the depositary. The depositary may receive ADRs instead of ordinary shares to close out a pre-release. The depositary may pre-release ADRs only under the following conditions: (1) before or at the time of the pre-release, the person to whom the pre-release is being made represents to the depositary in writing that it or its customer owns the ordinary shares or ADRs to be deposited; (2) the pre-release is fully collateralized with cash or other collateral that the depositary considers appropriate; and (3) the depositary must be able to close out the pre-release on not more than five business days’ notice. In addition, the depositary will limit the number of ADSs that may be outstanding at any time as a result of pre-release, although the depositary may disregard the limit from time to time, if it thinks it is appropriate to do so.

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Inspection Rights of ADR Holders

          The depositary will make available for inspection by holders of ADRs at its Corporate Trust Office any reports, notices and other communications, including any proxy soliciting material, received from the Company which are received by the depositary as the holder of the underlying ordinary shares and made generally available to the holders of ordinary shares by the Company. The depositary will keep books, at its Corporate Trust Office, for the registration of ADRs and transfers of ADRs which shall at all reasonable times be open for inspection by the ADR holders, provided that such inspection shall not be for the purpose of communicating with other ADR holders for purposes other than the business of the Company or a matter related to the Deposit Agreement or the ADRs.

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DESCRIPTION OF DEBT SECURITIES

          This prospectus describes the general terms and provisions of the debt securities we may offer and sell by this prospectus. When we offer to sell a particular series of debt securities, we will describe the specific terms of the series in a prospectus supplement. We will also indicate in the prospectus supplement whether the general terms and provisions described in this prospectus apply to a particular series of debt securities.

          We may offer under this prospectus an indeterminate aggregate principal amount of debt securities. We may offer debt securities in the form of either senior debt securities or subordinated debt securities. The senior debt securities and the subordinated debt securities are together referred to in this prospectus as the “debt securities.” Unless otherwise specified in a prospectus supplement, the senior debt securities will be our direct, unsecured obligations and will rank equally with all of our other unsecured and unsubordinated indebtedness. The subordinated debt securities generally will be entitled to payment only after payment of our senior debt.

          Certain of our subsidiaries may guarantee the debt securities we offer. Those guarantees may or may not be secured by liens, mortgages, and security interests in the assets of those subsidiaries. The terms and conditions of any such subsidiary guarantees, and a description of any such liens, mortgages or security interests, will be set forth in the prospectus supplement that will accompany this prospectus.

          The debt securities will be issued under an indenture between us and a trustee, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part. We have summarized the general features of the debt securities to be governed by the indenture. The summary is not complete. The executed indenture will be incorporated by reference from a report on Form 6-K. We encourage you to read the indenture, because the indenture, and not this summary, will govern your rights as a holder of debt securities. Capitalized terms used in this summary will have the meanings specified in the indenture. References to “we,” “us” and “our” in this section, unless the context otherwise requires or as otherwise expressly stated, refer to City Telecom (H.K.) Limited, excluding its subsidiaries.

          Our statements below relating to the debt securities and the indentures are also qualified in their entirety by reference to all of the provisions of the applicable indenture and any applicable United States federal income tax considerations as well as any applicable modifications of or additions to the general terms described below in the applicable prospectus supplement or supplemental indenture. For a description of the terms of a particular issue of debt securities, reference must be made to both the related prospectus supplement and to the following description.

Additional Information

          The terms of each series of debt securities will be established by or pursuant to a resolution of our board of directors, or a committee thereof, and set forth or determined in the manner provided in an officers’ certificate or by a supplemental indenture. The particular terms of each series of debt securities will be described in a prospectus supplement relating to such series, including any pricing supplement.

          We may issue an unlimited amount of debt securities under the indenture, and the debt securities may be in one or more series with the same or various maturities, at par, at a premium or at a discount. Except as set forth in any prospectus supplement, we will also have the right to “reopen” a previous series of debt securities by issuing additional debt securities of such series without the consent of the holders of debt securities of the series being reopened or any other series. Any additional debt securities of the series being reopened will have the same ranking, interest rate, maturity and other terms as the previously issued debt securities of that series. These additional debt securities, together with the previously issued debt securities of that series, will constitute a single series of debt securities under the terms of the applicable indenture.

          We will set forth in a prospectus supplement, including any pricing supplement, relating to any series of debt securities being offered, the aggregate principal amount and other terms of the debt securities, which will include some or all of the following:

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• the title;

• any limit on the amount that may be issued;

• whether or not we will issue the series of debt securities in global form, and, if so, the terms and the name of the depository;

• the maturity date;

• the interest rate, which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining such dates;

• whether or not the debt securities will be secured or unsecured, and the terms of any securities;

• classification as senior or subordinated debt securities;

• in the case of subordinated debt securities, the degree, if any, to which the subordinated debt securities of the series will be senior to or be subordinated to other indebtedness of our in right of payment, whether the other indebtedness is outstanding or not, the aggregate amount of outstanding indebtedness as of the most recent practicable date that is senior to the subordinated debt and a description of any limitations on the issuance of additional senior indebtedness, if any;

• if the securities are guaranteed, the name of the guarantor and a brief outline of the contract of guarantee;

• information about other classes of securities issued by us that may limit holders’ rights under the securities that they’ve purchased;

• the terms on which any series of debt securities may be convertible into or exchangeable for our ordinary shares or other of our securities, including (a) provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option and (b) provisions pursuant to which the number of ordinary shares or other securities of ours that the holders of the series of debt securities receive would be subject to adjustment;

• if any principal or interest is to be amortized, the amortization schedule by which any principal and/or interest will be paid;

• a schedule listing the premium at which we will repay principal in order to retire the debt securities early, if we choose to do so;

• the kind and priority of any lien securing the issue, as well as a brief identification of the principal properties subject to each lien;

• the tax effects of any “original issue discount” as that term is defined in Section 1232 of the Internal Revenue Code (26 U.S.C. 1232);

• the name and address of the trustee and the nature of any material relationship between the trustee and us or any of our affiliates, the percentage of the class of securities that is needed to require the trustee to take action, and what indemnification the trustee may require before proceeding to enforce any lien;

• the place where payments will be payable and the name and address of the paying agent;

• our right, if any, to defer payment of interest and the maximum length of any such deferral period;

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• the date, if any, after which, and the price at which, we may, at our option, redeem the series of debt securities pursuant to any optional redemption provisions;

• the date, if any, on which, and the price at which we are obligated, pursuant to any mandatory sinking fund provisions or otherwise, to redeem, or at the holder’s option to purchase, the series of debt securities;

• whether the indenture will restrict our ability to pay dividends, or will require us to maintain any asset ratios or reserves;

• whether we will be restricted from incurring any additional indebtedness;

• any listing of a series of debt securities on a securities exchange or market;

• the denominations in which we will issue the series of debt securities, if other than denominations of US$1,000 and any integral multiple thereof;

• the consequences of any failure to pay principal, interest, or any sinking or amortization installment; and

• any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities.

          We will provide information on the applicable United States and Hong Kong income tax considerations and other special considerations applicable to any of these debt securities in the applicable prospectus supplement.

          If we denominate the purchase price of any of the debt securities in a foreign currency or currencies or a foreign currency unit or units, or if the principal of, and premium and interest on, any series of debt securities is payable in a foreign currency or currencies or a foreign currency unit or units, we will provide you with information on the restrictions, elections, general tax considerations, specific terms and other information with respect to that issue of debt securities and such foreign currency or currencies or foreign currency unit or units in the applicable prospectus supplement.

Transfer and Exchange

          Each debt security will be represented by either one or more global securities registered in the name of The Depositary Trust Company, as depositary, or a nominee (we will refer to any debt security represented by a global debt security as a “book-entry debt security”), or a certificate issued in definitive registered form (we will refer to any debt security represented by a certificated security as a “certificated debt security”) as set forth in the applicable prospectus supplement.

          You may transfer or exchange certificated debt securities at any office we maintain for this purpose in accordance with the terms of the indenture. No service charge will be made for any transfer or exchange of certificated debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with a transfer or exchange.

          You may effect the transfer of certificated debt securities and the right to receive the principal of, and any premium and interest on, certificated debt securities only by surrendering the certificate representing those certificated debt securities and either reissuance by us or the trustee of the certificate to the new holder or the issuance by us or the trustee of a new certificate to the new holder.

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No Protection in the Event of a Change of Control

          Unless we state otherwise in the applicable prospectus supplement, the debt securities will not contain any provisions which may afford holders of the debt securities protection in the event we undergo a change in control or in the event of a highly leveraged transaction (whether or not such transaction results in a change in control) which could adversely affect holders of debt securities.

Covenants

          We will set forth in the applicable prospectus supplement any restrictive covenants applicable to any issue of debt securities.

Consolidation, Merger and Sale of Assets

          We may not consolidate with or merge with or into, or convey, transfer or lease all or substantially all of our properties and assets to, any person, which we refer to as a successor person, unless:

• we are the surviving corporation or the successor person (if other than us) expressly assumes our obligations on the debt securities and under the indenture;

• immediately after giving effect to the transaction, no event of default, and no event which, after notice or lapse of time, or both, would become an event of default, shall have occurred and be continuing under the indenture; and

• certain other conditions are met, including any additional conditions described in the applicable prospectus supplement.

Events of Default

          Event of default means, with respect to any series of debt securities, any of the following:

• default in the payment of any interest upon any debt security of that series when it becomes due and payable, and continuance of that default for a period of 30 days (unless the entire amount of the payment is deposited by us with the trustee or with a paying agent prior to the expiration of the 30-day period);

• default in the payment of principal of or premium on any debt security of that series when due and payable;

• default in the performance or breach of any other covenant or warranty by us in the indenture (other than a covenant or warranty that has been included in the indenture solely for the benefit of a series of debt securities other than that series), which default continues uncured for a period of 90 days after we receive written notice from the trustee or we and the trustee receive written notice from the holders of not less than a majority in principal amount of the outstanding debt securities of that series as provided in the indenture;

• certain events of bankruptcy, insolvency or reorganization of our company; and

• any other event of default provided with respect to debt securities of that series that is described in the applicable prospectus supplement.

          No event of default with respect to a particular series of debt securities (except as to certain events of bankruptcy, insolvency or reorganization) necessarily constitutes an event of default with respect to any other series

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of debt securities. The occurrence of an event of default may constitute an event of default under our bank credit agreements in existence from time to time. In addition, the occurrence of certain events of default or an acceleration under the indenture may constitute an event of default under certain of our other indebtedness outstanding from time to time.

          If an event of default with respect to debt securities of any series at the time outstanding occurs and is continuing, then the trustee or the holders of not less than a majority in principal amount of the outstanding debt securities of that series may, by a notice in writing to us (and to the trustee if given by the holders), declare to be due and payable immediately the principal (or, if the debt securities of that series are discount securities, that portion of the principal amount as may be specified in the terms of that series) of, and accrued and unpaid interest, if any, on all debt securities of that series. In the case of an event of default resulting from certain events of bankruptcy, insolvency or reorganization, the principal (or such specified amount) of and accrued and unpaid interest, if any, on all outstanding debt securities will become and be immediately due and payable without any declaration or other act on the part of the trustee or any holder of outstanding debt securities. At any time after a declaration of acceleration with respect to debt securities of any series has been made, but before a judgment or decree for payment of the money due has been obtained by the trustee, the holders of a majority in principal amount of the outstanding debt securities of that series may rescind and annul the acceleration if all events of default, other than the non-payment of accelerated principal and interest, if any, with respect to debt securities of that series, have been cured or waived as provided in the indenture. We refer you to the prospectus supplement relating to any series of debt securities that are discount securities for the particular provisions relating to acceleration of a portion of the principal amount of such discount securities upon the occurrence of an event of default.

          The indenture provides that the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any holder of outstanding debt securities, unless the trustee receives indemnity satisfactory to it against any loss, liability or expense. Subject to certain rights of the trustee, the holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the debt securities of that series.

          No holder of any debt security of any series will have any right to institute any proceeding, judicial or otherwise, with respect to the indenture or for the appointment of a receiver or trustee, or for any remedy under the indenture, unless:

• that holder has previously given to the trustee written notice of a continuing event of default with respect to debt securities of that series; and

• the holders of at least a majority in principal amount of the outstanding debt securities of that series have made written request, and offered reasonable indemnity, to the trustee to institute the proceeding as trustee, and the trustee has not received from the holders of a majority in principal amount of the outstanding debt securities of that series a direction inconsistent with that request and has failed to institute the proceeding within 60 days.

          Notwithstanding the foregoing, the holder of any debt security will have an absolute and unconditional right to receive payment of the principal of, and any premium and interest on, that debt security on or after the due dates expressed in that debt security and to institute suit for the enforcement of payment.

          If any securities are outstanding under the indenture, the indenture requires us, within 120 days after the end of our fiscal year, to furnish to the trustee a statement as to compliance with the indenture. The indenture provides that the trustee may withhold notice to the holders of debt securities of any series of any default or event of default (except in payment on any debt securities of that series) with respect to debt securities of that series if it in good faith determines that withholding notice is in the interest of the holders of those debt securities.

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Modification and Waiver

          We may modify and amend the indenture with the consent of the holders of at least a majority in principal amount of the outstanding debt securities of each series affected by the modifications or amendments. We may not make any modification or amendment without the consent of the holders of each affected debt security then outstanding if that amendment will:

• reduce the amount of debt securities whose holders must consent to an amendment or waiver;

• reduce the rate of or extend the time for payment of interest (including default interest) on any debt security;

• reduce the principal of, or premium on, or change the fixed maturity of, any debt security or reduce the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation with respect to any series of debt securities;

• reduce the principal amount of discount securities payable upon acceleration of maturity;

• waive a default in the payment of the principal of, or premium or interest on, any debt security (except a rescission of acceleration of the debt securities of any series by the holders of at least a majority in aggregate principal amount of the then outstanding debt securities of that series and a waiver of the payment default that resulted from such acceleration);

• make the principal of, or premium or interest on, any debt security payable in currency other than that stated in the debt security;

• make any change to certain provisions of the indenture relating to, among other things, the right of holders of debt securities to receive payment of the principal of, and premium and interest on, those debt securities and to institute suit for the enforcement of any such payment and to waivers or amendments; or

• waive a redemption payment with respect to any debt security.

          Except for certain specified provisions, the holders of at least a majority in principal amount of the outstanding debt securities of any series may on behalf of the holders of all debt securities of that series waive our compliance with provisions of the indenture. The holders of a majority in principal amount of the outstanding debt securities of any series may on behalf of the holders of all the debt securities of such series waive any past default under the indenture with respect to that series and its consequences, except a default in the payment of the principal of, or any premium or interest on, any debt security of that series or in respect of a covenant or provision, which cannot be modified or amended without the consent of the holder of each outstanding debt security of the series affected; provided, however, that the holders of a majority in principal amount of the outstanding debt securities of any series may rescind an acceleration of the debt securities of such series and its consequences, including any related payment default that resulted from the acceleration.

Discharging Our Obligations

          We may choose to either discharge our obligations on the debt securities of any series in a legal defeasance, or to release ourselves from our covenant restrictions on the debt securities of any series in a covenant defeasance. We may do so at any time after we deposit with the trustee sufficient cash or government securities to pay the principal, interest, any premium and any other sums due to the stated maturity date or a redemption date of the debt securities of the series. If we choose the legal defeasance option, the holders of the debt securities of the series will not be entitled to the benefits of the indenture except for registration of transfer and exchange of debt securities, replacement of lost, stolen, destroyed or mutilated debt securities, conversion or exchange of debt securities, sinking fund payments and receipt of principal and interest on the original stated due dates or specified redemption dates.

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          We may discharge our obligations under the indenture or release ourselves from covenant restrictions only if, in addition to making the deposit with the trustee, we meet some specific requirements. Among other things:

• we must deliver an opinion of our legal counsel that the discharge will not result in holders having to recognize taxable income or loss or subject them to different tax treatment. In the case of legal defeasance, this opinion must be based on either an IRS letter ruling or change in federal tax law;

• we may not have a default on the debt securities discharged on the date of deposit;

• the discharge may not violate any of our agreements; and

• the discharge may not result in our becoming an investment company in violation of the Investment Company Act of 1940.

Governing Law

          The indenture and the debt securities will be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to conflict of law principles that would result in the application of any law other than the laws of the State of New York.

          Subsequent filings may include additional terms not listed above. Unless otherwise indicated in subsequent filings with the Commission relating to the indenture, principal, premium and interest will be payable and the debt securities will be transferable at the corporate trust office of the applicable trustee. Unless other arrangements are made or set forth in subsequent filings or a supplemental indenture, principal, premium and interest will be paid by checks mailed to the holders at their registered addresses.

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DESCRIPTION OF WARRANTS

     We may issue warrants to purchase debt or equity securities or securities of third parties or other rights, including rights to receive payment in cash or securities based on the value, rate or price of one or more specified securities or indices, or any combination of the foregoing. Warrants may be issued independently or together with any other securities and may be attached to, or separate from, such securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a warrant agent. The terms of any warrants to be issued and a description of the material provisions of the applicable warrant agreement will be set forth in the applicable prospectus supplement.

     The applicable prospectus supplement will describe the following terms of any warrants in respect of which the prospectus is being delivered:

• the title of such warrants;

• the aggregate number of such warrants;

• the price or prices at which such warrants will be issued;

• the currency or currencies, in which the price of such warrants will be payable;

• the securities or other rights, including rights to receive payment in cash or securities based on the value, rate or price of one or more specified commodities, currencies, securities or indices, or any combination of the foregoing, purchasable upon exercise of such warrants;

• the date on which the right to exercise such warrants shall commence and the date on which such right shall expire;

• if applicable, the minimum or maximum amount of such warrants which may be exercised at any one time;

• if applicable, the designation and terms of the securities with which such warrants are issued and the number of such warrants issued with each such security;

• if applicable, the date on and after which such warrants and the related securities will be separately transferable;

• provisions for changes or adjustments in the exercise price;

• the amount of warrants outstanding;

• information with respect to book-entry procedures, if any;

• any material Hong Kong and U.S. federal income tax consequences;

• the anti-dilution provisions of the warrants; and

• any other terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such warrants.

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DESCRIPTION OF RIGHTS TO PURCHASE ORDINARY SHARES

     We may issue subscription rights to purchase ordinary shares. We may issue these rights independently or together with any other offered security.

     The applicable prospectus supplement will describe the specific terms of any subscription rights offering, including:

• the title of the subscription rights;

• the securities for which the subscription rights are exercisable;

• the exercise price for the subscription rights;

• the number of subscription rights issued;

• if applicable, a discussion of the material US federal or income tax considerations applicable to the issuance or exercise of the subscription rights;

• any other terms of the subscription rights, including terms, procedures and limitations relating to the exchange and exercise of the subscription rights;

• if applicable, the record date to determine who is entitled to the subscription rights and the ex-rights date;

• the date on which the rights to exercise the subscription rights will commence, and the date on which the rights will expire;

• the extent to which the offering includes an over-subscription privilege with respect to unsubscribed securities; and

• if applicable, the material terms of any standby underwriting arrangement we enter into in connection with the offering.

     Each subscription right will entitle its holder to purchase for cash a number of ordinary shares, ADSs or any combination thereof at an exercise price described in the prospectus supplement. Subscription rights may be exercised at any time up to the close of business on the expiration date set forth in the prospectus supplement. Ant the close of business on the expiration date, all unexercised subscription rights will become void.

     Upon receipt of payment and the subscription form properly completed and executed at the subscription rights agent’s office or another office indicated in the prospectus supplement, we will, as soon as practicable, forward the ordinary shares or ADSs purchasable with this exercise. Rights to purchase ordinary shares in the form of ADSs will be represented by certificates issued by the ADS depositary upon receipt of the rights to purchase ordinary shares registered hereby. The prospectus supplement may offer more details on how to exercise the subscription rights.

     Depending on the nature of the offering, we may enter into a standby underwriting arrangement with one or more underwriters under which the underwriter(s) will purchase any offered securities remaining unsubscribed for after the offering, as described in the prospectus supplement.

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DESCRIPTION OF UNITS

     We may, from time to time, issue units comprised of one or more of the other securities that may be offered under this prospectus, in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately at any time, or at any time before a specified date.

     Any applicable prospectus supplement will describe:

• the material terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;

• any material provisions relating to the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and

• any material provisions of the governing unit agreement that differ from those described above.

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PLAN OF DISTRIBUTION

          We may sell securities under this prospectus in offerings:

• through one or more underwriters or dealers;

• through agents;

• directly to investors;

• in “at the market offerings,” within the meaning of Rule 415(a)(4) of the Securities Act of 1933, to or through a market maker or into an existing trading market, on an exchange or otherwise; or

• through a combination of any of these methods of sale.

          In addition, we may issue the securities as a dividend or distribution or in a subscription rights offering to our existing security holders. In some cases, we or dealers acting for us or on our behalf may also repurchase securities and reoffer them to the public by one or more of the methods described above. This prospectus may be used in connection with any offering of our securities through any of these methods or other methods described in the applicable prospectus supplement.

          We may price the securities we sell under this prospectus:

• at a fixed public offering price or prices, which we may change from time to time;

• at market prices prevailing at the times of sale;

• at prices calculated by a formula based on prevailing market prices;

• at negotiated prices; or

• in a combination of any of the above pricing methods.

          If we use underwriters for an offering, they will acquire securities for their own account and may resell them from time to time in one or more transactions at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the securities will be subject to the conditions set forth in the applicable underwriting agreement. We may offer the securities to the public through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. Subject to certain conditions and except as otherwise set forth in the applicable prospectus supplement, the underwriters will be obligated to purchase all the securities of the series offered by the prospectus supplement. The public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may change from time to time. Only underwriters named in a prospectus supplement are underwriters of the securities offered by that prospectus supplement.

           The aggregate value of all compensation received or to be received by any members of FINRA participating in an offering will not exceed 8% of the offering proceeds.

          We may grant to the underwriters options to purchase additional securities to cover over-allotments, if any, at the public offering price with additional underwriting discounts or commissions. If we grant any over-allotment option, the terms of any over-allotment option will be set forth in the prospectus supplement relating to those securities.

          If we use dealers for an offering, they will acquire securities for their own account and may resell them from time to time to the public at varying prices determined by the dealers at the time of resale. The applicable prospectus supplement will include the names of the dealers and the terms of the transaction.

          We may also sell securities directly or through agents. We will name any agent involved in an offering and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement states otherwise, our agents will act on a best-efforts basis.

          We may authorize agents, underwriters or dealers to solicit offers by certain types of institutional investors to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. We will describe the conditions of these contracts and the commissions we must pay for solicitation of these contracts in the prospectus supplement.

          We may provide agents and underwriters with indemnification against certain civil liabilities, including liabilities under the Securities Act of 1933, or contribution with respect to payments that the agents or underwriters may make with respect to such liabilities. Underwriters or agents may engage in transactions with us, or perform services for us, in the ordinary course of business. We may also use underwriters or agents with whom we have a material relationship. We will describe the nature of any such relationship in the prospectus supplement.

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          An underwriter may engage in overallotment, stabilizing transactions, short covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange Act of 1934. Overallotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Short covering transactions involve purchases of the securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriter to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a covering transaction to cover short positions. These activities may cause the price of our securities to be higher than it would otherwise be on the open market. The underwriter may discontinue any of these activities at any time.

          All securities we offer, other than ordinary shares, will be new issues of securities, with no established trading market. Underwriters may make a market in these securities, but will not be obligated to do so and may discontinue market making at any time without notice. We cannot guarantee the liquidity of the trading markets for any securities.

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DIVIDEND POLICY

          Unless the relevant provisions of the Companies Ordinance require otherwise, we may by ordinary resolution (being a resolution passed by a majority of our shareholders who attend and vote at a meeting of shareholders) from time to time declare dividends, but no dividend shall exceed the amount recommended by our board of directors. Our Articles contain provisions on apportioning dividends where shares are not or were not fully paid for during the period covered by the dividend.

          Unless the relevant provisions of the Companies Ordinance require otherwise, our board of directors may pay such interim dividends as appears to them to be justified by our financial position and pay any dividend payable at a fixed rate at intervals decided upon by our board of directors, whatever our financial position, if the board of directors feels that this payment is justified.

          In respect of any dividend proposed to be paid or declared by our board of directors or by us in a general meeting, our board of directors may further propose and announce prior to or at the same time as the payment or declaration of such dividend either that:

1)	Such dividend be made in whole or in part in the form of an allotment of shares to the shareholders, credited as being fully paid. However, all the shareholders entitled to receive these new shares will also be entitled to choose to receive the dividend (or a part of it) in cash and not shares; or
2)	The shareholders entitled to such dividend are entitled to elect to receive an allotment of shares, credited as fully paid in stead of the whole or that part of the cash dividend as the board of directors may decide upon.

          Any general meeting declaring a dividend may, upon the recommendation of our board of directors, by ordinary resolutions, direct that the dividend shall be met, wholly or partly, by the distribution of our assets.

          Any dividend not claimed by a shareholder after a period of six years from the date when it was first due to be paid shall be forfeited and shall revert to us. The payment by our board of directors of any unclaimed dividend, interest or other sum payable on or in respect of a share into a separate account shall not make us responsible as a trustee for such sums.

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OFFERING EXPENSES

          The following is a statement of expenses in connection with the distribution of the securities registered. All amounts shown are estimates except the SEC registration fee. The estimates do not include expenses related to offerings of particular securities. Each prospectus supplement describing an offering of securities will reflect the estimated expenses related to the offering of securities under that prospectus supplement.

SEC registration fee	US$  7,130
Legal fees and expenses	US$50,000
Accounting fees and expenses	US$20,000
Printing and engraving expenses	US$20,000
Miscellaneous expenses	US$  1,000
Total	US$98,130

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MATERIAL CHANGES

          There have not been any material changes in our affairs that have occurred since the end of the latest fiscal year for which certified financial statements are included in this prospectus and that have not been described in a report filed under the Exchange Act and incorporated by reference.

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LEGAL MATTERS

          The validity of the securities offered in this prospectus will be passed upon for us by Jones Day, our Hong Kong and U.S. counsel. Any underwriters will be advised with respect to other issues relating to any offering by their own legal counsel.

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EXPERTS

          The consolidated financial statements of City Telecom (H.K.) Limited and its subsidiaries as of August 31, 2008 and 2009, and for each of the years in the two-year period ended August 31, 2009, have been incorporated by reference herein and in this Registration Statement in reliance upon the report of KPMG, an independent registered public accounting firm, incorporated by reference herein, and upon authority of said firm as experts in accounting and auditing.

          The offices of KPMG are located at 8^th Floor, Prince’s Building, 10 Chater Road, Central, Hong Kong, People’s Republic of China.

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WHERE YOU CAN FIND MORE INFORMATION

          We have filed a registration statement on Form F-3 with the Securities and Exchange Commission in connection with this offering. In addition, we file reports with, and furnish information to, the Securities and Exchange Commission. You may read and copy the registration statement and any other documents we have filed at the Securities and Exchange Commission, including any exhibits and schedules, at the Securities and Exchange Commission’s public reference room at 100 F Street N.E., Washington, D.C. 20549. You may call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on this public reference room. As a foreign private issuer, all documents which were filed after November 4, 2002 on the Securities and Exchange Commission’s EDGAR system are available for retrieval on the Securities and Exchange Commission’s website at www.sec.gov.

          This prospectus is part of the registration statement and does not contain all of the information included in the registration statement. Whenever a reference is made in this prospectus to any of our contracts or other documents, the reference may not be complete and, for a copy of the contract or document, you should refer to the exhibits that are a part of the registration statement.

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INCORPORATION OF INFORMATION BY REFERENCE

          The Securities and Exchange Commission allows us to “incorporate by reference” into this prospectus the information we file with it, which means that we can disclose important information to you by referring you to those documents. Information incorporated by reference is part of this prospectus. The following documents filed with the Securities and Exchange Commission by our company are incorporated by reference in this registration statement:

1)	our Annual Report on Form 20-F for the year ended August 31, 2009, filed on December 18, 2009, as amended by the Form 20-F/A filed on March 24, 2010, which contains audited consolidated financial statements as of August 31, 2008 and 2009 and for each of the years in the two-year period ended August 31, 2009; and
2)	our Current Reports on Form 6-K furnished on December 30 and 31, 2009 and February 5, 2010.

          All subsequent annual reports filed by our company pursuant to the Securities Exchange Act of 1934 on Form 20-F prior to the termination of the offering shall be deemed to be incorporated by reference in this prospectus and to be a part hereof from the date of filing of such documents. We may also incorporate any Form 6-K subsequently submitted by us to the Commission prior to the termination of the offering by identifying in such Forms 6-K that they are being incorporated by reference herein, and any Forms 6-K so identified shall be deemed to be incorporated by reference in this prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

          Copies of reports and other information, when so filed, may be inspected without charge and may be obtained at prescribed rates at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, and at the regional office of the SEC located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website at www.sec.gov that contains information regarding registrants that make electronic filings with the SEC using its EDGAR system.

          We will provide to each person, including any beneficial owner, to whom this prospectus is delivered, a copy of these filings, at no cost, upon written or oral request to us at:

City Telecom (H.K.) Limited
Level 39, Tower 1, Metroplaza
No. 223 Hing Fong Road,
Kwai Chung, New Territories,
Hong Kong
Attn: Mr. Lai Ni Quiaque
Telephone number: (852) 3145 6068

Copies of these filings may also be accessed at our website, www.ctigroup.com.hk.

          As a foreign private issuer, we are exempt from the rules under Section 14 of the Exchange Act prescribing the furnishing and content of proxy statements and our officers, directors and principal shareholders are exempt from the reporting and other provisions in Section 16 of the Exchange Act.

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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

Item 8. Indemnification of Directors and Officers.

          Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the following provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

          Under the Hong Kong Companies Ordinance (the “Ordinance”) a company may indemnify and purchase insurance for any director or officer of the company. In accordance with the Ordinance, however, directors and officers are not indemnified against any liability arising out of negligence, default, breach of duty or breach of trust with respect to the company, unless such liability is incurred in defending any proceedings, whether civil or criminal, in which judgment is given in the director’s or officer’s favor, or in which the director or officer is acquitted, or in connection with any application in which relief is granted to the director or officer by the court pursuant to the Ordinance from liability for negligence, default, breach of duty or breach of trust in relation to the affairs of the company.

          Pursuant to our Articles, we have agreed to indemnify our directors and officers, to the extent permitted by Hong Kong law, against certain liabilities and expenses incurred by such persons in successfully defending claims against them in their capacity as a director or officer of the Company. In addition, we maintain a Director’s and Officer’s Insurance Policy and our officers and directors are covered by this insurance (with certain exceptions and limitations) that indemnifies them against losses for which we grant them indemnification and for which they become legally obligated to pay on account of claims made against them for “wrongful acts” committed before or during the policy period.

Item 9. Exhibits.

          The following exhibits are filed with this registration statement:

Exhibit Number	Description
1.1	Form of Underwriting Agreement*
1.2	Form of Placement Agent Agreement*
3.1	Memorandum and Articles of Association of the Company (1)
4.1	Specimen Certificate for Ordinary Shares (2)
4.2	Specimen Certificate for American Depositary Receipts (included in Exhibit 4.3)
4.3	Form of Deposit Agreement among the Company, The Bank of New York as Depositary and holders of the American Depositary Receipts (3)
4.4	Form of Indenture for Debt Securities
4.5	Form of Warrant*
4.6	Form of Right to Purchase Ordinary Shares*
4.7	Form of Unit*
5.1	Opinion of Jones Day with respect to New York law regarding the validity of the Securities
5.2	Opinion of Jones Day with respect to Hong Kong law regarding the validity of the Securities
12.1	Ratio of Earnings to Fixed Charges
23.1	Consent of KPMG
23.2	Consent of Jones Day (included in Exhibit 5.1)
23.3	Consent of Jones Day (included in Exhibit 5.2)
24.1	Power of attorney (4)
25.1	Statement of Eligibility of Trustee on Form T-1 for Indenture*

(1)	Filed as Exhibit 1 to the Company’s Registration Statement on Form 20-F (Registration No.333-11012), filed with the Securities and Exchange Commission (“SEC”) on January 30, 2006, and incorporated herein by reference.
(2)	Filed as Exhibit 4.1 to the Company’s Registration Statement on Form F-1 (Registration No.333-11012), as amended, initially filed with the Commission on November 2, 1999, and incorporated herein by reference.
(3)	Filed as Exhibit 4.3 to the Company’s Registration Statement on Form F-1 (Registration No. 333-11012), as amended, initially filed with the Commission on November 2, 1999, and incorporated herein by reference.
(4)	Previously filed with the Registration Statement on Form F-3, filed on February 8, 2010.
*	To be filed by amendment or as an exhibit to a report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, including any Report of Foreign Private Issuer on Form 6-K, and incorporated herein by reference if necessary or required by the transaction.

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Item 10. Undertakings.

1) The undersigned Registrant hereby undertakes:

a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement;

i)	To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended;
ii)	To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or any decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
iii)	To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, paragraphs (1)(a)(i), (1)(a)(ii) and (1)(a)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

b)	That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
c)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
d)	To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act of 1933, as amended, need not be furnished, provided, that the Registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (1)(d) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act of 1933, as amended, or Rule 3-19 of Regulation S-K if such financial statements and information are contained in periodic reports filed with or furnished to the SEC by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, that are incorporated by reference in this Form F-3.
e)	That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

i) If the Registrant is relying on Rule 430B:

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(1)

Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(2)

Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or

ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

f) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

i)	Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;
ii)	Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;
iii)	The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and
iv)	Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

2) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual

II-3

	report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
3)	The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report, to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.
4)	Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
5)	The undersigned Registrant hereby undertakes that:

a)

For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

b)

For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

6) The undersigned Registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) of the Trust Indenture Act.

II-4

SIGNATURES

          Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this Amendment No. 1 to the registration statement on Form F-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in Hong Kong, on April 2, 2010.

CITY TELECOM (H.K.) LIMITED
By:	/s/ Lai Ni Quiaque
	Title:	Chief Financial Officer

           Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the registration statement has been signed by the following persons in the capacities indicated on April 2, 2010.

Signature

* 

Name: Wong Wai Kay, Ricky

Title: Chairman 

* 

Name: Cheung Chi Kin, Paul

Title: Vice Chairman 

* 

Name: Yeung Chu Kwong, William

Title: Chief Executive Officer 

/s/ Lai Ni Quiaque

Name: Lai Ni Quiaque

Title: Chief Financial Officer 

*  

Name: Cheng Mo Chi, Moses

Title: Non-Executive Director 

*  

Name: Lee Hon Ying, John

Title: Independent Non-Executive Director 

*  

Name: Chan Kin Man

Title: Independent Non-Executive Director 

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*
Name: Peh Jefferson Tun Lu
Title: Independent Non-Executive Director
*By:	/s/ Lai Ni Quiaque
	Name: Lai Ni Quiaque Attorney-in-fact

Authorized Representative

Pursuant to the requirement of the Securities Act of 1933, as amended, the undersigned, the duly undersigned representative in the United States of City Telecom (H.K.) Limited has signed this amendment No. 1 to the Registration Statement on Form F-3 in the United States, on April 2, 2010.

Title: Authorized U.S. Representative 

II-6

EXHIBIT INDEX

Exhibit Number	Description
1.1	Form of Underwriting Agreement*
1.2	Form of Placement Agent Agreement*
3.1	Memorandum and Articles of Association of the Company (1)
4.1	Specimen Certificate for Ordinary Shares (2)
4.2	Specimen Certificate for American Depositary Receipts (included in Exhibit 4.3)
4.3	Form of Deposit Agreement among the Company, The Bank of New York as Depositary, and holders of the American Depositary Receipts (3)
4.4	Form of Indenture for Debt Securities
4.5	Form of Warrant*
4.6	Form of Right to Purchase Ordinary Shares*
4.7	Form of Unit*
5.1	Opinion of Jones Day with respect to New York law regarding the validity of the Securities
5.2	Opinion of Jones Day with respect to Hong Kong law regarding the validity of the Securities
12.1	Ratio of Earnings to Fixed Charges
23.1	Consent of KPMG
23.2	Consent of Jones Day (included in Exhibit 5.1)
23.3	Consent of Jones Day (included in Exhibit 5.2)
24.1	Power of attorney (4)
25.1	Statement of Eligibility of Trustee on Form T-1 for Indenture*

(1)	Filed as Exhibit 1 to the Company’s Registration Statement on Form 20-F (Registration No.333-11012), filed with the Securities and Exchange Commission (“SEC”) on January 30, 2006, and incorporated herein by reference.
(2)	Filed as Exhibit 4.1 to the Company’s Registration Statement on Form F-1 (Registration No.333-11012), as amended, initially filed with the Commission on November 2, 1999, and incorporated herein by reference.
(3)	Filed as Exhibit 4.3 to the Company’s Registration Statement on Form F-1 (Registration No.333-11012), as amended, initially filed with the Commission on November 2, 1999, and incorporated herein by reference.
(4)	Previously filed with the Registration Statement on Form F-3, filed on February 8, 2010.
*	To be filed by amendment or as an exhibit to a report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, including any Report of Foreign Private Issuer on Form 6-K, and incorporated herein by reference if necessary or required by the transaction.

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EX-4.4

Exhibit 4.4

CITY TELECOM (H.K.) LIMITED

INDENTURE

[TRUSTEE],

as Trustee

Dated as of                     

TABLE OF CONTENTS

	Page
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE		1
Section 1.01. Definitions		1
Section 1.02. Other Definitions		4
Section 1.03. Incorporation by Reference of TIA		4
Section 1.04. Rules of Construction		5
ARTICLE 2. THE NOTES		5
Section 2.01. Forms		5
Section 2.02. Amount Unlimited; Issuable in Series		6
Section 2.03. Authentication		9
Section 2.04. Date and Denomination of Notes		10
Section 2.05. Execution of Notes		10
Section 2.06. Exchange and Registration of Transfer of Notes		11
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes		13
Section 2.08. Temporary Notes		14
Section 2.09. Cancellation of Notes Paid, etc		14
Section 2.10. Computation of Interest		15
Section 2.11. Form of Legend for Global Notes		15
Section 2.12. Persons Deemed Owners		16
ARTICLE 3. REDEMPTION AND PREPAYMENT		16
Section 3.01. Applicability of Article		16
Section 3.02. Notice of Redemption; Partial Redemptions		16
Section 3.03. Payment of Notes Called for Redemption		17
Section 3.04. Exclusion of Certain Securities from Eligibility for Selection for Redemption		18
ARTICLE 4. COVENANTS		18
Section 4.01. Payment of Principal and Interest		18
Section 4.02. Offices for Notices and Payments, Etc		18
Section 4.03. No Interest Extension		19
Section 4.04. Appointments To Fill Vacancies in Trustee’s Office		19
Section 4.05. Provision as to Paying Agent		19
Section 4.06. Reports by the Company		20
Section 4.07. Securityholder Lists		21
ARTICLE 5. SUCCESSORS		21
Section 5.01. Limitation on Mergers, Consolidations and Sales of Assets		21

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TABLE OF CONTENTS
(continued)

	Page
Section 5.02. Successor Corporation To Be Substituted		21
Section 5.03. Opinion of Counsel To Be Given Trustee		22
ARTICLE 6. DEFAULTS AND REMEDIES		22
Section 6.01. Event of Default Defined; Acceleration of Maturity; Waiver of Default		22
Section 6.02. Collection of Indebtedness by Trustee; Trustee May Prove Debt		24
Section 6.03. Application of Proceeds		26
Section 6.04. Suits for Enforcements		27
Section 6.05. Restoration of Rights on Abandonment of Proceedings		27
Section 6.06. Limitation on Suits by Noteholders		27
Section 6.07. Right of Noteholders To Institute Certain Suits		28
Section 6.08. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default		28
Section 6.09. Control by Holders of Notes		28
Section 6.10. Waiver of Past Defaults		29
Section 6.11. Right of Court To Require Filing of Undertaking To Pay Costs		29
ARTICLE 7. TRUSTEE		29
Section 7.01. Duties of Trustee		29
Section 7.02. Rights of Trustee		31
Section 7.03. Individual Rights of Trustee		32
Section 7.04. Trustee’s Disclaimer		32
Section 7.05. Notice of Defaults		32
Section 7.06. Reports by Trustee to Holders		32
Section 7.07. Compensation and Indemnity		33
Section 7.08. Replacement of Trustee		34
Section 7.09. Successor Trustee by Merger, etc		35
Section 7.10. Eligibility; Disqualification		36
Section 7.11. Preferential Collection of Claims Against Company		36
Section 7.12. Money Held in Trust		36
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE		36
Section 8.01. Option To Effect Legal Defeasance or Covenant Defeasance		36
Section 8.02. Legal Defeasance and Discharge		36
Section 8.03. Covenant Defeasance		37
Section 8.04. Conditions to Legal or Covenant Defeasance		37
Section 8.05. Deposited Money and Government Securities To Be Held in Trust; Other Miscellaneous Provisions		39

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TABLE OF CONTENTS
(continued)

	Page
Section 8.06. Repayment to Company		39
Section 8.07. Reinstatement		40
Section 8.08. Survival		40
ARTICLE 9. SUPPLEMENTAL INDENTURES		40
Section 9.01. Supplemental Indentures Without Consent of Noteholders		40
Section 9.02. Supplemental Indentures with Consent of Noteholders		42
Section 9.03. Effect of Supplemental Indenture		43
Section 9.04. Documents To Be Given to Trustee		43
Section 9.05. Notation on Securities in Respect of Supplemental Indentures		43
Section 9.06. Conformity with the TIA		43
ARTICLE 10. SATISFACTION AND DISCHARGE		43
Section 10.01. Satisfaction and Discharge		43
Section 10.02. Deposited Cash and U.S. Government Securities To Be Held in Trust; Other Miscellaneous Provisions		45
Section 10.03. Repayment to Company		45
ARTICLE 11. MISCELLANEOUS		45
Section 11.01. TIA Controls		45
Section 11.02. Notices		45
Section 11.03. Communication by Holders of Notes with Other Holders of Notes		47
Section 11.04. Certificate and Opinion as to Conditions Precedent		47
Section 11.05. Statements Required in Certificate or Opinion		47
Section 11.06. Form of Documents Delivered to Trustee		48
Section 11.07. Acts of Holders		48
Section 11.08. Rules by Trustee and Agents		49
Section 11.09. No Personal Liability of Directors, Officers, Employees and Stockholders		49
Section 11.10. Governing Law		49
Section 11.11. No Adverse Interpretation of Other Agreements		49
Section 11.12. Notes in a Specified Currency Other than Dollars		49
Section 11.13. Successors		50
Section 11.14. Severability		50
Section 11.15. Counterpart Originals		50
Section 11.16. Table of Contents, Headings, etc		50
Section 11.17. Qualification of this Indenture		50
Section 11.18. Company-Owned Notes Disregarded		50

-iii- 

CROSS-REFERENCE TABLE

TIA Section	Indenture
Reference	Section
310(a)(1)	7.10
(a)(2)	7.10
(a)(3)	N.A.
(a)(4)	N.A.
(a)(5)	7.10
(b)	7.08, 7.10
(c)	N.A.
311(a)	7.11
(b)	7.11
(c)	N.A.
312(a)	4.07
(b)	11.03
(c)	11.03
313(a)	7.06
(b)(1)	N.A.
(b)(2)	7.06
(c)	7.06
(d)	7.06
314(a)	4.06
(b)	N.A.
(c)(1)	11.04
(c)(2)	11.04
(c)(3)	N.A.
(d)	N.A.
(e)	11.05
315(a)	7.01
(b)	7.05, 11.02
(c)	7.01
(d)	7.01
(e)	6.11
316(a) (last sentence)	11.18
(a)(1)(A)	6.09
(a)(1)(B)	6.10
(a)(2)	N.A.
(b)	6.07
317(a)(1)	6.02
(a)(2)	6.02
(b)	4.05
318(a)	11.02

N.A. means Not Applicable.

Note: This Cross-Reference Table shall not, for any purpose, be deemed to be part of this Indenture.

     This INDENTURE, dated as of ___, by and among City Telecom (H.K.) Limited, a company with limited liability under the Companies Ordinance (Cap.32) of Hong Kong (the “Company”) and [•], as trustee (the “Trustee”).

ARTICLE 1.

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires, the terms defined in this Section 1.01 shall have the respective meanings specified in this Section 1.01. Except as otherwise expressly provided or unless the context otherwise requires, all other terms used in this Indenture which are defined in the TIA (as defined below) shall have the meanings assigned to such terms in the TIA.

     “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

     “Agent” means, with respect to any series of Notes, any Registrar, co-registrar, Paying Agent or additional paying agent.

     “Bankruptcy Law” means any bankruptcy, insolvency, reorganization or other similar law of Hong Kong or other applicable jurisdiction or any political subdivision thereof or other applicable bankruptcy, insolvency, reorganization or other similar law.

     “Board of Directors” means either the Board of Directors of the Company or any committee of such Board duly authorized to act on its behalf.

     “Board Resolution” means one or more resolutions, certified by the secretary or an assistant secretary of the Company to have been duly adopted or consented to by the Board of Directors and to be in full force and effect, and delivered to the Trustee.

     “Business Day” means a day that (a) in the Place of Payment (or in any of the Places of Payment, if more than one) in which amounts are payable and (b) in New York, New York and the city in which the Corporate Trust Office is located, is not a Saturday or Sunday or any other day on which banking institutions are authorized or required by law or regulation to close.

     “Commission” means the United States Securities and Exchange Commission.

     “Company” means City Telecom (H.K.) Limited, and any successor thereto.

     “Company Request” and “Company Order” mean, respectively, a written request, order or consent signed in the name of the Company by its Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer, Vice President, Treasurer, an Assistant Treasurer, Controller, an Assistant Controller, Secretary or an Assistant Secretary, delivered to the Trustee.

     “Corporate Trust Office” means, with respect to any series of Notes, the office of the Trustee of such series of Notes at which the trust created by this Indenture shall, at any particular time, be principally administered, which office is, at the date as of which this Indenture is dated, located at [•].

     “Default” means any event that is, or after notice or passage of time or both would be, an Event of Default.

     “Depositary” means, with respect to the Notes of any series issuable or issued in whole or in part in global form, The Depositary Trust Company (unless another Person is specified in a supplemental indenture with respect to any series of Notes) and in any event any and all successors thereto appointed as depositary with respect to any series of Notes and having become such pursuant to the applicable provisions of this Indenture.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Global Note” means, with respect to any series of Notes, a Note of such series issued in global form that evidences all or part of the Notes of such series and bears the Global Note Legend (or such legend as may be specified as contemplated by Section 2.02 for such series of Notes).

     “Global Note Legend” means the legend set forth in Section 2.11.

     “Holder,” “Holder of Notes,” “Noteholder” or other similar terms mean the Person in whose name a Note is registered in the Security Register kept by the Registrar for that purpose in accordance with the terms hereof.

     “Indenture” means this instrument, as originally executed or as it may from time to time be supplemented or amended in accordance with Article 9 hereof.

     “Note” or “Notes” means a note or notes, as the case may be, of any series authenticated and delivered from time to time under this Indenture.

     “Officer” means the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief Financial Officer, any Executive Vice President or any Senior Vice President of the Company.

     “Officers’ Certificate” means, with respect to any Person, a certificate signed by the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief Financial Officer or any Vice President and by the Treasurer, any Assistant Treasurer, the Controller, any Assistant Controller, the Secretary or any Assistant Secretary of such Person, and delivered to the Trustee, in accordance with the applicable provisions of this Indenture.

     “Opinion of Counsel” means a written opinion, in form and substance reasonably satisfactory to the Trustee, from legal counsel who is acceptable to the Trustee and which meets the requirements of Section 11.05 hereof. The counsel may be an employee of or counsel to the Company or the Trustee.

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     “Original Issue Discount Note” means any Note which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 6.01.

     “Outstanding,” when used with reference to Notes, shall, subject to the provisions of Section 11.18, mean, as of any particular time, all Notes authenticated and delivered by the Trustee under this Indenture, except:

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

     (b) Notes, or portions thereof, for the payment or redemption of which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own paying agent), provided that if such Notes are to be redeemed prior to the maturity thereof, notice of such redemption shall have been mailed as provided in Article 3, or provision satisfactory to the Trustee shall have been made for mailing such notice;

     (c) Notes as to which defeasance has been effected pursuant to Article 8; and

     (d) Notes in lieu of or in substitution for which other Notes shall have been authenticated and delivered, or which shall have been paid, pursuant to the terms of Section 2.07, unless proof satisfactory to the Trustee is presented that any such Notes are held by persons in whose hands any of such Notes is a valid, binding and legal obligation of the Company.

     In determining whether the Holders of the requisite principal amount of Outstanding Notes of any or all series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of an Original Issue Discount Note that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 6.01.

     “Overdue Rate” means, with respect to each series of Notes, the rate of interest designated as such in the supplemental indenture relating to such series as contemplated by Section 2.02, or if no such rate is specified, the rate at which such Notes shall bear interest.

     “Paying Agent” means any Person authorized by the Company to pay the principal of (and premium if any) or interest on any Notes on behalf of the Company.

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

     “Place of Payment,” when used with respect to the Notes of any series, means the place or places where the principal of and interest, if any, on the Notes of such series are payable as determined in accordance with the Indenture.

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     “Responsible Officer,” when used with respect to the Trustee of a series of Notes, means any officer within the Corporate Trust Department of the Trustee (or any successor group of the Trustee) with direct responsibility for the administration of this Indenture with respect to such series of Notes and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Specified Currency” means the currency in which a Note is denominated, which may include U.S. dollars, any foreign currency or any composite of two or more currencies.

     “TIA” means the Trust Indenture Act of 1939, as amended.

     “Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture or until a different Trustee shall have been appointed with respect to a particular series, and thereafter “Trustee” shall mean such successor Trustee or such Trustee with respect to such particular series.

     “U.S. Government Securities” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer’s option.

Section 1.02. Other Definitions.

Term	Defined in Section:
“Agent Member”	2.06	(7)
“Covenant Defeasance”	8.03
“Event of Default”	6.01
“Legal Defeasance”	8.02
“losses”	7.07
“Market Exchange Rate”	11.12
“Registrar”	2.06
“Security Register”	2.06

Section 1.03. Incorporation by Reference of TIA.

     (a) Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

     (b) The following TIA terms used in this Indenture have the following meanings:

     “indenture securities” means the Notes;

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     “indenture security holder” means a Holder of a Note;

     “indenture to be qualified” means this Indenture;

     “indenture trustee” or “institutional trustee” means the Trustee; and

     “obligor” on the Notes means the Company and any successor obligor upon the Notes.

Section 1.04. Rules of Construction.

     (a) Unless the context otherwise requires:

(i)	a term has the meaning assigned to it;
(ii)	an accounting term not otherwise defined herein has the meaning assigned to it in accordance with GAAP;
(iii)	“or” is not exclusive;
(iv)	words in the singular include the plural, and in the plural include the singular;
(v)	all references in this instrument to “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and subdivisions of this instrument as originally executed;
(vi)	the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;
(vii)	“including” means “including without limitation;”
(viii)	provisions apply to successive events and transactions; and
(ix)	references to sections of or rules under the Securities Act, the Exchange Act or the TIA shall be deemed to include substitute, replacement or successor sections or rules adopted by the Commission from time to time thereunder.

ARTICLE 2.

THE NOTES

Section 2.01. Forms. (a) The Notes of each series shall be in substantially such form as shall be established by or pursuant to one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such legends or endorsements placed thereon as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or

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regulation of any stock exchange on which the Notes of such series may be listed, or to conform to usage.

     (b) The indentures supplemental hereto establishing the form and terms of the Notes of any series pursuant to Sections 2.01 and 2.02, respectively, of this Indenture, may provide for issuance of Global Notes. If Notes of a series are so authorized to be issued as Global Notes, any such Global Note may provide that it shall represent that aggregate amount of Notes from time to time endorsed thereon and may also provide that the aggregate amount of Outstanding Notes represented thereby may from time to time be reduced to reflect exchanges. Any endorsement of a Global Note to reflect the amount, or any increase or decrease in the amount or changes in the rights of Holders of Notes represented thereby, shall be made in such manner and by such person or persons as shall be specified therein.

     (c) The Trustee’s Certificate of Authentication on all Notes shall be in substantially the following form:

     “This is one of the Notes of the series designated therein described in the within-mentioned Indenture.

[•], as Trustee

By:                                         
      Authorized Officer”

Section 2.02. Amount Unlimited; Issuable in Series. The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture is unlimited.

     The Notes may be issued in one or more series. There shall be established in or pursuant to one or more indentures supplemental hereto, prior to the issuance of Notes of any series:

     (1) the title of the Notes of the series (which shall distinguish the Notes of the series from the Notes of all other series and which may be part of a series of Notes previously issued);

     (2) any limit upon the aggregate principal amount of the Notes of the series which may be authenticated and delivered under this Indenture (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes of the series pursuant to Sections 2.06, 2.07, 2.08, 3.03 or 9.05);

     (3) the date or dates on which the principal and premium, if any, of the Notes of the series is payable;

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     (4) the rate or rates, or the method of determination thereof, at which the Notes of the series shall bear interest, if any, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable and, if other than as set forth in Section 2.04, the record dates for the determination of Holders to whom interest is payable;

     (5) in addition to the office or agency of the Company in the Borough of Manhattan, The City of New York required to be maintained pursuant to Section 4.02, any other place or places where the principal of, and premium, if any, and any interest on Notes of the series shall be payable;

     (6) the Specified Currency of the Notes of the series;

     (7) the currency or currencies in which payments on the Notes of the series are payable, if other than the Specified Currency;

     (8) the right, if any, of the Company to redeem, purchase or repay the Notes of the series, and the price or prices at which, the period or periods within which and the terms and conditions upon which Notes of the series may be so redeemed, in whole or in part, at the option of the Company, pursuant to any sinking fund or otherwise;

     (9) the obligation, if any, of the Company to redeem, purchase or repay Notes of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the price at which or process by which and the period or periods within which and the terms and conditions upon which Notes of the series shall be so redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;

     (10) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Notes of the series shall be issuable;

     (11) if other than the principal amount thereof, the portion of the principal amount of Notes of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.01;

     (12) if the principal of or interest on the Notes of the series are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than the Specified Currency, the period or periods within which, and the terms and conditions upon which, such election may be made;

     (13) if the amount of payments of principal of and interest on the Notes of the series may be determined with reference to an index based on a coin or currency other than the Specified Currency, the manner in which such amounts shall be determined;

     (14) any additions to or changes in the Events of Default with respect to the Notes of the series, as set forth herein;

     (15) if other than the rate of interest stated in the title of the Notes of the series, the applicable Overdue Rate;

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     (16) in the case of any series of non-interest bearing Notes, the applicable dates for purposes of clause (a) of Section 4.07;

     (17) if other than [•] is to act as Trustee for the Notes of the series, the name and Corporate Trust Office of such Trustee;

     (18) if either or both of the provisions related to Legal Defeasance or Covenant Defeasance are altered or do not apply to any Notes of the series;

     (19) if applicable, that any Notes of the series shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the name of the respective Depositaries for such Global Notes, the form of any legend or legends which shall be borne by any such Global Note in addition to or in lieu of that set forth in Section 2.11 and any circumstances in addition to or in lieu of those set forth in clause (2) of Section 2.06 in which any such Global Note may be exchanged in whole or in part for Notes in definitive form, and any transfer of such Global Note in whole or in part may be issued in definitive form, in the name or names of Persons other than the Depositary for such Global Note or a nominee thereof;

     (20) whether such Notes of the series are secured and, if so, the provisions related to such security;

     (21) whether such Notes of the series are convertible or exchangeable and, if so, the provisions related to such convertibility or exchangeability;

     (22) whether such Notes of the series are subordinated securities and, if so, the provisions related to such subordination;

     (23) any additions or changes to the covenants set forth in Article 4 which apply to Notes of the series and, if applicable, whether any such covenant shall not be subject to defeasance under Article 8; and

     (24) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture).

     All Notes of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such indenture supplemental hereto.

     Notwithstanding Section 2.02(2) herein and unless otherwise expressly provided with respect to a series of Notes, the aggregate principal amount of a series of Notes may be increased and additional Notes of such series may be issued up to the maximum aggregate principal amount authorized with respect to such series as increased; provided that no Event of Default with respect to such series has occurred and is continuing.

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Section 2.03. Authentication. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes of any series executed by the Company together with a Company Order for authentication and the Trustee shall thereupon authenticate and deliver said Notes upon receipt of such Company Order. In authenticating such Notes, and accepting the additional responsibilities under this Indenture in relation to such Notes, the Trustee shall be entitled to receive and (subject to Section 7.01) shall be fully protected in relying upon:

     (1) a copy of any resolution or resolutions of the Board of Directors relating thereto and, if applicable, an appropriate record of any action taken pursuant to such resolution, in each case certified by the Secretary or an Assistant Secretary of the Company;

     (2) an executed supplemental indenture relating thereto;

     (3) an Officers’ Certificate prepared in accordance with Section 11.04 which shall also state to the best knowledge of the signers of such Officers’ Certificate that no Event of Default with respect to any series of Notes shall have occurred and be continuing; and

     (4) an Opinion of Counsel prepared in accordance with Section 11.04 which, in addition to satisfying the provisions of Section 11.04, shall also substantially state:

     (A) the form or forms and terms of such Notes have been established by and in conformity with the provisions of this Indenture; provided that if all such Notes are not to be issued at the same time, such Opinion of Counsel may state that such terms will be established in conformity with the provisions of this Indenture, subject to any conditions specified in such Opinion of Counsel; and

     (B) such Notes, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, moratorium, reorganization, and other laws of general applicability relating to or affecting the enforcement of creditors’ rights and to general principles of equity.

     The Trustee shall have the right to decline to authenticate and deliver or cause to be authenticated and delivered any Notes of any series under this Section 2.03 if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or if the Trustee in good faith by its board of directors or trustees, executive committee, or a trust committee of directors or trustees and/or vice presidents shall determine that such action would expose the Trustee to personal liability to existing Noteholders.

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Section 2.04. Date and Denomination of Notes. The Notes of each series shall be issuable in registered form without coupons in such denominations as shall be specified as contemplated by Section 2.02. In the absence of any such specification with respect to the Notes of any series, the Notes of such series shall be issuable in denominations of $1,000 and any multiple of $1,000. Notes of each series shall be numbered, lettered or otherwise distinguished in such manner or in accordance with such plan as the Officers of the Company executing the same may determine with the approval of the Trustee.

     Every Note shall be dated the date of its authentication.

     The person in whose name any Note of a particular series is registered at the close of business on any record date (as hereinafter defined) with respect to any interest payment date for such series shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such Note upon any registration of transfer or exchange subsequent to the record date and prior to such interest payment date; provided, however, that if and to the extent that the Company shall default in the payment of the interest due on such interest payment date, such defaulted interest shall be paid to the persons in whose names Outstanding Notes of such series are registered on a subsequent record date established by notice given by mail by or on behalf of the Company to the Holders of such Notes not less than 15 days preceding such subsequent record date, such record date to be not less than five days preceding the date of payment of such defaulted interest. Except as otherwise specified as contemplated by Section 2.02 for Notes of a particular series, the term “record date” as used in this Section 2.04 with respect to any regular interest payment date, shall mean, the last day of the calendar month preceding such interest payment date if such interest payment date is the fifteenth day of such calendar month, and shall mean the fifteenth day of the calendar month preceding such interest payment date if such interest payment date is the first day of a calendar month, whether or not such day shall be a day on which banking institutions in The City of New York are authorized or required by law or executive order to close or remain closed.

     Interest on the Notes may at the option of the Company be paid by check mailed to the persons entitled thereto at their respective addresses as such appear on the registry books of the Company.

Section 2.05. Execution of Notes. The Notes shall be signed in the name and on behalf of the Company by the manual or facsimile signature of its Chairman of the Board of Directors, its Chief Executive Officer, its President, or its Chief Financial Officer and its Treasurer or Assistant Treasurer, its Secretary or Assistant Secretary. Only such Notes as shall bear thereon a certificate of authentication substantially in the form herein recited, executed by the Trustee by the manual signature of an authorized officer, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee upon any Note executed by the Company shall be conclusive evidence that the Note so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture.

     In case any officer of the Company who shall have signed any of the Notes shall cease to be such officer before the Notes so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Notes nevertheless may be authenticated and

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delivered or disposed of as though the person who signed such Notes had not ceased to be such officer of the Company; and any Note may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Note, shall be the proper officers of the Company, although at the date of the execution of this Indenture any such person was not such an officer.

Section 2.06. Exchange and Registration of Transfer of Notes. Notes of any series may be exchanged for a like aggregate principal amount of Notes of the same series of other authorized denominations. Notes to be exchanged shall be surrendered, at the option of the Holders thereof, either at the office or agency designated and maintained by the Company for such purpose for such series in the Borough of Manhattan, The City of New York, in accordance with the provisions of Section 4.02 or at any of such other offices or agencies as may be designated and maintained by the Company for such purpose for such series in accordance with the provisions of Section 4.02, and the Company shall execute and register and the Trustee shall authenticate and deliver in exchange therefor the Note or Notes which the Noteholder making the exchange shall be entitled to receive. Each person designated by the Company pursuant to the provisions of Section 4.02 as a person authorized to register and register transfer of the Notes is sometimes herein referred to as a “Registrar.” The Trustee is hereby initially appointed as Registrar for each series of Notes.

     The Company shall keep, at one of its offices or agencies maintained pursuant to Section 4.02, a register for each series of Notes issued hereunder (the registers of all Registrars being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall register Notes and shall register the transfer of Notes as in this Article 2 provided. The Security Register shall be in written form or in any other form capable of being converted into written form within a reasonable time. At all reasonable times the Security Register shall be open for inspection by the Trustee and any Registrar other than the Trustee. Upon due presentment for registration or registration of transfer of any Note of any series at any designated office or agency, the Company shall execute and register and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Note or Notes of the same series for an equal aggregate principal amount. Registration or registration of transfer of any Note by any Registrar in the registry books of the Company maintained by such Registrar, and delivery of such Note, duly authenticated, shall be deemed to complete the registration or registration of transfer of such Note.

     No person shall at any time be designated as or act as a Registrar unless such person is at such time empowered under applicable law to act as such under and to the extent required by applicable law and regulations.

     All Notes presented for registration of transfer or for exchange, redemption or payment shall (if so required by the Company or the Trustee) be duly endorsed by, or be accompanied by a written instrument or instruments of transfer or exchange in form satisfactory to the Company and the Trustee duly executed by, the Holder or his attorney duly authorized in writing.

     No service charge shall be made for any exchange or registration of transfer of Notes, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.

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     The Company shall not be required to issue, exchange or register a transfer of (a) any Notes of any series for a period of 15 days next preceding the selection of Notes of that series to be redeemed and thereafter until the date of the mailing of a notice of redemption of Notes of that series selected for redemption, provided, however, that the Trustee shall have no duty or responsibility with respect to issuing, exchanging or registering a transfer during such period unless and until it shall have received written notice setting forth the date which starts such 15 day period; or (b) any Notes selected, called or being called for redemption in whole or in part except, in the case of any Note to be redeemed in part, the portion thereof not so to be redeemed.

     The provisions of clauses (1), (2), (3), (4), (5), (6) and (7) below shall apply only to Global Notes:

     (1) Each Global Note of any series authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Note or a nominee thereof and delivered to such Depositary or nominee thereof or custodian therefor, and each such Global Note shall constitute a single Note for all purposes under this Indenture.

     (2) Notwithstanding any other provision in this Indenture, no Global Note of any series may be exchanged in whole or in part for Notes of such series issued in definitive form, and no transfer of a Global Note of any series in whole or in part may be registered in the name of any Person other than the Depositary for such Global Note or a nominee thereof unless (A) such Depositary (i) has notified the Company that it is unwilling or unable to continue its services as Depositary for such Global Note and no successor Depositary has been appointed within 90 days after such notice or (ii) ceases to be a “clearing agency” registered under Section 17A of the Securities Exchange Act of 1934 when the Depositary is required to be so registered to act as the Depositary and so notifies the Company, and no successor Depositary has been appointed within 90 days after such notice, (B) the Company determines at any time that the Notes of such series shall no longer be represented by Global Notes and shall inform such Depositary for such Global Note of such determination and participants in such Depositary elect to withdraw their beneficial interests in the Notes from such Depositary, following notification by the Depositary of their right to do so, or (C) such exchange is made upon request by or on behalf of the Depositary for such Global Note in accordance with customary procedures, following the request of a beneficial owner seeking to exercise or enforce its rights under the Notes.

     (3) Subject to clause (2) above, any exchange of a Global Note of any series for other Notes of such series may be made in whole or in part, and all such Notes issued in exchange for a Global Note or any portion thereof shall be registered in such names as the Depositary for such Global Note shall direct.

     (4) Every Note of a series authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Note of such series or any portion thereof shall be authenticated and delivered in the form of, and shall be, a Global Note, unless such Note is registered in the name of a Person other than the Depositary for such Global Note or a nominee thereof.

     (5) Subject to the provisions of clause (7) below, the registered Holder of Notes of any series may grant proxies and otherwise authorize any Person, including Agent Members (as

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defined below in clause (7)) and Persons that may hold interests through Agent Members, to take any action which such Holder is entitled to take under this Indenture or such Notes.

     (6) In the event of the occurrence of any of the events specified in clause (2) above, the Company will promptly make available to the Trustee a reasonable supply of certificated Notes of such series in definitive, fully registered form, without interest coupons.

     (7) Neither any members of, or participants in, the Depositary of any series (collectively, the “Agent Members”) nor any other Persons on whose behalf Agent Members may act shall have any rights under this Indenture with respect to any Global Note of such series registered in the name of the Depositary or any nominee thereof, or under any such Global Note, and the Depositary or such nominee, as the case may be, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company or the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by such Depositary or such nominee, as the case may be, or impair, as between such Depositary, its Agent Members and any other person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a Holder of any Note.

Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes. In case any temporary or definitive Note shall become mutilated or be destroyed, lost or stolen, the Company in the case of a mutilated Note shall, and in the case of a lost, stolen or destroyed Note may in its discretion, execute and, upon the written request or authorization of any Officer of the Company, the Trustee shall authenticate and deliver, a new Note of the same series, bearing a number not contemporaneously Outstanding, in exchange and substitution for the mutilated Note, or in lieu of and in substitution for the Note so destroyed, lost or stolen. In every case the applicant for a substituted Note shall furnish to the Company and to the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of such Note and the ownership thereof.

     Upon the issuance of any substituted Note, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. In case any Note which has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substituted Note, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Note) if the applicant for such payment shall furnish to the Company and to the Trustee such security or indemnity as may be required by them to save each of them harmless and, in case of destruction, loss or theft, evidence satisfactory to the Company and the Trustee of the destruction, loss or theft of such Note and the ownership thereof.

     Every replacement Note of any series issued in accordance with this Section 2.07 shall be the valid obligation of the Company, evidencing the same indebtedness as the destroyed, lost or stolen Note, and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes of the same series duly issued hereunder. All Notes shall be

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held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes and shall preclude (to the extent lawful) any and all other rights or remedies with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

Section 2.08. Temporary Notes. Pending the preparation of definitive Notes of any series the Company may execute and, upon receipt of a Company Order, the Trustee shall authenticate and deliver temporary Notes of such series (printed, lithographed or typewritten). Temporary Notes of any series shall be issuable in any authorized denomination and substantially in the form of the definitive Notes in lieu of which they are issued, but with such omissions, insertions and variations as may be appropriate for temporary Notes, all as may be determined by the Company, as evidenced by its execution of such Notes. Every such temporary Note shall be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with the same effect, as the definitive Notes in lieu of which they are issued. Without unreasonable delay the Company will execute and deliver to the Trustee definitive Notes of such series and thereupon any or all temporary Notes of such series may be surrendered in exchange therefor, at the option of the holders thereof, either at the office or agency to be designated and maintained by the Company for such purpose for that series in the Borough of Manhattan, The City of New York, in accordance with the provisions of Section 4.02 or at any of such other offices or agencies as may be designated and maintained by the Company for such purpose for that series in accordance with the provisions of Section 4.02, and the Trustee shall authenticate and deliver in exchange for such temporary Notes of such series an equal aggregate principal amount of definitive Notes of the same series. Such exchange shall be made by the Company at its own expense and without any charge therefor. Until so exchanged, the temporary Notes of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Notes of the same series authenticated and delivered hereunder.

Section 2.09. Cancellation of Notes Paid, etc. All Notes surrendered for the purpose of payment, redemption, repayment, exchange or registration of transfer or for credit against any sinking fund shall, if surrendered to the Company, any Registrar, any Paying Agent or any other agent of the Company or of the Trustee, be delivered to the Trustee and promptly cancelled by it, or, if surrendered to the Trustee, shall be promptly cancelled by it, and no Notes shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee may dispose of cancelled Notes in accordance with its customary procedures and, at the written request of the Company, deliver a certificate of such disposition to the Company or, at the written request of the Company, shall deliver cancelled Notes to the Company. If the Company shall acquire any of the Notes, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Notes unless and until the same are delivered to the Trustee for cancellation. Where the Notes are held in global form, and to the extent less than all of the Notes are to be cancelled, the Registrar’s notation of such cancellation on its books and records shall be deemed to satisfy any cancellation obligation.

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Section 2.10. Computation of Interest. Except as otherwise specified as contemplated by Section 2.02 for Notes of any series, interest on the Notes of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

Section 2.11. Form of Legend for Global Notes. Unless otherwise specified as contemplated by Section 2.02 for the Notes evidenced thereby, every Global Note authenticated and delivered hereunder shall bear a legend in substantially the following form (or such other form as a securities exchange or Depositary may request or require):

     THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”), OR A NOMINEE OF THE DEPOSITORY TRUST COMPANY. THIS NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY TRUST COMPANY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY TO A NOMINEE OF THE DEPOSITORY TRUST COMPANY OR BY A NOMINEE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITORY TRUST COMPANY OR ANOTHER NOMINEE OF THE DEPOSITORY TRUST COMPANY.

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

     PURSUANT TO A RECOMMENDATION PROMULGATED BY THE COMMITTEE ON UNIFORM SECURITY IDENTIFICATION PROCEDURES, THE COMPANY HAS CAUSED CUSIP NUMBERS TO BE PRINTED ON THE NOTES AND THE TRUSTEE MAY USE CUSIP NUMBERS IN NOTICES OF REDEMPTION OR REPURCHASE AS A CONVENIENCE TO HOLDERS. NO REPRESENTATION IS MADE AS TO THE ACCURACY OF SUCH NUMBERS EITHER AS PRINTED ON THE NOTES OR AS CONTAINED IN ANY NOTICE OF REDEMPTION AND RELIANCE MAY BE PLACED ONLY ON THE OTHER IDENTIFICATION NUMBERS PLACED THEREON.

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Section 2.12. Persons Deemed Owners. The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name any Note is registered as the owner of such Note for the purpose of receiving payments of principal of (and premium, if any) and interest on, such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

ARTICLE 3.

REDEMPTION AND PREPAYMENT

Section 3.01. Applicability of Article.

     The provisions of this Article 3 shall be applicable to the Notes of any series which are redeemable before their maturity.

Section 3.02. Notice of Redemption; Partial Redemptions.

     Notice of redemption to the Holders of Notes of any series to be redeemed as a whole or in part at the option of the Company shall be given by mailing notice of such redemption by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to such Holders of Notes of such series at their last addresses as they shall appear in the Security Register, with a copy thereof provided by the Company to the Trustee. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. Failure to give notice by mail, or any defect in the notice to the Holder of any Notes of such series designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. The notice of redemption to each such Holder shall specify (i) the principal amount of each Note held by such Holder to be redeemed, (ii) the date fixed for redemption, (iii) the redemption price, (iv) the place or places of payment, (v) the CUSIP number relating to the Notes, (vi) that payment will be made upon presentation and surrender of the Notes, (vii) whether interest, if any, accrued to the date fixed for redemption will be paid as specified in such notice and (viii) whether on and after said date interest, if any, thereon or on the portions thereof to be redeemed will cease to accrue. In case any Note is to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion thereof will be issued.

     The notice of redemption of Notes to be redeemed at the option of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company.

     On or before the redemption date specified in the notice of redemption given as provided in this Section 3.02, the Company will deposit with the Trustee or with one or more Paying Agents (or, if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in Section 4.05(b)) an amount of money sufficient to redeem on the redemption date all the Notes of such series so called for redemption at the appropriate redemption price,

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together with accrued interest, if any, to the date fixed for redemption. The Company will deliver to the Trustee at least 45 days prior to the date fixed for redemption (but no later than the receipt by the Holders of the notice of redemption) (unless a shorter notice period shall be satisfactory to the Trustee) an Officers’ Certificate stating the aggregate principal amount of Notes of such series to be redeemed. In case of a redemption at the election of the Company prior to the expiration of any restriction on such redemption, the Company shall deliver to the Trustee, prior to the giving of any notice of redemption to Holders pursuant to this Section 3.02, an Officers’ Certificate stating that such restriction has been complied with.

     If less than all of the Notes of such series are to be redeemed, selection of the Notes for redemption shall be made by the Trustee as follows:

     (a) if such Notes are listed on any principal national securities exchange, in compliance with the requirements of such principal national securities exchange; or

     (b) if such Notes are not so listed, on a pro rata basis (subject to the procedures of DTC) or, to the extent a pro rata basis is not permitted, in such manner as the Trustee shall deem to be fair and appropriate.

However, no Note of $1,000 in principal amount or less shall be redeemed in part. A new Note in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note. Notice of the redemption shall be given only after such selection has been made. Notes may be redeemed in part in multiples equal to the minimum authorized denomination for Notes or any multiple thereof. The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Notes selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Notes shall relate, in the case of any Note redeemed or to be redeemed only in part, to the portion of the principal amount of such Note which has been or is to be redeemed.

Section 3.03. Payment of Notes Called for Redemption.

     If notice of redemption has been given as provided by this Article 3, the Notes or portions of Notes specified in such notice shall become due and payable on the date and at the place or places stated in such notice at the applicable redemption price, together with interest, if any, accrued to the date fixed for redemption, and on and after said date (unless the Company shall default in the payment of such Notes at the redemption price, together with interest, if any, accrued to said date) interest, if any, on the Notes or portions of Notes so called for redemption shall cease to accrue, and such Notes shall cease from and after the date fixed for redemption, except as provided herein, to be entitled to any benefit or security under this Indenture, and the Holders thereof shall have no right in respect of such Notes except the right to receive the redemption price thereof and unpaid interest, if any, to the date fixed for redemption. On presentation and surrender of such Notes at a place of payment specified in said notice, said Notes or the specified portions thereof shall be paid and redeemed by the Company at the applicable redemption price, together with interest, if any, accrued thereon to the date fixed for redemption; provided that payment of interest, if any, becoming due on or prior to the date fixed

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for redemption shall be payable to the Holders of Notes registered as such on the relevant record date subject to the terms and provisions of this Section 3.03.

     If any Note called for redemption shall not be so paid upon surrender thereof for redemption, the redemption price shall, until paid or duly provided for, bear interest from the date fixed for redemption at the rate of interest borne by such Note.

     Upon presentation of any Note redeemed in part only, the Company shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense of the Company, a new Note or Notes, and of like tenor, of authorized denominations, in principal amount equal to the unredeemed portion of the Note so presented.

Section 3.04. Exclusion of Certain Securities from Eligibility for Selection for Redemption.

     Notes shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in an Officers’ Certificate delivered to the Trustee at least 45 days prior to the last date on which notice of redemption may be given as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Company, or (b) a Person specifically identified in such written statement as an Affiliate of the Company.

ARTICLE 4.

COVENANTS

Section 4.01. Payment of Principal and Interest.

     The Company covenants and agrees that it, for the benefit of each series of Notes, will duly and punctually pay or cause to be paid the principal of, premium, if any, and interest, if any, on each of the Notes at the place, at the respective times and in the manner provided in such Notes.

Section 4.02. Offices for Notices and Payments, Etc.

     So long as any Notes of a series are Outstanding, the Company will maintain in each Place of Payment for each series of Notes an office or agency where such Notes may be presented for payment, an office or agency where such Notes may be presented for registration of transfer and for exchange as provided in this Indenture, and an office or agency where notices and demands to or upon the Company in respect of such Notes or of this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in location, of such office or agency. In case the Company shall at any time fail to maintain any such office or agency, or shall fail to give notice to the Trustee of any change in the location thereof, presentation may be made and notice and demand may be served in respect of such Notes or of this Indenture at the Corporate Trust Office. The Company hereby initially designates the Corporate Trust Office for each such purpose.

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Section 4.03. No Interest Extension.

     In order to prevent any accumulation of claims for interest after maturity thereof, the Company will not directly or indirectly extend or consent to the extension of the time for the payment of any claim for interest on any of the Notes and will not directly or indirectly be a party to or approve any such arrangement by the purchase or funding of said claims or in any other manner; provided, however, that this Section 4.03 shall not apply in any case where an extension shall be made pursuant to a plan proposed by the Company to the Holders of all Notes.

Section 4.04. Appointments To Fill Vacancies in Trustee’s Office.

     The Company, whenever necessary to avoid or fill a vacancy in the office of the Trustee, will appoint, in the manner provided in Section 7.08, a Trustee, so that there shall at all times be a Trustee hereunder.

Section 4.05. Provision as to Paying Agent.

     (a) The Company hereby initially appoints the Trustee as the Paying Agent for each series of Notes. If the Company shall, for any series of Notes, appoint a Paying Agent other than the Trustee, it will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section 4.05,

(i)	that it will hold all sums held by it as such Paying Agent for the payment of the principal of or interest, if any, on such Notes (whether such sums have been paid to it by the Company or by any other obligor on such Notes) in trust for the benefit of the Holders of the Notes and the Trustee; and
(ii)	that it will give the Trustee notice of any failure by the Company (or by any other obligor on such Notes) to make any payment of the principal of, premium, if any, or interest, if any, on such Notes when the same shall be due and payable; and
(iii)	that it will, at any time during the continuance of any such failure, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

     (b) If the Company shall act as its own Paying Agent with respect to any series of Notes, it will, on or before each due date of the principal of or interest, if any, on such Notes, set aside, segregate and hold in trust for the benefit of the Holders of such Notes a sum sufficient to pay such principal, premium, if any, or interest, if any, so becoming due and will notify the Trustee of any failure to take such action and of any failure by the Company (or by any other obligor under such Notes) to make any payment of the principal of, premium, if any, or interest, if any, on such Notes when the same shall become due and payable.

     (c) Anything in this Section 4.05 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by it, or any Paying

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Agent hereunder, as required by this Section 4.05, such sums to be held by the Trustee upon the trusts herein contained. Upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

     (d) Anything in this Section 4.05 to the contrary notwithstanding, any agreement of the Trustee or any Paying Agent to hold sums in trust as provided in this Section 4.05 is subject to Sections 8.04 and 8.05.

     (e) Whenever the Company shall have one or more Paying Agents for any series of Notes, it will, on or before each due date of the principal of or interest, if any, on such Notes, deposit with a Paying Agent a sum sufficient to pay the principal, premium, if any, or interest, if any, so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium, if any, or interest, if any, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

Section 4.06. Reports by the Company.

     The Company covenants:

     (a) to file with the Trustee, within 15 days after the Company files the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe), if any, which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of such Sections, then to file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act, in respect of a debt security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; provided that, in either case described in this subsection (a), such information, documents, reports and periodic information, as applicable, shall be deemed to be filed with the Trustee when publicly filed with the Commission through the Commission’s EDGAR system;

     (b) to file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations;

     (c) to transmit by mail to the Holders of the Notes within 30 days after the filing thereof with the Trustee, in the manner and to the extent provided in Section 7.06, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section 4.06 as may be required to be transmitted to such Holders by rules and regulations prescribed from time to time by the Commission;

     (d) to furnish to the Trustee by [•] of each fiscal year of the Company beginning with [•], a brief certificate from the principal executive officer, principal financial officer or principal accounting officer as to his knowledge of the Company’s compliance with all

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conditions and covenants under this Indenture during the prior fiscal year. For purposes of this subsection (d), such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture; and

     (e) to deliver to the Trustee written notice of any event that with the giving of notice and the lapse of time would become an Event of Default under clause (c) of Section 6.01, such notice to be delivered to the Trustee by the date that is the later of (1) 30 days after the occurrence of such event and (2) promptly after (but no later than five Business Days after) an Officer of the Company becomes aware of the occurrence of such event.

Section 4.07. Securityholder Lists. If and so long as the Trustee shall not be the Registrar for the Notes of any series, the Company and any other obligor on the Notes will furnish or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require of the names and addresses of the Holders of the Notes of such series pursuant to TIA§ 312 (a) semi-annually not more than 15 days after each record date for the payment of interest on such Notes, as hereinabove specified, as of such record date, and on dates to be determined pursuant to Section 2.02 for non-interest bearing Notes in each year, and (b) at such other times as the Trustee may request in writing, within thirty days after receipt by the Company of any such request as of a date not more than 15 days prior to the time such information is furnished.

ARTICLE 5.

SUCCESSORS

Section 5.01. Limitation on Mergers, Consolidations and Sales of Assets.

     The Company may not consolidate or merge with or into, or sell, lease or convey all or substantially all of its assets in any one transaction or series of transactions to any other corporation, unless:

     (a) the resulting, surviving or transferee Person is either the Company or is a corporation organized under the laws of Hong Kong, the United States, any state or the District of Columbia and expressly assumes by supplemental indenture all of the Company’s obligations under this Indenture and the Notes of each series issued hereunder; and

     (b) immediately after giving effect to the transaction, with respect to each series of Notes issued hereunder, no Event of Default or event which with notice or lapse of time would be an Event of Default has occurred and is continuing.

Section 5.02. Successor Corporation To Be Substituted.

     In case of any such consolidation or merger or any sale, conveyance or lease of all or substantially all of the property of the Company and upon the assumption by the successor corporation, by supplemental indenture executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of, premium, if any, and interest, if any, on all of the Notes of each series issued hereunder and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company, such successor corporation shall succeed to and be substituted for the Company, with

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the same effect as if it had been named herein as the party of the first part, and the Company (including any intervening successor to the Company which shall have become the obligor hereunder) shall be relieved of any further obligation under this Indenture and the Notes of each series issued hereunder; provided, however, that in the case of a sale, lease, exchange or other disposition of the property and assets of the Company (including any such intervening successor), the Company (including any such intervening successor) shall continue to be liable for its obligations under this Indenture and each series of Notes to the extent, but only to the extent, of liability to pay the principal of, premium, if any, and interest, if any, on such Notes at the time, places and rate prescribed in this Indenture and such Notes. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of the Company, any or all of the Notes of any series issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor corporation instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Notes of any series that previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Notes of any series that such successor corporation thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof.

     In case of any such consolidation or merger or any sale, lease, exchange or other disposition of all or substantially all of the property and assets of the Company, such changes in phraseology and form (but not in substance) may be made in the Notes, thereafter to be issued, as may be appropriate.

Section 5.03. Opinion of Counsel To Be Given Trustee.

     The Trustee, subject to Sections 7.01 and 7.02, shall receive an Officers’ Certificate and Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, lease, exchange or other disposition and any such assumption complies with the provisions of this Article 5.

ARTICLE 6.

DEFAULTS AND REMEDIES

Section 6.01. Event of Default Defined; Acceleration of Maturity; Waiver of Default.

     “Event of Default” with respect to Notes of any series, wherever used herein, means any one of the following events which shall have occurred and be continuing (whatever the reason for such Event of Default), whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

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     (a) default in the payment of any installment of interest upon any Notes of any series as and when the same shall become due and payable, and continuance of such default for a period of 60 days; or

     (b) default in the payment of all or any part of the principal or premium (if any) on any of Notes of such series as and when the same shall become due and payable either at maturity, upon any redemption, by declaration or otherwise; or

     (c) failure on the part of the Company duly to observe or perform any other of the covenants or agreements on the part of the Company in the Notes of such series or contained in this Indenture for a period of 90 days after the date on which written notice specifying such failure, stating that such notice is a “Notice of Default” hereunder and demanding that the Company remedy the same, shall have been given by registered or certified mail, return receipt requested, to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Notes of such series; or

     (d) without the consent of the Company a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company for any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

     (e) the Company shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or for any substantial part of its property, or make any general assignment for the benefit of creditors.

     If an Event of Default described in clause (a) or (b) occurs with respect to any series of Notes and is continuing, then, and in each and every such case, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Notes then Outstanding of such series by notice in writing to the Company (and to the Trustee if given by Holders), may declare the entire principal of the Notes of such series, and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration, the same shall become immediately due and payable.

     If an Event of Default with respect to any series of Notes described in clause (c) above occurs and is continuing for a period of 60 days after the date on which the underlying Default becomes an Event of Default, then, and in each and every such case, unless the principal of all of the Notes of such series shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all of the Notes of such series then Outstanding by notice in writing to the Company (and to the Trustee if given by Holders), may declare the entire principal of all of the Notes of such series then Outstanding, and the interest accrued thereon, if any, to be due and payable immediately, and upon such declaration, the same shall become immediately due and payable. If an Event of Default described in clause (d) or (e)

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above occurs and is continuing, then the principal amount of all the Notes then Outstanding of such series, and the interest accrued thereon, if any, shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

     The foregoing provisions are subject to the condition that if, at any time after the principal of the Notes of such series shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided:

     (a) the Company shall pay or shall deposit with the Trustee a sum sufficient to pay:

(i)	all matured installments of interest upon all the Notes of such series; and
(ii)	the principal of any and all Notes of such series which shall have become due otherwise than by acceleration; and
(iii)	interest upon such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at the Overdue Rate applicable to such series to the date of such payment or deposit; and
(iv)	all amounts payable to the Trustee pursuant to Section 7.07; and

     (b) all Events of Default with respect to such series of Notes, other than the non-payment of the principal of Notes of such series which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein,

then, and in every such case, the Holders of a majority, or any applicable supermajority, in aggregate principal amount of the Notes of such series then Outstanding, by written notice to the Company and to the Trustee, may waive all defaults related to such series of Notes and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default relating to such series of Notes or shall impair any right consequent thereon.

Section 6.02. Collection of Indebtedness by Trustee; Trustee May Prove Debt.

     The Company covenants that (a) in case default shall be made in the payment of any installment of interest on any of the Notes of any series when such interest shall have become due and payable, and such default shall have continued for a period of 60 days, or (b) in case default shall be made in the payment of all or any part of the principal of any of the Notes of any series when the same shall have become due and payable, whether upon maturity of such Notes or upon any redemption or by declaration or otherwise, then upon demand of the Trustee, the Company will pay to the Trustee for the benefit of the Holders of such Notes of such series the whole amount that then shall have become due and payable on such Notes for principal and interest, as the case may be (with interest to the date of such payment upon the overdue principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest at the Overdue Rate applicable to such series of Notes); and in addition

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thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, and such other amount due the Trustee under Section 7.07 in respect of such Notes.

     Until such demand is made by the Trustee, the Company may pay the principal of and interest on such Notes to the registered Holders, whether or not the Notes be overdue.

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

     In case there shall be pending proceedings relative to the Company or any other obligor upon the Notes of any series then Outstanding under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or its property or such other obligor, or in case of any other similar judicial proceedings relative to the Company or other obligor upon such Notes, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of such Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 6.02, shall be entitled and empowered, by intervention in such proceedings or otherwise:

     (a) to file and prove a claim or claims for the whole amount of principal and interest, if any, owing and unpaid in respect of such Notes, and, in the case of any judicial proceedings, to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for amounts payable to the Trustee under Section 7.07) and of the Holders of such Notes allowed in any judicial proceedings relative to the Company or other obligor upon such Notes, or to the creditors or property of the Company or such other obligor; and

     (b) unless prohibited by applicable law and regulations, or unless otherwise directed by a majority in aggregate principal amount of the Notes of each affected series at the time Outstanding, to vote on behalf of the Holders of such Notes in any election of a receiver, assignee, trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings, custodian or other person performing similar functions in respect of any such proceedings; and

     (c) to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the Holders of such Notes and of the Trustee on their behalf; and any trustee, receiver, or liquidator, custodian or other similar official performing similar functions in respect of any such proceedings is hereby authorized by each of the Holders of such Notes to make payments to the Trustee, and, in the

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event that the Trustee shall consent to the making of payments directly to the Holders of such Notes, to pay to the Trustee its costs and expenses of collection and all other amounts due to it pursuant to Section 7.07.

     Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Holder of such Notes any plan of reorganization, arrangement, adjustment or composition affecting such Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder of such Notes in any such proceeding, except as aforesaid in clause (b).

     All rights of action and of asserting claims under this Indenture, or under any of the Notes of any series, may be enforced by the Trustee without the possession of any of such Notes or the production thereof in any trial or other proceedings relative thereto, and any such action or proceedings instituted by the Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of judgment shall be awarded to the Trustee for ratable distribution to the Holders of such Notes in respect of which such action was taken, after payment of all sums due to the Trustee under Section 7.07 in respect of such Notes.

     In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee shall be held to represent all the Holders of the Notes of such series in respect to which such action was taken, and it shall not be necessary to make any Holders of such Notes parties to any such proceedings.

Section 6.03. Application of Proceeds.

     Any moneys collected by the Trustee pursuant to this Article 6 in respect of the Company’s obligations with respect to a series of Notes shall be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or interest, upon presentation of the several Notes in respect of which monies have been collected and stamping (or otherwise noting) thereon the payment, or issuing Notes of such series in reduced principal amounts in exchange for the presented Notes of like series if only partially paid, or upon surrender thereof if fully paid:

     FIRST: To the payment of all amounts due to the current Trustee and then to each predecessor Trustee under Section 7.07 in respect to the Notes of such series;

     SECOND: In case the principal of the Outstanding Notes of such series in respect of which moneys have been collected shall not have become and be then due and payable, to the payment of interest on such Notes in default in the order of the maturity of the installments on such interest, with interest (to the extent that such interest has been collected by the Trustee and is permitted by applicable law) upon the overdue installments of interest at the Overdue Rate applicable to such Notes, such payments to be made ratably to the persons entitled thereto, without discrimination or preference;

     THIRD: In case the principal of the Outstanding Notes of such series in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon such Notes for principal

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and interest, with interest upon the overdue principal, and (to the extent that such interest has been collected by the Trustee and is permitted by applicable law) upon the overdue installations of interest at the Overdue Rate applicable to such Notes; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Notes of such series, then to the payment of such principal and interest, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest or of any such Note over any other such Note, ratably to the aggregate of such principal and accrued and unpaid interest; and

     FOURTH: To the payment of the remainder, if any, to the Company or any other person lawfully entitled thereto.

Section 6.04. Suits for Enforcements.

     In case an Event of Default with respect to any series of Notes has occurred, has not been waived and is continuing, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture and such Notes by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or such Notes or in aid of the exercise of any power granted in this Indenture or such Notes or to enforce any other legal or equitable right vested in the Trustee by this Indenture, such Notes or by law.

Section 6.05. Restoration of Rights on Abandonment of Proceedings.

     In case the Trustee or any Holder shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee or such Holder, then and in every such case the Company, the Trustee and the Holders shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company, the Trustee and the Holders shall continue as though no such proceedings had been taken.

Section 6.06. Limitation on Suits by Noteholders.

     No Holder of any Note of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to this Indenture or such Note, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy hereunder or thereunder, unless (a) such Holder previously shall have given to the Trustee written notice of an Event of Default with respect to the Notes of that series and of the continuance thereof, as hereinbefore provided, and (b) the Holders of not less than 25% in aggregate principal amount of the Notes then Outstanding of such series shall have made written request upon the Trustee to institute such action or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and (c) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to

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institute any such action or proceeding, and (d) no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 6.09. For the protection and enforcement of the provisions of this Section 6.06, each and every Holder of Notes of such series and the Trustee shall be entitled to such relief as can be given either at law or in equity.

Section 6.07. Right of Noteholders To Institute Certain Suits.

     Notwithstanding any other provision in this Indenture and any provision of any Note, the right of any Holder of any Note to receive payment of the principal of, premium, if any, and interest, if any, on such Note, on or after the respective due dates expressed in such Note, or upon redemption, by declaration, repayment or otherwise, or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default.

     No right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Notes of any series is intended to be exclusive of any other right or remedy and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

     No delay or omission of the Trustee or of any Holder of such Notes to exercise any right or remedy accruing upon any Event of Default with respect to any such series of Notes occurring and continuing as aforesaid shall impair any such right or remedy or shall be construed to be a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Indenture, any Note or law to the Trustee or to the Holders of such Notes may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or, subject to Section 6.06, by the Holders of Notes.

Section 6.09. Control by Holders of Notes.

     The Holders of a majority in aggregate principal amount of the Notes of each affected series at the time Outstanding shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such Notes by this Indenture; provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture and shall not expose the Trustee to personal liability; and provided further, that (subject to the provisions of Section 7.01) the Trustee shall have the right to decline to follow any such direction (a) if the Trustee, being advised by counsel, shall determine that the action or proceeding so directed may not lawfully be taken; or (b) if the Trustee by its board of directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee shall determine in good faith that the action or proceedings so directed would involve the Trustee in personal liability; or (c) if the Trustee in good faith shall so determine that the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the

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interests of the Holders of the Notes not joining in the giving of said direction, it being understood that (subject to Section 7.01) the Trustee shall have no duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders.

     Nothing in this Indenture shall impair the right of the Trustee in its discretion to take any action deemed proper by the Trustee that is not inconsistent with such direction or directions by Noteholders.

Section 6.10. Waiver of Past Defaults.

     Prior to the declaration of acceleration of the maturity of the Notes of any series as provided in Section 6.01, the Holders of a majority in aggregate principal amount of such Notes at the time Outstanding may on behalf of the Holders of all such Notes waive any past default or Event of Default described in Section 6.01 and its consequences, except a default in respect of a covenant or provision of this Indenture or of such series of Notes which cannot be modified or amended without the consent of the Holder of each Note of such series affected. In the case of any such waiver, the Company, the Trustee and the Holders of all such Notes shall be restored to their former positions and rights hereunder, respectively, and such default shall cease to exist and be deemed to have been cured and not to have occurred for purposes of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

Section 6.11. Right of Court To Require Filing of Undertaking To Pay Costs.

     All parties to this Indenture agree, and each Holder of any Note by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 6.11 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Noteholder or group of Noteholders holding in the aggregate more than 10% in aggregate principal amount of the Notes of any series, or to any suit instituted by any Noteholder for the enforcement of the payment of the principal of or interest on any Note on or after the due date expressed in such Note or any date fixed for redemption.

ARTICLE 7.

TRUSTEE

Section 7.01. Duties of Trustee.

     (a) If an Event of Default with respect to any series of Notes has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

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     (b) Except during the continuance of an Event of Default with respect to any series of Notes:

     (1) the duties of the Trustee with respect to any series of Notes shall be determined solely by the express provisions of this Indenture, and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

     (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any certificate or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

     (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

     (1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

     (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

     (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.09 hereof.

     (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to this Section 7.01.

     (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holder, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against the cost, expenses and liabilities which might be incurred by it in compliance with such request or direction.

     (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

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Section 7.02. Rights of Trustee.

     Subject to TIA § 315:

     (a) The Trustee may conclusively rely upon and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order or document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in any such document.

     (b) Any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution.

     (c) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel, and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

     (d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

     (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.

     (f) The Trustee shall not be bound to make investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney.

     (g) The Trustee shall not be deemed to have notice of any Default or Event of Default with respect to any series of Notes unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event that is in fact such a Default or Event of Default is received by a Responsible Officer of the Trustee at the Corporate Trust Office of the Trustee from the Company or the Holders of 25% in aggregate principal amount of the Outstanding Notes of such series, and such notice references the specific Default or Event of Default, the series of Notes and this Indenture.

     (h) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

     (i) The Trustee shall have no duty to inquire as to the performance of the Company’s covenants herein.

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     (j) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

     (k) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

Section 7.03. Individual Rights of Trustee.

     The Trustee, Registrar, Paying Agent or Agent in its individual or any other capacity may become the owner or pledgee of Notes of any series and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee, Registrar, Paying Agent or Agent.

Section 7.04. Trustee’s Disclaimer.

     The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes of any series, it shall not be accountable for the Company’s use of the proceeds of the Notes or of any series thereof or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes of any series or any other document in connection with the sale of the Notes of any series or pursuant to this Indenture other than its certificate of authentication.

Section 7.05. Notice of Defaults.

     If a Default or Event of Default with respect to any series of Notes occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders of such Notes, as their names and addresses appear in the Security Register, a notice of the Default or Event of Default within 90 days after it occurs, unless such default shall have been cured or waived. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on any such Note, the Trustee may withhold and shall be protected in withholding the notice if and so long as its Responsible Officers in good faith determine that withholding the notice is in the interests of the Holders of such Notes. In the case of any Default of the character specified in Section 6.01(c) no such notice to Holders shall be given until at least 90 days after the occurrence thereof.

Section 7.06. Reports by Trustee to Holders.

     Within 60 days after each [•] beginning with the [•] following the date of this Indenture, and for so long as Notes of any series remain Outstanding, the Trustee shall mail to the Holders, as their names and addresses appear in the Security Register, a report dated as of

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such [•], in accordance with, and to the extent required under, TIA § 313(a), and the Trustee shall otherwise comply with TIA § 313.

     A copy of each report at the time of its mailing to the Holders shall be mailed to the Company and filed with the Commission and each stock exchange on which Notes of a series are listed in accordance with TIA § 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange and any delisting thereof.

Section 7.07. Compensation and Indemnity.

     The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

     The Company shall indemnify the Trustee or any predecessor Trustee against and hold each harmless against any and all losses, claims, damages, penalties, fines, liabilities or expenses, including incidental and out-of-pocket expenses and reasonable attorneys’ fees (for purposes of this Article 7, “losses”) incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07) and defending itself against any claim (whether asserted by the Company or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent such losses may be attributable to its negligence or bad faith. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations under this Section 7.07, unless (and then only to the extent that) the Company has been prejudiced thereby. The Company shall defend the claim, and the Trustee shall cooperate in the defense. The Trustee may have separate counsel if the Trustee has been reasonably advised by counsel that there may be one or more legal defenses available to it that are different from or additional to those available to the Company and in the reasonable judgment of such counsel it is advisable for the Trustee to engage separate counsel, and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The Company need not reimburse any expense or indemnify against any loss incurred by the Trustee through the Trustee’s own willful misconduct, gross negligence or bad faith.

     The obligations of the Company under this Section 7.07 shall survive the satisfaction and discharge of this Indenture, the resignation or removal of the Trustee and payment in full of the Notes of all series issued pursuant to this Indenture through the expiration of the applicable statute of limitations.

     To secure the Company’s payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Notes of each series on all money or property held or collected by the Trustee,

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except that held in trust to pay principal of, premium, if any, and interest on particular Notes of such series. Such Lien shall survive the satisfaction and discharge of this Indenture.

     When the Trustee incurs expenses or renders services after an Event of Default specified in Sections 6.01(d) or 6.01(e) with respect to any series of Notes, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

Section 7.08. Replacement of Trustee.

     A resignation or removal of the Trustee and appointment of a successor Trustee with respect to any or all series of Notes shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.

     The Trustee with respect to any or all series of Notes may resign in writing at any time upon 30 days’ prior notice to the Company and be discharged from the trust hereby created by so notifying the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after giving such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. The Holders of a majority in aggregate principal amount of the then Outstanding Notes of any series of Notes may remove the Trustee by so notifying the Trustee and the Company in writing.

     If, with respect to the applicable series of Notes:

     (a) the Trustee fails to comply with Section 7.10 hereof;

     (b) the Trustee is adjudged bankrupt or insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

     (c) a custodian or public officer takes charge of the Trustee or its property; or

     (d) the Trustee becomes incapable of acting,

then (i) the Company may remove the Trustee or (ii) subject to Section 6.11, any Holder who has been a bona fide Holder of a Note for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason with respect to any series of Notes (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee for each such affected series of Notes (it being understood that any such successor Trustee may be appointed with respect to the Notes of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Notes of any particular series).

     If a successor Trustee with respect to any series of Notes does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the bona fide Holders of at least 10% in aggregate principal amount of the then Outstanding Notes of

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such series may petition any court of competent jurisdiction for the appointment of a successor Trustee.

     A successor Trustee with respect to any series of Notes shall execute, acknowledge and deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective without any further act, deed or conveyance, and the successor Trustee shall become vested with all the rights, powers and duties of the retiring Trustee with respect to such series of Notes. The successor Trustee shall mail a notice of its succession by first-class mail, postage prepaid, to the Holders of such series as their names and addresses appear in the Security Registrar. Each notice shall include the name of the successor Trustee and the address of its principal corporate trust office. Subject to the Lien provided for in Section 7.07 hereof, the retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided, however, that all sums owing to the Trustee hereunder shall have been paid. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all rights, powers and trusts. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

     In the case of an appointment hereunder of a separate or successor Trustee with respect to the Notes of one or more series (but not all series of Notes) Outstanding, the Company, any retiring Trustee and each successor or separate Trustee with respect to the Notes of any applicable series shall execute and deliver an indenture supplemental hereto (1) which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of any retiring Trustee with respect to the Notes of any series as to which any such retiring Trustee is not retiring shall continue to be vested in such retiring Trustee and (2) that shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustee co-trustee of the same trust and that each such separate, retiring or successor Trustee shall be Trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any such other Trustee.

Section 7.09. Successor Trustee by Merger, etc.

     If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another Person, the successor Person without any further act shall, if such successor Person is otherwise eligible hereunder, be the successor Trustee, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Notes of any series shall have been authenticated, but not delivered by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Notes of such series so authenticated with the same effect as if such successor Trustee had itself authenticated such Notes.

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Section 7.10. Eligibility; Disqualification.

     There shall at all times be a Trustee for each series hereunder that is a Person organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50.0 million (or a wholly-owned subsidiary of a bank or trust company, or of a bank holding company, the principal subsidiary of which is a bank or trust company having a combined capital and surplus of at least $50.0 million) as set forth in its most recent published annual report of condition.

     The Trustee shall comply with the terms of TIA § 310(b).

Section 7.11. Preferential Collection of Claims Against Company.

     The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.

Section 7.12. Money Held in Trust.

     Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

ARTICLE 8.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. Option To Effect Legal Defeasance or Covenant Defeasance.

     The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers’ Certificate, at any time, elect (unless otherwise provided in the supplemental indenture related to such series of Notes) to have either Sections 8.02 or 8.03 hereof applied to all Outstanding Notes of any series upon compliance with the conditions set forth below in this Article 8.

Section 8.02. Legal Defeasance and Discharge.

     Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02 with respect to any series of Notes, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from its obligations with respect to all Outstanding Notes of each affected series on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the Outstanding Notes of such series, which shall thereafter be deemed to be Outstanding only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (a) and (b) below, and to have satisfied all of its

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obligations under such Notes and this Indenture with respect to such series of Notes (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments delivered to it by the Company acknowledging the same), except for the following provisions which shall survive with respect to each such series of Notes until otherwise terminated or discharged hereunder: (a) the rights of Holders of Outstanding Notes of such series to receive payments in respect of the principal of, premium, if any, and interest on such Notes when such payments are due from the trust referred to below; (b) the Company’s obligations with respect to the Notes of such series concerning mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust; (c) the rights, powers, trusts, duties and immunities of the Trustee, and the Company’s obligations in connection therewith; and (d) the Legal Defeasance provisions of this Indenture. Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 with respect to any series of Notes notwithstanding the prior exercise of its option under Section 8.03 hereof.

Section 8.03. Covenant Defeasance.

     Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 with respect to any series of Notes, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the provisions contained in Articles 4 (other than in Section 4.06, to the extent that such an obligation cannot be defeased under the TIA) and 5 (including such obligations as are set forth in a supplemental indenture with respect to Articles 4 and 5) with respect to the Notes of such series on and after the date the conditions set forth in Section 8.04 are satisfied with respect to such series (hereinafter, “Covenant Defeasance”), and such Notes shall thereafter be deemed not Outstanding for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed Outstanding for all other purposes hereunder (it being understood that such Notes shall not be deemed Outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the Outstanding Notes of such series, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant, or by reason of any reference in any such covenant to any other provision herein or in any other document, and such omission to comply shall not constitute a Default or an Event of Default with respect to such series of Notes under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof Sections 6.01(d) and 6.01(e) hereof shall not constitute Events of Default or defaults hereunder with respect to such series of Notes.

Section 8.04. Conditions to Legal or Covenant Defeasance.

     The following shall be the conditions to the application of either Sections 8.02 or 8.03 hereof to the Outstanding Notes of any series:

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     In order to exercise either Legal Defeasance or Covenant Defeasance with respect to any series of Notes:

     (a) the Company must irrevocably deposit, or cause to be deposited, with the Trustee, in trust, for the benefit of the Holders of the Notes of such series, cash in U.S. dollars, non-callable U.S. Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, which opinion has been delivered to the Trustee, to pay, without reinvestment, the principal of, premium, if any, and interest on the Outstanding Notes of such series on the stated maturity thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes of such series are being defeased to maturity or to a particular redemption date;

     (b) in the case of Legal Defeasance with respect to any series of Notes, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or there has been a change in the applicable United States federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the Outstanding Notes of such series will not recognize income, gain or loss for United States federal income tax purposes as a result of such Legal Defeasance, and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance with respect to such series of Notes had not occurred;

     (c) in the case of Covenant Defeasance with respect to any series of Notes, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the Outstanding Notes of such series will not recognize income, gain or loss for United States federal income tax purposes as a result of such Covenant Defeasance of such series of Notes, and such Holders will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance with respect to such series of Notes had not occurred;

     (d) no Default or Event of Default with respect to such series of Notes shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit;

     (e) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or by which the Company is bound;

     (f) the Company must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of the Notes of such series over other creditors of the Company, or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others;

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     (g) the Company must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel in the United States reasonably acceptable to the Trustee, each stating that the conditions precedent provided for or relating to Legal Defeasance or Covenant Defeasance, as applicable, in the case of the Officers’ Certificate, in clauses (a) through (f) and, in the case of the Opinion of Counsel, in clauses (b) and (c) of this paragraph, have been complied with.

Section 8.05. Deposited Money and Government Securities To Be Held in Trust; Other Miscellaneous Provisions.

     Subject to Section 8.06 hereof, all cash and/or non-callable U.S. Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively, and solely for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the Outstanding Notes of any series shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such cash and/or securities need not be segregated from other funds except to the extent required by law.

     The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash and/or non-callable U.S. Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Notes of such series.

     Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any cash and/or non-callable U.S. Government Securities held by it as provided in Section 8.04 hereof that, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance of the affected series of Notes.

Section 8.06. Repayment to Company.

     Any cash and/or non-callable U.S. Government Securities deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on any Note of any series and remaining unclaimed for two years after such principal, premium, if any, or interest has become due and payable shall be paid to the Company at its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such cash and/or securities, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in The New York Times and The Wall Street Journal (national edition), notice that such cash and/or securities remain unclaimed and that, after a date specified therein, which shall not be less than 30 days

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from the date of such notification or publication, any unclaimed balance of such cash and/or securities then remaining will be repaid to the Company.

Section 8.07. Reinstatement.

     If the Trustee or Paying Agent is unable to apply any cash and/or non-callable U.S. Government Securities to any series of Notes in accordance with Sections 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture and such Notes shall be revived and reinstated as though no deposit had occurred pursuant to Sections 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Sections 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, or interest on any Note of such series following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

Section 8.08. Survival.

     The Trustee’s rights under Section 7.07 and this Article 8 shall survive termination of this Indenture.

ARTICLE 9.

SUPPLEMENTAL INDENTURES

Section 9.01. Supplemental Indentures Without Consent of Noteholders.

     The Company, when authorized by a Board Resolution (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to an Officers’ Certificate), and the Trustee, upon the written request of the Company, may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the TIA as in force at the date of the execution thereof) for one or more of the following purposes:

     (a) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Notes of one or more series any property or assets;

     (b) to evidence the succession of another Person to the Company, or successive successions, and the assumption by the successor Person of the covenants, agreements and obligations of the Company pursuant to Article 5;

     (c) to add to the covenants of the Company such further covenants, restrictions, conditions or provisions as the Company and the Trustee shall consider to be for the protection of the Holders of all or any series of Notes (and if such covenants are to be for the benefit of less than all of the series of Notes, stating that such covenants are expressly being included for the benefit of such series), and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of

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Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, however, that in respect of any such additional covenant, restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate principal amount of the Notes of such series to waive such an Event of Default;

     (d) to provide for the issuance of and establish the form and terms of Notes of any series as permitted by Sections 2.01 and 2.02;

     (e) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture that may be defective or inconsistent with any other provision contained herein or in any supplemental indenture;

     (f) to make any other provisions as the Company may deem necessary or desirable; provided, however, that no such provisions shall materially adversely affect the legal rights of the Holders of any Notes of the applicable series;

     (g) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA, or under any similar federal statute hereafter enacted, and to add to this Indenture such other provisions as may be expressly permitted by the TIA, excluding, however, the provisions referred to in TIA § 316(a)(2) as in effect at the date as of which this instrument was executed or any corresponding provision provided for in any similar federal statute hereafter enacted;

     (h) to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Notes of any or all series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Section 7.08;

     (i) in the case of subordinated Notes, to make any change in the provisions of this Indenture or any supplemental indenture relating to subordination that would limit or terminate the benefits available to any holder of senior indebtedness under such provisions; provided that such change is made in accordance with the provisions of such senior Notes; and

     (j) to add guarantees with respect to the Notes of any series or to secure the Notes of any series.

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

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     Any supplemental indenture authorized by the provisions of this Section 9.01 may be executed without the consent of the Holders of any of the Notes then Outstanding, notwithstanding any of the provisions of Section 9.02.

Section 9.02. Supplemental Indentures with Consent of Noteholders.

     With the consent of the Holders of not less than a majority in aggregate principal amount of the Notes of each series then Outstanding affected by such supplemental indenture, the Company, when authorized by a Board Resolution (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to an Officers’ Certificate), and the Trustee may, upon the written request of the Company and receipt of the aforementioned Board Resolution and upon filing with the Trustee evidence of the consent of the Holders of the Notes as aforesaid, from time to time and at any time, enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the TIA as in force at the date of execution thereof) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Notes of each such series; provided, that no such supplemental indenture shall (a) extend the stated final maturity of the principal of any Note, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest, if any, thereon, or reduce or alter the method of computation of any amount payable on redemption, repayment or purchase by the Company thereof (or the time at which any such redemption, repayment or purchase may be made), or make the principal thereof, or interest, if any, thereon payable in any coin or currency other than that provided in such Notes, this Indenture or any supplemental indenture or in accordance with the terms of such Notes, or impair or affect the right of any Noteholder to institute suit for the payment thereof or, if such Notes provide therefor, any right of repayment or purchase at the option of the Noteholder, without the consent of the Holder of each Note so affected, (b) reduce the percentage of Notes of any series, the consent of the Holders of which is required for any such supplemental indenture, without the consent of the Holders of each Note so affected, whether such consenting Holders in the aggregate hold a majority in principal amount of the Notes so affected or not or (c) modify any of the provisions of this Section 9.02, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of Holders of each Note so affected.

     The Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may at its discretion, but shall not be obligated to, enter into such supplemental indenture.

     It shall not be necessary for the consent of the Noteholders under this Section 9.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

     Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section 9.02, the Company (or the Trustee at the request and expense of the Company) shall give notice thereof to the Holders of then

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Outstanding Notes affected thereby, as provided in Section 11.02. Any failure of the Company to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

Section 9.03. Effect of Supplemental Indenture.

     Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and shall be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the Holders of Notes of each series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 9.04. Documents To Be Given to Trustee.

     The Trustee, subject to the provisions of Sections 7.01 and 7.02, shall be entitled to receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article 9 complies with the applicable provisions of this Indenture and that all conditions precedent to the execution and delivery of such supplemental indenture have been satisfied.

Section 9.05. Notation on Securities in Respect of Supplemental Indentures.

     Notes of any series authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article 9 may bear a notation in form approved by the Trustee for such series as to any matter provided for by such supplemental indenture or as to any action taken by Noteholders. If the Company or the Trustee shall so determine, new Notes of any series so modified as to conform, in the opinion of the Trustee and the Company, to any modification of this Indenture contained in any such supplemental indenture may be prepared and executed by the Company, authenticated by the Trustee and delivered in exchange for the Notes of such series then Outstanding.

Section 9.06. Conformity with the TIA.

     Every supplemental indenture executed pursuant to this Article 9 shall conform to the requirements of the TIA as then in effect if this Indenture shall then be qualified under the TIA.

ARTICLE 10.

SATISFACTION AND DISCHARGE

Section 10.01. Satisfaction and Discharge.

     The obligations of the Company pursuant to any series of Notes shall be discharged and shall cease to be of further effect, except as to surviving rights of registration of transfer or exchange of the Notes of such series, as to all Notes of such series issued hereunder, and the

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Trustee, on demand and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when:

     (a) either:

(i)

all Notes of such series that have been previously authenticated and delivered (except lost, stolen or destroyed Notes that have been replaced or paid, and Notes for whose payment money has previously been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from the trust) have been delivered to the Trustee for cancellation; or

(ii)

(A) all Notes of such series that have not been previously delivered to the Trustee for cancellation, have become due and payable by their terms, will become due and payable at their stated maturity within one year, have been called for redemption, or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name and at the expense of the Company, and the Company has irrevocably deposited or caused to be deposited with the Trustee, as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable U.S. Government Securities, or a combination thereof, in such amounts as shall be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes of such series not previously delivered to the Trustee for cancellation or redemption for principal, premium, if any, and interest on the Notes of such series to the date of deposit, in the case of Notes that have become due and payable, or to the stated maturity or redemption date, as the case may be; (B) the Company has paid all other sums payable by the Company with respect to the Notes of such series under this Indenture and the Notes; and (C) the Company has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes of such series at their stated maturity or on the redemption date, as the case may be.

     In the case of either clause (i) or (ii):

     (b) no Default or Event of Default shall have occurred and be continuing with respect to such series of Notes on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company is a party or by which the Company is bound; and

     (c) the Company shall have delivered to the Trustee an Officers’ Certificate and Opinion of Counsel stating that all conditions precedent relating to the satisfaction and discharge of such series of Notes have been satisfied.

     Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.07 shall survive.

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Section 10.02. Deposited Cash and U.S. Government Securities To Be Held in Trust; Other Miscellaneous Provisions.

     Subject to Section 10.03, all cash and/or non-callable U.S. Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 10.02, the “Trustee”) pursuant to Section 10.01 hereof in respect of the Outstanding Notes of such series to be satisfied and discharged in accordance with Section 10.01 shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such cash and/or securities need not be segregated from other funds except to the extent required by law.

Section 10.03. Repayment to Company.

     Any cash and/or non-callable U.S. Government Securities deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on any Note of any series and remaining unclaimed for two years after such principal, premium, if any, or interest has become due and payable shall be paid to the Company at its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such cash and/or securities, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in The New York Times and The Wall Street Journal (national edition), notice that such cash and/or securities remain unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such cash and/or securities then remaining will be repaid to the Company.

ARTICLE 11.

MISCELLANEOUS

Section 11.01. TIA Controls.

     If any provision of this Indenture limits, qualifies or conflicts with another provision that is required or deemed to be included in this Indenture by the TIA, such required or deemed provision shall control.

Section 11.02. Notices.

     Any request, demand, authorization, direction, notice, consent, waiver or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), facsimile transmission or overnight air courier guaranteeing next-day delivery, to the other’s address:

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If to the Company:

City Telecom (H.K.) Limited
12th Floor, Trans Asia Centre
No. 18 Kin Hong Street
Kwai Chung, New Territories
Hong Kong
Attention: Mr. Lai Ni Quiaque
Telecopier No.: (852) 3145 6068

with a copy to:

Jones Day
29th Floor, Edinburgh Tower
The Landmark
15 Queen’s Road Central
Hong Kong
Attention: Jeffrey Maddox
Telecopier No.: (852) 2868 5871

If to the Trustee:

     The Company or the Trustee, by notice to the other, may designate additional or different addresses for subsequent notices or communications.

     All notices and communications (other than those sent to the Trustee or Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if sent by facsimile transmission; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next-day delivery.

     Any notice or communication to a Holder shall be mailed by first-class mail, postage prepaid, or by overnight air courier guaranteeing next-day delivery to its address shown on the Security Register. Any notice or communication shall also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect therein shall not affect its sufficiency with respect to other Holders.

     If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

     If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.

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     Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

Section 11.03. Communication by Holders of Notes with Other Holders of Notes.

     Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

Section 11.04. Certificate and Opinion as to Conditions Precedent.

     Upon any request or application by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee:

     (a) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and

     (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with.

Section 11.05. Statements Required in Certificate or Opinion.

     Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include:

     (a) a statement that the Person making such certificate or opinion has read such covenant or condition and the definitions relating thereto;

     (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

     (c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable such Person to express an informed opinion as to whether or not such covenant or condition has been complied with; and

     (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

With respect to matters of fact, an Opinion of Counsel may rely on an Officers’ Certificate, certificates of public officials or reports or opinions of experts.

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Section 11.06. Form of Documents Delivered to Trustee.

     In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

     Any certificate or opinion of an officer of the Company may be based, in so far as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion (including any Opinion of Counsel) may be based, in so far as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such Person giving such certificate, opinion or Opinion of Counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

     Where any person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Section 11.07. Acts of Holders.

     (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders of the outstanding Notes of all series or more than one series, as the case may be, may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Company. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 11.07.

     (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by an officer of a corporation or a member of a partnership, on behalf of such corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

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

     (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind the Holder of every Note issued upon the transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Note.

Section 11.08. Rules by Trustee and Agents.

     The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

Section 11.09. No Personal Liability of Directors, Officers, Employees and Stockholders.

     No past, present or future director, officer, employee, incorporator or stockholder of the Company, as such, shall have any liability for any obligations of the Company under the Notes of any series or this Indenture, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes of any series. The waiver and release may not be effective to waive or release liabilities under the federal securities laws.

Section 11.10. Governing Law.

     THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS RULES OF SUCH STATE (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), EXCEPT THAT THE AUTHORIZATION AND EXECUTION OF THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION OF ORGANIZATION OF THE COMPANY.

Section 11.11. No Adverse Interpretation of Other Agreements.

     This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 11.12. Notes in a Specified Currency Other than Dollars. Unless otherwise specified as contemplated by Section 2.02 with respect to a particular series of Notes, whenever for purposes of this Indenture any action may be taken by the Holders of a specified percentage in aggregate principal amount of Notes of all series or all series affected by a particular action at the time Outstanding and, at such time, there are Outstanding any Notes of any series which are denominated in a Specified Currency other than U.S. dollars, then the principal amount of Notes of such series which shall be deemed to be Outstanding for the purpose of taking such action shall be that amount of U.S. dollars that could be obtained for such amount of such Specified

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Currency at the Market Exchange Rate. For purposes of this Section 11.12, “Market Exchange Rate” shall mean the noon U.S. dollar buying rate in New York City for cable transfers of the Specified Currency published by the Federal Reserve Bank of New York. If such Market Exchange Rate is not available for any reason with respect to such Specified Currency, such quotation of the Federal Reserve Bank of New York or such other quotations as appropriate shall be used. The provisions of this paragraph shall apply in determining the equivalent principal amount in respect of Notes of a series denominated in a Specified Currency other than U.S. dollars in connection with any action taken by Holders of Notes pursuant to the terms of this Indenture.

     In no event will the Trustee have any duty or liability regarding the Market Exchange Rate or any alternative determination provided for in the preceding paragraph.

Section 11.13. Successors.

     All covenants and agreements of the Company in this Indenture and the Notes shall bind its successors and assigns. All covenants and agreements of the Trustee in this Indenture shall bind its successors and assigns.

Section 11.14. Severability.

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

Section 11.15. Counterpart Originals.

     The parties may sign counterparts of this Indenture. Each counterpart shall be an original, but all of them together represent the same agreement.

Section 11.16. Table of Contents, Headings, etc.

     The Table of Contents, Cross-Reference Table and headings in this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 11.17. Qualification of this Indenture.

     The Trustee shall be entitled to receive from the Company any such Officers’ Certificates, Opinions of Counsel or other documentation as it may reasonably request in connection with any such qualification of this Indenture under the TIA.

Section 11.18. Company-Owned Notes Disregarded.

     In determining whether the Holders of the requisite aggregate principal amount of Notes, or any series thereof, have concurred in any demand, request, notice, direction, consent or waiver under this Indenture, Notes which are owned by the Company or any other obligor on the Notes with respect to which such determination is being made or by any person directly or indirectly

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controlling or controlled by or under direct or indirect common control with the Company or any other obligor on the Notes with respect to which such determination is being made shall be disregarded and deemed not to be Outstanding for the purpose of any such determination; provided, that for the purposes of determining whether the Trustee shall be protected in relying on any such demand, request, notice, direction, consent or waiver only Notes which the Trustee knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section 11.18 if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Notes and that the pledgee is not a person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

[Signatures on following pages]

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Company:

CITY TELECOM (H.K) LIMITED

By:
Name:

Title:

Trustee:

[•], as Trustee

By:

Name:

Title:

EX-5.1

Ex 5.1

[Letterhead of Jones Day]

City Telecom (H.K.) Limited
Level 39, Tower 1, Metroplaza
No. 223 Hing Fong Road
Kwai Chung, New Territories
Hong Kong

     Re: Registration Statement on Form F-3 Filed by City Telecom (H.K.) Limited

Ladies and Gentlemen:

     We have acted as special United States counsel for City Telecom (H.K.) Limited (the “Company”), a company incorporated with limited liability under the laws of the Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”), in connection with the authorization of the issuance and sale from time to time, on a delayed basis, by the Company of (i) ordinary shares of the Company (the “Ordinary Shares”), as represented by American Depositary Shares, (ii) debt securities (the “Debt Securities”), in one or more series, which may be convertible into or exchangeable for Ordinary Shares, (iii) warrants to purchase Ordinary Shares (the “Warrants”), (iv) rights to purchase Ordinary Shares (the “Rights”) and (v) Units consisting of any of Ordinary Shares, Debt Securities, Warrants or Rights (the “Units”) in each case, as contemplated by the Registration Statement on Form F-3 to which this opinion has been filed as an exhibit (the “Registration Statement”). The Ordinary Shares, the Debt Securities, the Warrants, the Rights and the Units are collectively referred to herein as the “Securities.” The Securities may be offered and sold from time to time pursuant to Rule 415 under the United States Securities Act of 1933 (the “Securities Act”).

     In connection with the opinions expressed herein, we have examined such documents, records and matters of law as we have deemed relevant or necessary for purposes of this opinion. Based on the foregoing, and subject to the further limitations, qualifications and assumptions set forth herein, we are of the opinion that:

1.	The Debt Securities, upon receipt by the Company of such lawful consideration therefor as the Company’s board of directors (or an authorized committee thereof) may determine, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with its terms.
2.	The Warrants, upon receipt by the Company of such lawful consideration therefor as the Company’s board of directors (or an authorized committee thereof) may determine, will constitute valid and binding obligations of the Company.
3.	The Rights, upon receipt by the Company of such lawful consideration therefor as the Company’s board of directors (or an authorized committee thereof) may determine, will constitute valid and binding obligations of the Company.
4.	The Units, upon receipt by the Company of such lawful consideration therefor as the Company’s board of directors (or an authorized committee thereof) may determine, will constitute valid and binding obligations of the Company.

     In rendering the foregoing opinions, we have assumed that: (i) the Registration Statement, and any amendments thereto, will have become effective (and will remain effective at the time of issuance of any Securities thereunder); (ii) a prospectus supplement describing each class or series of Securities offered pursuant to the Registration Statement, to the extent required by applicable law and relevant rules and regulations of the Securities and Exchange Commission (the “Commission”), will be timely filed with the Commission; (iii) the definitive terms of each class or series of Securities will have been established in accordance with the authorizing resolutions adopted by the Company’s board of directors (or a duly authorized committee thereof); (iv) the Company will issue and deliver the Securities in the manner contemplated by the Registration Statement and any Securities issuable upon conversion, exchange or exercise of any other Security, will have been authorized and reserved for issuance, in each case within the limits of the then remaining authorized but unreserved and unissued amounts of such Securities; (v) the resolutions authorizing the Company to issue, offer and sell the Securities will have been adopted by the Company’s board of directors (or an authorized committee thereof) and will be in full force and effect at all times at which the Securities are offered or sold by the Company; (vi) all Securities will be issued in compliance with applicable United States federal and state securities laws and (vii) any Indenture, Warrant Agreement, Rights Agreement or Unit Agreement (each as defined below) will be governed by and construed in accordance with the laws of the State of New York.

     With respect to any Securities consisting of any series of Debt Securities, we have further assumed that: (i) such Debt Securities will have been issued pursuant to an indenture that has been executed and delivered by the Company and the applicable trustee in a form approved by us (the “Indenture”), and the Indenture will have been qualified under the United States Trust Indenture Act of 1939; (ii) all terms of such Debt Securities not provided for in the applicable Indenture will have been established in accordance with the provisions of the applicable

Indenture and reflected in appropriate documentation approved by us and, if applicable, executed and delivered by the Company and the applicable trustee and (iii) such Debt Securities will be executed, authenticated, issued and delivered in accordance with the provisions of the applicable Indenture.

     With respect to any Securities consisting of Warrants, we have further assumed that: (i) the warrant agreement, approved by us, relating to the Warrants (the “Warrant Agreement”) to be entered into between the Company and an entity selected by the Company to act as the warrant agent (the “Warrant Agent”) will have been authorized, executed and delivered by the Company and the Warrant Agent and (ii) the Warrants will be authorized, executed and delivered by the Company and the Warrant Agent in accordance with the provisions of the Warrant Agreement.

     With respect to any Securities consisting of Rights, we have further assumed that: (i) the subscription rights agreement, approved by us, relating to the Rights (the “Rights Agreement”) to be entered into between the Company and an entity selected by the Company to act as the subscription rights agent (the “Rights Agent”) will have been authorized, executed and delivered by the Company and the Rights Agent and (ii) the Rights will be authorized, executed and delivered by the Company and the Rights Agent in accordance with the provisions of the Rights Agreement.

     With respect to any Securities consisting of Units, we have further assumed that: (i) any unit agreement, approved by us, relating to the Units (the “Unit Agreement”) that is entered into between the Company and an entity selected by the Company to act as the unit agent (the “Unit Agent”) will have been authorized, executed and delivered by the Company and the Unit Agent; (ii) the Units will be authorized, executed and delivered by the Company and the Unit Agent in accordance with the provisions of the Unit Agreement and (iii) each component of such Unit will be authorized, validly issued, fully paid and nonassessable (to the extent applicable) and will constitute a valid and binding obligation of the Company as contemplated by the Registration Statement and the applicable Unit Agreement, if any.

     We have further assumed that (i) the Company is a company incorporated with limited liability under the laws of the Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”), existing and in good standing under the laws of Hong Kong, has all requisite power and authority, will have obtained all requisite organizational, third party and governmental authorizations, consents and approvals and made all filings and registrations required to enable it to execute, deliver and perform its obligations under, as applicable, the Indenture, the Debt Securities, the Warrants, the Warrant Agreement, the Rights, the Rights Agreement, the Units and the Unit Agreement; (ii) such execution, delivery and performance will not violate or conflict with any law, rule, regulation, order, decree, judgment, instrument or agreement binding upon or applicable to it or its

properties; (iii) the Indenture, the Debt Securities, the Warrants, the Warrant Agreement, the Rights, the Rights Agreement, the Units and the Unit Agreement (a) will have been (1) duly authorized by the Company and (2) executed and delivered by the Company under the laws of Hong Kong, (b) do not violate the laws of Hong Kong and (c) constitute valid and binding obligations of the Company under the laws of Hong Kong and (iv) the Ordinary Shares have been authorized by the Company and, upon receipt by the Company of the full amount of the lawful consideration therefor, as the Company’s board of directors (or an authorized committee thereof) may determine, will be validly issued, fully paid and nonassessable.

     Our opinions set forth above are limited by bankruptcy, insolvency, reorganization, fraudulent transfer and fraudulent conveyance, voidable preference, moratorium or other similar laws and related regulations and judicial doctrines from time to time in effect relating to or affecting creditors’ rights generally, and by general equitable principles and public policy considerations, whether such principles and considerations are considered in a proceeding at law or at equity.

     As to facts material to the opinions and assumptions expressed herein, we have relied upon oral or written statements and representations of officers and other representatives of the Company and others. The opinions expressed herein are limited to the laws of the State of New York as currently in effect, and we express no opinion as to the effect of the laws of any other jurisdiction.

     We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to Jones Day under the caption “Legal Matters” in the prospectus constituting a part of such Registration Statement. In giving such consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder.

Very truly yours,

/s/JONES DAY

EX-5.2

Exhibit 5.2

[Letterhead of Jones Day]

City Telecom (H.K.) Limited
Level 39, Tower 1, Metroplaza
No. 223 Hing Fong Road
Kwai Chung, New Territories
Hong Kong

     Re: Registration Statement on Form F-3 Filed by City Telecom (H.K.) Limited

     We have acted as legal advisers on the laws of the Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”) for City Telecom (H.K.) Limited (the “Company”), a company incorporated with limited liability under the laws of Hong Kong, in connection with the authorization of the issuance and sale from time to time, on a delayed basis, by the Company of (i) ordinary shares of the Company (the “Ordinary Shares”), as represented by American Depositary Shares, (ii) debt securities (the “Debt Securities”), in one or more series, which may be convertible into or exchangeable for Ordinary Shares, (iii) warrants to purchase Ordinary Shares (the “Warrants”), (iv) rights to purchase Ordinary Shares (the “Rights”) and (v) Units consisting of any of Ordinary Shares, Debt Securities, Warrants or Rights (the “Units”) in each case, as contemplated by the Registration Statement on Form F-3 to which this opinion has been filed as an exhibit (the “Registration Statement”). The Ordinary Shares, the Debt Securities, the Warrants, the Subscription Rights and the Units are collectively referred to herein as the “Securities.” The Securities may be offered and sold from time to time pursuant to Rule 415 under the United States Securities Act of 1933 (the “Securities Act”).

     In giving this opinion we have examined copies of the following documents with respect to the Company:

(a)

the certificate of incorporation dated May 19, 1992, memorandum and articles of association, and current business registration certificate;

(b)

a copy of the resolution of the shareholders of the Company passed at the Company’s Annual General Meeting held on December 18, 2009 authorizing the directors to allot, issue and deal with additional shares in the share capital of the Company or securities convertible into such shares or options, warrants, or similar rights to subscribe for any shares or convertible securities and to make, issue or grant offers, agreements or options with an aggregate nominal amount not exceeding 20 per cent of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of the said resolution; and

(c) an extract from the Minutes of the meeting of the Board of Directors of the Company held on February 4, 2010 approving the filing of the Registration Statement and the allotment and issue of the Ordinary Shares, including the notice of such meeting, and an extract of Written Resolutions of Directors dated March 31, 2010 approving the issue of approximately 3,500,000 American Depositary Shares (equivalent to approximately 70,000,000 Ordinary Shares of the Company).

     In such examination, we have assumed, without any independent investigation and verification that:

(i)	all signatures, seals, chops and markings (if any) on all documents are genuine and have been duly affixed, all documents submitted to us as originals are authentic and complete and all documents submitted to us as certified or photostatic copies conform to the authentic originals which are authentic and complete and have not been amended, superseded, revoked or revised in any manner;
(ii)	the constitutional documents referred to in paragraph (a) on page 1 of this opinion are up-to-date;
(iii)	the meetings of the shareholders and the board of directors of the Company (including any duly authorized committee thereof) at which any of the resolutions upon which we rely in giving this opinion were duly convened with proper notice and were quorate at the time the relevant resolutions were passed;
(iv)	the resolutions contained in the written resolutions of the board of directors of the Company referred to in paragraph (c) on page 2 of this opinion remain in full force and effect without modifications, and have not been superseded;
(v)	the Registration Statement, and any amendments thereto, will have become effective (and will remain effective at the time of issuance of any Securities thereunder);
(vi)	a prospectus supplement describing each class or series of Securities offered pursuant to the Registration Statement, to the extent required by applicable law and relevant rules and regulations of the United States Securities and Exchange Commission (the “Commission”), will be timely filed with the Commission;
(vii)	the definitive terms of each class or series of Securities will have been established in accordance with the authorizing resolutions adopted by the Company’s board of directors (or a duly authorized committee thereof);
(viii)	the Company will issue and deliver the Securities in the manner contemplated by the Registration Statement and any Securities issuable upon conversion, exchange or exercise of any other Security, will have been authorized and reserved for issuance, in each case within the limits of the then remaining authorized but unreserved and unissued amounts of such Securities;
(ix)	the resolutions authorizing the Company to allot, issue, offer and sell the Securities will have been adopted by the Company’s shareholders and board of directors (or an

	authorized committee thereof) and will be in full force and effect at all times at which the Securities are offered or sold by the Company; and
(x)	all Securities will be issued in compliance with applicable Hong Kong law and applicable United States federal and state securities laws.

     We are qualified to advise City Telecom regarding the laws of Hong Kong in force at the date hereof and as currently interpreted by the Hong Kong courts. We do not express any opinion in respect of those matters governed by or construed in accordance with the laws of any jurisdiction other than Hong Kong.

     Based upon and subject to the assumptions and qualifications contained herein, we are of the opinion that the Ordinary Shares, upon receipt by the Company of the full amount of the lawful consideration therefor, will be validly issued, fully paid and nonassessable.

     This opinion is limited to the matters specifically stated herein and is not to be read as extended by implication to any other matters not specifically referred to herein. In addition, this opinion speaks only as of the date hereof and we expressly disclaim any responsibility to advise you or any other person who is permitted to rely on the opinions expressed herein of any development or circumstance of any kind including any change of law or fact that may occur after the date of this opinion even though such development, circumstance or change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to this opinion.

     We hereby consent to the filing of this opinion as Exhibit 5.2 to the Registration Statement and to the reference to Jones Day under the caption “Legal Matters” in the prospectus constituting a part of such Registration Statement. In giving such consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder.

Very truly yours,

/s/JONES DAY

EX-12.1

Ex 12.1

CALCULATION OF
RATIO OF EARNINGS TO FIXED CHARGES

     Our ratio of earnings to fixed charges for the three fiscal years ended August 31, 2005, 2006 and 2007, presented in accordance with HKFRS, and for the two fiscal years ended August 31, 2008 and 2009, presented in accordance with IFRS, are as follows:

	Fiscal Year Ended August 31,
	2005			2006			2007		2008		2009
	HK$			HK$			HK$		HK$		HK$
	(in thousands)
Earnings
Profit before taxation		(170,221	)		(149,306	)		30,891		108,372		251,559
Add: Fixed charges		56,509			88,637			87,504		75,137		55,127
Total Earnings		(113,712	)		(60,669	)		118,395		183,509		306,686
Fixed charges
Interest expensed		54,816			87,208			85,375		73,472		53,582
Amortization of capitalized expenses relating to indebtedness		1,693			1,429			2,129		1,665		1,545
Total Fixed Charges		56,509			88,637			87,504		75,137		55,127
Ratio of Earnings to Fixed Charges		(2.01	)		(0.68	)		1.35		2.44		5.56

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
City Telecom (H.K.) Limited:

We consent to the use of our report dated November 5, 2009, with respect to the consolidated balance sheets of City Telecom (H.K.) Limited and its subsidiaries as of August 31, 2008 and 2009, and the related consolidated income statements, the consolidated statements of changes in equity and the consolidated cash flow statements for the years ended August 31, 2008 and 2009, incorporated herein by reference and to the reference to our firm under the heading “Experts” in the registration statement.

/s/KPMG
Hong Kong, China
April 2, 2010