EXHIBIT 4.6
GAINFAIR FINANCE LIMITED
US$200,000,000 Zero Coupon Guaranteed Convertible Bonds Due 2008
Purchase Agreement
October 28, 2003
Citigroup Global Markets Limited
Citigroup Centre
Canada Square
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
As Representatives of the Initial Purchasers
Ladies and Gentlemen:
Gainfair Finance Limited (to be renamed as Brilliance China
Automotive Finance Limited), a corporation organized under the laws of the
British Virgin Islands (the "Issuer"), proposes to issue and sell to the several
parties named in Schedule I hereto (the "Initial Purchasers"), for whom you (the
"Representatives") are acting as representatives, US$170,000,000 principal
amount of its Zero Coupon Guaranteed Convertible Bonds Due 2008 to be guaranteed
(the "Guarantee") by Brilliance China Automotive Holdings Limited (the
"Company") (the "Firm Securities"). The Issuer also proposes to grant to the
Initial Purchasers an option to purchase up to US$30,000,000 additional
principal amount of such Bonds (the "Option Securities" and, together with the
Firm Securities, the "Securities"). The Securities are convertible into ordinary
shares, par value US$0.01 per share (the "Shares"), of the Company at the
conversion price set forth in the terms and conditions of the Securities (the
"Terms and Conditions") and which shall be substantially in the form set out in
Exhibit A. The Securities will be constituted by a trust deed (the "Trust
Deed"), expected to be dated as of the Closing Date, between the Issuer, the
Company and The Bank of New York, as trustee (the "Trustee"). Payments under the
Securities will be made on behalf of the Issuer by paying agents appointed under
a paying and conversion agency agreement (the "Agency Agreement") expected to be
dated as of the Closing Date between the Issuer, the Company, trustee and the
agents named therein (the "Agents"). To the extent there are no additional
parties listed on Schedule I other than you, the term Representatives as used
herein shall mean you as the Initial Purchasers, and the terms Representatives
and Initial Purchasers shall mean either the singular or plural as the context
requires. The use of the neuter in this Agreement shall include the feminine and
masculine wherever appropriate. Certain terms used herein are defined in Section
22 hereof.
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The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities or the Shares issuable upon conversion
thereof under the Act in an offshore transaction in reliance upon Regulation S
of the Act.
In connection with the sale of the Securities, each of the Issuer
and the Company undertakes to prepare an offering memorandum in a form required
by the Representatives, on behalf of the Initial Purchasers (the "Offering
Memorandum"), to be dated not later than three (3) business days prior to the
Closing Date or such other date as may be agreed between the Company and the
Representatives, on behalf of the Initial Purchasers (the "Publication Date"),
for use in connection with the issue of the Securities and the listing of the
Securities on the Luxembourg Stock Exchange and hereby authorize you to
distribute copies of the Offering Memorandum and the Terms and Conditions in
connection with the offering and sale of the Securities. The Company confirms
that the Offering Memorandum will include or incorporate by reference a
description of the terms of the Securities, the terms of the offering and a
description of the Company and such other information, including financial
information, in relation to the Company as is customary for offerings of
securities such as the Securities by issuers doing business in The People's
Republic of China (the "PRC") and as the Initial Purchasers may require. Each of
the Issuer and the Company hereby confirms that it has authorized the use of the
Offering Memorandum, and any amendment or supplement thereto, in connection with
the offer and sale of the Securities by the Initial Purchasers. Unless stated to
the contrary, any references herein to the terms "amend", "amendment" or
"supplement" with respect to the Offering Memorandum shall be deemed to refer to
and include any information filed under the Exchange Act subsequent to the
Execution Time that is incorporated by reference therein.
Citigroup may, to the extent permitted by applicable laws,
over-allot and effect transactions in the Securities with a view to supporting
the market price of the Securities and the Shares at a level higher than that
which might otherwise prevail in the open market but in doing so Citigroup shall
act as principal and not as agent of the Issuer and any loss resulting from
over-allotment or stabilization shall be borne, and any profit arising therefrom
shall be beneficially retained, by Citigroup. Nothing contained in this
paragraph shall be construed so as to require the Issuer to issue in excess of
US$200,000,000 aggregate principal amount of Securities (being the maximum total
amount of the Securities comprising the Firm Securities and the Option
Securities).
1. Representations and Warranties. The Issuer and the Company
jointly and severally represent and warrant to each Initial Purchaser as set
forth below in this Section 1 subject to disclosures made in press announcements
published by the Company in Hong Kong and annual reports and other documents
filed by the Company with the relevant stock exchange or regulatory authority.
(a) On the Closing Date (as defined herein) and on any settlement
date, the Offering Memorandum will not (and any amendment or supplement thereto,
at the date thereof, at the Closing Date and on any settlement date, will not)
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
makes no representation or warranty as to the information contained in or
omitted from the Offering Memorandum, or any amendment or supplement thereto, in
reliance upon and
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in conformity with information furnished in writing to the Company by or on
behalf of the Initial Purchasers through the Representatives specifically for
inclusion therein.
(b) Neither the Issuer, the Company, nor any of their respective
Affiliates, or any person acting on its or their behalf has directly or
indirectly, made offers or sales of any security, or solicited offers to buy,
any security under circumstances that would require the registration of the
Securities or the Shares issuable upon conversion thereof under the Act.
(c) Neither the Issuer, the Company, nor any of their respective
Affiliates, or any person acting on its or their behalf has engaged in any
directed selling efforts (within the meaning of Regulation S) with respect to
the Securities or the Shares issuable upon conversion thereof; and each of the
Issuer, the Company, their respective Affiliates and each person acting on its
or their behalf has complied with the offering restrictions requirement of
Regulation S.
(d) Each of the Issuer and the Company is a "foreign issuer" (as
defined in Regulation S) which reasonably believes that there is no substantial
U.S. market interest (as defined in Regulation S) in the Issuer's or the
Company's debt securities or in the Shares or any securities of the same class
or series as the Shares.
(e) No registration of the Securities or the Shares issuable upon
conversion thereof is required under the Act for the offer and sale of the
Securities to or by the Initial Purchasers in the manner contemplated herein and
in the Offering Memorandum.
(f) Each of the Issuer and the Company is not, and after giving
effect to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Offering Memorandum will not be, an
"investment company" as defined in the Investment Company Act, without taking
account of any exemption arising out of the number of holders of the Issuer's
and the Company's securities.
(g) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
(h) Each of the Issuer and the Company has not paid or agreed to pay
to any person any compensation for soliciting another to purchase any securities
of the Issuer or of the Company (except as contemplated in this Agreement).
(i) Each of the Issuer and the Company has not taken, directly or
indirectly, any action designed to or that has constituted or that might
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of the Issuer or
of the Company to facilitate the sale or resale of the Securities.
(j) Each of the Issuer, the Company and their respective
subsidiaries has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business, and is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction that requires such qualification.
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(k) All the outstanding shares of capital stock of each subsidiary
of the Issuer and the Company have been duly authorized and validly issued and
are fully paid and nonassessable, and all outstanding shares of capital stock of
the subsidiaries are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any security interest, claim, lien or
encumbrance.
(l) The Company's authorized equity capitalization will be as set
forth in the Offering Memorandum; the capital stock of the Company will conform
to the description thereof to be contained in the Offering Memorandum; the
outstanding Shares have been duly authorized and validly issued and are fully
paid and nonassessable; the Shares initially issuable upon conversion of the
Securities have been duly authorized and, when issued upon conversion of the
Securities against payment of the conversion price, will be validly issued,
fully paid and nonassessable; the Board of Directors of the Company has duly and
validly adopted resolutions reserving such Shares for issuance upon conversion
of the Securities; the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for the
Securities or the Shares issuable upon conversion thereof; and, save as
disclosed in press announcements published by the Company in Hong Kong, and
annual reports and other documents filed by the Company with the relevant stock
exchange or regulatory authority, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital stock of or
ownership interests in the Company are outstanding.
(m) The statements to be set out in the Offering Memorandum under
the headings "Taxation", "Terms and Conditions of the Bonds", "Description of
the Shares" and "Description of the ADSs" will fairly summarize the matters
therein described.
(n) This Agreement has been duly authorized, executed and delivered
by each of the Issuer and the Company and constitutes a legal, valid, binding
instrument enforceable against each of the Issuer and the Company in accordance
with its terms (subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity); each of the Trust Deed and the Agency Agreement has been
duly authorized and, assuming due authorization, execution and delivery thereof
by the Trustee and the Agents, as applicable, when executed and delivered by
each of the Issuer and the Company, will constitute a legal, valid, binding
instrument enforceable against the Issuer and the Company in accordance with its
terms (subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity); and
the Securities have been duly authorized, and, when executed and authenticated
in accordance with the provisions of the Trust Deed, the Agency Agreement and
this Agreement and delivered to and paid for by the Initial Purchasers, will
have been duly executed and delivered by the Issuer and will constitute the
legal, valid and binding obligations of the Issuer entitled to the benefits of
the Trust Deed (subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity) and will be convertible into Shares in accordance with
their terms.
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(o) Other than The Stock Exchange of Hong Kong Limited ("Hong Kong
Stock Exchange") having agreed to list the Shares to be issued upon the
conversion of the Securities (the "New Shares"), no consent, approval,
authorization, filing with or order of any court or governmental agency or body
is required in connection with the transactions contemplated herein, in the
Trust Deed or in the Agency Agreement or by the issuance of the Securities or
the Shares upon conversion thereof.
(p) None of the execution and delivery of the Trust Deed, this
Agreement or the Agency Agreement, the issuance and sale of the Securities or
the issuance of the Shares upon conversion thereof, or the consummation of any
other of the transactions herein or therein contemplated, nor the fulfillment of
the terms hereof or thereof will conflict with, result in a breach or violation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Issuer or the Company or any of their respective subsidiaries pursuant to,
(i) the charter or by-laws or comparable constituting documents of the Issuer or
the Company or any of their respective subsidiaries; (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Issuer or the Company or any of their respective subsidiaries is a
party or bound or to which its or their property is subject, the violation of
which would, individually or in the aggregate, have a Material Adverse Effect;
or (iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Issuer, the Company or any of their
respective subsidiaries or any of its or their properties, the violation of
which would, individually or in the aggregate, have a Material Adverse Effect.
(q) The consolidated financial statements of the Company as of and
for the years ended December 31, 2001 and 2002 (the "Annual Financial
Statements") and the unaudited condensed consolidated financial statements of
the Company as of and for the six months ended June 30, 2002 and 2003 (the
"semi-annual Financial Statements", together with the Annual Financial
Statements, the "Financial Statements") present fairly the financial condition,
results of operations and cash flows of the Company as of the dates and for the
periods indicated, and have been prepared in conformity with generally accepted
accounting principles in Hong Kong applied on a consistent basis throughout the
periods involved (except as otherwise noted therein); the selected financial
data to be set forth under the caption "Selected Consolidated Financial
Information" in the Offering Memorandum fairly present, on the basis to be
stated in the Offering Memorandum, the information included or incorporated by
reference therein.
(r) The Company has not entered into any material contract or
commitment (including capital commitments) that, in the context of consummating
the transactions contemplated herein, might be material for disclosure and the
Company has carried on its business in the ordinary and usual course.
(s) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Issuer,
the Company or any of their respective subsidiaries or its or their property is
pending or, to the best knowledge of the Issuer and the Company, threatened that
(i) could reasonably be expected to have a material adverse effect on the
performance of this Agreement, the Trust Deed or the Agency Agreement, or the
consummation of any of the transactions contemplated hereby or thereby or (ii)
could reasonably
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be expected to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business (a "Material Adverse Effect").
(t) Each of the Issuer, the Company and their respective
subsidiaries owns or leases all such properties as are necessary to the conduct
of its operations as presently conducted.
(u) Neither the Issuer, the Company nor any of their respective
subsidiaries is in violation or default of (i) any provision of its charter or
bylaws or comparable constituting documents; (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to which it is a
party or bound or to which its property is subject, the violation of which
would, individually or in the aggregate, have a Material Adverse Effect; or
(iii) any statute, law, rule, regulation, judgment, order or decree applicable
to the Issuer, the Company or any of their respective subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Issuer, the Company or such subsidiary or
any of its properties, as applicable, the violation of which would, individually
or in the aggregate, have a Material Adverse Effect.
(v) PricewaterhouseCoopers, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements and
schedules to be included or incorporated by reference in the Offering
Memorandum, are independent public accountants with respect to the Company
within the meaning of the Hong Kong Society of Accountants.
(w) There are no stamp or other issuance or transfer taxes or duties
or other similar fees or charges required to be paid in connection with the
execution and delivery of this Agreement, the Trust Deed, the Agency Agreement
or the issuance or sale by the Issuer of the Securities or upon the issuance of
Shares by the Company upon the conversion thereof.
(x) Each of the Issuer and the Company has filed all tax returns
that are required to be filed or has requested extensions thereof (except in any
case in which the failure so to file would not have a Material Adverse Effect)
and has paid all taxes required to be paid by it and any other assessment, fine
or penalty levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a Material Adverse Effect.
(y) No labor problem or dispute with the employees of the Issuer or
the Company or any of their respective subsidiaries exists or is threatened or
imminent, and neither the Issuer nor the Company is aware of any existing or
imminent labor disturbance by the employees of any of its or its subsidiaries'
principal suppliers, contractors or customers, except as would not have a
Material Adverse Effect.
(z) The Issuer, the Company and each of their respective
subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; all policies of insurance and
fidelity or surety bonds insuring the Issuer, the Company or any of their
6
respective subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Issuer, the Company and
their respective subsidiaries are in compliance with the terms of such policies
and instruments; there are no claims by the Issuer, the Company or any of their
respective subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; neither the Issuer, the Company nor any of their respective
subsidiaries has been refused any insurance coverage sought or applied for; and
neither the Issuer, the Company nor any of their respective subsidiaries has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.
(aa) No subsidiary of the Issuer or the Company is currently
prohibited, directly or indirectly, from paying any dividends to the Company,
from making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company.
(bb) The Issuer, the Company and their respective subsidiaries
possess all licenses, certificates, permits and other authorizations issued by
the appropriate regulatory authorities necessary to conduct their respective
businesses, and neither the Issuer, the Company nor any of their respective
subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect.
(cc) The Issuer, the Company and each of their respective
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles in Hong Kong and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(dd) The Issuer, the Company and their respective subsidiaries are
(i) in compliance with any and all applicable laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"); (ii)
have received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses; and (iii) have not received notice of any actual or
potential liability under any Environmental Law, except where such
non-compliance with Environmental Laws, failure to receive required permits,
licenses or other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect.
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(ee) In the ordinary course of its business, each of the Issuer and
the Company periodically reviews the effect of Environmental Laws on the
business, operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws, or
any permit, license or approval, any related constraints on operating activities
and any potential liabilities to third parties); on the basis of such review,
each of the Issuer and the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a Material
Adverse Effect.
(ff) Each of the Issuer and the Company has not taken any action or
omitted to take any action (such as issuing any press release relating to any
Securities without an appropriate legend) which may result in the loss by any of
the Initial Purchasers of the ability to rely on any stabilization safe harbor
provided by the Financial Services Authority under the Financial Services and
Markets ▇▇▇ ▇▇▇▇ (the "FSMA"). The Issuer has been informed of the guidance
relating to stabilization provided by the Financial Services Authority, in
particular in Section MAR 2 Annex 2G of the Financial Services Handbook.
(gg) None of the Issuer, the Company, their respective subsidiaries
or, to the knowledge of the Issuer or the Company, any director, officer, agent,
employee or Affiliate of the Issuer, the Company or any of their respective
subsidiaries is aware of or has taken any action, directly or indirectly, that
would result in a violation by such Persons of Foreign Corrupt Practices Act of
1977, as amended, and the rules and regulations thereunder (the "FCPA"),
including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of
value to any "foreign official" (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA; and the Issuer, the Company,
their respective subsidiaries and, to the knowledge of the Issuer, the Company,
their respective Affiliates have conducted their businesses in compliance with
the FCPA and have instituted and maintain policies and procedures designed to
ensure, and which are reasonably expected to continue to ensure, continued
compliance therewith.
(hh) None of the Issuer, the Company, any of their respective
subsidiaries or, to the knowledge of the Issuer or the Company, any director,
officer, agent, employee or Affiliate of the Issuer or the Company or any of
their respective subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Department of
the Treasury ("OFAC"); and the Company will not directly or indirectly use the
proceeds of the offering of the Securities hereunder, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner
or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.
(ii) Prior to the date hereof, each of the Issuer and the Company
has furnished to the Representatives letters, each substantially in the form of
Exhibit B hereto, duly executed by
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each director of the Company and Huachen Automotive Group Holdings Company
Limited ("Huachen Automotive") and addressed to the Representatives.
(jj) No event has occurred or circumstance arisen which, had the
Securities already been issued, could reasonably be expected to (whether or not
with the giving of notice and/or the passage of time and/or the fulfillment of
any other requirement) constitute an event described under "Events of Default"
in the Terms and Conditions.
(kk) All public announcements made by the Company to its
shareholders, including any release of financial information or results of
operations by the Company after June 30, 2003, were, as of the date made, true
and accurate in all material respects.
(ll) Each of the Issuer and the Company is in compliance in all
material respects with (with respect to the Shares) and will comply in all
material respects with (with respect to the Shares and the Securities) all
applicable laws and the applicable requirements of the Hong Kong Stock Exchange
Listing Rules and the Luxembourg Stock Exchange in connection with the issue of
the Securities.
(mm) The Securities (when issued) will constitute direct,
unconditional, unsecured and unsubordinated obligations of the Issuer and will
at all times rank pari passu without any preference among themselves and with
all other present and future unconditional, unsecured and unsubordinated
obligations of the Issuer other than those preferred by statute or applicable
law.
(nn) There are no restrictions applicable to the Shares generally
upon the voting or transfer of any of the Shares pursuant to the Company's
constitutional documents or pursuant to any agreement or other instrument to
which the Company is a party or by which the Company may be bound.
(oo) The Guarantee will be duly authorized by the Company prior to
the Closing Date and when the Trust Deed has been duly executed and delivered on
the Closing Date, the Guarantee will constitute valid and legally binding
obligations of the Guarantor.
(pp) The payment obligations of the Guarantor under the Guarantee
(when issued) will at all times rank pari passu with all other present and
future, unconditional, unsecured and unsubordinated obligations of the Company
other than those preferred by statute or applicable law.
(qq) The Issuer is a wholly-owned subsidiary of the Company.
The representations and warranties contained in, or given pursuant to,
Section 1 shall be deemed to have been repeated at the Publication Date, the
Closing Date and on any settlement date taking into account facts and
circumstances subsisting at such date.
Any certificate signed by any officer of the Issuer or the Company and
delivered to the Representatives or counsel for the Initial Purchasers in
connection with the offering of the Securities shall be deemed a representation
and warranty by the Issuer or, as the case may be, the Company, as to matters
covered thereby, to each Initial Purchaser.
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2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Issuer
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Issuer, at a purchase price of
98.0% of the principal amount thereof (which reflects an issue price of 100% of
the principal amount thereof less an underwriting commission of 2.0% of the
principal amount thereof), the principal amount of Firm Securities set forth
opposite such Initial Purchaser's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Issuer hereby grants an
option to the several Initial Purchasers to purchase, severally and not jointly,
the Option Securities at the same purchase price as Initial Purchasers shall pay
for the Firm Securities. The option may be exercised in whole or in part at any
time (but not more than once) on or before the 30th day after the date hereof
upon written or telegraphic notice by the Representatives to the Issuer setting
forth the principal amount of Option Securities as to which the several Initial
Purchasers are exercising the option and the settlement date. Delivery of the
Option Securities, and payment therefor, shall be made as provided in Section 3
hereof. The principal amount of Option Securities to be purchased by each
Initial Purchaser shall be the same percentage of the total principal amount of
Option Securities to be purchased by the several Initial Purchasers as such
Initial Purchaser is purchasing of the Firm Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional Securities.
3. Delivery and Payment. (a) Delivery of and payment for the Firm
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 A.M., London time, on November 28,
2003, or at such time on such later date not more than three Business Days after
the foregoing date as the Representatives shall designate, which date and time
may be postponed by agreement between the Representatives and the Issuer and the
Company or as provided in Section 9 hereof (such date and time of delivery and
payment for the Securities being herein called the "Closing Date"). Delivery of
the Securities shall be made by the Issuer delivering a global bond (the "Global
Bond") evidencing the Securities in respect of the Firm Securities, duly
executed on behalf of the Issuer and authenticated in accordance with the Trust
Deed, to a common depositary designated for the purpose by Euroclear S.A./N.V.,
as operator of the Euroclear System ("Euroclear") and Clearstream Banking,
societe anonyme ("Clearstream, Luxembourg") for credit on or about the Closing
Date to the accounts of Euroclear and Clearstream, Luxembourg with such common
depositary as directed by the Representatives for the respective accounts of the
several Initial Purchasers against payment by the several Initial Purchasers
through the Representatives of the purchase price thereof to or upon the order
of the Issuer by wire transfer payable in same-day funds to the account
specified by the Issuer. Delivery of the Securities shall be made through the
facilities of Euroclear and Clearstream Luxembourg.
(b) If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Issuer will deliver
the Option Securities (at the expense of the Issuer) to the Representatives on
the date specified by the Representatives (which shall be within three Business
Days after exercise of said option) for the respective accounts of the several
Initial Purchasers, against payment by the several Initial Purchasers through
the
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Representatives of the purchase price thereof to or upon the order of the Issuer
by wire transfer payable in same-day funds to the account specified by the
Issuer. If settlement for the Option Securities occurs after the Closing Date,
the Issuer will deliver to the Representatives on the settlement date for the
Option Securities, and the obligation of the Initial Purchasers to purchase the
Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Initial Purchasers. (a) Each Initial Purchaser
acknowledges that the Securities and the Shares issuable upon conversion thereof
have not been and will not be registered under the Act and may not be offered or
sold within the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Act.
(b) Each Initial Purchaser, severally and not jointly, represents
and warrants to and agrees with the Company that:
(i) the Securities have not been and will not be registered
under the Act and may not be offered or sold within the United
States except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Act;
(ii) it has not offered or sold, and agrees that it will not
offer or sell, any Securities constituting part of its allotment
within the United States except in accordance with Rule 903 of
Regulation S under the Act. Accordingly, neither it, its affiliates
nor any persons acting on its or their behalf have engaged or will
engage in any directed selling efforts with respect to the
Securities. Terms used in this paragraph have the meaning given to
them by Regulation S under the Act;
(iii) it nor any of its affiliates (as defined in Rule 501(b)
of Regulation D), nor any person acting on its or their behalf has
engaged or will engage in any form of general solicitation or
general advertising (within the meaning of Regulation D) in
connection with any offer and sale of the Securities in the United
States;
(iv) it has not entered and agrees that it will not enter into
any contractual arrangement with any distributor (as that term is
defined in Regulation S) with respect to the distribution or
delivery of the Securities, except with its affiliates or with the
prior written consent of the Company;
(v) it has not offered or sold and, prior to the expiry of a
period of six months from the date of issuance of the Securities,
will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or as agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995;
11
(vi) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relation to the Securities in, from or otherwise involving the
United Kingdom; and
(vii) it has only communicated or caused to be communicated
and will only communicate or cause to be communicated any invitation
or inducement to engage in investment activity (within the meaning
of section 21 of the FSMA) received by it in connection with the
issue or sale of any Securities, in circumstances in which section
21(1) of the FSMA does not apply to the Company.
5. Agreements. Each of the Issuer and the Company severally and
jointly agrees with each Initial Purchaser that:
(a) Each of the Issuer and the Company will furnish to each Initial
Purchaser and to counsel for the Initial Purchasers, without charge, on the
Publication Date and during the period referred to in paragraph (c) below, as
many copies of the Offering Memorandum and any amendments and supplements
thereto as they may reasonably request.
(b) Each of the Issuer and the Company will not amend or supplement
the Offering Memorandum, other than by filing documents under the Exchange Act
that are incorporated by reference therein, without the prior written consent of
the Representatives; provided, however, that, prior to the completion of the
distribution of the Securities by the Initial Purchasers (as determined by the
Initial Purchasers), the Issuer and the Company will not file any document under
the Exchange Act that is incorporated by reference in the Offering Memorandum
unless, prior to such proposed filing, each of the Issuer and the Company has
furnished the Representatives with a copy of such document for their review and
the Representatives have not reasonably objected to the filing of such document.
The Issuer and the Company will promptly advise the Representatives when any
document filed under the Exchange Act that is incorporated by reference in the
Offering Memorandum shall have been filed with the Commission.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the Representatives), any
event occurs as a result of which the Offering Memorandum, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it should
be necessary to amend or supplement the Offering Memorandum to comply with
applicable law, the Issuer and the Company will promptly (i) notify the
Representatives of any such event; (ii) subject to the requirements of paragraph
(b) of this Section 5, prepare an amendment or supplement that will correct such
statement or omission or effect such compliance; and (iii) supply any
supplemented or amended Offering Memorandum to the several Initial Purchasers
and counsel for the Initial Purchasers without charge in such quantities as they
may reasonably request.
(d) The Issuer and the Company will arrange, if necessary, for the
qualification of the Securities for sale by the Initial Purchasers under the
laws of such jurisdictions as the
12
Representatives may designate (including Singapore and the Netherlands) and will
maintain such qualifications in effect so long as required for the sale of the
Securities; provided that in no event shall either the Issuer or the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of process in
suits, other than those arising out of the offering or sale of the Securities,
in any jurisdiction where it is not now so subject. The Issuer and the Company
will promptly advise the Representatives of the receipt by the Issuer or the
Company of any notification with respect to the suspension of the qualification
of the Securities for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose.
(e) Each of the Issuer and the Company will not, and will not permit
any of their respective Affiliates to, resell any Securities or Shares issued
upon conversion thereof that have been acquired by any of them.
(f) None of the Issuer, the Company, their respective Affiliates, or
any person acting on its or their behalf will, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Securities or Shares
issuable upon conversion thereof under the Act.
(g) The Issuer and the Company will take all steps as the Initial
Purchasers may reasonably require to finalize the Terms and Conditions, the
terms of the Trust Deed and the Agency Agreement and the Offering Memorandum
(including the incorporation of the comments of the Initial Purchasers in the
Offering Memorandum), as soon as practicable hereafter and in addition publish
any information that the Representatives believe is necessary to be published in
order to enable investors and their investment advisors to make an informed
assessment of (i) the assets and liabilities, financial position, profits and
losses and prospects of the Company and its subsidiaries and (ii) the merits of
an investment in the Securities.
(h) The Issuer and the Company will arrange to deliver to you three
copies of the Offering Memorandum and listing particulars, and of any amendment
or supplement thereto, signed by an authorized officer of each of the Issuer and
the Company, which are required for the purpose of making the application to
list the Securities on the Luxembourg Stock Exchange (the "Luxembourg
Particulars"), and will deliver to you without charge such number of copies of
the Luxembourg Particulars as you may reasonably request. Each of the Issuer and
the Company agrees to take such other reasonable steps as may be required for
the purpose of obtaining a listing of the Securities on the Luxembourg Stock
Exchange on or prior to the Closing Date, provided that if such listing has not
been obtained by the Closing Date, each of the Issuer and the Company agrees
that it shall use its best endeavours to obtain a listing of the Securities on
the Luxembourg Stock Exchange or other stock exchange mutually acceptable to the
Representatives and the Company as soon as practicable following the Closing
Date.
(i) None of the Issuer, the Company, their respective Affiliates, or
any person acting on its or their behalf will engage in any directed selling
efforts with respect to the Securities; and each of them will comply with the
offering restrictions requirement of Regulation S. Terms used in this paragraph
have the meanings given to them by Regulation S.
13
(j) The Company will reserve and keep available at all times, free
of pre-emptive rights, the full number of Shares issuable upon conversion of the
Securities.
(k) Each of the Issuer and the Company will not for a period of 90
days following the Execution Time, without the prior written consent of
Citigroup, directly or indirectly, offer, sell, contract to sell, pledge,
otherwise dispose of, enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Issuer, the Company or any of their respective Affiliates or
any person in privity with the Issuer or the Company or any of their respective
Affiliates, file (or participate in the filing of) a registration statement with
the Commission in respect of, or establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act in respect of, any shares of capital stock of the
Company or any securities convertible into, or exercisable or exchangeable for,
shares of capital stock of the Company (other than the Securities and any
exercise or assignment of options granted by Huachen Automotive to certain
directors of the Company), or publicly announce an intention to effect any such
transaction; provided, however, that the Company may issue and sell Shares or
securities convertible into or exchangeable for Shares pursuant to any employee
stock option plan, stock ownership plan or dividend reinvestment plan of the
Company described in the Offering Memorandum and in effect at the Execution
Time, and the Company may issue Shares issuable upon the conversion of
securities or the exercise of warrants outstanding at the Execution Time and
described in the Offering Memorandum.
(l) The Issuer and the Company will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(m) Between the date hereof and the Closing Date, the Issuer and the
Company will not do or authorize any act or thing that would result in an
adjustment of the conversion price.
(n) The Issuer, failing whom the Company, agrees to pay the costs
and expenses relating to the following matters: (i) the preparation of the Trust
Deed and the Agency Agreement, the issuance of the Securities, the fees of the
Trustee and Agents and the issuance of the Shares upon conversion of the
Securities; (ii) the preparation, printing or reproduction of the Offering
Memorandum and each amendment or supplement to either of them; (iii) the
printing (or reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the Offering
Memorandum, and all amendments or supplements to either of them, as may, in each
case, be reasonably requested for use in connection with the offering and sale
of the Securities; (iv) the preparation, printing, authentication, issuance and
delivery of certificates for the Securities; (v) any stamp or transfer taxes in
connection with the original issuance and sale of the Securities; (vi) the
printing (or reproduction) and delivery of this Agreement, any blue sky
memorandum and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Securities; (vii) any
registration or qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states, Singapore, the Netherlands
and any other
14
jurisdictions specified pursuant to Section 5(d) (including filing fees and the
reasonable fees and expenses of counsel for the Initial Purchasers relating to
such registration and qualification); (viii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Issuer and the Company; and (ix) all other costs and
expenses incident to the performance by the Issuer and the Company of their
obligations hereunder.
(o) Each of the Issuer and the Company will, for a period of twelve
months following the Execution Time, furnish to the Representatives (i) all
reports or other communications (financial or other) generally made available to
stockholders, and deliver such reports and communications to the Representatives
as soon as they are available, unless such documents are furnished to or filed
with the Commission or any securities exchange on which any class of securities
of the Company is listed and generally made available to the public and (ii)
such additional information concerning the business and financial condition of
the Company as the Representatives may from time to time reasonably request
(such statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to
stockholders).
(p) Each of the Issuer and the Company will not take any action or
omit to take any action (such as issuing any press release relating to any
Securities without an appropriate legend) which may result in the loss by any of
the Initial Purchases of the ability to rely on any stabilization safe harbor
provided by the Financial Services Authority under the FSMA.
(q) Each of the Issuer and the Company confirms that it has
authorized the Representatives to make or cause to be made an application on its
behalf for the Securities to be listed on the Luxembourg Stock Exchange.
(r) Each of the Issuer and the Company will use its best endeavours
to maintain such listing on the Luxembourg Stock Exchange for as long as any
Security is outstanding. If, however, it is unable to do so, having used such
endeavours, or if the maintenance of such listing is unduly onerous, each of the
Issuer and the Company will instead use its best endeavours promptly to obtain
and thereafter to maintain a listing for the Securities on such other stock
exchange as it may (with the approval of the Representatives or, after the
Closing Date, the Trustee) decide or, failing such decision, as the
Representatives or, after the Closing Date, the Trustee may reasonably
determine.
(s) Each of the Issuer and the Company will notify the Initial
Purchasers promptly of any changes affecting any of the Issuer's and/or the
Company's representations, warranties, agreements and indemnities herein at any
time prior to payment being made to or for the account of the Issuer on the
Closing Date and each settlement date.
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Firm Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties of the Issuer and the Company contained herein at
the Execution Time, the Publication Date, the Closing Date and any settlement
date pursuant to Section 3 hereof, to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions hereof, to the
performance by the
15
Issuer and the Company of their obligations hereunder and to the following
additional conditions:
(a) The Offering Memorandum shall be prepared in form and content
similar to that prepared in connection with offerings of similar types of
securities;
(b) There shall not have come to the notice of the Initial
Purchasers any matter or event showing any of the representations, warranties
and/or undertakings of the Issuer or the Company under this Agreement to be
untrue or misleading in any material respect or there shall have not been any
material breach on the Company's part of any provision of this Agreement;
(c) The Issuer and the Company shall have requested and caused
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Bermuda counsel for the Issuer and the Company, to
furnish to the Representatives its opinion, in a form reasonably satisfactory to
the Representatives, dated the Closing Date and addressed to the
Representatives.
(d) The Issuer and the Company shall have requested and caused ▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, English and Hong Kong counsel for the Issuer and the Company, to
furnish to the Representatives its opinion, in a form reasonably satisfactory to
the Representatives, dated the Closing Date and addressed to the
Representatives.
(e) The Representatives shall have received from Linklaters, English
and Hong Kong counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Trust Deed, the Agency Agreement, the
Offering Memorandum (as amended or supplemented at the Closing Date) and other
related matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(f) Each of the Issuer and the Company shall have furnished to the
Representatives a certificate signed by (x) the Chairman of the Board and (y)
the principal financial or accounting officer of the Issuer and the Company,
dated the Closing Date, to the effect that the signers of such certificate have
carefully examined the Offering Memorandum, any amendment or supplement to the
Offering Memorandum and this Agreement and that:
(i) the representations and warranties in this Agreement are
true and correct on and as of the Closing Date with the same effect
as if made on the Closing Date, and the Issuer and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied hereunder at or prior to the
Closing Date; and
(ii) since the date of the most recent financial statements
included or incorporated by reference in the Offering Memorandum
(exclusive of any amendment or supplement thereto), there has been
no material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business.
16
(g) At the Publication Date and at the Closing Date, the Issuer and
the Company shall have requested and caused PricewaterhouseCoopers to furnish to
the Representatives letters, dated respectively as of the Publication Date and
as of the Closing Date, in form and substance satisfactory to the
Representatives.
(h) Subsequent to the Execution Time or the Publication Date or, if
earlier, the dates as of which information is given in the Offering Memorandum
(exclusive of any amendment or supplement thereto), there shall not have been
(i) any change or decrease specified in the letter or letters referred to in
paragraph (h) of this Section 6; or (ii) any change, or any development
involving a prospective change, in or affecting the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from transactions in the
ordinary course of business the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed with
the offering or delivery of the Securities as contemplated in the Offering
Memorandum (exclusive of any amendment or supplement thereto).
(i) Prior to the Execution Time, each of the Issuer and the Company
shall have furnished to the Representatives a letter substantially in the form
of Exhibit B hereto from each director of the Company and Huachen Automotive
addressed to the Representatives.
(j) The Company shall have caused the Shares initially issuable upon
conversion of the Securities to be approved for listing, subject to issuance and
to conditions imposed by the Hong Kong Stock Exchange which the Company does not
unreasonably object, on the Hong Kong Stock Exchange.
(k) The Luxembourg Stock Exchange having agreed to list the
Securities, subject only to the issue of the Global Bond, or the Representatives
(on behalf of the Initial Purchasers) being satisfied that such listing will be
granted.
(l) Prior to the Closing Date, each of the Issuer and the Company
shall have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Initial Purchasers, this Agreement and all obligations of the Initial
Purchasers hereunder may be cancelled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Issuer and the Company in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of counsel for the Initial Purchasers on the Closing
Date.
7. Indemnification. (a) Each of the Issuer and the Company jointly
and severally agrees to indemnify and hold harmless each Initial Purchaser, the
directors, officers and Affiliates of each Initial Purchaser and each person who
controls any Initial Purchaser within the
17
meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other U.S. federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any breach or alleged breach by the Issuer or the
Company of the representations, warranties or covenants given by the Issuer or
the Company herein or (ii) any untrue statement or alleged untrue statement of a
material fact to be contained in the Offering Memorandum or in any amendment or
supplement thereto or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by it in connection with defending any such loss, claim, damage,
liability or action; provided, however, that the Issuer and the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission to be made in the Offering
Memorandum, or in any amendment thereof or supplement thereto, in reliance upon
and in conformity with written information furnished to the Issuer and the
Company by or on behalf of any Initial Purchaser through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability that the Issuer or the Company may otherwise have.
(b) Each Initial Purchaser severally, and not jointly, agrees to
indemnify and hold harmless the Issuer, the Company, each of its directors, each
of its officers, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Issuer and the Company to each Initial Purchaser, but only
with reference to written information relating to such Initial Purchaser
furnished to the Issuer and the Company by or on behalf of such Initial
Purchaser through the Representatives specifically for inclusion in the Offering
Memorandum or in any amendment or supplement thereto. This indemnity agreement
will be in addition to any liability that any Initial Purchaser may otherwise
have. The Issuer and the Company acknowledge that only such information
furnished by the Initial Purchasers to the Issuer and the Company in writing
expressly for inclusion in the Offering Memorandum or in any amendment or
supplement thereto will be so included.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel (including local counsel) of the indemnifying party's choice
at the indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of any separate
counsel, other than local counsel if not appointed by the indemnifying party,
retained by
18
the indemnified party or parties except as set forth below); provided, however,
that such counsel shall be satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel (including
local counsel) to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
8. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities
which the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Securities set
forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities, and if such nondefaulting Initial Purchasers do not purchase all
the Securities, this Agreement will terminate without liability to any
nondefaulting Initial Purchaser, the Issuer or the Company. In the event of a
default by any Initial Purchaser as set forth in this Section 8, the Closing
Date shall be postponed for such period, not exceeding five Business Days, as
the Representatives shall determine in order that the required changes in the
Offering Memorandum or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Initial
Purchaser of its liability, if any, to the Issuer or the Company or any
nondefaulting Initial Purchaser for damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Issuer
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) there shall come to the notice of the Initial Purchasers any
matter or event showing any of the representations, warranties and/or
19
undertakings of the Issuer or the Company under this Agreement to be untrue or
misleading in any material respect or there shall have been any breach on the
Issuer's or the Company's part of any provision of this Agreement; (ii) trading
in the Company's Shares shall have been suspended by the U.S. Securities and
Exchange Commission or the Hong Kong Stock Exchange so as to make it impractical
to proceed with the offering or the delivery of the Securities or; (iii) trading
in securities generally on the New York Stock Exchange or the Hong Kong Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established on either of such exchanges; (iv) a banking moratorium shall have
been declared either by U.S. federal or New York State authorities; (v) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the sole judgment
of the Representatives, impractical or inadvisable to proceed with the offering
or delivery of the Securities as contemplated in the Offering Memorandum
(exclusive of any amendment or supplement thereto); or (vi) there shall have
occurred a change in U.S., Hong Kong, PRC or international financial political
or economic conditions or currency exchange rates or exchange controls as would,
in the judgment of the Representatives after consultation with the Company be
likely to prejudice materially the success of the proposed issue, sale or
distribution of the Securities, whether in the primary market or in respect of
dealings in the secondary market.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Issuer, the Company or their respective officers and of the Initial Purchasers
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Initial
Purchasers or the Issuer or the Company or any of the indemnified persons
referred to in Sections 7 hereof, and will survive delivery of and payment for
the Securities. The provisions of Section 7 hereof shall survive the termination
or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup General Counsel and confirmed to
Citigroup at Citigroup Centre, Canada Square, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
Attention: General Counsel; or, if sent to the Issuer, or, if sent to the
Company, will be mailed, delivered or telefaxed to ▇▇▇-▇▇▇▇-▇▇▇▇ and confirmed
to it at Suites 1602-5, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
attention of ▇▇. ▇▇ Xiao An.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
indemnified persons referred to in Section 8 hereof and their respective
successors, and, except as expressly set forth in Section 5(h) hereof, no other
person will have any right or obligation hereunder. The Contracts (Rights of
Third Parties) ▇▇▇ ▇▇▇▇ applies to this Section 12 and Section 7.
13. Jurisdiction. Each of the Issuer and the Company agrees that any
suit, action or proceeding against the Issuer or the Company brought by any
Initial Purchaser, the directors, officers, employees and agents of any Initial
Purchaser, or by any person who controls any Initial Purchaser, arising out of
or based upon this Agreement or the transactions contemplated hereby may be
instituted in the courts of England, and waives any objection which it may now
or hereafter have to the laying of venue of any such proceeding, and irrevocably
submits to the non-
20
exclusive jurisdiction of such courts in any suit, action or proceeding. Each of
the Issuer and the Company hereby appoints ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, London, now at ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ (attention: Dispute Resolution
Partner/Service of Process) as its authorized agent (the "Authorized Agent")
upon whom process may be served in any suit, action or proceeding arising out of
or based upon this Agreement or the transactions contemplated herein that may be
instituted in the courts of England, by any Initial Purchaser, the directors,
officers, employees, Affiliates and agents of any Initial Purchaser, or by any
person who controls any Initial Purchaser, and expressly accepts the
non-exclusive jurisdiction of any such court in respect of any such suit, action
or proceeding. Each of the Issuer and the Company hereby represents and warrants
that the Authorized Agent has accepted such appointment and has agreed to act as
said agent for service of process, and each of the Issuer and the Company agrees
to take any and all action, including the filing of any and all documents that
may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent shall be deemed, in
every respect, effective service of process upon the Issuer or, as the case may
be, the Company. Notwithstanding the foregoing, any action arising out of or
based upon this Agreement may be instituted by any Initial Purchaser, the
directors, officers, employees, Affiliates and agents of any Initial Purchaser,
or by any person who controls any Initial Purchaser, in any court of competent
jurisdiction in Bermuda. The parties hereto each hereby waive any right to trial
by jury in any action, proceeding or counterclaim arising out of or relating to
this Agreement.
14. Applicable Law. This Agreement, as to which time shall be of the
essence, will be governed by and construed in accordance with the laws of
England.
15. Currency. Each reference in this Agreement to U.S. dollars (the
"relevant currency"), including by use of the symbol "$", is of the essence. To
the fullest extent permitted by law, the obligation of the Issuer and the
Company in respect of any amount due under this Agreement will, notwithstanding
any payment in any other currency (whether pursuant to a judgment or otherwise),
be discharged only to the extent of the amount in the relevant currency that the
party entitled to receive such payment may, in accordance with its normal
procedures, purchase with the sum paid in such other currency (after any premium
and costs of exchange) on the Business Day immediately following the day on
which such party receives such payment. If the amount in the relevant currency
that may be so purchased for any reason falls short of the amount originally
due, the Issuer and the Company will pay such additional amounts, in the
relevant currency, as may be necessary to compensate for the shortfall. Any
obligation of the Issuer or, as the case may be, the Company not discharged by
such payment will, to the fullest extent permitted by applicable law, be due as
a separate and independent obligation and, until discharged as provided herein,
will continue in full force and effect.
16. Waiver of Immunity. To the extent that the Issuer or the Company
has or hereafter may acquire any immunity (sovereign or otherwise) from any
legal action, suit or proceeding, from jurisdiction of any court or from set-off
or any legal process (whether service or notice, attachment in aid or otherwise)
with respect to itself or any of its property, each of the Issuer and the
Company hereby irrevocably waives and agrees not to plead or claim such immunity
in respect of its obligations under this Agreement.
21
17. Waiver of Tax Confidentiality. Notwithstanding anything herein
to the contrary, purchasers of the Securities (and each employee, representative
or other agent of the Issuer and the Company) may disclose to any and all
persons, without limitation of any kind, the U.S. tax treatment and U.S. tax
structure of any transaction contemplated herein and all materials of any kind
(including opinions or other tax analyses) that are provided to the purchasers
of the Securities relating to such U.S. tax treatment and U.S. tax structure,
other than any information for which nondisclosure is reasonably necessary in
order to comply with applicable securities laws.
18. Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇. A person who is
not a party to this Agreement has no right under the Contracts (Rights of Third
Parties) ▇▇▇ ▇▇▇▇ to enforce any term of this Agreement except and to the extent
(if any) that this Agreement expressly provides for such Act to apply to any of
its terms.
19. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
20. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
21. Definitions. The terms that follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the U.S. Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in London or Hong Kong.
"Citigroup" shall mean Citigroup Global Markets Limited.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Issuer, the Company and the several Initial Purchasers.
Very truly yours,
GAINFAIR FINANCE LIMITED
BY: /s/ ▇▇▇▇▇▇ ▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇
Title: Director
BRILLIANCE CHINA AUTOMOTIVE HOLDINGS
LIMITED
BY: /s/ ▇▇▇▇▇▇ ▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇
Title: Director
The foregoing Agreement is hereby confirmed and accepted
as of the date first above written.
CITIGROUP GLOBAL MARKETS LIMITED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
23
SCHEDULE I
Principal Amount
of Firm
Securities to be
Initial Purchasers Purchased
---------------------------------------------------------------------- ----------------
Citigroup Global Markets Limited...................................... US$170,000,000
Total......................................... US$170,000,000
EXHIBIT A
Terms and Conditions
EXHIBIT B
[Letterhead of officer, director or major stockholder of the Company]
__________, ____
Citigroup Global Markets Limited
As Representative of the Initial Purchasers
Citicorp. Centre
Canada Square
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with a proposed
Purchase Agreement (the "Purchase Agreement") between Gainfair Finance Limited
(to be renamed as Brilliance China Automotive Finance Limited), a British Virgin
Islands corporation (the "Issuer"), Brilliance China Automotive Holdings
Limited, a Bermudan corporation (the "Company") and you as representatives of a
group of Initial Purchasers named therein, relating to an offering of Zero
Coupon Guaranteed Convertible Bonds Due 2008, which will be convertible into
ordinary shares, US$0.01 par value (the "Shares"), of the Company.
In order to induce you and the other Initial Purchasers to enter
into the Purchase Agreement, the undersigned will not, without the prior written
consent of Citigroup Global Markets Limited, directly or indirectly, offer,
sell, contract to sell, pledge or otherwise dispose of, enter into any
transaction which is designed to, or might reasonably be expected to, result in
the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the undersigned or any affiliate of the
undersigned or any person in privity with the undersigned or any affiliate of
the undersigned of, file (or participate in the filing of) a registration
statement with the U.S. Securities and Exchange Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the U.S. Securities
and Exchange Commission promulgated thereunder with respect to, any shares of
capital stock of the Company or any securities convertible into, or exercisable
or exchangeable for such capital stock, or publicly announce an intention to
effect any such transaction, for a period of 90 days after the date of the
Purchase Agreement, other than Shares disposed of as bona fide gifts approved by
Citigroup Global Markets Limited and any exercise or assignment of options
granted by Huachen Automotive Group Holdings Company Limited to certain
directors of the Company.
If for any reason the Purchase Agreement shall be terminated prior
to the Closing Date (as defined in the Purchase Agreement), the agreement set
forth above shall likewise be terminated.
Very truly yours,
By:___________________________________
Name:
Title:
