EXHIBIT 4(ll)
Dated 30 April 2004
PCCW LIMITED
and
ASIAN MOTION LIMITED
and
CITIGROUP GLOBAL MARKETS HONG KONG FUTURES AND SECURITIES
LIMITED
PLACING AGREEMENT
relating to shares in the capital of
▇▇▇▇ ▇▇▇▇ Gas Holdings Limited
Linklaters
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▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇
Telephone (▇▇▇) ▇▇▇▇ ▇▇▇▇
Facsimile (▇▇▇) ▇▇▇▇ ▇▇▇▇/2810 1695
Ref: DSY/L-068504-05-01
THIS AGREEMENT is made on 30 April 2004
BETWEEN:
(1) PCCW LIMITED, a company duly incorporated under the laws of Hong Kong
whose registered office is at ▇▇/▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, 979
King's Road, Quarry Bay, Hong Kong (the "Guarantor");
(2) ASIAN MOTION LIMITED, a company duly incorporated under the laws of
the British Virgin Islands whose registered office is at P.O. Box 957,
Offshore Incorporations Centre, Road Town, Tortola, the British Virgin
Islands (the "Vendor"); and
(3) CITIGROUP GLOBAL MARKETS HONG KONG FUTURES AND SECURITIES LIMITED, a
company duly incorporated under the laws of Hong Kong whose registered
office is at ▇▇/▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
("Citigroup").
WHEREAS:
(A) On 5 March 2004, the Guarantor conditionally agreed to sell or procure
the sale of the entire issued share capital of the Target and other
assets to the Company in consideration for the issue by the Company of
1,648,333,333 Shares and HK$3,590 million of convertible loan notes.
(B) Upon completion of the Disposal, the Vendor will be entitled to become
the beneficial owner of the Sale Shares. The Vendor will direct the
Company to issue the Sale Shares directly to the Placees (or their
nominees), such Sale Shares representing part of the Vendor's
entitlement to be issued with new Shares as consideration for the
Disposal.
(C) The Vendor has agreed to appoint Citigroup and Citigroup has agreed to
act as placing agent and underwriter for the purpose of procuring, as
agent of the Vendor, purchasers for (or, failing which, purchasing
itself) the Sale Shares (on the terms and subject to the conditions
herein contained).
NOW IT IS HEREBY AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, the following expressions shall, unless the context
requires otherwise, have the following meanings:
"Agreement" means this placing agreement (as may be amended or varied
from time to time by an agreement in writing duly executed by the
Parties);
"Associate" has the meaning ascribed thereto in the Listing Rules;
"Business Day" means any day (excluding a Saturday) on which banks are
generally open for banking business in Hong Kong;
"CCASS" means the Central Clearing and Settlement System operated by
Hong Kong Securities Clearing Company Limited;
"Circulars" means the DFG Circular and the PCCW Circular;
"Closing Date" means the Business Day immediately after Disposal
Completion, or such other date as the Vendor and Citigroup may agree
in writing;
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"Companies Ordinance" means the Companies Ordinance (Chapter 32 of the
Laws of Hong Kong) for the time being in force;
"Company" means ▇▇▇▇ ▇▇▇▇ Gas Holdings Limited, the shares of which
are listed on the Stock Exchange;
"Company Group" means the Company and its subsidiaries, and the
expression "member of the Company Group" shall be construed
accordingly;
"Completion" means completion of the Placing in accordance with
Clause 5;
"Conditions" means the conditions precedent for completion of the
Placing as set out in Clause 4.1;
"DFG Circular" means the circular to shareholders of the Company
dated 2 April 2004;
"Disposal" means the sale of the entire issued share capital of the
Target by the Vendor and other assets procured to be sold by the
Guarantor to the Company;
"Disposal Agreement" means the agreement dated 5 March 2004 between
the Guarantor and the Company in respect of the Disposal (as may be
amended, varied and supplemented in writing from time to time by the
parties thereto);
"Disposal Completion" means completion of the Disposal;
"Executive" means the Executive Director of the Corporate Finance
Division of the Securities and Futures Commission or any delegate for
the time being of the Executive Director;
"Group" means the Company Group or the Target Group (as the case may
be), and the expression "relevant member of the Group" shall be
construed accordingly;
"Hong Kong" means the Hong Kong Special Administrative Region of the
People's Republic of China;
"HK$" means Hong Kong dollars, the lawful currency of Hong Kong;
"Listing Rules" means the Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited for the time being in force;
"Parties" means the named parties to this Agreement and their
respective successors and permitted assigns, and "Party" means each
one of them;
"PCCW Circular" means the circular to the shareholders of the Guarantor
dated 26 March 2004;
"Placee" means any professional institutional and other investor whom
Citigroup will procure or has procured to purchase any of the Sale
Shares pursuant to its obligations under this Agreement;
"Placing" means the placing to the Placees by or on behalf of
Citigroup of the Sale Shares on the terms and subject to the
conditions set out in this Agreement;
"Placing Period" means the period commencing upon the execution of
this Agreement and ending at 4:00 pm (Hong Kong time) on the second
Business Day immediately before the Closing Date (or such later time
and date as the Vendor and Citigroup may agree in writing);
"Placing Price" means HK$2.65 per Sale Share;
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"Press Announcement" means the press announcement issued by the
Guarantor and the Company on 5 March 2004 in respect of, amongst other
things, the Disposal;
"Regulation S" means Regulation S under the Securities Act;
"Sale Shares" means the 237,000,000 Shares to be sold by the Vendor
and which are to be placed by Citigroup pursuant to this Agreement;
"Securities Act" means the US Securities Act of 1933, as amended;
"SFC" means the Securities and Futures Commission of Hong Kong;
"SFO" means the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong) for the time being in force;
"SGM" means the special general meeting to be convened by the Company
to consider and approve, amongst other things, the Disposal;
"Shares" means the shares of HK$0.10 each in the share capital of the
Company after completion of the Capital Reorganisation (as defined in
the DFG Circular);
"Stock Exchange" means The Stock Exchange of Hong Kong Limited;
"subsidiary" has the same meaning as in Section 2 of the Companies
Ordinance;
"Takeovers Code" means the Hong Kong Code on Takeovers and Mergers;
"Target" means Ipswich Holdings Limited;
"Target Group" means Target and its subsidiaries, and the expression
"member of the Target Group" shall be construed accordingly,
"Taxation" and "Tax" mean all forms of taxation whether of Hong Kong
or elsewhere in the world whenever imposed and all statutory,
governmental, state, provincial, local governmental or municipal
impositions, duties and levies and all penalties, charges, costs and
interests relating thereto;
"Unplaced Sale Shares" means any Sale Shares not purchased by the
Placees;
"US" or "United States" means the United States of America; and
"US$" means United States dollars, the lawful currency of the United
States.
1.2 Any reference to a document being "in the agreed form" means in the
form of the draft thereof signed for identification on behalf of the
Vendor and Citigroup with such alterations (if any) as may be agreed
between the Parties.
1.3 In this Agreement, references to any statute, statutory provision,
rule of the Takeovers Code or Listing Rules include a reference to
that statute, statutory provision or Listing Rules as may be from time
to time amended, extended or re-enacted.
1.4 In this Agreement, references to persons include references to bodies
corporate, references to singular include references to the plural and
vice versa.
1.5 In this Agreement, references to "the actual knowledge of the Vendor"
means "the actual knowledge of the Vendor and the Guarantor".
1.6 Headings in this Agreement are inserted for convenience only and shall
not affect the interpretation of this Agreement.
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2 APPOINTMENT OF CITIGROUP AND THE PLACING
2.1 Subject to the provisions of this Agreement, the Vendor hereby
appoints Citigroup as agent (to the exclusion of all others) and
Citigroup (relying on the representations, warranties and undertakings
herein contained and subject to the conditions as hereinafter
mentioned) agrees to act as agent for the Vendor during the Placing
Period to procure purchasers for the Sale Shares at the Placing Price
(or, failing such procurement, to purchase from the Vendor by itself
and/or its nominee at the Placing Price on the Closing Date any
Unplaced Sale Shares).
2.2 Notwithstanding Clause 2.1 but subject to Clause 2.8, at any time
Citigroup may elect that some or all of the Sale Shares are purchased
by it and/or its nominee as principal from the Vendor at the Placing
Price and, in that event, the Sale Shares may subsequently be sold by
Citigroup and/or its nominee (each a "Seller") as principal to
purchasers (the "Purchasers") at any price(s) as the Seller in its
discretion may determine, without being under any obligation to notify
the Vendor of the price(s) at which those Sale Shares are sold to
purchasers provided that: (i) any stamp duty payable in respect of
such sale by the Seller as principal shall be borne by the relevant
Seller; (ii) Citigroup shall not (and shall require its sub-placing or
sub-underwriting agents not to) place or sell any of the Sale Shares
to any person whom it knows to be a "connected person" (as defined in
the Listing Rules) of the Company or the Guarantor; and (iii) upon the
request of the Vendor, Citigroup shall provide forthwith to the Vendor
for submission to the SFC and/or the Stock Exchange the particulars of
the Purchasers and particulars of the transactions between the Seller
and the Purchasers, if the SFC or the Stock Exchange so requires.
2.3 The Vendor hereby confirms that this appointment confers on Citigroup
all powers, authorities and discretions on behalf of the Vendor which
are reasonably and properly necessary for, or reasonably incidental
to, the making of the Placing (including, without limiting the
foregoing, the completion of the relevant contract notes on behalf of
the Vendor and the submission of such contract notes and other
documents for stamping, if applicable) and hereby agrees to ratify and
confirm such matters which Citigroup may lawfully do in the proper
exercise of such powers, authorities and discretion in accordance with
this Agreement.
2.4 Subject to fulfilment of the Conditions, the Vendor shall sell the
Sale Shares free from all liens, charges and encumbrances and together
with all rights attaching to them as at the Closing Date, including
the right to receive all dividends declared, made or paid on or after
the Closing Date.
2.5 The choice of Placees for the Sale Shares shall be determined solely
by Citigroup. Citigroup shall not place any of the Sale Shares to any
person whom it knows to be a "connected person" (as defined in the
Listing Rules) of the Company or the Guarantor.
2.6 In the event that, as at the close of the Placing Period, there are
any Unplaced Sale Shares, Citigroup shall purchase, or procure its
nominees to purchase, on the Closing Date the Unplaced Sale Shares at
the Placing Price from which Citigroup shall be entitled to deduct all
the amounts it is entitled to be paid under Clause 7. If there are no
Unplaced Sale Shares as at the end of the Closing Date, the
underwriting obligations of Citigroup under Clause 2.1 and under this
Clause 2.6 shall cease.
2.7 If the trades are to be crossed on the Stock Exchange, Citigroup shall
be responsible for arranging a broker to report the transactions under
the Placing to the Stock Exchange. If the SFC or the Stock Exchange so
requires, Citigroup shall provide forthwith to the SFC
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and/or the Stock Exchange the particulars of the Placing (including,
but not limited to, the identities of the Placees), with a copy of such
information to be provided to the Vendor at the same time.
2.8 Immediately following the close of the Placing Period but in any event
no later than 10:00 am (Hong Kong time) on the Business Day prior to
the Closing Date, Citigroup shall give written instructions to the
Company through the Vendor regarding the issue and allotment of the
Sale Shares for Completion (or for completion of the purchase by
Citigroup or its nominee in respect of any Unplaced Sale Shares) and
provide the Company through the Vendor with such information as is
necessary for Completion (or for completion of the purchase by
Citigroup or its nominee in respect of any Unplaced Sale Shares).
3 PRESS ANNOUNCEMENT
The Guarantor hereby authorises Citigroup to release or cause to be
released for publication on its behalf, as soon as possible upon the
execution of this Agreement, a press announcement concerning the
Placing in the agreed form (together with such amendments as may be
required by the Stock Exchange).
4 CONDITIONS
4.1 Completion is conditional upon the fulfilment of the following
conditions:
4.1.1 the Listing Committee of the Stock Exchange granting listing
of and permission to deal in the Sale Shares (and such
listing and permission not being subsequently revoked prior
to the deposit of the Sale Shares into CCASS under Clause 5.2
hereof); and
4.1.2 completion of the Disposal in accordance with the terms
described in the Press Announcement.
The Vendor shall use all reasonable endeavours to procure the Company
to furnish such information, supply such documents, pay such fees and
do all such acts and things as may reasonably be required by Citigroup
and/or the Stock Exchange in connection with the fulfilment of the
Conditions. Citigroup shall provide the Vendor and the Company with
such necessary assistance as may be reasonably requested by the Vendor
and the Company respectively in connection with the fulfilment of the
Conditions.
4.2 If the Conditions are not fulfilled on or prior to 21 May 2004 (or
such later time as may be agreed between the Vendor and Citigroup),
the obligations and liabilities of Citigroup, the Guarantor and the
Vendor under the Placing shall be null and void and neither the
Vendor, the Guarantor nor Citigroup shall have any claim against any
of the others for costs, damages, compensation or otherwise (provided
that the Vendor shall reimburse Citigroup any reasonable legal fees
and out-of-pocket expenses which Citigroup shall be obliged to pay in
connection with the Placing).
4.3 The Vendor shall inform Citigroup in writing that the Disposal
Agreement has become unconditional as soon as practicable thereafter.
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5 COMPLETION OF THE PLACING
5.1 Completion shall take place at 3:30 pm (Hong Kong time) on the Closing
Date (or such other time and/or date as Citigroup and the Vendor may
agree in writing).
5.2 At or before 10:00 am (Hong Kong time) on the date of Disposal
Completion, the Vendor shall procure the delivery of the relative
share certificate(s) for the Sale Shares to Citigroup for deposit into
the account of the Vendor with Citigroup for the Sale Shares to be
held in CCASS. Further, the Vendor will, no later than 12:00 noon on
the Closing Date, provide to the Placing Agent all such further
documents and authorities as may be necessary or desirable to enable
the Placing Agent on behalf of the Vendor to effect transfer and
settlement of the Sale Shares at Completion as required and
contemplated by this Agreement.
5.3 The Vendor shall procure to be undertaken the actions set out in
Clause 5.2 at or prior to the times specified in that Clause.
Citigroup shall render appropriate and prompt assistance to the Vendor
and/or the Company for such purpose.
5.4 Citigroup (or its nominee or agent) shall, subject to the Vendor duly
discharging its obligations under Clause 5.2 at or prior to the times
specified in that Clause, make or procure the making of payment in
Hong Kong dollars by real time gross settlement in immediately
available funds to the Vendor before 3:30 pm (Hong Kong time) on the
Closing Date of an amount equivalent to the Placing Price multiplied
by the number of Sale Shares (less the amounts payable to Citigroup
referred to in Clause 7.1) to the bank account notified by the Vendor
to Citigroup at least two Business Days before the Closing Date.
5.5 The Vendor hereby acknowledges that in performing its functions under
Clause 2, Citigroup is authorised to appoint one or more sub-placing
or sub-underwriting agents or selling agents in connection with the
Placing in accordance with or in anticipation of the terms of this
Agreement. All fees of such agents shall be paid and borne by
Citigroup out of the commissions, costs, charges and expenses payable
by the Vendor under Clause 7. Citigroup may enter into any agreements
with any of the agents for such purpose, provided that Citigroup shall
remain responsible for any act or omission carried out by such agent
in the performance of Citigroup's obligations hereunder.
5.6 Any transaction carried out by Citigroup for the purpose of the
Placing under and in accordance with this Agreement on behalf of the
Vendor (save and except the underwriting obligations of Citigroup
referred to in Clauses 2.1 and 2.6 and matters associated therewith)
shall constitute a transaction carried out at the request of the
Vendor, as its agent and not in respect of or for the benefit of
Citigroup's own account and Citigroup shall not be responsible for any
loss or damage to any persons arising from any such transaction,
except to the extent any such loss or damage arises out of any fraud,
wilful default or negligence on the part of Citigroup and/or its
employees or agents or for any breach by Citigroup of its obligations
under this Agreement.
5.7 The Sale Shares shall be offered by Citigroup as agent for the Vendor
at the Placing Price (plus such Hong Kong stamp duty, brokerage, SFC
transaction levy, investor compensation levy and Stock Exchange
trading fee payable by purchasers) during the period from the date of
this Agreement up to the close of the Placing Period and Citigroup
hereby represents, warrants and undertakes with the Vendor that it
will comply with the relevant selling restrictions under applicable
laws and regulations in respect of the Placing.
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6 UNDERTAKINGS OF THE VENDOR
6.1 The Vendor shall (and it shall use all reasonable endeavours to
procure the Company to) make all appropriate disclosures pursuant to,
and will comply in all respects with, the Listing Rules, the Takeovers
Code, the SFO and other applicable laws and regulations in connection
with the Placing.
6.2 The Vendor shall (and it shall use all reasonable endeavours to
procure the Company to) promptly provide Citigroup, upon request, with
all such information known to it or which on reasonable enquiry ought
to be known to it relating to the Group or the Vendor or otherwise as
may be required by Citigroup in connection with the Placing for the
purpose of complying with any applicable law, regulation or direction
(including the establishment of any defence to any action under any of
the same, whether relating to due diligence or otherwise) or any
requirement of the Stock Exchange, the SFC or any other applicable
regulatory body.
6.3 The Vendor shall (and it shall use all reasonable endeavours to
procure the Company to) procure that particulars of every significant
new factor known to it which is capable of materially and adversely
affecting the Placing and which arises between the date hereof and the
Closing Date shall be promptly provided to Citigroup.
6.4 Without prejudice to the foregoing obligations, the Vendor undertakes
with Citigroup that it shall do all such other acts and things as may
be reasonably required to be done by it to carry into effect the
Placing in accordance with the terms of this Agreement.
6.5 The Vendor undertakes to Citigroup that (except for: (i) the sale of
the Sale Shares pursuant to, and any other transactions under, this
Agreement; (ii) compliance with the requirements of the Listing Rules
or compliance with the Guarantor's undertaking to the Stock Exchange
to ensure that sufficient Shares are "held by the public" (within the
meaning of Rule 8.08 of the Listing Rules); or (iii) any Shares
acquired by the Vendor after the Closing Date) for a period of three
months from the Closing Date, it will not and will procure that none
of its nominees and companies controlled by it (whether individually
or together and whether directly or indirectly) (for the avoidance of
doubt, excluding the Company) will:
6.5.1 offer, sell, contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of
(either conditionally or unconditionally, or directly or
indirectly, or otherwise) any Shares or any interests therein
beneficially owned or held by the Vendor or any securities
convertible into or exercisable or exchangeable for or
substantially similar to any such Shares or interests;
6.5.2 enter into any swap or similar agreement that transfers, in
whole or in part, the economic risk of ownership of such
Shares, whether any such transaction is to be settled by
delivery of Shares or such other securities, in cash or
otherwise; or
6.5.3 announce any intention to enter into or effect any such
transaction described in Clause 6.5.1 or 6.5.2,
without first having obtained the written consent of Citigroup.
6.6 The Vendor undertakes to Citigroup to use its best endeavours to
procure that, for a period of three months from the Closing Date, the
Company will not, save pursuant to: (1) the terms of any employee
share option scheme of the Company; or (2) bonus or scrip dividend or
similar arrangements which provide for the allotment of Shares in lieu
of the
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whole or part of a dividend on Shares of the Company in accordance
with its bye-laws; or (3) conversion of outstanding convertible bonds
or loan notes; or (4) the issue of new Shares as consideration and of
convertible notes by the Company under the Disposal Agreement; or (5)
any requirements under the Listing Rules in order to ensure that
sufficient Shares are "held by the public" (within the meaning of Rule
8.08 of the Listing Rules) following the Closing Date:
6.6.1 allot or issue, or offer to allot or issue, or grant any
option, right or warrant to subscribe (either conditionally
or unconditionally, or directly or indirectly, or otherwise)
any Shares or any interests in Shares or any securities
convertible into or exercisable or exchangeable for or
substantially similar to any Shares or interest in Shares; or
6.6.2 agree (conditionally or unconditionally) to enter into or
effect any such transaction with the same economic effect as
any of the transactions described in Clause 6.6.1; or
6.6.3 announce any intention to enter into or effect any such
transaction described in Clause 6.6.1 or 6.6.2,
without first having obtained the written consent of Citigroup.
7 PAYMENT OF FEES, COMMISSIONS AND EXPENSES
7.1 In consideration of the services of Citigroup in relation to the
Placing, the Vendor shall pay to Citigroup:
7.1.1 an underwriting commission, in Hong Kong dollars, of 1.5% of
the amount equal to the Placing Price multiplied by the
number of Sale Shares, which total amount Citigroup is hereby
authorised to deduct from the payment to be made by it to the
Vendor pursuant to Clause 5.4 (and out of which Citigroup
agrees to pay, or procure that Placees and purchasers of any
Unplaced Sale Shares pay, all brokerage and sub-underwriting
fees other than those specified in this Clause 7.1 and in
Clause 7.4, but for the avoidance of doubt, Citigroup shall
not be obliged to make any payments to any other agents or
sub-agents or advisers of the Vendor);
7.1.2 if applicable, seller's stamp duty at the rate of 0.1% of the
amount equal to the Placing Price per Sale Share multiplied
by the number of Sale Shares, which amounts Citigroup is
hereby authorised to deduct from the payments to be made by
it to the Vendor pursuant to Clause 5.4;
7.1.3 unless the Sale Shares are to be delivered in board lots or
through CCASS, all charges, fees and expenses of the
Company's branch share registrars in Hong Kong in effecting
the transfer of the Sale Shares, and the issue of
certificates therefor in board lots, to the Placees (or,
where applicable, Citigroup or its nominee), which amounts
Citigroup is hereby authorised to deduct from the payments to
be made by it to the Vendor pursuant to Clause 5.4 for the
purposes of paying on the Vendor's behalf such costs,
charges, fees and expenses; and
7.1.4 in respect of the Vendor as a seller, SFC transaction levy
and investor compensation levy at the prevailing applicable
rates (0.005% and 0.002% respectively) and Stock Exchange
trading fee at the prevailing applicable rate (0.005%) on the
amount equal to the Placing Price multiplied by the number of
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Sale Shares, which amounts Citigroup is hereby authorised to
deduct from the payments to be made by it to the Vendor
pursuant to Clause 5.4.
7.2 If this Agreement is terminated pursuant to Clause 10 or if for any
reason the Placing is not completed (save as a result of Citigroup's
or its agent's negligence, fraud, wilful default or breach of this
Agreement or of any applicable law), the Vendor shall remain liable to
Citigroup for the payment of all costs, charges and expenses referred
to in Clause 7.1.3 and for the stamp duty, trading fee, investor
compensation levy and transaction levy referred to in Clauses 7.1.2
and 7.1.4 to the extent already incurred.
7.3 The Vendor hereby acknowledges that, in addition to the commissions,
costs, charges and expenses referred to in Clause 7.1, Citigroup shall
be entitled to keep for its own account any brokerage fees or
commission that it may receive from the Placees.
7.4 Each of the Vendor, the Guarantor and the Company shall be liable for
the costs and expenses of its own legal and other professional
advisers and out-of-pocket expenses incurred in connection with the
Placing.
8 REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
8.1 In consideration of Citigroup entering into this Agreement and
agreeing to perform its obligations hereunder, the Vendor represents,
warrants and undertakes to Citigroup (save as specifically disclosed
in writing to Citigroup on or before the signing of this Agreement and
expressed to be for the purpose of disclosure against the following
warranties) as follows:
8.1.1 all facts stated in the Recitals are true and accurate;
8.1.2 subject to and upon completion of the Disposal, the Sale
Shares will be fully paid up and the Vendor will be entitled
to become the beneficial owner of the Sale Shares and the
Vendor has the necessary power and authority to enable it to
sell the Sale Shares to be sold by it hereunder free from any
lien, charge, option, warrant, pre-emptive right, or other
encumbrance or third party right whatsoever and together with
all rights attaching thereto as at the Closing Date;
8.1.3 the Vendor is duly incorporated and validly existing under
the laws of the place of its incorporation and the Vendor has
power under its constitutional documents to permit its entry
into this Agreement in the manner set out herein and this
Agreement (and its performance) has been duly authorised
(such authorisation remaining in full force and effect) and
executed by and constitutes legally binding obligations of
the Vendor, enforceable in accordance with its terms; save as
disclosed in the Press Announcement and to be disclosed in
the announcement in respect of the Placing, there is: (i) no
authorisation, consent or approval required for the purposes
of or as a consequence of the Placing or the Disposal either
from governmental, regulatory or other public bodies
(including, without limitation, the Stock Exchange) or
authorities or courts; and (ii) no authorisation, consent or
approval required for the purposes of or as a consequence of
the Placing or the Disposal from any third party pursuant to
any material contractual arrangement or other material
arrangement to which the Vendor is a party;
8.1.4 the Vendor shall ensure that none of its Associates shall
purchase any of the Sale Shares under the Placing;
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8.1.5 the financial information in relation to the Company Group
and the Target Group contained in the Circulars (except, for
the avoidance of doubt, the information relating to the
Target Group in connection with the proforma financials and
related adjustments and all financial analysis in the "Letter
from Goldbond" in the DFG Circular) is true, accurate and not
misleading in all material respects and has been prepared in
accordance with generally accepted accounting principles,
standards and practice in Hong Kong;
8.1.6 all statements of fact in relation to the Company Group and
the Target Group contained in the Circulars are true,
accurate and not misleading in all material respects, and all
statements of opinion, intention or expectation in relation
to the Guarantor, the Vendor, the Target Group or the Company
Group (except, for the avoidance of doubt, any views,
opinions, analysis, recommendations, interpretations,
intentions or expectations of the Company, its directors and
its advisers in connection with such statements in relation
to the Target Group) contained therein (if any) are truly and
honestly held and have been made on reasonable grounds after
due and careful consideration, and there is no other fact or
matter omitted therefrom the omission of which would make any
statement therein misleading in any material respect or which
is otherwise material in the context of the Placing;
8.1.7 the Vendor is not in possession of any non-public information
relating to the Company Group or the Target Group or their
respective businesses the release of which could adversely
affect the trading price of the Shares in any material
respect and, to the actual knowledge of the Vendor, there is
not in existence any material or information relating to the
Company Group which will be required to be disclosed by the
Company under the Listing Rules and/or the listing agreement
it made with the Stock Exchange;
8.1.8 all information (in either written or electronic form)
supplied by or on behalf of the Vendor, (but only to the
actual knowledge of the Vendor in relation to the Company
Group) the Company or any of their respective officers,
directors, employees or advisers, for the purpose of or in
connection with the Placing, and all information and records
which may be made available to the public by or with the
permission of the Vendor and (to the actual knowledge of the
Vendor in relation to the Company Group) the relevant member
of the relevant Group (including information contained in
annual reports, statutory filings and registrations) is and
was, when supplied or published, true, accurate and not
misleading;
8.1.9 save as disclosed in the Circulars (but only to the actual
knowledge of the Vendor in relation to the Company Group),
there is no claim, litigation, arbitration, prosecution or
other legal proceedings or investigation or enquiry in
progress or pending or threatened against any member of the
Company Group or the Target Group, nor is there any claim in
progress, pending or threatened or any facts or circumstances
which would give rise to a claim against any member of the
Company Group or the Target Group, which individually or in
the aggregate would have or have had a material adverse
effect on the condition, financial, trading or otherwise, or
the earnings, business affairs or business prospects (whether
or not arising in the ordinary course of business) of the
relevant Group as a whole or which is individually or in the
aggregate material for disclosure in the context of the
Placing;
-10-
8.1.10 save as disclosed in the Circulars (but only to the actual
knowledge of the Vendor in relation to the Company Group),
there has been no material adverse change in the condition,
financial or otherwise, or the earnings, net assets, business
affairs or business prospects (whether or not arising in the
ordinary course of business) of the Company Group as a whole
since 30 September 2003 or of the Target Group as a whole
since 31 December 2003;
8.1.11 save as disclosed in the Circulars (but only to the actual
knowledge of the Vendor in relation to the Company Group),
each member of the Company Group or the Target Group is duly
incorporated and validly existing under the laws of the place
of its incorporation and each member of the Company Group or
the Target Group has power to own its assets and to conduct
its business in the manner presently conducted in all
material respects and there has been no petition filed, order
made or effective resolution passed for the liquidation or
winding up of any member of the relevant Group which is
material to the relevant Group;
8.1.12 save as disclosed in the Circulars (but only to the actual
knowledge of the Vendor in relation to the Company Group),
each member of the Company Group or the Target Group has
obtained such authorisations and licences (if any) as are
required under the provisions of any applicable law in any
jurisdiction in which it carries on business and are material
in connection with the operation of its business and there is
no material breach by any member of the Company Group or the
Target Group of the provisions of any ordinance, statute or
regulation governing such authorisations or licences nor is
there any reason why any such authorisation or licence should
be withdrawn or cancelled;
8.1.13 save as disclosed in the Circulars (but only to the actual
knowledge of the Vendor in relation to the Company Group),
the Company is not in material breach of any rules,
regulations or requirements of the Stock Exchange or its
listing agreement made with the Stock Exchange and, other
than the relevant Conditions and subject to the satisfaction
of the conditions set out in clauses 4.1.1 to 4.1.17 of the
Disposal Agreement, all necessary consents (if any) which are
relevant (to maintain the listing status of the Company on
the Stock Exchange or to complete the Placing and the
Disposal in the manner contemplated) have been obtained from
the Stock Exchange and other authorities;
8.1.14 save as disclosed in the Circulars (but only to the actual
knowledge of the Vendor in relation to the Company Group),
there is no order, decree or judgement of any court or
governmental agency or regulatory body outstanding or
anticipated against any member of the Company Group or the
Target Group which may individually or in the aggregate have
or has had a material adverse effect upon the condition,
financial or otherwise or the earnings, business affairs or
business prospects (whether or not arising in the ordinary
course of business) of the relevant Group (taken as a whole)
or which is individually or in the aggregate material in the
context of the Placing and/or the Disposal;
8.1.15 save as disclosed in the Circulars (but only to the actual
knowledge of the Vendor in relation to the Company Group), no
member of the Company Group or the Target Group is in
material breach of or in default of any contract or agreement
which could reasonably be expected to have or has had a
material adverse effect upon the condition, financial or
otherwise or the earnings, business affairs or business
prospects (whether or not arising in the ordinary course of
business) of
-11-
the relevant Group (taken as a whole) or which is individually
or in the aggregate material in the context of the Placing
and/or the Disposal;
8.1.16 save as disclosed in the Circulars (but only to the actual
knowledge of the Vendor in relation to the Company Group), no
material outstanding indebtedness of any member of the
Company Group or the Target Group has become payable or
repayable by reason of any default of any member of the
relevant Group and no event has occurred or is impending
which may result in such indebtedness becoming payable or
repayable prior to its maturity date, in a demand being made
for such indebtedness to be paid or repaid or in any step
being taken to enforce any security for any such indebtedness
of any member of the relevant Group;
8.1.17 save as disclosed in the Circulars (but only to the actual
knowledge of the Vendor in relation to the Company Group), no
member of the Company Group or the Target Group is a party to
or under any obligation which is material and which is of an
unusual or unduly onerous nature; neither this Agreement nor
the Placing or the Disposal will constitute or give rise to a
breach of or default under any agreement or other arrangement
to which any member of the relevant Group is a party or give
rise to any rights of any third party in respect of any
assets of the relevant Group and which is individually or in
the aggregate material in the context of the Placing and/or
the Disposal;
8.1.18 each of the copy of: (i) the audited consolidated accounts of
the relevant member of the Target Group or the Company Group
for the financial year ended on 31 December 2003 or 31 March
2003 respectively; and (ii) the audited consolidated interim
accounts of the relevant member of the Company Group for the
six months ended 30 September 2003, which have been provided
to Citigroup prior to the execution of this Agreement (in
each case concerning the Company Group, only to the actual
knowledge of the Vendor in relation to the Company Group):
(i) have been prepared on a recognised and consistent
basis and in accordance with generally accepted
accounting principles, standards and practice in Hong
Kong; and
(ii) comply with all applicable laws, statutes and
regulations in all material respects and show a true
and fair view of the state of affairs of the relevant
Group and of its results for the period in question;
(iii) are not affected by any unusual or non-recurring items
and do not include transactions not normally
undertaken by the relevant member of the relevant
Group (save as disclosed in the said relevant
accounts);
(iv) make adequate provision for all Taxation whether in
Hong Kong or any other part of the world in respect of
all accounting periods ended on or before the
respective date for which the relevant member of the
relevant Group was then or might at any time
thereafter become or have been liable;
8.1.19 the Company is duly incorporated and validly existing under
the laws of the place of its incorporation and, subject to
the satisfaction of the conditions set out in clauses 4.1.1
to 4.1.17 of the Disposal Agreement, the Company has power
under its constitutional documents to permit the issue of the
Sale Shares to the Placees in the manner set out herein; save
as disclosed in the Circulars and subject to the
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satisfaction of the conditions set out in clauses 4.1.1 to
4.1.17 of the Disposal Agreement, there is: (i) no
authorisation, consent or approval required for the
purposes of or as a consequence of the Placing or the
Disposal either from governmental, regulatory or other
public bodies (including, without limitation, the Stock
Exchange) or authorities or courts; and (ii) no
authorisation, consent or approval required for the
purposes of or as a consequence of the Placing or the
Disposal from any third party pursuant to any material
contractual arrangement or other material arrangement to
which the Company or any other member of the Company Group
or the Vendor is a party;
8.1.20 save as disclosed in the Circulars and subject to the
satisfaction of the conditions set out in clauses 4.1.1 to
4.1.17 of the Disposal Agreement (but only to the actual
knowledge of the Vendor in relation to the Company Group),
the compliance by the Vendor or the Company with all the
relevant provisions of this Agreement, as well as the
consummation of the transactions herein contemplated, will
not conflict with or result in a breach or violation of, or
result in any third party consent being required under, the
constitutional documents of the Vendor or the Company, any of
the material terms or provisions of any material indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which any member of the Company Group, the
Target Group or the Vendor or by which any member of the
relevant Group or the Vendor is a party or to which any of
the material property or assets of any member of the relevant
Group or the Vendor is subject, or any applicable law, rule
or regulation, including, without limitation, the Listing
Rules or any order of any court or governmental agency or
body having jurisdiction over any member of the relevant
Group or the Vendor or the property or assets of any member
of the relevant Group or the Vendor;
8.1.21 save as disclosed in the Circulars, the interim report of the
Company for the six months ended 30 September 2003, and the
latest annual report and audited financial statements of the
Company or the Target (but only to the actual knowledge of
the Vendor in relation to the Company Group), no unissued
share capital of any member of the Company Group or the
Target Group is under any option (or agreed conditionally or
unconditionally to be put under any option) and no person has
any outstanding warrant, pre-emptive right or any other right
of any description to require shares to be allotted or issued
by any member of the relevant Group;
8.1.22 the Vendor has not been, is not and will not be at any time
engaged in any market misconduct or insider dealing for the
purposes of the SFO in connection with the Placing and the
related transactions entered into or to be entered into
pursuant to this Agreement; neither the Vendor nor any person
acting on the Vendor's behalf or under its control has taken
or will take, directly or indirectly, any action designed or
which was designed, or which constitutes or has constituted
or might reasonably be or have been expected to cause or
result in, stabilisation or manipulation of the price of any
Shares or other securities of the Company;
8.1.23 neither the Vendor nor (to the actual knowledge of the Vendor
in relation to the Company and its affiliates) the Company
nor any of their affiliates (as defined in Rule 405 under the
Securities Act), nor any person acting on behalf of any such
person (save as to Citigroup and its agents whose actions as
the Vendor's agent are not warranted in such terms): (i) has
engaged or will engage in any "directed
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selling efforts" (as defined in Regulation S) with respect
to the Sale Shares; or (ii) has offered or sold or will
offer or sell any security, has solicited or will solicit
offers to buy any security or has taken or will take any
other action under circumstances that would require
registration of any of the Sale Shares under the Securities
Act;
8.1.24 neither the Vendor and its affiliates nor, to the actual
knowledge of the Vendor, the Company nor any of its
affiliates (as defined in Rule 405 under the Securities Act),
nor any person acting on behalf of any such person (save as
to Citigroup and its agents whose actions as the Vendor's
agent are not warranted in such terms) has, directly or
indirectly, taken or will take any action designed to cause
or to result in, or that has constituted or which might
reasonably be expected to cause or result in, the
stabilisation in violation of applicable laws or manipulation
of the price of any security of the Company to facilitate the
sale or resale of the Sale Shares;
8.1.25 the Vendor and, to the actual knowledge of the Vendor, the
Company have complied and will comply with the "offering
restrictions" (as such term is defined in Regulation S);
8.1.26 subject to the fulfilment of the requirements as disclosed in
the Circulars and to be disclosed in the announcement in
respect of the Placing, the sale of the Sale Shares by the
Vendor pursuant to this Agreement will not result in any
breach of and will comply with all relevant provisions of the
Listing Rules and all other applicable laws, rules and
regulations;
8.1.27 save as disclosed in the Circulars and subject to the
satisfaction of the conditions set out in clauses 4.1.1 to
4.1.17 of the Disposal Agreement, the Company has the full
right, power and authority to allot and issue the Sale Shares
and all necessary authorisations, approvals, consents and
licences relating to the same have been, or will, prior to
Completion, be unconditionally obtained and are, or will,
immediately prior to Completion, be in full force and effect;
and
8.1.28 based on the information supplied to the Vendor by the
Company and to the actual knowledge of the Vendor, the
Company is a "foreign issuer" (as such term is defined in
Regulation S) which reasonably believes that there is no
"substantial US market interest" (as such term is defined in
Regulation S) in the Sale Shares or securities of the Company
of the same class as the Sale Shares.
8.2 Citigroup hereby represents, warrants and undertakes to the Vendor
as follows:
8.2.1 United States The Sale Shares have not been and will not be
registered under the Securities Act and may not be offered or
sold within the United States or to, or for the account or
benefit of, US persons except in accordance with Regulation S
or pursuant to an exemption from the registration
requirements of the Securities Act. Citigroup represents that
it has offered and sold the Sale Shares, and agrees that it
will offer and sell the Sale Shares, only in accordance with
Rule 903 of Regulation S. Accordingly, neither it, its
affiliates nor any persons acting on its or their behalf have
engaged or will engage in any directed selling efforts (as
such term is defined in Regulation S) with respect to the
Sale Shares, and it and they have complied and will comply
with the offering restrictions requirement of Regulation S.
Citigroup represents that 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
-14-
S) with respect to the distribution or delivery of the Sale
Shares, except with its affiliates or with the prior
written consent of the Company.
8.2.2 United Kingdom (i) It has not offered or sold and, prior to
the expiry of a period of six months from the Closing Date,
will not offer or sell any Sale Shares 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 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; and (ii) 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 Financial Services and Markets
▇▇▇ ▇▇▇▇ (the "FSMA")) in connection with the issue or sale
of any Sale Shares in circumstances in which section 21(1) of
the FSMA does not apply to the Company or the Vendor; and
(iii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relation to the Sale Shares in, from or otherwise involving
the United Kingdom.
8.2.3 Hong Kong (i) It has not offered or sold and will not offer
or sell in Hong Kong, by means of any document, any of the
Sale Shares other than to persons whose ordinary business is
to buy or sell shares or debentures, whether as principal or
agent, or in circumstances which do not constitute an offer
to the public within the meaning of the Companies Ordinance,
(except if permitted to do so under the securities laws of
Hong Kong); (ii) it has not issued and will not issue any
advertisement, invitation or document relating to the Sale
Shares, whether in Hong Kong or elsewhere, which is directed
at, or the contents of which are likely to be accessed or
read by, the public in Hong Kong (except if permitted to do
so under the securities laws of Hong Kong), other than with
respect to Sale Shares which are or are intended to be
disposed of only to persons outside Hong Kong or only to
"professional investors" within the meaning of the SFO and
any rules made thereunder; and (iii) neither itself,
Citigroup Global Markets Asia Limited nor any persons
controlling, controlled by or under the same control as
either of them (except in the capacity of an exempt principal
trader as such term is defined in the Takeovers Code)
acquired any voting rights in the Company during the period
commencing six months prior to the date of the Press
Announcement and ending on the date of the SGM which
constituted a "disqualifying transaction" for the purpose of
the Takeovers Code and it did not (and Citigroup Global
Markets Asia Limited and any persons controlling, controlled
by or under the same control as it did not) acquire or
dispose of any voting rights in the Company in the period
between the date of the Press Announcement and the date of
the SGM without the prior consent of the Executive.
8.2.4 Singapore Documents or materials in connection with the offer
or sale, or invitation for subscription or purchase, of the
Sale Shares may not be circulated or distributed, and the
Sale Shares may not be offered or sold, or be made the
subject of an invitation for subscription or purchase,
whether directly or indirectly: (i) to persons in Singapore
other than under circumstances in which such offer, sale or
invitation does not constitute an offer or sale, or
invitation for subscription or purchase, of the Sale Shares
to the public in Singapore; or (ii) to the public or any
member of the public in Singapore other than: (A) to an
institutional investor or
-15-
other person specified in Section 274 of the Securities and
Futures Act, Chapter 289 of Singapore (the "SFA"); (B) to a
sophisticated investor, and in accordance with the
conditions, specified in Section 275 of the SFA; or (C)
otherwise pursuant to, and in accordance with the
conditions of, any other applicable provision of the SFA.
8.2.5 Capacity Citigroup is duly incorporated and validly existing
under the laws of the place of its incorporation and
Citigroup has power under its constitutional documents to
permit its entry into this Agreement in the manner set out
herein and this Agreement (and its performance) has been duly
authorised (such authorisation remaining in full force and
effect) and executed by and constitutes legally binding
obligations of Citigroup, enforceable in accordance with its
terms; there is no authorisation, consent, approval or (save
as referred to in Clause 2.7) notification required for the
purposes of or as a consequence of the Placing either from
governmental, regulatory or other public bodies (including,
without limitation, the Stock Exchange) or authorities or
courts or from any third party pursuant to any contractual or
other arrangement to which Citigroup is a party.
8.2.6 Private Placing That:
(a) the Placing will be a private placement of securities
and not an offer to the public within the meaning of
the Companies Ordinance and will be effected by
telephone conversations leading to concluded
contracts;
(b) it will, whether before or after Completion, continue
to provide information regarding the Placees as
required by the Stock Exchange and/or the relevant
regulatory authority or governmental agency in Hong
Kong for delivery to the Stock Exchange and/or the
relevant regulatory authority or governmental agency
in Hong Kong; and
(c) it will procure that any sub-agent and/or
sub-underwriter appointed by Citigroup or any other
person through whom it may effect the Placing or offer
any Sale Shares shall observe the foregoing provisions
of this Clause 8.2.6.
8.2.7 Compliance with certain laws Subject as set out in this
Agreement, Citigroup confirms and undertakes to the Vendor
and the Guarantor:
(a) not to, directly or indirectly, engage in unlawful
price stabilisation in relation to the Placing; and
(b) not to:
(i) distribute or publish any documents (including,
without limitation to the foregoing, any
prospectus, form of application, offering
circular, advertisement or other offering
material or any report or other document
calculated to invite or lead to offers or
agreements being made to purchase any of the Sale
Shares); or
(ii) make any representations or statements in
relation to the Placing or offer any
representation or statement regarding the
Company, the Vendor or the Target Group or the
financial or business position or prospects of
the Company, the Vendor or the Target Group,
-16-
which was not or is not, at the time of making the
same, general knowledge in the marketplace in any
country or jurisdiction, except where such offer, sale
or delivery is made under circumstances that shall not
result in or constitute a breach of any applicable
laws and regulations or give rise to a requirement for
any prospectus to be published or filed or any
registration or qualification to be made or obtained
(other than such as are made or obtained by Citigroup)
in any such country or jurisdiction and all offers,
sales and deliveries of Sale Shares shall be made on
such terms.
8.3 In consideration of Citigroup entering into this Agreement and
agreeing to perform its obligations hereunder, the Guarantor
represents, warrants or undertakes to Citigroup that the Guarantor is
duly incorporated and validly existing under the laws of the place of
its incorporation and the Guarantor has power under its constitutional
documents to permit its entry into this Agreement in the manner set
out herein and this Agreement (and its performance) has been duly
authorised (such authorisation remaining in full force and effect) and
executed by and constitutes legally binding obligations of the
Guarantor, enforceable in accordance with its terms; save for those
disclosed in the Circulars and to be disclosed in the announcement in
respect of the Placing, there is no authorisation, consent, approval
or notification required for the purposes of or as a consequence of
the Placing either from governmental, regulatory or other public
bodies (including, without limitation, the Stock Exchange) or
authorities or courts or from any third party pursuant to any
contractual or other arrangement to which the Guarantor is a party.
8.4 The representations, warranties and undertakings set out in Clause 8
are given as at the date hereof and are true and accurate and in
force, and shall remain true and accurate and in force up to and
including the Closing Date as if given or made on such date, with
reference in each case to the facts and circumstances then subsisting.
The Vendor undertakes to notify Citigroup of any material matter or
event coming to its attention prior to Completion which shows or may
show any of the representations, warranties and undertakings set out
in Clause 8.1 to be or to have been untrue, inaccurate or misleading,
in any material respect. The Guarantor undertakes to notify Citigroup
of any material matter or event coming to its attention prior to
Completion which shows or may show any of the representations,
warranties and undertakings set out in Clause 8.3 to be or to have
been untrue, inaccurate or misleading, in any material respect.
Citigroup undertakes to notify the Vendor of any material matter or
event coming to its attention prior to Completion which shows or may
show any of the representations, warranties and undertakings set out
in Clause 8.2 to be or to have been untrue, inaccurate or misleading,
in any material respect.
8.5 Save as a result of Citigroup's or its agent's negligence, fraud,
wilful default or breach of this Agreement or any applicable laws,
rules or regulations, Citigroup shall not be responsible for and no
claim shall be made against Citigroup by the Company or the Vendor to
recover any loss, damage, cost, charge or expense which the Vendor or
the Company may suffer or incur by reason of or arising out of the
carrying out by Citigroup of any work pursuant to its rights or
obligations hereunder, or for any alleged insufficiency of the Placing
Price or otherwise in connection with the Placing.
8.6 The rights and remedies of each Party in respect of the
representations, warranties and undertakings referred to in Clause 8
shall not be affected by: (i) Completion; (ii) any investigation made
into the affairs of any Party or the relevant Group or any knowledge
held or gained of any such affairs by or on behalf of the other Party
or the relevant Group;
-17-
or (iii) any event or matter whatsoever, other than a specific and
duly authorised written waiver or release by the other Party.
8.7 Citigroup acknowledges and accepts that each of all warranties,
representations and undertakings provided by the Vendor set out in
Clauses 8.1.5 and 8.1.18 of this Agreement as they relate to the
Company, any member of the Company Group or their respective
directors, business, activities, assets, affairs and financial or
other information shall also be subject to and qualified by any and
all things specifically disclosed in the audited consolidated accounts
of the Company for the financial year ended on 31 March 2003, the
audited consolidated interim accounts of the Company for the six
months ended 30 September 2003 or the Disposal Agreement.
8.8 The Vendor undertakes to deliver a legal opinion (from Linklaters
addressed to Citigroup) in a form reasonably satisfactory to Citigroup
before the Closing Date and such opinion is solely in respect of the
enforceability of the guarantee by PCCW-HKT Telephone Limited dated 30
April 2004 in favour of Citigroup for the Vendor's obligations under
this Agreement.
9 INDEMNITY
9.1 The Vendor undertakes to indemnify Citigroup for itself and as trustee
for each of its agents, subsidiaries and associated companies involved
in connection with the Placing, their respective directors, officers,
employees and agents (duly authorised as permitted herein) and each
person who controls (including but not limited to controlling persons
within the meaning of Section 15 of the Securities Act or Section
20(a) of the US Securities Exchange Act of 1934) Citigroup or any of
its subsidiaries or associated companies (in this Clause 9, the
"Indemnified Parties") against all or any costs, expenses (including
legal fees reasonably incurred), fees, claims, actions, liabilities,
demands, proceedings or judgements (including, but not limited to, all
such losses, costs, charges, liabilities or expenses suffered or
reasonably incurred in disputing or defending any claims, actions,
demands, proceedings or judgements (in this Clause 9, the
"Proceedings") and/or in establishing its rights to be indemnified
pursuant to this Clause 9.1 and/or in seeking advice in relation to
any Proceedings) brought or established, or threatened to be brought
or established, against any of the Indemnified Parties by any Placee
or by any governmental agency, regulatory body or other person:
9.1.1 directly or indirectly arising out of or in connection with
any breach of any of the representations, warranties and
undertakings on the part of the Vendor contained in Clauses 6
and 8 (other than Clauses 8.2, 8.5 and 8.7); or
9.1.2 directly or indirectly arising out of or in connection with
the Placing or any transactions contemplated hereby which do
not in any such case arise from Citigroup's or its agent's
fraud, negligence or wilful default or breach of this
Agreement or of any applicable laws, rules or regulations.
9.2 The indemnities contained in Clause 9.1 shall remain in full force and
effect notwithstanding Completion in accordance with its terms and
shall extend to include all costs, charges and expenses which
Citigroup and/or any of the relevant Indemnified Parties may
reasonably incur or pay in disputing, settling or compromising any
matter to which the indemnity might relate and in establishing the
right to indemnification pursuant to this clause in respect of any
matter.
-18-
9.3 The Vendor shall not, without the prior written consent of Citigroup,
settle or compromise or consent to the entry of any judgement 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 relevant Indemnified Parties are actual
or potential parties to such claim or action) from any of the relevant
Indemnified Parties. Such prior written consent of Citigroup is not
required if the Vendor procures that such settlement, compromise or
consent includes an unconditional release of each relevant Indemnified
Party from all liability arising out of such claim, action, suit or
proceeding.
9.4 Citigroup shall not (and it shall procure that none of the Indemnified
Parties shall), without the prior written consent of the Vendor,
settle or compromise or consent to the entry of any judgement with
respect to any pending or threatened claim, action, suit or proceeding
in respect of which indemnification or contribution may be sought
hereunder. As soon as reasonably practicable after receipt by the
relevant Indemnified Parties of notice of commencement of any claim,
action or proceeding for which indemnification may be sought
hereunder, Citigroup shall (and it shall procure the relevant
Indemnified Parties to) deliver notice of such claim, action, suit or
proceeding to the Vendor, but the failure so to notify the Vendor will
not relieve it from any liability under Clause 9.1 unless and to the
extent such failure results in the forfeiture by the Vendor of
substantial rights and defences. Except to the extent that it would be
inappropriate due to actual or potential conflicting interests between
the parties (including situations in which there are one or more legal
defences available to the Indemnified Party that are different from or
additional to those available to the Vendor), the parties will
co-operate with each other (so far as each is reasonably able) to
procure the giving of all such information and render all such
assistance to one another as may reasonably be requested in connection
with such proceedings. Subject to the above, Citigroup shall (and it
shall procure the Indemnified Parties to) have due regard to any
reasonable request which the Vendor may make in relation to the
conduct of the defence of such proceedings. If any amount is received
by any of the Indemnified Parties in respect of any proceedings
otherwise than under this indemnity, Citigroup shall procure that the
relevant Indemnified Parties in receipt of any such amount repays to
the Vendor the corresponding portion of any amount paid under the
indemnity in Clause 9.1 which is referable to the matter giving rise
to the proceedings less any reasonable out-of-pocket costs and
expenses incurred by any Indemnified Party in recovering the same and
any tax suffered on the receipt (and subject to such repayment being
for no greater amount than the amount paid under the indemnity in
Clause 9.1 by the Vendor to the Indemnified Party in respect of such
matter).
9.5 The Vendor agrees that none of the Indemnified Parties will have any
liability (save for any obligations imposed on them under this
Agreement or under any applicable laws) to the other Parties, directly
or indirectly, arising out of or in connection with the Placing or any
transactions contemplated hereby.
9.6 The Vendor shall not, and shall use all reasonable endeavours to
procure that no member of the Company Group or the Target Group will,
at any time prior to or on the Closing Date do or omit to do anything
which may cause any of the representations, warranties and
undertakings set out in Clause 8.1 to be untrue in any material
respect.
9.7 Citigroup shall not, and shall procure that its agents, staff and
employees (as well as any other person or company who or which is
controlled by, a controller of, or under the same control as,
Citigroup) will not, at any time prior to or on the Closing Date do or
omit to do
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anything which may cause any of the representations, warranties and
undertakings set out in Clause 8.2 to be untrue in any material
respect.
10 TERMINATION
10.1 Notwithstanding anything contained in this Agreement, if at any time
prior to 3:30 pm (Hong Kong time) on the Closing Date (the "Cut-Off
Time"):
10.1.1 there develops, occurs or comes into force:
(i) any new law or regulation or any change in existing
laws or regulations; or
(ii) any significant or adverse change in the local,
national or international economic, political,
military or financial conditions, securities market
conditions or currency exchange rates or exchange
controls, including without limitation, any outbreak
or escalation of international hostilities,
declaration by the federal government of the United
States or the government of Hong Kong of a national
emergency or other calamity or crisis; or
(iii) the declaration of a general banking moratorium by the
US or Hong Kong authorities; or
(iv) any suspension of dealings in the Shares for a period
of over two consecutive trading days (other than as a
result of: (a) suspension of dealings for reason of
the Company's insufficient public float; or (b) the
Company announcing the Placing); or
(v) any moratorium, suspension or material restriction on
trading in shares or securities generally on the Stock
Exchange or the establishment of minimum prices for
shares or securities generally on the Stock Exchange,
in the case of each of (i) to (v), the effect of which, in the
opinion of Citigroup: (1) has or is reasonably likely to have
a material adverse effect on the financial position of the
Company Group and the Target Group taken as a whole; or (2) is
or would be materially adverse to the success of the Placing;
or (3) is so material and adverse as to make it impracticable
or inadvisable or inexpedient to proceed with the Placing on
the terms and in the manner contemplated herein;
10.1.2 any breach of any of the representations, warranties and
undertakings by the Vendor or the Guarantor set out in Clause
6 or Clause 8.1, 8.3 and 8.4 comes to the knowledge of
Citigroup, or any event occurs or any matter arises on or
after the date hereof and prior to the Closing Date which if
it had occurred or arisen before the date hereof would have
rendered any of such representations, warranties and
undertakings untrue or incorrect or there has been a breach
of, or failure to perform, any other provision of this
Agreement on the part of the Vendor (and in each of the
aforesaid cases, the effect of which, in the opinion of
Citigroup: (1) has or is reasonably likely to have a material
adverse effect on the financial position of the Company Group
and the Target Group taken as a whole; (2) is or would be
materially adverse to the success of the Placing; or (3) is
so material and adverse as to make it impracticable or
inadvisable or inexpedient to proceed with the Placing on the
terms and in the manner contemplated herein); or
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10.1.3 any change or any development involving a prospective change
in the general affairs, prospects, earnings, business,
properties, stockholders' equity or in the financial or
trading position of the Company Group and the Target Group
taken as a whole, which in the opinion of Citigroup is so
material and adverse as to make it impractical or inadvisable
or inexpedient to proceed with the Placing on the terms and
in the manner contemplated herein,
then and in any such case, Citigroup may terminate this Agreement
without liability to the Vendor and the Company by giving notice in
writing to the Vendor, which notice may be given at any time prior to
the Cut-Off Time.
10.2 Without prejudice to any other provisions of this Agreement, Citigroup
shall have the right exercisable at any time by notice in writing to
the Vendor to terminate this Agreement if any of the Sale Shares are
not delivered by or on behalf of the Vendor in accordance with Clause
5.2 (save where such non-delivery of the Sale Shares is as a result of
any non-performance of any provision of this Agreement by Citigroup or
any fraud, wilful default or negligence on the part of Citigroup
and/or its employees or agents).
10.3 In the event that Citigroup terminates this Agreement in accordance
with Clauses 10.1 or 10.2, all obligations of each of the Parties
under this Agreement shall cease and determine and no Party shall have
any claim against any other Party in respect of any matter arising out
of or in connection with this Agreement except for:
10.3.1 any antecedent breach of any obligation under this Agreement;
and
10.3.2 liabilities under Clauses 7.2 and 9.
11 ANNOUNCEMENTS
Save for the Press Announcement, the Circulars and the press
announcements in respect of the Placing, the results of the
extraordinary general meeting of the Guarantor and/or the ongoing
connected transactions with the group of companies of the Guarantor to
be released by the Company and/or the Guarantor, and save as required
by law or by the Stock Exchange or the SFC, the Vendor undertakes to
procure that no public announcement or communication to the press or
to the Stock Exchange concerning the Placing or any member of the
Company Group or the Target Group which is material in relation to the
Placing shall be made by or on behalf of the Vendor or the Company
between the date hereof and seven days after the Closing Date without
prior written approval from Citigroup as to the content, timing and
manner of making thereof (such approval not to be unreasonably
withheld or delayed). For the avoidance of doubt: (i) the press
announcement in respect of the Placing to be released by the Company
shall be approved by Citigroup before it is released (such approval
not to be unreasonably withheld or delayed); and (ii) the Guarantor,
the Vendor, the Company and other members of the Company Group and the
Target Group which are material in relation to the Placing shall be
free to make press releases (or make communication) to respond to
questions posed by the press on a basis consistent with the strategy
agreed in advance with Citigroup.
12 TIME OF THE ESSENCE
Any time, date or period mentioned in this Agreement may be extended
by mutual agreement between the Vendor and Citigroup but as regards
any time, date or period
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originally fixed or any date or period so extended as aforesaid, time
shall be of the essence.
13 GUARANTEE OF THE VENDOR'S OBLIGATIONS
13.1 In consideration of Citigroup entering into this Agreement and
agreeing to perform its obligations hereunder, the Guarantor:
13.1.1 undertakes to Citigroup that it will procure the due and
punctual performance by the Vendor of all of its obligations,
commitments and undertakings under or pursuant to this
Agreement (the "Vendor's Obligations"); and
13.1.2 guarantees to Citigroup the due and punctual performance by
the Vendor of the Vendor's Obligations and the due and
punctual payment by the Vendor of any moneys payable by the
Vendor pursuant to this Agreement or for any breach of this
Agreement (the "Vendor's Payments").
13.2 Vendor's Default
If and whenever the Vendor defaults for any reason whatsoever in the
performance or satisfaction of any Vendor's Obligation or any Vendor's
Payment, the Guarantor shall forthwith upon demand unconditionally
perform (or procure performance of) and satisfy (or procure the
satisfaction of) the Vendor's Obligation or the Vendor's Payment (as
the case may be) in regard to which such default has been made in the
manner prescribed by this Agreement and so that the same benefits
shall be conferred on Citigroup as it would have received if the
Vendor's Obligations or the Vendor's Payments (as the case may be) had
been duly performed and satisfied by the Vendor.
13.3 Continuing Guarantee
This guarantee is to be a continuing guarantee and accordingly is to
remain in force until all the Vendor's Obligations and Vendor's
Payments shall have been performed or satisfied.
14 NOTICES
14.1 All notices delivered hereunder shall be in writing and shall be
communicated to the following addresses:
If to Citigroup, to:
▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇▇ ▇▇▇▇
Attention: Legal Department
If to the Vendor, to:
▇▇/▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇'▇ ▇▇▇▇
-▇▇-
▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇▇ ▇▇▇▇
Attention: Company Secretary
If to the Guarantor, to:
▇▇/▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇'▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇▇ ▇▇▇▇
Attention: Company Secretary
14.2 Any such notice shall be served either by hand or by facsimile. Any
notice shall be deemed to have been served, if served by hand, when
delivered and if sent by facsimile, on receipt of confirmation of
transmission. Any notice received on a Sunday or public holiday shall
be deemed to be received on the next Business Day.
15 MISCELLANEOUS
15.1 Each Party undertakes with the other Parties that it shall execute and
perform and procure that there are executed and performed such further
documents and acts as the other Parties may reasonably require to give
effect to the provisions of this Agreement.
15.2 This Agreement constitutes the entire agreement and understanding
between the Parties in connection with the Placing. This Agreement
supersedes all previous agreements or understandings which shall cease
to have any further force or effect and no Party has entered into this
Agreement in reliance upon any representation, warranty or undertaking
which is not set out or referred to in this Agreement.
15.3 No variation of this Agreement shall be valid unless it is in writing
and signed by or on behalf of each of the Parties. The expression
"variation" shall include any variation, supplement, deletion or
replacement however effected.
15.4 This Agreement may be executed in any number of counterparts and by
the Parties on separate counterparts, each of which is an original but
all of which together constitute one and the same instrument.
15.5 No failure or delay by any Party in exercising any right or remedy
provided by law under or pursuant to this Agreement shall impair such
right or remedy or operate or be construed as a waiver or variation of
it or preclude its exercise at any subsequent time and no single or
partial exercise of any such right or remedy shall preclude any other
or further exercise of it or the exercise of any other right or
remedy.
15.6 Notwithstanding any other provisions in this Agreement, no Party shall
have any right to make any claim against the Guarantor in connection
with this Agreement unless legal proceedings for such claim commences
before the date which is two years after the Closing Date.
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16 APPLICABLE LAW AND JURISDICTION
This Agreement is governed by and shall be construed in accordance
with the laws of Hong Kong for the time being in force and the Parties
hereby irrevocably submit to the non-exclusive jurisdiction of the
Hong Kong courts.
-24-
IN WITNESS WHEREOF this Agreement has been entered into on the day and year
first before written.
SIGNED by )
for and on behalf of )
PCCW LIMITED )
in the presence of: )
SIGNED by )
for and on behalf of )
ASIAN MOTION LIMITED )
in the presence of: )
SIGNED by )
for and on behalf of )
CITIGROUP GLOBAL MARKETS )
HONG KONG FUTURES AND )
SECURITIES LIMITED )
in the presence of: )
-25-
Contents
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Clause Heading Page
1 DEFINITIONS AND INTERPRETATION.......................................1
2 APPOINTMENT OF CITIGROUP AND THE PLACING.............................4
3 PRESS ANNOUNCEMENT...................................................5
4 CONDITIONS...........................................................5
5 COMPLETION OF THE PLACING............................................6
6 UNDERTAKINGS OF THE VENDOR...........................................7
7 PAYMENT OF FEES, COMMISSIONS AND EXPENSES............................8
8 REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS.........................9
9 INDEMNITY...........................................................18
10 TERMINATION.........................................................20
11 ANNOUNCEMENTS.......................................................21
12 TIME OF THE ESSENCE.................................................21
13 GUARANTEE OF THE VENDOR'S OBLIGATIONS...............................22
14 NOTICES.............................................................22
15 MISCELLANEOUS.......................................................23
16 APPLICABLE LAW AND JURISDICTION.....................................24
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