EXHIBIT 4.15
Dated 22 April 2004
NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED
and
NAM TAI ELECTRONICS, INC.
and
THE EXECUTIVE DIRECTORS
(AS DEFINED HEREIN)
and
THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
and
THE INTERNATIONAL PLACING UNDERWRITERS
(AS DEFINED HEREIN)
INTERNATIONAL UNDERWRITING AGREEMENT
relating to an International Placing consisting
initially of 180,000,000 Shares (subject to adjustment) of nominal value
HK$0.01 each in
in the capital of
Nam Tai Electronic & Electrical Products Limited
LINKLATERS
10th Floor, Alexandra House
Chater Road
Hong Kong
Telephone (852) 2842 4888
Facsimile (852) 2810 8133/2810 1695
Ref :L-065038-05-001/ DWLT/CLLW/KKLC
TABLE OF CONTENTS
CONTENTS PAGE
1 INTERPRETATION.................................. 2
2 THE GLOBAL OFFERING............................. 11
3 THE INTERNATIONAL PLACING....................... 16
4 COSTS, EXPENSES, FEES AND COMMISSIONS........... 23
5 REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS.... 25
6 FURTHER UNDERTAKINGS............................ 27
7 INDEMNITY....................................... 35
8 CONTRIBUTION.................................... 38
9 TERMINATION IN EXCEPTIONAL CIRCUMSTANCES........ 39
10 GENERAL PROVISIONS.............................. 41
SCHEDULE 1 The International Placing Underwriters... 50
SCHEDULE 2 The Executive Directors.................. 51
SCHEDULE 3 The Reorganisation Documents............. 52
SCHEDULE 4 The Conditions Precedent Documents....... 53
SCHEDULE 5 Form of Deed Poll........................ 57
SCHEDULE 6 Professional Investor Treatment Notice... 59
SCHEDULE 7 The Warranties........................... 61
SIGNATURE PAGE...................................... 82
THIS AGREEMENT is made on 22 April 2004
BETWEEN:-
(1) NAM TAI ELECTRONIC & ELECTRICAL PRODUCTS LIMITED, a company incorporated
under the laws of the Cayman Islands whose registered office is at Century
Yard, Cricket Square, Hutchins Drive, P.O. Box 2681 GT, George Town, Grand
Cayman, British West Indies (the "COMPANY");
(2) NAM TAI ELECTRONICS, INC., a company incorporated under the laws of
British Virgin Islands whose registered office is at McW. Todman & Co.,
McNamara Chambers, PO Box 3342, Road Town, Tortola, British Virgin Islands
(the "SELLING SHAREHOLDER");
(3) THE EXECUTIVE DIRECTORS (as hereinafter defined);
(4) THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, a company
incorporated under the laws of Hong Kong whose registered office is at 1
Queen's Road Central, Hong Kong ("HSBC"); and
(5) THE INTERNATIONAL PLACING UNDERWRITERS (as defined herein).
RECITALS:-
(A) The Company was incorporated in the Cayman Islands with limited liability
on 9 June 2003 under the Companies Law and has been registered as an
oversea company in Hong Kong under Part XI of the Companies Ordinance on
19 March 2004;
(B) As at the date of this Agreement, the authorised share capital of the
Company is HK$20,000,000 divided into 2,000,000,000 Shares, of which
800,000,000 Shares have been allotted and issued and are fully paid or
credited as fully paid;;
(C) As at the date of this Agreement, the Selling Shareholder is the legal and
beneficial owner of 800,000,000 Shares representing 100% of the existing
issued share capital of the Company;
(D) The Company, the Selling Shareholder, the Executive Directors, HSBC and
the Public Offer Underwriters (as defined herein) entered into an
underwriting agreement dated 15 April 2004 providing for the underwriting
of the Public Offer by the Public Offer Underwriters subject to the terms
and conditions set out therein. Pursuant to the Public Offer, the Public
Offer Shares were offered to the public in Hong Kong;
(E) The Selling Shareholder has agreed to offer for sale the International
Placing Shares by way of placing to selected placees under the
International Placing at the Offer Price, and the International Placing
Underwriters have severally agreed to purchase or procure the purchase of
the International Placing Shares on and subject to the terms and
conditions hereinafter mentioned;
(F) The Selling Shareholder has agreed to grant to HSBC, exercisable at the
sole and absolute discretion of HSBC, the Over-allotment Option (as
defined herein) to require the Selling Shareholder to sell up to an
aggregate of 30,000,000 additional Shares, subject to and on the terms of
this Agreement;
(G) Immediately upon completion of the Global Offering (as defined herein) and
assuming the Over-allotment Option (as defined herein) will not be
exercised, the Selling Shareholder will own 600,000,000 Shares
representing 75% of the existing issued share capital of the Company or,
if the Over-allotment Option (as defined herein) expected to be granted is
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fully exercised, the Selling Shareholder will own 570,000,000 Shares
representing 71.25% of the existing issued share capital of the Company;
(H) The International Placing is to be made (i) outside the United States to
non-US persons within the meaning of and pursuant to Regulation S and (ii)
in the United States to qualified institutional buyers within the meaning
of and pursuant to Rule 144A or otherwise pursuant to an applicable
exemption;
(I) The Company, the Selling Shareholder and HSBC (on behalf of the Public
Offer Underwriters) have entered into the Price Determination Agreement on
the date hereof to record their agreement regarding the Offer Price;
(J) The International Placing Underwriters have severally agreed to procure
the purchase of, or failing which to purchase, the International Placing
Shares, on the terms and subject to the conditions set out herein;
(K) The Executive Directors are the executive directors of the Company;
(L) The Company has appointed Computershare Hong Kong Investor Service Limited
to act as its Hong Kong branch share registrar and transfer office;
(M) The Selling Shareholder has appointed HSBC to act as the sponsor in
respect of the listing of the Share on the Stock Exchange;
(N) The Selling Shareholder has appointed HSBC to act as the global
coordinator, the sponsor, lead manager and bookrunner of the Global
Offering;
(O) HSBC, on behalf of the Company, has submitted an application to the Stock
Exchange for listing of and permission to deal in the Shares in issue and
the Shares to be issued as described in the Final Offering Circular; and
(P) The Warrantors have agreed to give the representations, warranties and
undertakings contained in this Agreement.
IT IS HEREBY AGREED as follows:-
1 INTERPRETATION
1.1 DEFINITIONS
In this Agreement (including the Recitals and the Schedules), the
following expressions shall, unless defined otherwise or the context
otherwise requires, have the following meanings:-
"ACCOUNTS DATE" 31 December 2003;
"AFFILIATE" in relation to a particular company, any
company or other entity which is its holding
company or subsidiary, or any subsidiary of
its holding company or which directly or
indirectly through one or more
intermediaries, controls or is controlled by,
or is under common control with, the company
specified. For the purposes of this
definition, the term "control" (including the
terms "controlling", "controlled by" and
"under common control with") means the
possession, direct or indirect, of the power
to direct or cause the direction of the
management and policies of a person,
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whether through the ownership of voting
securities, by contract, or otherwise;
"AGREEMENT BETWEEN the agreement expected to be entered into on
INTERNATIONAL PLACING the date hereof between HSBC and the other
UNDERWRITERS" International Placing Underwriters governing
certain rights and obligations as between the
International Placing Underwriters in
relation to the International Placing;
"AGREEMENT BETWEEN the agreement expected to be entered into on
SYNDICATES" the date hereof between the Public Offer
Underwriters, the International Placing
Underwriters and HSBC governing certain
rights and obligations as between the parties
thereto in connection with the Global
Offering;
"APPLICATION FORMS" the application forms on which Public Offer
Applications may be made (as amended or
supplemented pursuant to Clause 6.1.1(x) or
Clause 6.1.1(x) of the Public Offer
Underwriting Agreement (as the case may be));
"APPROVALS" includes all approvals, sanctions, orders,
franchises, clearances, declarations,
qualifications, licences, permits,
certificates, consents, permissions,
authorisations, filings and registrations and
"APPROVAL" shall be construed accordingly;
"ARTICLES OF ASSOCIATION" the articles of association of the Company
conditionally adopted on 8 April 2004;
"BOARD" the board of directors of the Company;
"BROKERAGE" brokerage per Share of 1% of the Offer Price;
"BROKERAGE, FEE AND the Brokerage, the Trading Fee, the
LEVIES" Transaction Levy and the Investor
Compensation Levy;
"BUSINESS DAY" a day that is not a Saturday, Sunday or
public holiday in Hong Kong;
"CCASS" the Central Clearing and Settlement System
established and operated by Hong Kong
Securities Clearing Company Limited;
"CLOSING" with respect to the initial International
Placing Shares prior to any adjustments under
Clause 2.3, the time when payment and
delivery is to made under Clause 3.5.8 after
all the Conditions have been fulfilled or
waived in accordance with this Agreement,
which is expected to be 8:00 a.m. on the
Force Majeure Expiry Date or otherwise as
agreed between the Company, the Selling
Shareholder and HSBC (on behalf of the
International Placing Underwriters), and with
respect to the Over-allotment Shares, the
date and time determined by HSBC (on behalf
of the International Placing Underwriters)
for the payment and delivery thereof as
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referred to in Clause 2.3.(iv);
"CLOSING DATES" the Placing Closing Date and the Option
Closing Dates and "CLOSING DATE" shall mean
any or a specific one of such dates;
"CLOSING TIME OF 8:00 a.m. on the Force Majeure Expiry Date;
DELIVERY"
"COMPANIES LAW" the Companies Law, Cap. 22 (Law 3 of 1961, as
consolidated and revised) of the Cayman
Islands;
"COMPANIES ORDINANCE" the Companies Ordinance (Chapter 32 of the
Laws of Hong Kong) (as amended);
"COMPLETION" the latest of (i) the last Closing Date for
delivery of the Offer Shares; and (ii) the
expiry, release or settlement in full of the
Over-allotment Option; and (iii) the
completion of the distribution of the Offer
Shares as determined by HSBC;
"CONDITIONS" the conditions set out in Clause 2.1.1;
"CONDITIONS PRECEDENT the documents listed in Schedule 4;
DOCUMENTS"
"CONTINUING BUSINESSES" the businesses carried out by the Group in
the three years ended 31 December 2003,
except for the Discontinued Businesses;
"DEED OF INDEMNITY" the deed of indemnity dated 15 April 2004
provided in connection with the Global
Offering entered into between the Selling
Shareholder and the Company;
"DEED POLL" the deed poll the form of which is set out in
Schedule 5;
"DIRECTORS" the directors of the Company whose names are
set out in the section headed "Directors,
Senior Management and Staff" in the Final
Offering Circular;
"DISCONTINUED BUSINESSES" the Group's discontinued businesses related
to the trading and manufacturing of essential
components and subassemblies for mobile
phones in the three years ended 31 December
2003;
"ENCUMBRANCE" any pledge, charge, lien, mortgage, security
interest, claim, pre-emption rights, equity
interest, third party rights or interests or
rights similar to the foregoing;
"EXERCISE NOTICE" written notice upon which the Over-allotment
Option may be exercised pursuant to Clause
2.3.2(iv);
"EXECUTIVE DIRECTORS" the executive directors of the Company whose
names and addresses are listed in Schedule 2;
"FINAL OFFERING CIRCULAR" the final offering circular dated the date of
this Agreement to be issued by the Company in
connection with the International Placing in
the agreed form (as amended or
4
supplemented pursuant to Clause 6.1.1(x));
"FORCE MAJEURE EXPIRY the Listing Date;
DATE"
"FORMAL NOTICE" the formal notice dated 16 April 2004
published by the Company in connection with
the Public Offer (as amended or supplemented
pursuant to Clause 6.1.1(x) or clause
6.1.1(x) of the Public Offer Underwriting
Agreement);
"GLOBAL OFFERING" the Public Offer and the International
Placing;
"GOVERNMENTAL AUTHORITY" any public, regulatory, taxing,
administrative or governmental, agency or
authority (including, without limitation, the
Stock Exchange, the SFC), other authority and
any court at the national, provincial,
municipal or local level;
"GROUP" the Company, NTSZ and NTIC or, where the
context so requires, in respect of the period
before the Reorganisation is completed, the
Continuing Businesses operated by NTSZ and
the businesses operated by NTIC and the sales
co-ordination and marketing activities
operated by NTEEPHK;
"HK DOLLAR" AND "HK$" Hong Kong dollar, the lawful currency of Hong
Kong;
"HOLDING COMPANY" has the meaning ascribed thereto in section 2
of the Companies Ordinance; "HONG KONG" the
Hong Kong Special Administrative Region of
the PRC;
"INDEMNIFIED PARTY" has the meaning ascribed thereto in Clause
7.1;
"INDEMNIFYING PARTY" has the meaning ascribed thereto in Clause
7.1;
"INTERNATIONAL PLACING" the conditional placing of the International
Placing Shares on and subject to the terms of
the Placing Documents and this Agreement;
"INTERNATIONAL PLACING the 180,000,000 Shares initially to be
SHARES" offered for sale by the Selling Shareholder
and placed under the International Placing,
subject to adjustment pursuant to Clauses
2.3, 2.4 and 2.5;
"INTERNATIONAL PLACING the underwriters whose names and addresses
UNDERWRITERS" are listed in columns (I) and (II) in
Schedule 1, being the several underwriters of
the International Placing;
"INTERNATIONAL PLACING in relation to each International Placing
UNDERWRITING COMMITMENT" Underwriter, the maximum number of
International Placing Shares set out opposite
its name in column (IV) in Schedule 1 and, in
the event that the Over-allotment Option is
exercised, in column (V) in Schedule 1, which
such International Placing Underwriter has
agreed to purchase or to procure purchasers
for, pursuant to the terms of this Agreement,
subject to adjustment as set out in Clause
2.5;
"INVESTOR COMPENSATION SFC investor compensation levy per Share of
0.002% of the
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LEVY" Offer Price;
"LAWS" include all laws, rules, statutes,
ordinances, regulations, guidelines,
opinions, notices, circulars, orders,
judgements, decrees or rulings of any
Governmental Authority and "LAW" includes any
one of them;
"LISTING COMMITTEE" the listing committee of the Stock Exchange;
"LISTING DATE" the day on which dealings in the Shares
commence on the Stock Exchange;
"LISTING RULES" the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited;
"MACAO" the Macao Special Administrative Region of
the PRC;
"NTEEPHK" Nam Tai Electronic & Electrical Products
Limited, a company incorporated under the
laws of Hong Kong (which has recently changed
its name to Nam Tai Trading Company Limited
[name in chinese]);
"NTIC" Nam Tai Investments Consultant (Macao
Commercial Offshore) Company Limited, a
company incorporated in Macao and wholly
owned by the Company;
"NTSZ" [name in chinese](Namtai Electronic
(Shenzhen) Company Limited), a wholly foreign
owned enterprise established under the laws
of the PRC and wholly owned by the Company;
"OFFER DOCUMENTS" the Public Offer Documents and the Placing
Documents;
"OFFER PRICE" $[-], being the final Hong Kong dollar price
per Offer Share (exclusive of the Brokerage,
Fee and Levies) at which the International
Placing Shares are to be offered for sale
under the Global Offering in accordance with
the provisions of Clause 3;
"OFFER SHARES" the Public Offer Shares and the International
Placing Shares;
"OPERATIVE DOCUMENTS" the Reorganisation Documents, the Deed of
Indemnity, the Price Determination Agreement,
the Receiving Banker Agreement, the
Registrars Agreement and the Sub-Registrars
Agreement;
"OPTION CLOSING" the payment for and delivery of
Over-allotment Shares are to be made pursuant
to any exercise of the Over-allotment Option,
to be determined by HSBC (on behalf of the
International Placing Underwriters) pursuant
to Clause 2.3.2(iv);
"OPTION CLOSING DATE" the date of Option Closing;
"OPTION TIME OF DELIVERY" has the meaning ascribed thereto in Clause
2.3.2(iv);
6
"OVER-ALLOTMENT OPTION" the option granted by the Selling Shareholder
to HSBC, exercisable by HSBC, to require the
Selling Shareholder to sell up to an
aggregate of 30,000,000 additional Shares
pursuant to Clause 2.3 of this Agreement;
"OVER-ALLOTMENT SHARES" the additional Shares which the Selling
Shareholder may be required to sell at the
Offer Price pursuant to the Over-allotment
Option;
"PENSION SCHEMES" the provident fund, retirement and welfare
fund schemes of members of the Group as
described in the section headed "Directors,
Senior Management and Staff" of the
Prospectus;
"PLACING CLOSING" the payment for and delivery of the initial
International Placing Shares (other than the
Over-allotment Shares) are to be made
pursuant to Clause 3.5.8;
"PLACING CLOSING DATE" the date of Placing Closing;
"PLACING DOCUMENTS" the Preliminary Offering Circular and the
Final Offering Circular;
"PLACING MONEYS" moneys received from placees in respect of
the International Placing;
"PORTAL" The Portal(SM) Market of The Nasdaq
Stock Market;
"PRC" the People's Republic of China (which shall
for the purposes of this Agreement, unless
otherwise indicated, exclude Hong Kong, Macao
and Taiwan);
"PRE-IPO SHARE OPTION the share option scheme adopted by the sole
SCHEME" shareholder of the Company by way of written
resolution dated 22 March 2004, the principal
terms of which are summarised in the
paragraph headed "Pre-IPO Share Option
Scheme" in Appendix V of the Prospectus;
"PRELIMINARY OFFERING the preliminary offering circular dated 12
CIRCULAR" April 2004 issued by the Company and
circulated to the International Placing
Underwriters and selected prospective placees
in connection with the International Placing
(as amended or supplemented pursuant to
Clause 6.1.1(x));
"PRICE DETERMINATION the agreement entered into on the date hereof
AGREEMENT" between the Company, the Selling Shareholder
and HSBC (on behalf of the Public Offer
Underwriters) to record their agreement of
the Offer Price;
"PROFESSIONAL INVESTOR the notice from HSBC in the form set out in
TREATMENT NOTICE" Schedule 6;
"PROPERTY VALUERS" LCH (Asia-Pacific) Surveyors Limited;
"PROSPECTUS" the prospectus dated 16 April 2004 issued by
the Company in connection with the Public
Offer (as amended or supplemented pursuant to
Clause 6.1.1(x) or clause 6.1.1(x)
7
of the Public Offer Underwriting Agreement
(as the case may be));
"PROSPECTUS DATE" 16 April 2004, being the date of issue of the
Prospectus;
"PUBLIC OFFER" the offer of the Public Offer Shares for sale
on and subject to the terms and conditions
set out in the Public Offer Documents;
"PUBLIC OFFER APPLICATIONS" valid applications for Public Offer Shares
made on Application Forms (including, without
limitation and for the avoidance of doubt,
applications made on white Application Forms
by HKSCC Nominees Limited on behalf of
applicants who have given electronic
application instructions) and accompanied by
cheques or cashier's orders for the full
amount payable on application which are
honoured on first (or, at HSBC's option,
subsequent) presentation and otherwise in
compliance with the terms of the Public Offer
Documents;
"PUBLIC OFFER DOCUMENTS" the Prospectus and the Application Forms;
"PUBLIC OFFER SHARES" the 20,000,000 Shares initially being offered
for sale by the Selling Shareholder pursuant
to the Public Offer, as adjusted in
accordance with clauses 2.3 and 2.4 of the
Public Offer Underwriting Agreement;
"PUBLIC OFFER OVER- a situation where the aggregate number of
SUBSCRIPTION" Public Offer Shares being applied for under
Public Offer Applications is greater in
number than the aggregate number of the
initial Public Offer Shares;
"PUBLIC OFFER UNDERWRITERS" the underwriters identified in the Public
Offer Underwriting Agreement as being the
several underwriters of the Public Offer;
"PUBLIC OFFER the underwriting agreement dated 15 April
UNDERWRITING AGREEMENT" 2004 between the Company, the Selling
Shareholder, the Executive Directors, HSBC
and the Public Offer Underwriters relating
the Public Offer;
"PUBLIC OFFER UNDER- has the meaning attributed thereto in clause
SUBSCRIPTION" 3.4.2 of the Public Offer Underwriting
Agreement;
"QUALIFIED INSTITUTIONAL has the meaning attributed thereto in Rule
BUYERS" OR "QIBS" 144A;
"RECEIVING BANKER" HSBC, in its capacity as the bank appointed
to hold the application monies received in
connection with the Public Offer pursuant to
the Receiving Banker Agreement;
"RECEIVING BANKER the agreement dated 15 April 2004 and entered
AGREEMENT" into by the Selling Shareholder, HSBC
Nominees (Hong Kong) Limited and HSBC;
"REFERENCE INTERNATIONAL the amount obtained by A x (PV + OPV) where
A = the Offer
8
PLACING AMOUNT" Price, PV = the initial number of
International Placing Shares and OPV = the
number of Over-allotment Shares to be sold by
the Selling Shareholder pursuant to the
exercise of the Selling Shareholder's
Over-allotment Option and allocated to the
International Placing in accordance with
Clause 2.3.2(i);
"REGISTRARS" Bank of Butterfield International (Cayman)
Ltd., being the principal share registrar of
the Company;
"REGISTRARS AGREEMENT" the registrars and transfer agent agreement
dated 16 April 2004 between the Company and
the Registrars;
"REGULATION D" Regulation D promulgated under the US
Securities Act;
"REGULATION S" Regulation S promulgated under the US
Securities Act;
"REORGANISATION" the corporate reorganisation of the Group in
preparation for the listing of the Shares on
the Stock Exchange as defined and described
in the Final Offering Circular;
"REORGANISATION DOCUMENTS" the documents referred to in Schedule 3;
"REPORTING ACCOUNTANTS" Deloitte Touche Tohmatsu;
"RULE 144A" Rule 144A promulgated under the US Securities
Act;
"SELLING AGENT" any sub-agent (including, without limitation,
any US Selling Agent) on behalf of the
Company appointed pursuant to the provisions
of Clause 3.4.3;
"SFC" the Securities and Futures Commission of Hong
Kong;
"SHARE OPTION SCHEME" the share option scheme conditionally adopted
by the sole shareholder of the Company at an
extraordinary general meeting held on 8 April
2004, the principal terms of which are
summarised in the paragraph headed "Share
Option Scheme" in Appendix V of the
Prospectus;
"SHARE(S)" ordinary shares of nominal value HK$0.01 each
in the share capital of the Company;
"STOCK BORROWING the stock borrowing and lending agreement of
AGREEMENT" even date in connection with Shares between
the Selling Shareholder and HSBC;
"STOCK EXCHANGE" The Stock Exchange of Hong Kong Limited;
"SUB-REGISTRARS" Computershare Hong Kong Investor Services
Limited, being the Hong Kong branch share
registrar of the Company;
"SUB-REGISTRARS the branch registrar agreement dated 16 April
AGREEMENT" 2004 between the Company and the
Sub-Registrars;
"SUBSIDIARIES" the subsidiaries of the Company named in the
accountants' report, the text of which is set
out in Appendix I to the Final Offering
Circular, and "SUBSIDIARY" means any or a
specific
9
one of them;
"SUBSIDIARIES" has the meaning ascribed thereto in the
Companies Ordinance;
"TIME OF DELIVERY" the Closing Time of Delivery or an Option
Time of Delivery (as the case may be);
"TRADING FEE" Stock Exchange trading fee per Share of
0.005% of the Offer Price;
"TRANSACTION" any transaction, act, event, omission or
circumstance existing of whatever nature;
"TRANSACTION LEVY" SFC transaction levy per Share of 0.005% of
the Offer Price;
"UNDERWRITERS" the Public Offer Underwriters and the
International Placing Underwriters;
"UNDERWRITING DOCUMENTS" this Agreement, the Price Determination
Agreement and the Public Offer Underwriting
Agreement;
"US" AND "UNITED STATES" the United States of America, its
territories, its possessions, any State of
the United States and the District of
Columbia;
"US EXCHANGE ACT" the United States Securities Exchange Act of
1934 (as amended or supplemented);
"US INVESTMENT COMPANY ACT" the United States Investment Company Act of
1940 (as amended or supplemented);
"US PERSON" has the meaning assigned thereto under
Regulation S;
"US SECURITIES ACT" the United States Securities Act of 1933 (as
amended or supplemented);
"US SELLING AGENT(S)" broker dealer(s) registered under Section 15
of the US Exchange Act who are identified as
Selling Agent(s) in the US in relation to the
International Placing;
"VERIFICATION NOTES" the verification notes dated 15 April 2004
prepared by Linklaters in connection with the
verification of the Prospectus;
"WARRANTIES" the representations, warranties, agreements
and undertakings to be given by the
Warrantors in Schedule 7;
"WARRANTORS" the Company and the Selling Shareholder.
1.2 OTHER INTERPRETATION
In this Agreement, unless otherwise specified:-
1.2.1 references to "RECITALS", "SECTIONS", "CLAUSES", "PARAGRAPHS" and
"SCHEDULES" are to recitals, sections, clauses, paragraphs of and
schedules to this Agreement;
10
1.2.2 a reference to any statute or statutory provision shall be construed
as a reference to the same as it may have been, or may from time to
time be, amended, modified or re-enacted;
1.2.3 references to a "COMPANY" shall be construed so as to include any
company, corporation or other body corporate, whenever and however
incorporated or established;
1.2.4 references to a "PERSON" shall be construed so as to include any
individual, firm, company, government, state or agency of a state or
any joint venture, association or partnership (whether or not having
separate legal personality);
1.2.5 references to writing shall include any modes of reproducing words
in a legible and non-transitory form;
1.2.6 references to times of the day are, unless otherwise specified, to
Hong Kong time;
1.2.7 headings to Clauses, sections and Schedules are for convenience only
and do not affect the interpretation of this Agreement;
1.2.8 the Schedules form part of this Agreement and shall have the same
force and effect as if expressly set out in the body of this
Agreement, and any reference to this Agreement shall include the
Schedules;
1.2.9 references to documents being "IN AGREED FORM" are to the form of
the draft or final or executed version thereof signed for
identification by or on behalf of the Company and HSBC with such
alterations as may be agreed between the Company and HSBC, but such
documents in agreed form do not form part of this Agreement;
1.2.10 references to "best knowledge, information, belief and/or
awareness" of any person or similar terms shall be treated as
including but not limited to any knowledge, information, belief and
awareness which the person would have had if such person had made
due and careful enquiries; and
1.2.11 words in the singular shall include the plural (and vice versa) and
words importing one gender shall include the other two genders.
2 THE GLOBAL OFFERING
2.1 CONDITIONS PRECEDENT
2.1.1 OBLIGATIONS CONDITIONAL
The obligations of the International Placing Underwriters under this
Agreement are conditional upon:-
(i) HSBC, on behalf of the International Placing Underwriters,
receiving from the Company and the Selling Shareholder (as the
case may be):
(a) the Conditions Precedent Documents listed in Part A of
Schedule 4 (other than those Conditions Precedent
Documents already received by HSBC (on behalf of the
Public Offer Underwriters) pursuant to Clause 2.1.1 of
the Public Offer Underwriting Agreement) in form and
substance satisfactory to HSBC not later than 5:00 p.m.
on the date hereof; and
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(b) the Conditions Precedent Documents listed in Part B of
Schedule 4 in form and substance satisfactory to HSBC
not later than 5:00 p.m. on the Business Day before each
Closing;
(ii) the Listing Committee granting listing of and permission to
deal in the Shares in issue and to be issued pursuant to the
Pre-IPO Share Option Scheme and the Share Option Scheme
(subject only to despatch of the share certificates in respect
thereof and such other normal conditions acceptable to the
Company and HSBC, on behalf of the Underwriters) not later
than 16 May 2004 and such listing and permission not
subsequently having been revoked prior to the commencement of
dealings in the Shares on the Stock Exchange;
(iii) the Price Determination Agreement being executed and delivered
by the parties thereto prior to or simultaneously with the
execution of this Agreement;
(iv) the Public Offer Underwriting Agreement, to the extent that it
is subject to any specific conditions, becoming unconditional
in accordance with its terms (other than any condition for the
other Underwriting Documents to become unconditional) and not
having been terminated in accordance with its terms or
otherwise;
(v) the Warranties being true and accurate on and as of the date
of this Agreement and the dates on which they are deemed to be
repeated under this Agreement (as though and they had been
given and made on such date by reference to the facts and
circumstances then subsisting); and
(vi) each of the Company, the Selling Shareholder and the Executive
Directors having complied with this Agreement and satisfied
all the obligations and conditions on its part under this
Agreement to be performed or satisfied on or prior to the
respective times and dates by which such obligations must be
performed or conditions met.
2.1.2 UNDERTAKING BY THE COMPANY, THE SELLING SHAREHOLDER AND THE
EXECUTIVE DIRECTORS
Each of the Company, the Selling Shareholder and the Executive
Directors undertakes to use its best endeavours to procure that the
Conditions are fulfilled by the times and dates stated therein, and
in particular shall furnish such information, supply such documents,
pay such fees, give such undertakings and do all such acts and
things as may be required by HSBC (on behalf of the International
Placing Underwriters), the Stock Exchange, the SFC and any relevant
Governmental Authority in connection with the application for the
listing of and permission to deal in the Shares on the Stock
Exchange or the fulfilment of the Conditions.
2.1.3 HSBC'S WAIVER
HSBC may, for itself and on behalf of the other International
Placing Underwriters, in its sole and absolute discretion, by giving
notice to the Company and the other International Placing
Underwriters on or before the respective latest times on which the
relevant Condition may be fulfilled:-
12
(i) extend the deadline for the fulfilment of any or all
Conditions by such number of days and/or hours and/or in such
manner as HSBC may determine on behalf of the International
Placing Underwriters but in any event no later than 16 May
2004; or
(ii) waive (conditionally or unconditionally) the Conditions under
Clauses 2.1.1(i), (v) or (vi) on behalf of the International
Placing Underwriters.
2.1.4 TERMINATION
If any of the Conditions is not fulfilled, or waived in accordance
with Clause 2.1.3, this Agreement (in the case of any non-fulfilment
or non-waiver on or prior to the International Placing Closing Date)
or the relevant unperformed obligations in connection with any
undelivered Over-allotment Shares (in the case of any non-fulfilment
or non-waiver after the International Placing Closing Date and on or
prior to the relevant Option Closing Date) shall cease and terminate
with immediate effect except that the provisions of Clause 9.2 shall
apply.
2.2 STABILIZATION
2.2.1 HSBC is hereby appointed as stabilizing manager in connection with
the Global Offering and may (but shall not be obliged) and not as
agent for the Company or the Selling Shareholder, to the extent
permitted by applicable Law of Hong Kong or elsewhere, over allocate
or effect any other transactions (in the market or otherwise and
whether in Hong Kong or elsewhere) with a view to supporting the
market price of the Shares at a level higher than that which might
otherwise prevail in the open market for a limited period after the
commencement of trading in the Shares ("STABILIZING ACTION").
2.2.2 HSBC may, in its sole and absolute discretion, appoint any of its
Affiliates or any other person(s) to be its agent(s) for the
purposes of taking any stabilizing action, with such authorities and
rights as HSBC has pursuant to Clause 2.2.1.
2.2.3 Stabilizing action, if taken, may be discontinued at any time.
2.2.4 Any liability, expenses and any loss resulting from such stabilizing
action shall be borne, and any profit arising from such stabilizing
action shall be beneficially retained, by HSBC.
2.2.5 Each of the Warrantors and the International Placing Underwriters
(other than HSBC) undertakes to the International Placing
Underwriters (including HSBC) that it will not take or cause or
authorise any other person to take, and the Warrantors shall cause
their respective affiliates, agents and/or subsidiaries not to take,
directly or indirectly, any stabilizing action or any action which
is designed to or which constitutes or which might be expected to
cause or result in the stabilization or manipulation, in violation
of applicable Laws, of the price of any security of the Company,
provided that the granting of the Over-allotment Option hereunder
shall not constitute a breach of this Clause 2.2.5.
2.3 OVER-ALLOTMENT OPTION
2.3.1 The Selling Shareholder hereby grants to HSBC an option, exercisable
at the sole and absolute discretion by HSBC, to require the Selling
Shareholder to sell up to an additional 30,000,000 Shares to such
person(s) as HSBC shall direct at the
13
Offer Price (plus the Brokerage, Fee and Levies) per Share, subject
to the provisions of Clause 2.3.2.
2.3.2 The exercise of the Over-allotment Option is subject to the
following provisions:
(i) the Over-allotment Shares to be sold pursuant to an exercise
of the Over-allotment Option shall be deemed to be
International Placing Shares (subject to rounding by HSBC in
its sole and absolute discretion);
(ii) the Over-allotment Option shall be exercisable up to and
including at 5:00 p.m. on the date which is 30 days after the
last day for the lodging of applications under the Public
Offer;
(iii) the Over-allotment Option may be exercised in whole or in
part, for any number of times and can be used solely to cover
over-allocations in the International Placing;
(iv) the Over-allotment Option may be exercised upon issuance of
the Exercise Notice by HSBC to the Selling Shareholder setting
out (i) the number of Shares under the Over-allotment Option
as to which HSBC is then exercising the option; (ii) the time
and date of payment for and delivery of such Over-allotment
Shares (each such time and date in connection with exercise of
the Over-allotment Option, an "OPTION TIME OF DELIVERY"); and
(iii) the manner in which the share certificates in respect of
such Over-allotment Shares shall be issued;
(v) each Option Time of Delivery shall be determined by HSBC and,
unless HSBC and the Selling Shareholder agree in writing, such
time and date:
(a) shall not be earlier than two or later than five
Business Days after the date of receipt of the relevant
Exercise Notice;
(b) shall not be earlier than the Closing Time of Delivery;
and
(c) shall not be later than the date which is 30 days after
the last time for the lodging of applications under the
Public Offer;
(vi) any Over-allotment Shares sold pursuant to this Clause 2.3
shall for all purposes (including underwriting commissions and
expenses) be deemed to be delivered under and with the benefit
of all rights, representations, warranties and undertakings
applying under this Agreement to the International Placing
Shares, and HSBC shall, for all such purposes, be deemed to
have agreed to procure purchasers for, or failing which to
itself purchase, any such Over-allotment Shares and the
International Placing Underwriting Commitment of HSBC shall be
deemed to be increased by the number of such Over-allotment
Shares;
(vii) to the extent the Over-allotment Option is not previously
exercised, they may be surrendered and terminated at any time
upon notice by HSBC to the Selling Shareholder.
2.4 CLAWBACK FROM INTERNATIONAL PLACING TO PUBLIC OFFER
2.4.1 It is agreed and understood that pursuant to the Agreement Between
Syndicates and the Public Offer Underwriting Agreement, the
aggregate number of the initial Public Offer Shares shall be
increased in the following manner: if the number of
14
Shares validly applied for in Accepted [comment - not defined]
Public Offer Applications represents (i) 15 times or more but less
than 50 times (ii) 50 times or more but less than 100 times or (iii)
100 times or more, of the number of Shares initially available for
purchase under the Public Offer, then Shares will be reallocated to
the Public Offer from the International Placing, so that the total
number of Shares available under the Public Offer will be increased
to such number as represents approximately 30% (in the case of (i))
or 40% (in the case of (ii)) or 50% (in the case of (iii)),
respectively, of the number of Offer Shares initially available
under the Global Offering (before taking into account any exercise
of the Over-allotment Option).
2.4.2 In the event of a reallocation of Offer Shares from the
International Placing to the Public Offer pursuant to Clauses 2.4.1,
the relevant number of International Placing Shares shall be
withdrawn from the International Placing and made available as
additional Public Offer Shares offered for sale pursuant to the
Public Offer, provided always that:
(i) for the avoidance of doubt, any such reallocation shall have
no effect on the obligations of the Selling Shareholder to pay
the combined underwriting and management commission and
selling concession due to the International Placing
Underwriters which shall be determined pursuant to Clause 4.1;
and
(ii) subject as aforesaid and to the terms and conditions set out
in the Public Offer Underwriting Agreement, any Shares which
are reallocated from the International Placing to the Public
Offer shall be allocated in such manner as HSBC may, in its
sole and absolute discretion, determine.
2.5 ALLOCATION OF PUBLIC OFFER UNDER-SUBSCRIPTION TO INTERNATIONAL PLACING
2.5.1 If a Public Offer Under-Subscription shall occur, HSBC, at its sole
and absolute discretion, may (but shall not be obliged to)
reallocate all or any of the Public Offer Shares comprised in any
such Public Offer Under-Subscription from the Public Offer to the
International Placing and make such Offer Shares available for
purchase as additional International Placing Shares.
2.5.2 Subject as aforesaid and to the terms and conditions of the Placing
Documents, any Shares which are reallocated from the Public Offer to
the International Placing shall be allocated in such manner as HSBC
shall, in its sole and absolute discretion, determine.
2.5.3 Such reallocated Shares shall be allocated to such International
Placing Underwriters and in such manner as HSBC shall in its sole
and absolute discretion determine and in such amounts as HSBC and
such International Placing Underwriters shall agree, and the
International Placing Underwriting Commitment of each such
International Placing Underwriter shall be increased by the number
of reallocated Shares allocated to it and such International Placing
Underwriter agrees to take up or procure placees for such
reallocated Shares.
2.5.4 The Selling Shareholder shall pay combined underwriting and
management commission and selling concession to the International
Placing Underwriters in respect of Shares reallocated from the
Public Offer to the International Placing in accordance with Clause
4.1.
15
2.6 APPOINTMENT OF SPONSOR, GLOBAL COORDINATOR, BOOKRUNNER, LEAD MANAGER AND
INTERNATIONAL PLACING UNDERWRITERS
2.6.1 Subject to the terms and conditions of this Agreement:
(i) the Company hereby appoints, to the exclusion of all others,
HSBC as its sponsor in respect of the listing of the Shares on
the Stock Exchange; and
(ii) the Selling Shareholder hereby appoints, to the exclusion of
all others, HSBC as the global coordinator, bookrunner and
lead manager to manage the Global Offering; and
(iii) the Selling Shareholder hereby appoints, to the exclusion of
others, the International Placing Underwriters as underwriters
for the International Placing,
and HSBC and other International Placing Underwriters relying on the
representations, warranties, agreements, undertakings and
indemnities herein contained and subject as hereinafter mentioned,
accept their respective appointments hereunder.
2.6.2 Each such appointment is made on the basis, and upon terms, that the
appointee is irrevocably authorised to delegate all or any of its
relevant rights, duties, powers and discretions in such manner and
on such terms or subject to such conditions as it thinks fit (with
or without formality and without prior notice of any such delegation
being required to be given to the Company or the Selling
Shareholder) to any one or more of its Affiliates.
2.6.3 Each of the Company and the Selling Shareholder hereby confirms that
the foregoing appointments confer on each appointee and its
Affiliates all rights, powers, authorities and discretions on behalf
of the Company and the Selling Shareholder which are necessary for,
or incidental to, the performance of its roles contemplated by this
Agreement and hereby agree to ratify and confirm everything which
such appointee and its Affiliates have done or shall do in the
exercise of such rights, powers, authorities and discretions.
3 THE INTERNATIONAL PLACING
3.1 OFFER AND UNDERWRITING OF INTERNATIONAL PLACING SHARES
3.1.1 The Selling Shareholder agrees to offer and sell the International
Placing Shares for purchase by such placees as the International
Placing Underwriters shall direct or to the International Placing
Underwriters (as the case may be) at the Offer Price (plus the
Brokerage, Fee and Levies), payable in full in HK dollars, on and
subject to the terms and conditions set out in the Final Offering
Circular and this Agreement and, on and subject to the terms and
conditions of this Agreement and in reliance upon the Warranties and
the other representations, warranties, undertakings and indemnities
given by the Warrantors or any of them under this Agreement, each of
the International Placing Underwriters agrees severally (but not
jointly or jointly and severally) to procure the purchase of, or
failing which the International Placing Underwriter will itself
purchase, from the Selling Shareholder the maximum number of
International Placing Shares set forth opposite the name of such
International Placing Underwriter in column (IV) in Schedule 1 and,
in the event that the Over-allotment Option is duly exercised, that
portion of the number
16
of Over-allotment Shares in respect of which the Over-allotment
Option shall then have been exercised, up to but not exceeding the
number of Over-allotment Shares in column (V) in Schedule 1.
3.1.2 The International Placing Shares are to be offered on terms, inter
alia, that:
(i) the International Placing Shares have not been and will not be
registered under the US Securities Act and may not be offered
or sold within the US except in reliance on Rule 144A or
otherwise pursuant to an applicable exemption and outside the
US to non-US Persons in reliance on Regulation S;
(ii) all offers and sales of the International Placing Shares in
the US shall be made by US Selling Agents and otherwise in
compliance with the US Securities Act, the US Exchange Act and
applicable Laws.
3.1.3 The obligations of the International Placing Underwriters determined
pursuant to this Clause 3.1 may be rounded, as determined by HSBC in
its sole and absolute discretion, to avoid fractions and odd lots.
The determination of HSBC shall be final and conclusive.
3.2 HSBC'S OPTION
If one or more International Placing Underwriters incur an obligation
under Clause 3.1.1 to take up International Placing Shares, HSBC shall
have the right (but shall not be obliged) to purchase or procure placees
(which may include any other International Placing Underwriter(s)) to
purchase (subject to and in accordance with this Agreement) all or any of
the International Placing Shares for which any International Placing
Underwriter is required to purchase or procure purchasers pursuant to
Clause 3.1.1. Any purchase made or procured to be made by HSBC pursuant to
this Clause 3.2 in respect of which payment is duly made, specifying the
relevant International Placing Underwriter whose obligations HSBC is
thereby satisfying, shall satisfy pro tanto the obligation of the relevant
International Placing Underwriter under this Clause 3 and shall not affect
any agreement or arrangement between the International Placing
Underwriters regarding the payment of the combined underwriting and
management commission and selling concession.
3.3 DEFAULT OF AN INTERNATIONAL PLACING UNDERWRITER
Subject to the provisions of the Agreement Between International Placing
Underwriters (which shall not be binding on or confer any rights upon any
persons other than the parties thereto), none of HSBC or any of the
International Placing Underwriters will be liable for any failure on the
part of any of the other International Placing Underwriters to perform any
of such other International Placing Underwriter's obligations under this
Agreement. Notwithstanding the foregoing, each of HSBC and the
International Placing Underwriters shall be entitled to enforce any or all
of its rights under this Agreement either alone or jointly with any or all
of the other International Placing Underwriters.
3.4 APPOINTMENT OF INTERNATIONAL PLACING UNDERWRITERS
3.4.1 The Selling Shareholder hereby appoints the International Placing
Underwriters together to be its sole agents in respect of the offer
of the International Placing Shares and to arrange for the placing
thereof, and the International Placing Underwriters, relying on the
representations, warranties, undertakings and
17
indemnities herein contained and subject as hereinafter mentioned,
hereby accept the appointment.
3.4.2 The Selling Shareholder hereby confirm that the respective
appointments under Clause 3.4.1 confer on the International Placing
Underwriters all rights, powers, authorities and discretions on
behalf of the Selling Shareholder which are necessary for or
incidental to, the making of the International Placing and hereby
agrees to ratify and confirm everything which the International
Placing Underwriters shall do or have done in the exercise of such
rights, powers, authorities and discretions.
3.4.3 Each International Placing Underwriter may, in its absolute
discretion, appoint any of its Affiliates and/or, with the prior
written approval of HSBC, any other person (including a US Selling
Agent) to be sub-agent(s) on behalf of the Selling Shareholder for
the purposes of arranging for the placing of the International
Placing Shares, with such rights, powers, discretions and
authorities as the International Placing Underwriter has pursuant to
its appointment under this Clause 3.4.
3.4.4 The Selling Shareholder hereby approves, confirms and ratifies the
appointment by each International Placing Underwriter of any
sub-agent(s) pursuant to Clause 3.4.3 and everything (including,
without limitation, any oral contracts made on behalf of the Selling
Shareholder in respect of the placing of the International Placing
Shares with, and the sending of placing letters or telexes to, the
said placees under the International Placing) done by such
International Placing Underwriter and/or any such sub-agent(s) in
exercising its rights, powers, authorities and discretions or in
complying with their obligations under this Agreement.
3.5 CLOSING
3.5.1 HSBC shall inform the Sub-Registrars not later than 5:00 p.m. on the
day which is 2 Business Days immediately preceding the relevant
Closing Date of the total number of International Placing Shares to
be sold by the Selling Shareholder under the International Placing
at the relevant Closing (after taking into account any adjustment
made pursuant to Clauses 2.3, 2.4 and 2.5), the number of share
certificates required to be issued by the Company in the name of
HSBC Securities Asia Nominees Limited and/or such other name(s) as
HSBC may request, the denomination of each such certificate and the
manner in which such International Placing Shares are to be
delivered.
3.5.2 No later than 8:30 a.m. on the relevant Closing Date:
(i) the Selling Shareholder will deliver to the Registrars such
documents necessary to effect the transfer of the
International Placing Shares under the applicable Laws;
(ii) the Company shall (and the Selling Shareholder shall procure
that the Company shall):
(a) procure that the Registrars shall effect [COMMENT - no
share certificates issued to NTE Inc.] the transfer of
the International Placing Shares (including any
Over-allotment Shares specified in the relevant Exercise
Notice) to HSBC Securities Asia Nominees
18
Limited (as nominee for the placees who are entitled to
the International Placing Shares under the International
Placing) and/or such other name(s) as HSBC may request;
(b) procure that HSBC Securities Asia Nominees Limited (as
nominee for the placees who are entitled to the
International Placing Shares under the International
Placing) and/or such other name(s) as HSBC may request
shall be entered in the register of members of the
Company in respect of the International Placing Shares
accordingly (without payment of any registration fee);
and
(c) procure that share certificates in respect of the
International Placing Shares (each in a form complying
with the Listing Rules) shall be issued (in such number
and denominations as directed by HSBC) in the name of
HSBC Securities Asia Nominees Limited and/or such other
name(s) as HSBC may request and delivered or released to
such person(s) as HSBC may request and/or Hong Kong
Securities Clearing Company Limited for immediate credit
to such CCASS stock accounts as shall be notified by
HSBC to the Company for such purposes.
Subject to Clause 3.8.3, the Company and the Selling Shareholder
shall procure that the transfer of the International Placing Shares
to the placees thereof under the International Placing shall be
effected in a manner so that no stamp duty is payable in connection
with such transfer. The Selling Shareholder agrees to give all
consents and do all acts and things and execute all and any
documents which in the sole and absolute discretion of HSBC are
deemed necessary or desirable to effect the sale of the
International Placing Shares. The Selling Shareholder shall sell
each International Placing Shares free from any Encumbrance and with
the benefit of all rights attached thereto and thereafter accruing
thereto including the right to receive all dividends or other
distributions which may declared, paid or made thereon at or after
the Placing Closing Date.
3.5.3 The Company shall, pursuant to instructions given by HSBC (on behalf
of the International Placing Underwriters), procure that the
Sub-Registrar shall deposit the share certificates in respect of the
International Placing Shares into HSBC's CCASS participant's account
and/or other CCASS participants' accounts as HSBC may designate by
10:00 a.m. [COMMENT: 10:00 am is the time as agreed between
Computershare and HKSCC] on the relevant Closing Date [COMMENT: in
respect of International Placing Shares before adjustment, "Time of
Delivery" means 8:00 am on the Force Majeure Expiry Date].
3.5.4 No delivery of International Placing Shares to be purchased
hereunder shall be effective until and unless each of the Company
and Hong Kong Securities Clearing Company Limited shall have
furnished or caused to be furnished to HSBC, on behalf of the
International Placing Underwriters, certificates and other evidence
satisfactory to HSBC of such delivery of International Placing
Shares.
19
3.5.5 The Selling Shareholder shall receive the net proceeds from the
Global Offering through the following bank account:
"DESIGNATED BANK ACCOUNT" means the following bank account of Nam
Tai Group Management Limited, a wholly owned subsidiary of the
Selling Shareholder and incorporated in Hong Kong:
Holder of the Bank Account: Nam Tai Group Management Limited
Bank Name: The Hongkong and Shanghai Banking Corporation Limited
Account Number: 500-815287-001.
3.5.6 Subject to the Selling Shareholder having fulfilled its obligations
under this Clause 3.5 and to the extent such moneys have been
received by HSBC from the other International Placing Underwriters
pursuant to the terms of the Agreement Between International Placing
Underwriters (for the avoidance of doubt, HSBC shall not be
responsible for the failure or delay by any International Placing
Underwriter (except for itself in its capacities as an International
Placing Underwriter) to make such payment), HSBC (on behalf of the
International Placing Underwriters) shall pay or procured to be
paid, prior to 9:30 a.m. on the relevant Closing Date, to the
Selling Shareholder through Nam Tai Group Management Limited in Hong
Kong dollars in immediately available funds by crediting the
Designated Bank Account, the aggregate price for the International
Placing Shares to be delivered on such Closing, being the amount
obtained by multiplying the Offer Price by the total number of the
International Placing Shares to be delivered upon such Closing as
adjusted in accordance with Clauses 2.3, 2.4 and 2.5, subject to the
deductions to be made pursuant to Clause 3.5.9 and such payment into
the Designated Bank Account shall discharge the International
Placing Underwriters of any further payment obligations with respect
to the International Placing Shares. For the avoidance of doubt, the
Brokerage, Fee and Levies paid by the placees of the International
Placing shall not be payable to the Selling Shareholder and shall be
paid pursuant to Clause 3.8.1.
3.5.7 The following shall be deducted from the purchase price payable for
the International Placing Shares to the Selling Shareholder referred
to in Clause 3.5.8 and paid to HSBC (where a person other than HSBC
is entitled to any amount so paid, as agent on behalf of such
person) or to such person as HSBC may instruct:
(i) the combined management and underwriting commission and
selling concession payable under Clause 4.1;
(ii) the whole or such portion of the fees, costs and expenses
which remain payable by the Selling Shareholder under Clauses
3.8, 4.2, 4.3 and 4.4 as HSBC may calculate and direct being
an amount representing HSBC's estimate of all such fees, costs
and expenses, except to the extent that such fees, costs and
expenses have been deducted from the application moneys
pursuant to clause 3.6.1 of the Public Offer Underwriting
Agreement, provided that:
(a) without prejudice to the Selling Shareholder's
obligation under Clauses 4.3 and 4.4, any actual payment
under Clauses 4.3 and 4.4 shall not be made without
prior consent of the Selling Shareholder;
20
(b) if the amount deducted pursuant to this paragraph (ii)
is insufficient for purposes of covering such fees,
costs and expenses, the Selling Shareholder shall pay to
HSBC (where a person other than HSBC is entitled to any
amount so paid, as agent on behalf of such person)
and/or to such person as HSBC may instruct, an amount
equal to such shortfall forthwith upon receipt of demand
for the same from HSBC and, in any event, no later than
five Business Days from the date of such demand); and
(c) HSBC shall within three months of the date of this
Agreement pay to the Selling Shareholder through Nam Tai
Group Management Limited by crediting the Designated
Bank Account an amount equal to the balance of the
amount of fees, costs and expenses deducted under this
paragraph (ii), if any, after payment by HSBC on behalf
of the Selling Shareholder of the aforementioned fees,
costs and expenses.
3.5.8 The Selling Shareholder will maintain and cause to be maintained any
and all proceeds received by it from HSBC as payment for the Offer
Shares in the account at HSBC designated by them pursuant to Clause
3.5.7 prior to commencement of dealings of the Shares (and if such
proceeds relates to Over-allotment Shares, the Over-allotment
Shares) on the Hong Kong Stock Exchange.
3.6 THE PLACING DOCUMENTS
The Company has issued the Preliminary Offering Circular dated 12 April
2004 and will issue the Final Offering Circular on and dated the date
hereof. The Company will cause copies of the Placing Documents to be
delivered without charge to such persons, in such number, by the time and
in the manner as directed by HSBC.
3.7 FURTHER ASSURANCE
Without prejudice to the foregoing obligations, each of the Company, the
Selling Shareholder and the Executive Directors undertakes with the
International Placing Underwriters that it will give all such assistance
and provide all such information and do (or procure to be done) all such
other acts and things as may be required by HSBC to implement the
International Placing and this Agreement and that it will comply with all
requirements so as to enable listing of and permission to deal in the
Shares to be granted by the Listing Committee, such dealings to commence
on or before 16 May 2004 and to enable such listing to be maintained
thereafter, including in particular, effecting all necessary registrations
and/or filings with the Stock Exchange, the SFC, the Registrar of
Companies in Hong Kong, and the Executive Directors and the Company will
take all steps to ensure that each of the Directors shall duly sign or
cause to be duly signed on their behalf all documents required to be
signed by them as Directors for the purpose of or in connection with any
such registrations and/or filings or the obtaining of listing of and
permission to deal in the Shares on the Stock Exchange.
3.8 PAYMENT OBLIGATIONS RELATING TO THE INTERNATIONAL PLACING
3.8.1 PAYMENT OF BROKERAGE, FEE AND LEVIES ON BEHALF OF PLACEES
The International Placing Underwriters shall be entitled to retain
for their own account the Brokerage to be paid by the placees to the
International Placing Underwriters in respect of the International
Placing Shares. HSBC (on behalf of the
21
International Placing Underwriters) will arrange for payment on
behalf of placees under the International Placing of the Trading
Fee, the Transaction Levy and the Investor Compensation Levy in
respect of the sale of the International Placing Shares to the Stock
Exchange, such amounts to be paid out of the Placing Moneys payable
to the Selling Shareholder.
3.8.2 PAYMENT OF TRADING FEE, TRANSACTION LEVY AND INVESTOR COMPENSATION
LEVY ON BEHALF OF THE SELLING SHAREHOLDER
HSBC, on behalf of the Selling Shareholder, will arrange for the
payment of the Trading Fee, the Transaction Levy and the Investor
Compensation Levy payable by the Selling Shareholder in respect of
the sale of International Placing Shares to the Stock Exchange, such
amounts to be paid out of the Placing Moneys payable to the Selling
Shareholder.
3.8.3 PAYMENT OF TRANSFER AND OTHER FEES
(i) The Selling Shareholder shall pay any tax, duty (including
stamp duty), fund, levy, fee or other charge or expense
(including any fine or penalty) which may be payable in Hong
Kong or elsewhere, together with any interest and penalties,
payable on the offer or transfer of the International Placing
Shares under the Global Offering (whether payable as seller or
purchaser) in accordance with the terms of this Agreement, the
International Placing, the execution and delivery of, or the
performance of any of the provisions under, this Agreement,
which are or may be required to be paid under the applicable
Laws or by any Governmental Authority or otherwise, save for
any profit tax payable in Hong Kong by HSBC or the
International Placing Underwriters arising out of any
commission or fees received by any such party pursuant to
Clauses 4.1 and 4.2 to this Agreement. For the avoidance of
doubt, this includes, without limitation, any stamp duty
payable by the Selling Shareholder, the International Placing
Underwriters and the purchasers of the International Placing
Shares in relation to the transfers of the International
Placing Shares contemplated under this Agreement (including,
the transfer to the International Placing Underwriters, or
purchasers procured by the International Placing Underwriters,
and the re-offers and re-sales of, the International Placing
Shares, or transfers of, or agreements to transfer, the
International Placing Shares executed or made by the
International Placing Underwriters as transferor to placees
procured by the International Placing Underwriters under the
International Placing).
(ii) This Clause 3.8.3 shall, extend to:
(a) the sales and transfers by any person (the
"STOCKLENDERS") to any International Placing
Underwriter, and subsequent sales and retransfers by
each such International Placing Underwriter to the
relevant Stocklender, each under the terms of one or
more stock lending agreements, of a number of Shares not
exceeding, in total for all International Placing
Underwriters, the maximum number of Over-allotment
Shares to which the Over-allotment Option relates (for
the avoidance of doubt, regardless of whether, and the
extent to which the Over-allotment Option is exercised);
and
22
(b) (to the extent to which the Over-allotment Option is not
exercised) the sale, transfer or delivery by the
International Placing Underwriters to placees of a
number of Shares not exceeding, in total for all
International Placing Underwriters, the maximum number
of Over-allotment Shares to which the Over-allotment
Option relates (for the avoidance of doubt, regardless
of whether, and the extent to which, the Over-allotment
Option is exercised).
3.9 DISCHARGE FROM INTERNATIONAL PLACING UNDERWRITERS' OBLIGATIONS
As soon as the International Placing Shares comprising the International
Placing Underwriting Commitment of an International Placing Underwriter
shall be purchased and paid for by the International Placing Underwriter
and/or purchasers procured by such International Placing Underwriter
and/or otherwise pursuant to this Agreement, such International Placing
Underwriter shall be discharged from all further liability under this
Agreement save in respect of Clauses 10.8 and 10.9 and any antecedent
breaches under this Agreement.
4 COSTS, EXPENSES, FEES AND COMMISSIONS
4.1 UNDERWRITING COMMISSIONS
4.1.1 In consideration of the services of the International Placing
Underwriters under this Agreement, the Selling Shareholder will pay
a combined underwriting and management commission and selling
concession at the rate of 3.0% of the Reference International
Placing Amount, out of which the International Placing Underwriters
will meet all (if any) selling concessions.
4.1.2 For the avoidance of doubt:
(a) if the number of International Placing Shares is reduced as
provided in Clause 2.4, the International Placing Underwriters
shall still be entitled to be paid a combined underwriting and
management commission and selling concession of 3.0% in
relation to those International Placing Shares which are
withdrawn from the International Placing and made available
for purchase pursuant to Public Offer; and
(b) if the number of International Placing Shares is increased as
provided in Clause 2.5, the International Placing Underwriters
shall be entitled to be paid a combined underwriting and
management commission and selling concession of 3.0% in
relation to those additional International Placing Shares for
which the International Placing Underwriters shall have agreed
to purchase or procure purchasers.
4.2 OTHER FEES AND EXPENSES
The Selling Shareholder will further pay to HSBC (to the extent not
already paid under clause 4.2 of the Public Offer Underwriting Agreement)
such other fees and expenses of such amounts and in such manner as have
been separately agreed between the Company (or any member of the Group)
and/or the Selling Shareholder (or any member of its group) and HSBC.
4.3 INTERNATIONAL PLACING UNDERWRITERS' EXPENSES
23
The Selling Shareholder shall also pay to HSBC on behalf of the
International Placing Underwriters, all amount of costs, fees and expenses
(including, without limitation, the costs of the International Placing
Underwriters' legal advisers and all travelling, telecommunications,
postage and other out-of-pocket expenses) incurred by the International
Placing Underwriters or any of them or on their or its behalf under this
Agreement or in connection with the International Placing.
4.4 EXPENSES TO BE BORNE BY THE SELLING SHAREHOLDER
The Selling Shareholder shall be responsible for all costs, fees and
expenses arising from, in connection with or incidental to the Global
Offering, which shall include but are not limited to the following:-
(a) all capital duty, premium duty, tax, duty, levy and other fees,
charges and expenses payable, whether pursuant to any Law or
otherwise in respect of the transfer of the Offer Shares, the Global
Offering and all transactions contemplated thereunder, the execution
and delivery of, and the performance of any of the provisions under,
the Underwriting Documents save for any profit tax payable in Hong
Kong by any of HSBC or the Underwriters, arising out of any
commission or fees received by any of such parties pursuant to the
Underwriting Documents;
(b) fees and expenses of the Reporting Accountants;
(c) fees and expenses of the Receiving Banker;
(d) fees and expenses of the Property Valuers;
(e) fees and expenses of the Registrars and the Sub-Registrars;
(f) fees and expenses of all legal advisers;
(g) fees and expenses of the public relations consultants;
(h) fees and expenses of the translators;
(i) fees and expenses of other agents and advisers of the Company and
the Selling Shareholder;
(j) fees and expenses related to the application for listing of the
Shares on the Stock Exchange and the maintenance of a listing on the
Stock Exchange;
(k) fees and expenses related to the filing or registration of the Offer
Documents and any amendments and supplements thereto with any
relevant authority, including the Registrar of Companies in Hong
Kong;
(l) the costs and expenses of listing the Offer Shares on, and
qualifying the Offer Shares for trading in, PORTAL and any expenses
incidental thereto;
(m) costs and expenses relating to the launching of the Global Offering
and the conducting of roadshows, syndicate analysts' briefing and
video and other presentations relating to the Global Offering;
(n) printing and advertising costs;
(o) the costs of preparing, printing, delivery and distribution
(including transportation, packaging and insurance) of documents of
title to the Offer Shares;
24
(p) costs of despatch and distribution of the Offer Documents and all
amendments and supplements thereto in all relevant jurisdictions;
(q) CCASS transaction fees payable on the deposit into HSBC's CCASS
account, the transfers within CCASS of the International Placing
Shares by HSBC to the International Placing Underwriters and by the
International Placing Underwriters to the placees under the
International Placing; and
(r) all expenses in connection with the qualification of the
International Placing Shares for offering and sale under securities
laws of the relevant jurisdictions including the fees and
disbursement of counsel for the International Placing Underwriters
in connection with such qualification and in connection with the
Blue Sky surveys.
4.5 PAYMENT
All amounts due hereunder shall be due and payable on or before the
Listing Date and may be deducted from the Placing Moneys pursuant to
Clause 3.5.9.
5 REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
5.1 REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS BY THE WARRANTORS
The Warrantors jointly and severally represent, warrant, agree and
undertake to the International Placing Underwriters and each of them in
the terms set out in Part 1 of Schedule 7. The Company represents,
warrants, agrees and undertakes to the International Placing Underwriters
and each of them in the terms set out in Part 2 of Schedule 7. The Selling
Shareholder further represents, warrants, agrees and undertakes to the
International Placing Underwriters and each of them in the terms set out
in Part 3 of Schedule 7. The Warrantors accept that each of the
International Placing Underwriters is entering into this Agreement in
reliance upon each of such representations, warranties, agreements and
undertakings. Any certificate signed by a duly authorised officers of the
Company or the Selling Shareholder which is required to be delivered
pursuant to Clause 2.1.1(i) shall be deemed to be a representation,
warranty, agreement and undertaking by the Company or the Selling
Shareholder (as the case may be) to the International Placing Underwriters
and each of them as to the matters covered thereby.
5.2 RIGHTS IN RELATION TO THE WARRANTIES
5.2.1 Each of the Warranties shall be construed separately and shall not
be limited or restricted by reference to or inference from the terms
of any other of the Warranties or any other term of this Agreement.
5.2.2 The Warranties shall remain in full force and effect notwithstanding
completion of the Global Offering.
5.2.3 The Warranties are given on and as at the date of this Agreement
with respect to the facts and circumstances subsisting at the date
of this Agreement. In addition, the Warranties shall be deemed to be
given on and as at:
(i) the date of the Final Offering Circular;
(ii) immediately prior to 8:00 a.m. on the Force Majeure Expiry
Date;
(iii) the Closing Time of Delivery; and
25
(iv) each Option Time of Delivery [unless a notice is given
pursuant to Clause 9.2],
in each case with reference to the facts and circumstances then
subsisting. For the avoidance of doubt, nothing in this Clause 5.2.3
shall affect the on-going nature of the Warranties.
5.2.4 Each of the Warrantors undertakes to give notice to each of the
International Placing Underwriters forthwith of any matter or event
coming to their respective attention at any time on or prior to the
last date on which the Warranties are deemed to be given pursuant to
the provisions of Clause 5.2.3 which shows any of the Warranties to
be or to have been untrue or inaccurate or breached.
5.2.5 If at any time on or prior to Completion, by reference to the facts
and circumstances then subsisting, any matter or event comes to the
attention of any of the Warrantors which:
(i) would or might result in any of the Warranties, if repeated
immediately after the occurrence of such matter or event,
being untrue or inaccurate or breached; or
(ii) would or might render untrue, inaccurate or misleading any
statement, whether of fact or opinion, contained in the Public
Offer Documents, the Formal Notice or the Placing Documents or
any of them if the same were issued immediately after the
occurrence of such matter or event; or
(iii) would or might result in the omission of any fact which is
material for disclosure or required by applicable Laws to be
disclosed in the Public Offer Documents, the Formal Notice or
the Placing Documents or any of them (assuming that the
relevant documents were to be issued immediately after
occurrence of such matter or event); or
(iv) would or might result in any breach of the representations,
warranties or undertakings given by any of the Warrantors or
any circumstances giving rise to a claim under any of the
indemnities as contained in, or given pursuant to, this
Agreement,
such Warrantor shall forthwith notify and consult the Company (for
itself and on behalf of the Selling Shareholder) and HSBC (for
itself and on behalf of the other International Placing
Underwriters) and shall take such steps as may be requested by HSBC
(for itself and on behalf of the other International Placing
Underwriters) to remedy the same.
5.2.6 If any matter or event referred to in Clause 5.2.5 shall have
occurred, nothing herein shall prejudice any rights that HSBC or any
of the International Placing Underwriters may have in connection
with the occurrence of such matter or event, including without
limitation, its rights under Clause 9.
5.2.7 Each of the Company and the Selling Shareholder shall not, and shall
procure that their respective Affiliates will not, and the Executive
Directors and the Selling Shareholder shall procure that the Company
will not:
(i) do or omit to do anything which may cause, and will use its
best efforts not to permit, any of the Warranties to be untrue
or inaccurate or breached in any respect at or prior to any
time referred to in Clause 5.2.3 or, if later,
26
Completion (assuming such Warranties to be repeated at such
times with reference to the facts and circumstances then
subsisting); or
(ii) do or omit to do anything which could materially and adversely
affect the Global Offering.
5.2.8 For the purpose of this Clause 5:
(i) the representations, warranties, agreements and undertakings
shall remain in full force and effect notwithstanding the
completion of the purchase of the Offer Shares, the completion
of the Global Offering and all other matters and arrangements
referred to or contemplated by this Agreement; and
(ii) if an amendment or supplement to the Public Offer Documents,
the Formal Notice, the International Placing Documents or any
of them is published after the date hereof pursuant to Clause
6.1.1(x) or clause 6.1.1(x) of the Public Offer Underwriting
Agreement (as the case may be), representations warranties,
agreements and undertakings relating to any such documents
given pursuant to this Clause 5 shall be deemed to be repeated
on the date of publication of such amendment or supplement and
when so repeated, representations, warranties, agreements and
undertakings relating to such documents shall be read and
construed subject to the provisions of this Agreement as if
the references therein to such documents means such documents
when read together with such amendment or supplement.
6 FURTHER UNDERTAKINGS
6.1 FURTHER UNDERTAKINGS BY THE COMPANY, THE SELLING SHAREHOLDER AND THE
EXECUTIVE DIRECTORS
6.1.1 The Company undertakes to each of the International Placing
Underwriters that it will, and the Executive Directors and the
Selling Shareholder shall procure that the Company will:
(i) maintain a listing for the Shares on the Stock Exchange for at
least one year after the Conditions have been fulfilled and to
pay all fees and supply all further documents, information and
undertakings and publish all advertisements or other material
as may be necessary or advisable for such purpose, except
following a withdrawal of such listing which has been approved
by the relevant shareholders of the Company in accordance with
the Listing Rules or following an offer (within the meaning of
the Hong Kong Code on Takeovers and Mergers) for the Company
becoming unconditional;
(ii) procure that no connected persons (as defined in the Listing
Rules) of the Company will itself (or through a company
controlled by it) apply or purchase any Offer Shares either in
its own name or through nominees unless permitted to do so
under the Listing Rules, and if any such application therefor,
or after due and careful enquiries, it becomes aware of any
indication of interest therefor, has been made by such
persons, it shall forthwith notify HSBC (on behalf of the
International Placing Underwriters);
27
(iii) procure that there shall be delivered to the Stock Exchange as
soon as practicable the declaration in the form set out in
Appendix 5, Form F of the Listing Rules;
(iv) procure that the audited accounts of the Company for its
financial year ending 31 December 2004 will be prepared on a
basis consistent with the accounting policies adopted for the
purposes of the financial statements contained in the report
of the Reporting Accountants set out in Appendix I to the
Final Offering Circular;
(v) save as pursuant to any share option scheme of any member of
the Group, not without the prior written consent of HSBC (on
behalf of the International Placing Underwriters) and unless
in compliance with the Listing Rules:
(a) at any time after the date of this Agreement up to and
including the date falling six months after the date on
which dealings in the Shares first commence on the Stock
Exchange (the "FIRST SIX-MONTH PERIOD"):
(I) offer, accept subscription for, pledge, issue,
sell, lend, mortgage, assign, charge, contract to
issue or sell, sell any option or contract to
purchase, purchase any option or contract to sell,
grant or agree to grant any option, right or
warrant to purchase or subscribe for, lend or
otherwise transfer or dispose of, either directly
or indirectly, conditionally or unconditionally,
any of the share capital or other securities of
the Company or any interest therein (including,
but not limited to, any securities that are
convertible into or exchangeable for, or that
represent the right to receive any such capital or
securities or any interest therein); or
(II) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of
the economic consequences of ownership of any such
capital or securities or any interest therein; or
(III) enter into any transaction with the same economic
effect as any transaction described in paragraphs
(I) or (II) above;
(IV) agree or contract to, or publicly announce any
intention to enter into, any transaction described
in paragraphs (I), (II) or (III) above,
whether any such transaction described in paragraphs (I)
or (II) or (III) above is to be settled by delivery of
Shares or other securities, in cash or otherwise; and
(b) enter into any of the foregoing transactions in
paragraphs (a)(I), (II) and (III) above, or agree or
contract to or publicly announce any intention to enter
into any such transaction, such that the Selling
Shareholder would cease to be a controlling shareholder
(as defined in the Listing Rules) of the Company during
the six-month period
28
immediately following the First Six-Month Period (the
"SECOND SIX-MONTH PERIOD");
(vi) not, at any time after the date of this Agreement up to and
including the date on which all of the Conditions are
fulfilled (or waived) in accordance with this Agreement, amend
or agree to amend the Articles of Association save as
requested by Stock Exchange;
(vii) until the date falling one year after the Listing Date,
without the prior written consent of HSBC, not enter into or
procure, or permit any member of the Group to enter into, any
commitment or agreement or arrangement:
(a) of an unusual or onerous nature or outside its ordinary
course of business, whether or not that contract,
commitment or arrangement would constitute a material
contract for the purposes of the Prospectus, the
Preliminary Offering Circular or the Final Offering
Circular; and
(b) which could materially and adversely affect the business
or affairs of the Company and the Group taken as a
whole;
(viii) until the date falling six months after the Listing Date:
(a) discuss with HSBC:
(I) any major new developments in its sphere of
activity which are not public knowledge which may,
by virtue of the effect of those developments on
its assets and liabilities or financial position
or on the general course of its business, lead to
substantial movement in the price of its listed
securities;
(II) any change in the Company's financial condition or
in the performance of its business or in the
Company's expectation of its performance which, if
made public, would be likely to lead to
substantial movement in the price of its listed
securities; and
(III) any proposals or circumstances which may lead to
any such developments or changes as described in
paragraphs (I) and (II) above;
(b) forward to HSBC for perusal in draft all documents to be
sent to shareholders and all press announcements to be
issued by the Company, which will be sent to the Stock
Exchange during such period;
(ix) until the date falling six months year after the Listing Date,
furnish to HSBC copies of all reports or other communications
furnished to shareholders, and deliver to HSBC (i) as soon as
they are publicly available, copies of any reports and
financial statements furnished to or filed with the Stock
Exchange or any securities exchange on which any class of
securities of the Company may be listed, and (ii) such
additional information concerning the business and financial
condition of the Company publicly available as HSBC may from
time to time request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company
and its
29
subsidiaries are consolidated in reports furnished to its
shareholders generally or to the Stock Exchange);
(x) without prejudice to any other rights of any party hereto, if
at any time until the date on which the distribution of the
International Placing Shares has been completed as determined
by HSBC:
(a) Clause 5.2.5 applies; or
(b) any event shall have occurred as a result of which the
Offer Documents or the Formal Notice or any of them (as
then amended or supplemented pursuant to the provisions
of this Clause 6.1.1(x) or clause 6.1.1(x) of the Public
Offer Underwriting Agreement) would include an untrue
statement of a material fact or omit to state any
material fact necessary in order to make the statements
therein, in the light of the circumstances under which
they were made when such document was issued, not
misleading; or
(c) if it shall be necessary to amend or supplement the
Offer Documents or the Formal Notice or any of them to
comply with applicable Law,
promptly notify HSBC of such event and, subject to the
provisions of this Clause 6.1.1(x), the Company (for itself
and on behalf of the Selling Shareholder) shall, at its own
expense, amend or supplement the Offer Documents, the Formal
Notice or any of them, as the case may be, and shall issue and
publish such other announcement, circular, document, material
or information and do such other act or thing as necessary or
advisable to correct such statement or omission or effect such
compliance with applicable Law or as may be requested by HSBC
and shall, without charge, supply HSBC or as such person(s) as
it shall direct with as many copies as HSBC may from time to
time request of the aforesaid documents, material or
information;
Except for the Offer Documents and the Formal Notice or except
as otherwise provided pursuant to the Underwriting Documents,
each of the Company and the Selling Shareholder undertakes
that it shall not, and each of the Executive Directors
undertakes to procure that the Company shall not, without the
prior written approval of HSBC (for itself and on behalf of
the International Placing Underwriters), issue, publish,
distribute or otherwise make available any document (including
any prospectus or offering circular), announcement, material
or information in connection with the International Placing
(including any supplement or amendment thereto).
The Company will advise HSBC promptly of any proposal to amend
or supplement the Offer Documents or the Formal Notice or any
of them, and will not effect such amendment or supplementation
without HSBC's consent (such consent not to be unreasonably
withheld or delayed);
(xi) during the period of one year after the Listing Date, refrain
from taking any action that could jeopardise the listed status
of the Shares on the Stock Exchange, provided however, that
this paragraph shall not prevent the Company from taking any
action for the delisting of the Shares so long as (a) the
Company complies in all respects with the Listing Rules and
all
30
other applicable Laws, and (b) the requisite approval of such
action by the holders of the Shares is duly obtained;
(xii) for so long as the Shares are listed on the Stock Exchange
and during the period of one year after the Listing Date,
file with the Stock Exchange and the SFC and any other
Governmental Authority in Hong Kong and the Cayman Islands,
such reports, documents, agreements and other information
which may from time to time be required by applicable Laws to
be so filed because the Shares are listed on the Stock
Exchange;
(xiii) provide to HSBC (on behalf of the International Placing
Underwriters) any such other resolutions, consents,
authorities, documents, opinions and certificates which are
relevant in the context of the Global Offering owing to
circumstances arising or events occurring after the date of
this Agreement, but on or before 8:00 a.m. on the last
Closing Date, and as HSBC may require;
(xiv) for so long as any Offer Shares are "restricted securities"
within the meaning of Rule 144(a)(3) under the US Securities
Act, during any period in which it is neither subject to
Section 13 or 15(d) of the US Exchange Act nor exempt from
reporting pursuant to Rule 12g3-2(b) thereunder, provide to
any holder or beneficial owner of such restricted securities
or to any prospective purchaser of such restricted securities
designated by such holder or beneficial owner, upon the
request of such holder, beneficial owner or prospective
purchaser, the information required to be provided by Rule
144A(d)(4) under the US Securities Act. The Company will
execute and deliver the Deed Poll in favour of those persons
entitled to the benefit of the undertaking set forth in this
paragraph on or before the time and date set out in Clause
2.1.1(i);
(xv) for so long as any Offer Shares are "restricted securities"
within the meaning of Rule 144(a)(3) under the US Securities
Act, the Company will not become an "open-end investment
company", "unit investment trust" or "face-amount certificate
company", as such terms are defined in, and that is or is
required to be registered under Section 8 of, the US
Investment Company Act;
(xvi) cause the Offer Shares to be designated as eligible for
trading in PORTAL;
(xvii) during the period of two years after the last Time of
Delivery, the Company will not and will not permit any of its
"affiliates" (as defined in Rule 144 of the US Securities
Act) to resell in the United States any of the Offer Shares
which constitute "restricted securities" under Rule 144 of
the US Securities Act which have been acquired by the Company
or any such affiliates; and
(xviii) promptly from time to time to take such action as HSBC (on
behalf of the International Placing Underwriters) may
request, to qualify the Offer Shares for offer and sale by
the International Placing Underwriters or through their
Affiliates and agents under the Laws of such states of the
United States or other jurisdictions as HSBC may designate
and shall maintain such qualifications in effect so long as
HSBC may require for the offer and sale of the International
Placing Shares; provided, however, that, in connection
therewith, the Company shall not be obliged to file any
general consent to
31
service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not qualified. The Company
will immediately advise HSBC of the receipt by the Company of
any notification with respect to the suspension of the
qualification of the Offer Shares, for sale in any
jurisdiction or the initiation or threatening of any
proceedings for such purposes.
6.1.2 Each of the Company and the Selling Shareholder undertakes to each
of the International Placing Underwriters that it will, and the
Executive Directors and the Selling Shareholder shall procure that
the Company will:
(i) comply in all respects with the terms and conditions of the
Global Offering as provided for in the Offer Documents and the
Underwriting Documents and, in particular transfer the
International Placing Shares to successful placees under the
International Placing;
(ii) comply in a timely manner with its obligations under the
requirements of the Stock Exchange in connection with the
Global Offering (including, without limitation, the Listing
Rules);
(iii) procure compliance with the obligations imposed upon it by the
Companies Ordinance, the Companies Law and the Listing Rules
in respect of or by reason of the matters contemplated by this
Agreement, including but without limitation:-
(a) the making of all necessary registrations with the
Registrar of Companies in Hong Kong and the Registrar of
Companies in the Cayman Islands; and
(b) the making available for inspection at the offices of
Johnson Stokes & Master of the documents referred to in
Appendix VI to the Prospectus during the period referred
to therein; and
(iv) procure that the terms of the Registrars Agreement, the
Sub-Registrars Agreement and the Receiving Banker Agreement
shall not be amended without the prior written consent of
HSBC.
6.1.3 The undertakings in this Clause 6.1 shall remain in full force and
effect notwithstanding the completion of the Global Offering and all
matters contemplated in this Agreement.
6.2 RESTRICTIONS ON DEALINGS AND RELATED MATTERS
6.2.1 The Selling Shareholder agrees and undertakes that, save as pursuant
to the offer for sale of the Offer Shares under the Global Offering
or the Over-allotment Option or any stock lending arrangements
agreed between the Selling Shareholder and HSBC in connection with
the Global Offering, without the prior written consent of HSBC (on
behalf of the International Placing Underwriters) and unless in
compliance with the Listing Rules:
(i) during the First Six-Month Period:
(a) save for using the Shares beneficially owned by it as
security (including a charge or a pledge) in favour of
an authorised institution (as defined in the Banking
Ordinance (Chapter 155 of the Laws of Hong Kong)) for a
bona fide commercial loan, it will not offer, pledge,
32
charge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to
sell, grant or agree to grant any option, right or
warrant to purchase or subscribe for, lend or otherwise
transfer or dispose of, either directly or indirectly,
conditionally or unconditionally, any share capital or
other securities of the Company or any interest therein
(including, but not limited to any securities that are
convertible into or exchangeable for, or that represent
the right to receive, any such capital or securities or
any interest therein); or
(b) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic
consequences of ownership of any such capital or
securities or any interest therein; or
(c) enter into any transaction with the same economic effect
as any transaction described in (a) or (b) above; or
(d) agree or contract to, or publicly announce any intention
to enter into, any transaction described in (a) or (b)
or (c) above,
whether any such transaction described in (a) or (b) or (c)
above is to be settled by delivery of such capital or
securities, in cash or otherwise; and
(ii) during the Second Six-Month Period, it will not enter into any
of the foregoing transactions in paragraphs (i)(a) or (b) or
(c) above or agree or contract to or publicly announce any
intention to enter into any such transactions if, immediately
following such transfer or disposal, the Selling Shareholder
will cease to be a controlling shareholder (as the term is
defined in the Listing Rules) of the Company; and
(iii) until the expiry of the Second Six-Month Period, in the event
that it enters into any such transactions or agrees or
contracts to, or publicly announces an intention to enter into
any such transactions, it will take all reasonable steps to
ensure that it will not create a disorderly or false market in
the securities of the Company.
6.2.2 Subject to Clause 6.2.1, the Selling Shareholder agrees and
undertakes that, if at any time after the date of this Agreement up
to and including the date falling twelve months from the Listing
Date, it shall (i) if and when it pledges, mortgages or charges any
securities or interests in the securities of the Company
beneficially owned by it, immediately inform the Company and HSBC in
writing of such pledge, mortgage or charge together with the number
of securities so pledged or mortgaged or charged; and (ii) if and
when it receives indications, either verbal or written, from any
pledgee or mortgagee or chargee that any of the pledged, mortgaged
or charged securities or interests in the securities of the Company
will be disposed of, immediately inform the Company and HSBC in
writing of such indications. The Company agrees and undertakes that
upon receiving such information in writing from the Selling
Shareholder, it shall, as soon as practicable, notify the Stock
Exchange and in accordance with the requirements of the Listing
Rules or the Stock Exchange make a public disclosure in relation to
such information by way of press announcement.
33
6.2.3 Each of the Executive Directors and the Selling Shareholder agrees
and undertakes not to (whether itself or through any company
controlled by it) apply or subscribe for or purchase any Offer
Shares either in its own name or through nominees unless permitted
to do so under the Listing Rules, and if any such application has
been made or it has indicated an interest to acquire such Offer
Shares, it shall forthwith notify HSBC (on behalf of the
International Placing Underwriters);
6.2.4 The Company agrees and undertakes that it will not, and the Selling
Shareholder and each of the Executive Directors undertakes to
procure that the Company will not, effect any purchase of Shares, or
agree to do so, which may reduce the holdings of Shares of persons
other than the directors of the Company, its substantial
shareholders or their respective associates (as defined in the
Listing Rules) to below 25% on or before the date falling six months
after the Listing Date without first having obtained the prior
written consent of HSBC (on behalf of the International Placing
Underwriters).
6.2.5 The Warrantors will procure that none of the connected persons shall
be accepted as subscribers or purchasers of any Offer Shares either
in its own name or through nominees unless permitted to do so under
the Listing Rules and such subscriptions or purchases are disclosed
in the Preliminary Offering Circular, the Final Offering Circular
and the Prospectus.
6.3 OBLIGATIONS AND LIABILITY
6.3.1 The obligations of each of the Company, the Selling Shareholder, the
Executive Directors shall be binding on his, her or its personal
representatives and successors (as the case may be).
6.3.2 Any liability to the International Placing Underwriters or any of
them hereunder may in whole or in part be released, compounded or
compromised and time or indulgence may be given by HSBC on behalf of
the International Placing Underwriters or any of them as regards any
person under such liability without prejudicing the rights of any
other International Placing Underwriters or the relevant
International Placing Underwriter's other rights against such person
or the relevant International Placing Underwriter's rights against
any other person under the same or a similar liability.
6.3.3 Subject to the provisions of the Agreement Between International
Placing Underwriters (which shall not be binding on or confer any
rights upon any persons other than the parties thereto), for the
avoidance of doubt, neither HSBC nor any of the International
Placing Underwriters shall be responsible or liable for any breach
of the provisions of this Agreement by any of the International
Placing Underwriters (other than itself in its capacity as an
International Placing Underwriter).
6.3.4 Save and except for any breach of any of its obligations under this
Agreement and/or any loss or damage arising out of any gross
negligence, wilful default or fraud on the part of HSBC or the
relevant International Placing Underwriter, no claim shall be made
against HSBC or any of the International Placing Underwriters or
against any other of the Indemnified Parties (such right of the
Indemnified Parties being held by the International Placing
Underwriters as trustee for the Indemnified Parties) by any of the
Warrantors (and the Warrantors shall procure that none of its
affiliates shall make any such claim), to recover any damage, cost,
34
charge or expense which any of the Warrantors may suffer or incur by
reason of or arising out of the carrying out by HSBC or any of the
International Placing Underwriters of the work to be done by any of
them or the performance of their respective obligations hereunder or
otherwise in connection with the Offer Documents, the Global
Offering and any associated transactions (whether in performance of
its duties as underwriters or otherwise). Specifically (but without
prejudice to the generality of the foregoing), none of HSBC or the
International Placing Underwriters shall have any liability or
responsibility whatsoever for any alleged insufficiency of the Offer
Price or any dealing price of the Offer Shares or any announcements,
documents, materials, communications or information whatsoever made,
given, related or issued arising out of, in relation to or in
connection with the Company or the Global Offering (whether or not
approved by HSBC or any of the International Placing Underwriters.
7 INDEMNITY
7.1 Each of the Warrantors (collectively, the "INDEMNIFYING PARTIES" and
individually, an "INDEMNIFYING PARTY") jointly and severally undertakes to
HSBC, the International Placing Underwriters and each of them, for
themselves and on trust for the other Indemnified Parties (as hereinafter
defined), to indemnify and hold harmless HSBC and each of the
International Placing Underwriters, the Selling Agents, each person who
controls any Placing Underwriter or Selling Agent within the meaning of
Section 15 of the US Securities Act or Section 20 of the US Exchange Act
and each of their respective subsidiaries and Affiliates, and each of
their respective representatives, partners, directors, officers,
employees, assignees and agents (collectively, the "INDEMNIFIED PARTIES"
and individually, an "INDEMNIFIED PARTY") (on an after-tax basis) against:
(i) all actions, suits, claims (whether or not any such claim involves
or results in any actions or proceedings), demands, investigations,
judgement, awards and proceedings, joint or several, from time to
time instituted, made or brought or threatened or alleged to be
instituted, made or brought against or otherwise involve, (together
the "ACTIONS") and
(ii) all losses, liabilities and damage suffered and all payments,
expenses (including legal expenses and taxes (including stamp duty
and any penalties and/or interest arising in respect of any taxes)),
costs and charges (including, without limitation, all payments,
expenses, costs or charges suffered, made or incurred arising out
of, in relation to or in connection with the investigation, dispute,
defence or settlement of or response to any such Actions or the
enforcement of any such settlement or any judgement obtained in
respect of any such Actions) (together, the "LOSSES") which may be
made or incurred or suffered by,
an Indemnified Party (with such amount of indemnity to be paid to HSBC or
the relevant International Placing Underwriter to whom the Indemnified
Party is related to cover all the Actions against and Losses suffered,
made or incurred by such Indemnified Party) arising out of, in relation to
or in connection with:
(a) the performance by HSBC or any of the International Placing
Underwriters of their respective obligations under this Agreement or
the Offer Documents or otherwise in connection with the Global
Offering; or
35
(b) the issue, publication, distribution or making available of any of
the Offer Documents or the Formal Notice (including any amendments
or supplements thereto) in accordance with the terms of this
Agreement and/or any announcements, documents, materials,
communications or information whatsoever made, given, released or
issued arising out of, in relation to or in connection with the
Company or the Global Offering (whether or not approved by HSBC or
any of the International Placing Underwriters); or
(c) the offer or transfer of the Offer Shares; or
(d) a breach or alleged breach on the part of any of the Indemnifying
Parties of any of the provisions of any of the Underwriting
Documents or an action or omission of an Indemnifying Party or any
of their respective subsidiaries, directors, officers or employees
resulting in a breach of any of the provisions of any of the
Underwriting Documents; or
(e) any of the Warranties being untrue, inaccurate or having been
breached or being alleged to be untrue, inaccurate or alleged to
have been breached; or
(f) any untrue statement or alleged untrue statement of a fact contained
in any Offer Documents, the Formal Notice or in any announcements,
documents, materials, communications or information whatsoever made,
given, released or issued arising out of, in relation to or in
connection with the Company or the Global Offering (whether or not
approved by HSBC or any of the International Placing Underwriters),
or, in each case, any supplement or amendment thereto, or any
omission or alleged omission to state therein a fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading, or any of the Offer
Documents or the Formal Notice, or such announcement, document,
material, communication or information or any such supplement or
amendment thereto not containing any information material in the
context of the Global Offering whether required by Law or not; or
(g) any breach or alleged breach of the Laws of any country or territory
resulting from the distribution of any of the Offer Documents, the
Formal Notice or any announcements, documents, materials,
communications or information whatsoever made, given, released or
issued arising out of, in relation to or in connection with the
Company or the Global Offering (whether or not approved by HSBC or
any of the International Placing Underwriters) and/or any offer,
sale or distribution of the Shares, otherwise than in accordance
with and on the terms of those documents and the Underwriting
Documents; or
(h) the Global Offering failing to comply with the requirements of the
Securities and Futures (Stock Exchange Listing) Rules (Chapter 571V
of the Laws of Hong Kong), the Listing Rules or any other applicable
Laws; or
(i) any statement in any of the Offer Documents, the Formal Notice or
any announcements, documents, materials, communications or
information whatsoever made, given, released or arising out of, in
relation to or in connection with the Company, the Selling
Shareholder or the Global Offering (whether or not approved by HSBC
or any of the International Placing Underwriters) being or alleged
to be defamatory of any person; or
36
(j) any failure or alleged failure by any of the Directors to comply
with their respective obligations under the Listing Rules; or
(k) the breach or alleged breach by the Company, the Selling Shareholder
or other members of the Group of applicable Laws,
provided that the indemnity provided for in this Clause 7.1 shall not
apply in respect of an Indemnified Party to the extent where any such
Action made against or any such Loss suffered by, such Indemnified Party,
arises out of or in connection with fraud, gross negligence or wilful
default on the part of such Indemnified Party; and any settlement or
compromise of or consent to the entry of judgement with respect to any
Action or Loss by any of the Indemnified Parties shall not prejudice any
right, claim, action or demand any of the Indemnified Parties may have or
make against the Warrantors or any of them under this Clause 7.1 or
otherwise under this Agreement.
7.2 If any of the Warrantors becomes aware of any claim which may give rise to
a liability under the indemnity provided under Clause 7.1, such party
shall promptly give notice thereof to the other parties in writing.
7.3 Counsel to the Indemnified Parties shall be selected by HSBC. The Company
and/or the Selling Shareholder, as the case may be, may participate at its
own expense, in the defence of any such Action, provided however, that
counsel to the Company and/or the Selling Shareholder shall not (except
with the consent of the Indemnified Parties) also be counsel to the
Indemnified Parties.
7.4 None of the Indemnifying Parties shall, without the prior written consent
of the Indemnified Parties, settle or compromise or consent to the entry
of any judgement with respect to any Action, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution
could be sought under this Clause 7 (whether or not the Indemnified
Parties are actual or potential parties thereto).
7.5 Any settlement or compromise by any Indemnified Party in relation to any
claim shall be without prejudice to, and without (other than any
obligations imposed on it by Law) any accompanying obligation or duty to
mitigate the same in relation to, any claim, action or demand it may have
or make against any of the Indemnifying Parties under this Agreement. The
Indemnified Parties are not required to obtain consent from any of the
Indemnifying Parties with respect to such settlement or compromise. The
rights of the Indemnified Parties herein are in addition to any rights
that each Indemnified Party may have at Law or otherwise and the
obligations of the Indemnifying Parties herein shall be in addition to any
liability which the Indemnifying Parties may otherwise have.
7.6 If an Indemnifying Party enters into any agreement or arrangement with any
adviser for the purpose of or in connection with the Global Offering, the
terms of which provide that the liability of the adviser to the
Indemnifying Party or any other person is excluded or limited in any
manner, and any of the Indemnified Parties may have joint and/or several
liability with such adviser to the Indemnifying Party or to any other
person arising out of the performance of its duties in connection with the
Global Offering, the Indemnifying Party shall:
7.6.1 not be entitled to recover any amount from any Indemnified Party
which, in the absence of such exclusion or limitation, the
Indemnified Party would have been entitled to recover from such
Indemnified Party; and
37
7.6.2 indemnify the Indemnified Parties in respect of any increased
liability to any third party which would not have arisen in the
absence of such exclusion or limitation; and
7.6.3 take such other action as the Indemnified Parties may require to
ensure that the Indemnified Parties are not prejudiced as a
consequence of such agreement or arrangement.
7.7 No claim shall be made against any Indemnified Party by any Indemnifying
Party to recover any Losses incurred by the Indemnifying Party in
connection with or arising out of the services rendered or duties
performance by the Indemnified Party under this Agreement or otherwise in
connection with the Global Offering and the application for the listing
of, and permission to deal in, the Shares on the Stock Exchange unless and
to the extent that they are finally judicially determined by a court of
competent jurisdiction to have arisen primarily as a result of fraud,
gross negligence or wilful default of the relevant Indemnified Party.
7.8 For the avoidance of doubt, the indemnity under this Clause 7 shall cover
all costs, charges and expenses which any Indemnified Party may incur or
pay in disputing, settling or compromising any Action to which the
indemnity may relate and in establishing its right to indemnification
under this Clause 7.
7.9 All amounts subject to indemnity under this Clause 7 shall be paid by the
Indemnifying Party as and when they are incurred within 10 Business Days
of a written notice demanding payment being given to the relevant
Indemnifying Party by or on behalf of an Indemnified Party.
7.10 This Clause 7 shall remain in full force and effect notwithstanding the
completion of the Global Offering in accordance with the terms of this
Agreement or the termination of this Agreement.
8 CONTRIBUTION
8.1 If for any reason the undertaking to pay in Clause 7 is unavailable or
insufficient to indemnify and hold harmless an Indemnified Party in
respect of any Action or Loss referred to therein, then each Indemnifying
Party, in lieu of its obligations under Clause 7, shall contribute to the
amount paid or payable by such Indemnifying Party as a result of such
Action or Loss:
8.1.1 in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholder on the
one hand and the International Placing Underwriters on the other
from the International Placing; or
8.1.2 if the allocation provided by Clause 8.1.1 above is not permitted by
applicable Law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in Clause 8.1.1 above but
also the relative fault of the Company and the Selling Shareholder
on the one hand and the International Placing Underwriters on the
other in connection with the statements or omissions that resulted
in such Action or Loss, as well as any other relevant equitable
considerations.
8.2 The relative benefits received by the Company and the Selling Shareholder
on the one hand and the International Placing Underwriters on the other
shall be deemed to be in the same respective proportions as the net
proceeds from the International Placing (before deducting expenses)
received by the Company and the Selling Shareholder bear to the
38
total combined underwriting and management commission and selling
concessions received by the International Placing Underwriters, as set
forth in Clause 4.1.
8.3 The relative fault of the Company and the Selling Shareholder on the one
hand and the International Placing Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a fact or the omission or alleged omission to
state a fact relates to information supplied by the Company or the Selling
Shareholder on the one hand or by the International Placing Underwriters
on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
8.4 The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Clause 8 were determined by pro rata
allocation (even if the International Placing Underwriters were treated as
one entity for such purposes) or by any other method of allocation that
does not take account of the equitable considerations referred to in this
Clause 8. In no event shall an International Placing Underwriter be
required to contribute any amount in excess of the amount by which the
total combined underwriting and management commission and selling
concessions received by such International Placing Underwriter with
respect to the International Placing exceeds the amount of any Losses that
such International Placing Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (with
the meaning of Section 11(f) of the US Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The International Placing Underwriters' obligations to
contribute pursuant to this Clause 8 are several in proportion to their
respective purchase or subscription obligations hereunder (and not joint
or joint and several).
8.5 The indemnity and contribution agreements contained in this Clause 8 are
not exclusive and shall not limit any rights or remedies which may
otherwise be available to any Indemnified Party at law or in equity.
9 TERMINATION IN EXCEPTIONAL CIRCUMSTANCES
9.1 If, at any time prior to 8:00a.m. on the Force Majeure Expiry Date:
9.1.1 there has been a breach of any of the Warranties or there has been a
breach by the Company or the Selling Shareholder of any of the
provisions of this Agreement; or
9.1.2 any matter has arisen or has been discovered which would, had it
arisen immediately before the date of the Prospectus, the
Preliminary Offering Circular or the Final Offering Circular (as the
case may be), not having been disclosed in the Prospectus, the
Preliminary Offering Circular or the Final Offering Circular (as the
case may be), constitute an omission therefrom; or
9.1.3 any statement contained in the Prospectus, the Preliminary Offering
Circular or the Final Offering Circular (as the case may be) has
become or been discovered to be untrue, incorrect or misleading in
any respect; or
9.1.4 there shall have occurred any event, act or omission which gives or
is likely to give rise to any liability of any of the Company or the
Selling Shareholder pursuant to the indemnities referred to in
Clause 7; or
39
9.1.5 there shall have been any adverse change or prospective adverse
change in the business or the financial or trading position of any
member of the Group; or
9.1.6 there shall have developed, occurred, happened or come into effect
any event or series of events, matters or circumstances concerning
or relating to:
(i) any change in, or any event or series of events likely to
result in any change in, local, national or international
financial, political, economic, military, industrial, fiscal,
regulatory, currency or market conditions or equity securities
or stock or other financial market conditions or any monetary
or trading settlement system (including, without limitation,
any change in the system under which the value of the Hong
Kong currency is linked to that of the United States) in Hong
Kong, the Cayman Islands, the US, the United Kingdom, Japan,
or the PRC; or
(ii) any new Law or change in existing Laws or any change in the
interpretation or application thereof by any court or other
competent authority in Hong Kong, the Cayman Islands, the US,
the United Kingdom, Japan or the PRC; or
(iii) any event of force majeure affecting Hong Kong, the Cayman
Islands, the US, the United Kingdom, Japan or the PRC
including, without limiting the generality thereof, any act of
God, war, outbreak or escalation of hostilities (whether or
not war is declared) or act of terrorism, or declaration of a
national or international emergency or war, riot, public
disorder, civil commotion, economic sanctions, fire, flood,
explosion, epidemic, outbreak of an infectious disease,
calamity, crisis, strike or lock-out (whether or not covered
by insurance); or
(iv) the imposition of any moratorium, suspension or restriction on
trading in securities generally on the Stock Exchange or the
New York Stock Exchange or any suspension of trading of any of
the securities of the Company on any exchange or
over-the-counter market or any major disruption of any
securities settlement or clearing services in the US or Hong
Kong or on commercial banking activities in Hong Kong or New
York, due to exceptional financial circumstances or otherwise;
or
(v) a change or development involving a prospective change in
taxation or exchange control (or the implementation of any
exchange control) in Hong Kong, the Cayman Islands, the US or
the PRC,
which, in the sole opinion of HSBC (for itself and on behalf of the
International Placing Underwriters):
(i) is or will be, or is likely to be, materially adverse to the
general affairs, management, business, financial, trading or
other condition or prospects of the Group or to any present or
prospective shareholder of the Company in its capacity as
such; or
(ii) has or will have or is likely to have a material adverse
impact on the success of the Global Offering or the level of
Offer Shares applied for or accepted or purchased or the
distribution of the Offer Shares or dealings in the Shares in
the secondary market; or
40
(iii) makes it impracticable, inadvisable or inexpedient to proceed
with the Public Offer and/or the International Placing on the
terms and in the manner contemplated in the Offer Documents,
then HSBC, in its sole and absolute discretion, may on behalf of the
International Placing Underwriters, upon giving notice to the Company and
the Selling Shareholder made pursuant to the provisions of Clause 10.16 on
or prior to 8:00a.m. on the Force Majeure Expiry Date (with a copy of such
notice to each of the Selling Shareholder, the Executive Directors and the
other International Placing Underwriters), terminate this Agreement with
immediate effect.
9.2 Upon the termination of this Agreement or any obligations of the
International Placing Underwriters under this Agreement are terminated
pursuant to the provisions of Clauses 2.1, 3.3.2 or 9.1:
9.2.1 each of the parties hereto shall cease to have any rights or
obligations under this Agreement and no party to this Agreement
shall be under any liability to any other party in respect of this
Agreement and no party have any claim against any other party to
this Agreement for costs, damages, compensation or otherwise, save
in respect of the provisions of this Clause 9 and Clauses 7, 8 and
10, any antecedent breaches under this Agreement and any rights or
obligations which may have accrued under this Agreement prior to
such termination; and
9.2.2 the Selling Shareholder shall pay to HSBC all fees, costs and
expenses referred to Clauses 4.2, 4.3 and 4.4 as soon as practicable
and in any event within 10 Business Days from the date of receipt of
written demand for payment of the same; and
9.2.3 the Selling Shareholder shall refund forthwith all payments made by
or on behalf of any of the International Placing Underwriters (for
themselves or on behalf of the placees of the International Placing
Shares) or any of them pursuant to Clause 3.5.8 (to the extent
received).
10 GENERAL PROVISIONS
10.1 RELEASE
Any liability to any party under this Agreement may in whole or in part be
released, compounded or compromised, and time or indulgence may be given,
by that party (and, where any liability is owed to any International
Placing Underwriters, by HSBC on behalf of any or all of the International
Placing Underwriters) in its absolute discretion as regards any person
under such liability without in any way prejudicing or affecting that
party's rights against any other person under the same or a similar
liability, whether joint and several or otherwise.
10.2 REMEDIES AND WAIVERS
10.2.1 No failure or delay by any party hereto 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
41
preclude any other or further exercise of it or the exercise of any
other right or remedy.
10.2.2 The rights, powers and remedies provided in this Agreement are
cumulative and not exclusive of any rights, powers and remedies
(whether provided by Law or otherwise).
10.3 SUCCESSORS AND ASSIGNMENT
10.3.1 This Agreement shall be binding upon, and inure solely to the
benefit of the parties hereto and their respective heirs,
executors, administrators, successors and permitted assigns, and no
other person shall acquire or have any right under or by virtue of
this Agreement.
10.3.2 Each of HSBC and the International Placing Underwriters may assign
or transfer all or any part of the benefits of, or interest or
right in or under this Agreement.
10.3.3 Save as provided in Clause 10.3.2, no party hereto may assign or
transfer all or any part of the benefits of, or interest or right
in or under this Agreement.
10.3.4 Obligations under this Agreement shall not be assignable.
10.4 FURTHER ASSURANCE
Each of the parties hereto undertakes with the other parties hereto that
it shall execute and perform and procure that there are executed and
performed such further documents and acts as the other parties hereto may
reasonably require to give effect to the provisions of this Agreement.
10.5 ENTIRE AGREEMENT AND VARIATION
10.5.1 Save as otherwise agreed by the relevant parties, this Agreement,
together with any document referred to herein as being in the
agreed form, constitutes the entire agreement between the Company,
the Selling Shareholder, the Executive Directors, HSBC and the
International Placing Underwriters relating to the underwriting of
the International Placing to the exclusion of any terms implied by
Law which may be excluded by contract. Save as otherwise agreed by
the relevant parties, this Agreement supersedes all previous
agreements or understandings relating to the underwriting of the
International Placing which shall cease to have any further force
or effect and no party hereto has entered into this Agreement in
reliance upon any representation, warranty, agreement or
undertaking which is not set out or referred to in this Agreement.
10.5.2 No party shall have any right of action (except in the case of
fraud) against any other party to this Agreement arising out of or
in connection with any representation, warranty, agreement or
undertaking which is not set out in this Agreement except to the
extent such representation, warranty, agreement or undertaking is
repeated in this Agreement or the other documents or agreements
referred to herein which are incorporated by reference in this
Agreement.
10.5.3 No variation of this Agreement shall be valid unless it is in
writing and signed by or on behalf of each of the parties hereto.
The expression "VARIATION" shall include any variation, supplement,
deletion or replacement however effected.
42
10.6 TIME OF ESSENCE
Any time, date or period referred to in this Agreement may be extended by
mutual written agreement between the Company (for itself and for and on
behalf of the Selling Shareholder and the Executive Directors) and HSBC
(for itself and for and on behalf of the International Placing
Underwriters), but as regards any time, date or period originally fixed or
any time, date or period so extended as aforesaid, time shall be of the
essence.
10.7 ANNOUNCEMENTS
10.7.1 Subject to Clause 10.7.2, no announcement or public communication
concerning this Agreement or the subject matter hereof shall be
made by any of the parties hereto (and each party shall procure
that their respective directors, officers and agents shall comply
with the restrictions of this Clause 10.7) without the prior
written approval of HSBC.
10.7.2 Any party hereto may make an announcement or public communication
concerning this Agreement, the subject matter hereof or any
ancillary matter hereto if and to the extent:-
(i) required by Law; or
(ii) required by any Governmental Authority to which such party is
subject or submits, wherever situated, including, without
limitation, the Stock Exchange and the SFC whether or not the
requirement has the force of Law,
provided that in such case, the relevant party shall first consult
with HSBC in so far as it is reasonably practicable to do so.
10.8 CONFIDENTIALITY
10.8.1 Subject to Clause 10.8.2, each party hereto shall, and shall
procure that their respective directors, officers and agents will,
treat as strictly confidential all information received or obtained
as a result of entering into or performing this Agreement which
relates to:-
(i) the provisions of this Agreement;
(ii) the negotiations relating to this Agreement;
(iii) the subject matter of this Agreement; or
(iv) the other parties.
10.8.2 Any party hereto may disclose, or permit its directors, officers
and agents to disclose, information which would otherwise be
confidential if and to the extent:-
(i) required by Law;
(ii) required by any Governmental Authority to which such party is
subject or submits, wherever situated, including, without
limitation, the Stock Exchange and the SFC whether or not the
requirement for information has the force of Law;
(iii) required to vest the full benefit of this Agreement in such
party;
43
(iv) disclosed to the professional advisers and auditors of such
party under a duty of confidentiality;
(v) the information has come into the public domain through no
fault of such party;
(vi) the information becomes available to such party on a
non-confidential basis from a person not known by such party
to be bound by a confidentiality agreement with any of the
other parties hereto or to be otherwise prohibited from
transmitting the information;
(vii) the other parties have given prior written approval to the
disclosure, such approval not to be unreasonably withheld or
delayed; or
(viii) (where the disclosure is otherwise than by HSBC or its
directors, officers or agents) HSBC has given prior written
approval to the disclosure.
provided that in relation to (i), (ii) and (iii) above, such party
shall first consult with HSBC prior to making such disclosure.
10.9 RIGHTS OF CONTRIBUTION
The Selling Shareholder and the Executive Directors hereby irrevocably and
unconditionally:
10.9.1 (until the Underwriters' claims have become fully satisfied) waives
any right of contribution or recovery or any claim, demand or
action it may have or be entitled to take against the Company as a
result of any Action made or taken against it/him, whether alone or
jointly with the Company, as the case may be, in consequence of
its/his entering into this Agreement or otherwise with respect to
any act or matter relating to the Global Offering; and
10.9.2 acknowledges and agrees that the Company shall have no liability to
it whatsoever under the provisions of this Agreement or otherwise
in respect of any act or matter relating to the Global Offering.
10.10 INVALIDITY
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the Law of any jurisdiction,
that shall not affect or impair:-
10.10.1 the legality, validity or enforceability in that jurisdiction of
any other provision of this Agreement; or
10.10.2 the legality, validity or enforceability under the Law of any
other jurisdiction of that or any other provision of this
Agreement.
10.11 COUNTERPARTS
This Agreement may be executed in any number of counterparts, and by the
parties hereto on separate counterparts, but shall not be effective until
each party has executed at least one counterpart. Each counterpart when so
executed and delivered shall be an original, but all of which together
shall constitute one and the same instrument.
10.12 GOVERNING LAW
44
This Agreement shall be governed by and construed in accordance with the
laws of Hong Kong.
10.13 DISPUTE RESOLUTION
10.13.1 The parties hereto unconditionally and irrevocably agree that the
courts of Hong Kong shall have non-exclusive jurisdiction to
settle any disputes or differences (including claims for set-off
and counterclaims) arising out of or in connection with this
Agreement, including any dispute regarding the validity or
existence of this Agreement (each a "DISPUTE"). Each of the
parties submits to the non-exclusive jurisdiction of the Hong Kong
courts in connection therewith and unconditionally and irrevocably
waives any objection which it may have now or hereafter to the
laying of any such proceeding in the Hong Kong courts including
any right to invoke any claim that such proceeding have been
brought in an inconvenient forum.
10.13.2 The submission to jurisdiction pursuant to Clause 10.13.1 shall
not (and shall not be construed so as to) limit the right of any
of the parties to commence any proceeding against any other party
in whatsoever jurisdictions shall to it seem fit nor shall the
taking of any proceeding in any one or more jurisdictions preclude
the taking of any proceeding in any other jurisdiction, whether
concurrently or not.
10.13.3 Notwithstanding Clause 10.13.1, each of the parties hereto
unconditionally and irrevocably agrees that each of HSBC and/or
the International Placing Underwriters shall have the option to
refer any Dispute to be finally resolved by arbitration in
accordance with this Clause 10.13.3. Upon written notice by HSBC
and/or the International Placing Underwriters pursuant to this
Clause 10.13.3, such Dispute shall be referred to and finally
resolved by arbitration in accordance with the UNCITRAL
Arbitration Rules (the "RULES") as in force from time to time and
as may be amended by the rest of this Clause 10.13.
There shall be three arbitrators. The appointing authority shall
be the Hong Kong International Arbitration Centre ("HKIAC").
Where there are multiple parties, whether as claimant or as
respondent, the multiple claimants, jointly, shall appoint a
claimants-appointed arbitrator, and the multiple respondents,
jointly, shall appoint a respondents-appointed arbitrator for the
purpose of Article 7(1) of the Rules. The claimants-appointed
arbitrator and the respondents-appointed arbitrator shall then
choose the third arbitrator who will act as chairman of the
arbitral tribunal.
The seat of arbitration shall be Hong Kong, and the arbitration
shall be administered by HKIAC.
The governing law of the arbitration proceedings shall be the laws
of Hong Kong.
The language to be used in the arbitral proceedings shall be
English.
By agreeing to arbitration pursuant to this Clause 10.13.3, the
parties irrevocably waive their right to any form of appeal,
review or recourse to any state court or other judicial authority,
insofar as such waiver may be validly made and to the fullest
extent permitted by applicable Laws.
The award shall be given by a majority decision. If there be no
majority, the award shall be made by the chairman of the arbitral
tribunal alone.
45
10.13.4 Without prejudice to the provisions of Clause 10.13.5 or Clause
10.13.6, each of the parties unconditionally and irrevocably
agrees that any writ, judgement or other notice of process shall,
to the fullest extent permitted by applicable Laws, be validly and
effectively served on it if delivered to its address referred to
in this agreement and marked for the attention of the person
referred to in that Clause or to such other person or address in
Hong Kong as may be notified by the relevant party (as the case
may be) to the other parties hereto pursuant to the provisions of
this agreement.
10.13.5 The Selling Shareholder irrevocably appoints Mr. Jackie Wah of c/o
15th Floor, China Merchants Tower, Shun Tak Centre, 168-200
Connaught Road Central, Hong Kong as its authorised agent for the
service of process in Hong Kong in connection with this Agreement.
Service of process upon Mr. Jackie Wah at the above address shall
be deemed, for all purposes, to be due and effective service, and
shall be deemed completed whether or not forwarded to or received
by any such appointer. If for any reason such agent shall cease to
be the Selling Shareholder's agent for the service of process, the
Selling Shareholder shall forthwith appoint a new agent for the
service of process in Hong Kong acceptable to HSBC and deliver to
each of the other parties hereto a copy of the new agent's
acceptance of that appointment within 14 days, failing which HSBC
shall be entitled to appoint such new agent for and on behalf of
the Selling Shareholder and such appointment shall be effective
upon the giving notice of such appointment to the Selling
Shareholder. Nothing in this Agreement shall affect the right to
serve process in any other manner permitted by Law.
10.13.6 Where proceedings are commenced by any party in any jurisdiction
other than Hong Kong pursuant to Clause 10.13.2, upon being given
notice of such proceedings in writing, the party against whom such
proceedings have been brought shall immediately appoint an agent
to accept service of process in that jurisdiction and shall give
notice to the other party, as the case may be, of the details and
address for service of such agent.
10.14 IMMUNITY
To the extent that any party hereto may in any jurisdiction claim for
itself or its assets immunity from suit, execution, attachment (whether in
aid of execution, before judgement or otherwise) or other legal process or
to the extent that in any such jurisdiction there may be attributed to
itself or its assets such immunity (whether or not claimed), such party
hereby irrevocably agrees not to claim and irrevocably waives such
immunity to the full extent permitted by applicable Laws.
10.15 JUDGEMENT CURRENCY INDEMNITY
The obligation of any party (the "PAYING PARTY") in respect of any sum due
to any other party shall, notwithstanding any judgement in a currency
other than Hong Kong dollars, not be discharged until the first Business
Day, following receipt by the party to receive the payment (the "RECEIVING
PARTY") (as the case may be) of any sum adjudged to be so due in such
other currency, on which (and only to the extent that) the receiving party
(as the case may be) may in accordance with normal banking procedures
purchase Hong Kong dollars with such other currency. If the Hong Kong
dollars so purchased are less than the sum originally due to such party
(as the case may be) hereunder, the paying party agree, as a separate
obligation and notwithstanding any such judgement, to indemnify the
receiving
46
party (as the case may be) against such loss. If the Hong Kong dollars so
purchased are greater than the sum originally due to the receiving party
(as the case may be) hereunder, the receiving party (as the case may be)
agrees to pay to the paying party an amount equal to the excess of the
dollars so purchased over the sum originally due to it hereunder.
10.16 NOTICES
10.16.1 Any notice or other communication given or made under or in
connection with the matters contemplated by this Agreement shall
be in writing and shall be in the English language.
10.16.2 Any such notice or other communication shall be addressed as
provided in Clause 10.16.3 and, if so addressed, shall be deemed
to have been duly given or made as follows:-
(i) if sent by personal delivery, upon delivery at the address
of the relevant party;
(ii) if sent by post, on the third Business Day after the date of
posting;
(iii) if sent by facsimile, on receipt of confirmation of
transmission.
10.16.3 The relevant addresses and facsimile numbers of each party hereto
for the purposes of this Agreement, subject to Clause 10.16.4,
are:-
NAME OF PARTY ADDRESS FACSIMILE NO.
Nam Tai Electronic & 15th Floor, China Merchants Tower (852) 2263 1223
Electrical Products Limited Shun Tak Centre
Nos.168-200 Connaught Road
Central
Hong Kong
Attention: Mr. Joseph Hsu
Nam Tai Electronics, Inc. 15th Floor, China Merchants Tower (852) 2263 1223
Shun Tak Centre
Nos.168-200 Connaught Road
Central
Hong Kong
Attention: Mr. Jackie Wah
Wong Kuen Ling 15th Floor, China Merchants Tower (852) 2253 1223
Shun Tak Centre
Nos.168-200 Connaught Road
Central
Hong Kong
47
Guy Jean Francois Bindels 15th Floor, China Merchants Tower (852) 2263 1223
Shun Tak Centre
Nos.168-200 Connaught Road
Central
Hong Kong
The Hongkong and The Hongkong and Shanghai (852) 2845 5654
Shanghai Banking Banking Corporation Limited
Corporation Limited Level 15
1 Queen's Road Central
Hong Kong
Attention: Mr. Ronald Tham
The International Placing The Hongkong and Shanghai (852) 2845 5654
Underwriters Banking Corporation Limited
c/o The Hongkong and Level 15
Shanghai Banking 1 Queen's Road Central
Corporation Limited Hong Kong
Attention: Mr. Ronald Tham
10.16.4 A party may notify the other parties to this Agreement of a change
to its relevant address or facsimile number for the purposes of
Clause 10.16.3, provided that such notification shall only be
effective on:-
(i) the date specified in the notification as the date on which
the change is to take place; or
(ii) if no date is specified or the date specified is less than
five Business Days after the date on which notice is given,
the date falling five Business Days after notice of any such
change has been given.
10.16.5 All references in this Agreement to notices given to or received
from, consents or requests from or waivers by or consultations
with the International Placing Underwriters shall be to notices
given to or received from, consents or requests from or waivers by
or consultations with HSBC, on behalf of the International Placing
Underwriters.
10.16.6 All references in this Agreement to notices given to or received
from, consents or requests from or waivers by or consultations
with the Executive Directors and/or the Selling Shareholder (as
the case may be) shall be to notices given to or
48
received from, consents or requests from or waivers by or
consultations with the Company, on behalf of the Executive
Directors and/or the Selling Shareholder (as the case may be).
10.17 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND OBLIGATIONS
The respective indemnities, covenants, undertakings, agreements,
representations, warranties and other statements of the Company, the
Selling Shareholder and the Executive Directors or any of them as set
forth in this Agreement or made by or on behalf of any of them pursuant to
this Agreement, shall remain in full force and effect notwithstanding
completion of the Global Offering and regardless of any investigation (or
any statement as to the results thereof) made by or on behalf of any of
the International Placing Underwriters, any of their respective Affiliates
or any of their respective representatives, directors, officers, agents,
employees, advisers. Clauses 4.2, 4.3, 4.4, 7, 8, 10.7, 10.8 and 10.9
shall survive completion of the Global Offering.
10.18 NO WITHHOLDING BY THE COMPANY, THE SELLING SHAREHOLDER AND THE EXECUTIVE
DIRECTORS
All payments by or on behalf of each of the Company, the Selling
Shareholder and the Executive Directors under or in connection with this
Agreement (including deductions from the Placing Moneys) shall be paid
without set-off or counterclaim, and free and clear of and without
deduction or withholding for or on account of, any present or future
taxes, levies, imposts, funds, duties, fees, assessments or other charges
of whatever nature, imposed, levied, collected, withheld or assessed by
any Governmental Authority or any interest, penalties or similar
liabilities with respect thereto ("TAXES"). If any Taxes are required by
law to be deducted or withheld in connection with any such payment, the
Company the Selling Shareholder and the Executive Directors, as the case
may be, will increase the amount so paid so that the amount of such
payment received by the payee is such amount as the payee would have
received if no such deduction or withholding had been made.
10.19 NO TAXATION IN THE HANDS OF HSBC, THE INTERNATIONAL PLACING UNDERWRITERS
AND THE INDEMNIFIED PARTIES
If any sum payable under or in connection with this Agreement to HSBC or
any of the International Placing Underwriters or any of the Indemnified
Parties, or any sum payable under Clause 4 (other than under Clauses 4.1
and 4.2), shall be subject to Taxes in the hands of any of them or taken
into account as a receipt in computing the taxable profits or losses of
any of them, the sum payable shall be increased to such sum as will ensure
that, after payment of any Taxes which would not have arisen but for that
sum, HSBC or such International Placing Underwriter or such Indemnified
Party shall be left with a sum equal to the sum that it would have
received in the absence of such Taxes.
IN WITNESS WHEREOF this Agreement has been entered into the day and year first
before written.
49
SCHEDULE 1
THE INTERNATIONAL PLACING UNDERWRITERS
INTERNATIONAL PLACING UNDERWRITING COMMITMENT
(III)
(I) % OF TOTAL (IV) (V)
NAME OF NUMBER OF NUMBER OF NUMBER OF
INTERNATIONAL INTERNATIONAL INTERNATIONAL OVER-
PLACING (II) PLACING PLACING ALLOTMENT
UNDERWRITER ADDRESS SHARES SHARES SHARES
HSBC 1 Queen's Road 71 127,800,000 30,000,000
Central
Hong Kong
BNP Paribas 36th Floor, Asia Pacific 10 18,000,000
Peregrine Capital Limited Finance Tower
3 Garden Road
Central
Hong Kong
Nomura International 30th Floor, Two International 10 18,000,000
(Hong Kong) Limited Finance Centre
8 Finance Street
Hong Kong
Cazenove Asia Limited 5001, One Exchange Square 3 5,400,000
8 Connaught Place, Central
Hong Kong
DBS Asia Capital Limited 16th Floor, Man Yee Building 3 5,400,000
68 Des Voeux Road
Central
Hong Kong
VC CEF Capital Limited 38th Floor, The Centrium 3 5,400,000
60 Wyndham Street
Central
Hong Kong
50
SCHEDULE 2
THE EXECUTIVE DIRECTORS
NAME ADDRESS
Wong Kuen Ling Flat B, 33rd Floor, Block 11
Tierra Verde
33 Tsing King Road
Tsing Yi
New Territories
Hong Kong
Guy Jean Francois Bindels Flat C
10th Floor
Tower 12
Parc Oasis
Kowloon Tong
Hong Kong
51
SCHEDULE 3
THE REORGANISATION DOCUMENTS
The documents referred to in paragraph 4 of the section headed "Further
information about the Company" in Appendix V to the Prospectus including the
following:
(a) Sale & Purchase Agreement dated 30 December 2002 regarding the transfer of
equipment from NTSZ to Zastron.
(b) Supplemental agreement dated 26 March 2004 between NTSZ and Zastron.
(c) Certificate of Incorporation of the Company.
(d) - First Board Minutes of the Company dated 13 June 2003
- Register of Members of the Company dated 16 June 2003
(e) Sale & Purchase Agreement dated 3 July 2003 regarding the transfer of
interest in NTSZ.
(f) approval document issued by the Ministry of Commerce of the PRC dated 3
December 2003 ([2003] 1108).
(g) Certificate of Approval for Establishment of Enterprises with Investment
of Taiwan, Hong Kong, Macao and Overseas Chinese in the People's Republic
of China dated 4 December 2003 ([1998] 0041).
(h) Business Licence issued by Shenzhen Administration for Industry and
Commerce to NTSZ dated 11 December 2003.
(i) Memorandum of Understanding dated 26 March 2004 between NTSZ and NTEEPHK.
(j) Consultancy Agreement dated 1 October 2003 entered between NTSZ and NTIC.
(k) Approval document issued by the Macao Trade and Investment Promotion
Institute regarding the transfer of NTIC from NTE Inc. to the Company.
(l) Sale & Purchase Agreement dated 24 March 2004 regarding transfer of equity
in NTIC.
52
SCHEDULE 4
THE CONDITIONS PRECEDENT DOCUMENTS
PART A
1 A certified copy of the resolutions of the shareholders of the Company
referred to in paragraph 3 of Appendix V to the Prospectus.
2 A certified copy of the resolution(s) of the Directors or a committee of
the Board of Directors:-
(i) approving and authorising execution, delivery and performance of or
confirming the Underwriting Documents and each of the Operative
Documents to which the Company is a party together with all other
agreements and documents necessary for the Global Offering;
(ii) approving the listing of the Shares on the Stock Exchange;
(iii) approving and authorising the issue of the Preliminary Offering
Circular and the Final Offering Circular on behalf of the Company or
ratifying the same; and
(iv) approving and authorising the issue and the registration with the
Registrar of Companies in Hong Kong and the filing with the
Registrar of Companies in the Cayman Islands of the Public Offer
Documents.
3 A certified copy of the resolutions of the directors of the Selling
Shareholder, inter alia, approving and authorising execution, delivery and
performance of or confirming the Underwriting Documents and each of the
Operative Documents to which it is a party.
4 Certified copies of the Operative Agreements except for the Price
Determination Agreement.
5 A certified copy of each of the service contracts of the Directors.
6 Certified copies of the responsibility letters, powers of attorney and
statements of interests signed by all the Directors in forms previously
agreed by HSBC.
7 Two printed copies of each of the Public Offer Documents each duly signed
by two Directors or their respective duly authorised agents and, if signed
by their respective duly authorised agents, certified copies of the
relevant authorisation document.
8 The Verification Notes signed by or on behalf of each person to whom
responsibility is therein assigned (other than HSBC and its legal
advisers).
9 One signed original or certified copy of the accountants' report dated the
Prospectus Date by the Reporting Accountants, the text of which is
contained in Appendix I to the Prospectus.
10 One signed original of the statement of adjustments and letter relating
thereto both dated the Prospectus Date produced by the Reporting
Accountants.
11 One signed original or certified copy of the letter with the valuation
certificate(s) dated the Prospectus Date from the Property Valuers to the
Directors in connection with the valuation of the property interests of
the Group as at 29 February 2004, the text of which is contained in
Appendix III to the Prospectus.
53
12 One signed original of each of the letters dated the Prospectus Date from
the Reporting Accountants to the Directors and HSBC (as sponsor and on
behalf of the Public Offer Underwriters) confirming the indebtedness
statement contained in the Prospectus, commenting on the statement
contained in the Prospectus as to the sufficiency of working capital and
commenting on the other financial information set out in the Prospectus,
such letters to be in form and substance previously agreed by the
Reporting Accountants with the Company and HSBC on behalf of the Public
Offer Underwriters.
13 One signed original or a certified copy of each of the letters dated the
Prospectus Date referred to in the paragraph headed "Consents of experts"
in Appendix V to the Prospectus containing consents to the issue of the
Prospectus with the inclusion of references to their respective names, and
where relevant, their reports and letters in the form and context in which
they are included.
14 A letter from Johnson Stokes & Master to the International Placing
Underwriters confirming that a copy of each of the documents specified in
Appendix VI to the Prospectus have been delivered to the Registrar of
Companies in Hong Kong as required by section 342C of the Companies
Ordinance.
15 A certified copy of the written confirmation issued by the Registrar of
Companies in Hong Kong confirming registration of the Prospectus as
required by section 342C of the Companies Ordinance.
16 A certified copy of the Articles of Association of the Company which were
conditionally adopted by the sole shareholder of the Company at a special
general meeting which was held on 8 April 2004.
17 A certified copy of each of the material contracts referred to in
sub-paragraphs B(1) of the paragraph headed "Summary of material
contracts" in Appendix V to the Prospectus (other than the Public Offer
Documents and material contracts which are Operative Agreements).
18 One executed original of the Deed Poll.
19 A certified copy of each of the following:
(i) the translation certificate issued by the translators in respect of
the Prospectus;
(ii) the certificate of registration of the Company under Part XI of the
Companies Ordinance.
20 One signed original of the executed comfort letter dated as of the date
hereof, issued by the Reporting Accountants confirming the financial
information with respect to the Company set forth in the Preliminary
Offering Circular (in form and substance satisfactory to HSBC).
21 Certified copies of powers of attorney or authorities under which any of
the Conditions Precedent Documents (other than those material contracts
referred to in paragraph 17 above) are executed.
PART B
In respect of the Placing Closing:
1 One signed original of the comfort letter dated as of the Placing Closing
Date in form and substance satisfactory to HSBC, issued by the Reporting
Accountants.
54
2 One signed original of the legal opinion, dated as of the date immediately
before Placing Closing Date, from Conyers Dill & Pearman, Cayman, as to
Cayman Islands laws in form as previously agreed by HSBC.
3 One signed original of the legal opinion, dated as of the Placing Closing
Date, from Guangdong Jingtian Law Firm, as to PRC law, in form as
previously agreed by HSBC.
4 One signed original of the legal opinion, dated as of the Placing Closing
Date, from Jingtian & Gongcheng, as to PRC law, in form and substance
satisfactory to HSBC.
5 One signed original of the legal opinion, dated as of the Placing Closing
Date, from Artur Dos Santos Robarts, as to Macao law, in form as
previously agreed by HSBC.
6 One signed original of the legal opinion, dated as of the date immediately
before Placing Closing Date, from Johnson Stokes & Master, as to Hong Kong
law, in form as previously agreed by HSBC.
7 One signed original of the legal opinion, dated as of the date immediately
before Placing Closing Date, from McW. Todman & Co, as to British Virgin
Islands law, in form as previously agreed by HSBC.
8 One signed original of the "10b-5" disclosure letter, dated as of the
Placing Closing Date, issued by Linklaters in form and substance
satisfactory to HSBC.
9 A certificate dated as of the Placing Closing Date, in substance and form
satisfactory to HSBC, signed by a duly authorised officer of and on behalf
of each of the Company and the Selling Shareholder and by each of the
Executive Directors confirming (i) that such authorised officer has
carefully reviewed the Final Offering Circular and, to the best of such
officer's knowledge, the representation set forth in Clause 13.6 of
Schedule 7 is true and correct; (ii) that the representations and
warranties of the Company and the Selling Shareholder and the Executive
Directors are true and correct in all material respects as of the Placing
Closing Date, (iii) that the Company, Selling Shareholder and the
Executive Directors have performed all of their respective obligations and
satisfied all of the conditions required to be performed or satisfied
under this Agreement at or prior to the Placing Closing Date; (iv) that to
the best of such officer's knowledge there has not occurred any
termination events which would have such material adverse impact as set
out in Clause 9.1; (v) that subsequent to the date of the most recent
financial statements of the Company in the Final Offering Circular, there
has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole, except as set forth in or
contemplated by the Final Offering Circular or as described in such
certificate; and (vi) as to such other matters as HSBC may reasonably
request in writing 2 Business Days before the Placing Closing Date.
10 A certified copy/copies of the resolutions of the board committee of the
Company and the Selling Shareholder relating to the Placing Closing (in
forms satisfactory to HSBC).
In respect of each Option Closing:
11 One signed original of the bring down comfort letter dated as of the
Option Closing Date in form and substance satisfactory to HSBC, issued by
the Reporting Accountants.
1
12 One signed original of the bring down legal opinion, dated as of the
Option Closing Date, from Conyers Dill & Pearman, Cayman, as to Cayman
Islands laws in form and substance satisfactory to HSBC.
[COMMENT: items 13-17 are the same as items 3-7]
13 One signed original of the bring down "10b-5" disclosure letter, dated as
of the Option Closing Date, issued by Linklaters in form and substance
satisfactory to HSBC.
14 A certificate dated as of the Option Closing Date, in substance and form
satisfactory to HSBC, signed by a duly authorised officer of and on behalf
of each of the Company and the Selling Shareholder and by each of the
Executive Directors confirming the matters as set out in paragraph 8 of
Part B of this Schedule. For the purpose of this paragraph 17, all
references to the Placing Closing Date in paragraph 8 of Part B shall be
deemed to be references to the relevant Option Closing Date.
15 A certified copy/copies of the resolutions of the board committee of the
Company and the Selling Shareholder relating to the Option Closing (in
forms satisfactory to HSBC).
2
SCHEDULE 5
FORM OF DEED POLL
THIS DEED POLL is made on [-] 2004 by Nam Tai Electronic & Electrical Products
Limited, a limited company incorporated under the laws of the Cayman Islands,
whose registered office is at Century Yard, Cricket Square, Hutchins Drive, P.O.
Box 2681 GT, George Town, Grand Cayman, British West Indies (the "COMPANY").
WHEREAS:-
(A) The Company has entered into a placing and underwriting agreement dated
[22] April 2004 (the "AGREEMENT") with, inter alia, The Hongkong and
Shanghai Banking Corporation Limited ("HSBC") relating to the shares of
the Company to be sold by Nam Tai Electronics, Inc. in connection with the
Global Offering described in the Agreement.
(B) In order to ensure compliance with Rule 144A under the United States
Securities Act of 1933 (the "US SECURITIES ACT") in connection with
resales of its Shares, the Company intends to comply with the information
delivery requirements of Rule 144A(d)(4) under the US Securities Act.
NOW THIS DEED WITNESSETH AS FOLLOWS and is made by way of deed poll:-
1 The following expressions shall have the following meanings:
"SHARE" means a share of nominal value HK$0.01 in the capital of the
Company;
"PROSPECTIVE PURCHASER" means a prospective purchaser of Shares designated
to the Company as such by a Shareholder; and
"SHAREHOLDER" means the person recorded in the Company's register of
members as a holder for the time being of the Shares or any person having
a beneficial interest in the Shares.
2 The Company hereby undertakes that, for so long as any Shares are
"restricted securities" within the meaning of Rule 144(a)(3) under the US
Securities Act, the Company will, during any period in which it is neither
subject to Section 13 or 15(d) of the United States Securities Exchange
Act of 1934 nor exempt from reporting pursuant to Rule 12g3-2(b)
thereunder, provide to any holder or beneficial owner of such restricted
securities or to any prospective purchaser of such restricted securities
designated by such holder or beneficial owner, upon the request of such
holder, beneficial owner or prospective purchaser, the information
required to be provided by Rule 144A(d)(4) under the US Securities Act.
3 This Deed Poll shall be governed by and construed in accordance with the
laws of the Hong Kong Special Administrative Region of the People's
Republic of China ("HONG KONG").
4 Any suit, action or proceeding ("PROCEEDING") in relation to any dispute
arising out of or in connection with this Deed Poll may be brought in the
Hong Kong courts and the Company submits to the non-exclusive jurisdiction
of such courts in connection therewith. The Company unconditionally and
irrevocably waives any objection which it may have now or hereafter to the
laying of any such Proceeding in the Hong Kong courts including any right
to invoke any claim that such Proceeding have been brought in an
inconvenient forum. The foregoing submission to jurisdiction shall not
(and shall not be construed so as to) limit the right to commence any
Proceeding in any other jurisdictions nor shall the taking of any
3
Proceeding in any one or more jurisdictions preclude the taking of any
Proceeding in any other jurisdiction, whether concurrently or not. To the
extent that the Company may in any jurisdiction claim for itself or its
assets immunity from suit, execution, attachment (whether in aid of
execution, before judgement or otherwise) or other legal process or to the
extent that in any such jurisdiction there may be attributed to itself or
its assets such immunity (whether or not claimed), the Company hereby
irrevocably agrees not to claim and irrevocably waives such immunity to
the full extent permitted by applicable laws. If, for any reason the
Company does not have an agent to receive service of process in Hong Kong,
it will promptly appoint a substitute process agent and notify HSBC of
such appointment.
IN WITNESS whereof this deed poll has been executed as a deed on the date stated
above.
SEALED with the Seal of
NAM TAI ELECTRONIC & ELECTRICAL }
PRODUCTS LIMITED
and SIGNED by
Director
Director/Company Secretary
in the presence of:
Witness:
4
SCHEDULE 6
PROFESSIONAL INVESTOR TREATMENT NOTICE
1 You are a Professional Investor by reason of your being within a category
of person described in the Securities and Futures (Professional Investor)
Rules as follows:
1.1 a trust corporation having been entrusted with total assets of not less
than HK$40 million (or equivalent) as stated in its latest audited
financial statements prepared within the last 16 months, or in the latest
audited financial statements prepared within the last 16 months of the
relevant trust or trusts of which it is trustee, or in custodian
statements issued to the trust corporation in respect of the trust(s)
within the last 12 months;
1.2 a high net worth individual having, alone or with associates on a joint
account, a portfolio of at least HK$8 million (or equivalent) in
securities and/or currency deposits, as stated in a certificate from an
auditor or professional accountant or in custodian statements issued to
the individual within the last 12 months;
1.3 a corporation the sole business of which is to hold investments and which
is wholly owned by an individual who, alone or with associates on a joint
account, falls within paragraph 1.2 above; and
1.4 a high net worth corporation or partnership having total assets of at
least HK$40 million (or equivalent) or a portfolio of at least HK$8
million (or equivalent) in securities and/or currency deposits, as stated
in its latest audited financial statements prepared within the last 16
months or in custodian statements issued to the corporation or partnership
within the last 12 months.
HSBC has categorised you as a Professional Investor based on information
you have given us. You will inform us promptly in the event any such
information ceases to be true and accurate. You will be treated as a
Professional Investor in relation to all investment products and markets.
2 As a consequence of categorisation as a Professional Investor, HSBC is not
required to fulfil certain requirements under the Code of Conduct for
Persons Licensed by or Registered with the Securities and Futures
Commission (the "CODE") and other Hong Kong regulations. While HSBC may in
fact do some or all of the following in providing services to you, HSBC
has no regulatory responsibility to do so.
2.1 Client agreement
HSBC is not required to enter into a written agreement complying with the
Code relating to the services that are to be provided to you.
2.2 Risk disclosures
HSBC is not required by the Code to provide you with written risk warnings
in respect of the risks involved in any transactions entered into with
you, or to bring those risks to your attention.
2.3 Information about HSBC
HSBC is not required to provide you with information about its business or
the identity and status of employees and others acting on its behalf with
whom you will have contact.
5
2.4 Prompt confirmation
HSBC is not required by the Code to promptly confirm the essential
features of a transaction after effecting a transaction for you.
2.5 Information about clients
HSBC is not required to establish your financial situation, investment
experience or investment objectives, except where HSBC is providing advice
on corporate finance work.
2.6 Nasdaq - Amex Pilot Program
If you wish to deal through the Stock Exchange in securities admitted to
trading on the Stock Exchange under the Nasdaq-Amex Pilot Program, HSBC is
not required to provide you with documentation on that program.
2.7 Suitability
HSBC is not required to ensure that a recommendation or solicitation is
suitable for you in the light of your financial situation, investment
experience and investment objectives.
3 You have the right to withdraw from being treated as a Professional
Investor at any time in respect of all or any investment products or
markets on giving written notice to the Compliance Department of HSBC.
4 By entering into this Agreement, you represent and warrant to HSBC that
you are knowledgeable and have sufficient expertise in the products and
markets that you are dealing in and are aware of the risks in trading in
the products and markets that you are dealing in.
5 By entering into this Agreement, you hereby agree and acknowledge that you
have read and understood and have had explained to you the consequences of
consenting to being treated as a Professional Investor and the right to
withdraw from being treated as such as set out herein and that you hereby
consent to being treated as a Professional Investor.
6 By entering into this Agreement, you hereby agree and acknowledge that
HSBC will not provide you with any contract notes, statements of account
or receipts under the Hong Kong Securities and Futures (Contract Notes,
Statements of Account and Receipts) Rules where such would otherwise be
required.
6
SCHEDULE 7
THE WARRANTIES
PART 1
1 CAPACITY AND AUTHORITY
1.1 Each of the Warrantors has the requisite power and authority to enter into
and perform its obligations under each of this Agreement and each of the
Operative Documents to which it is a party.
1.2 This Agreement and each of Operative Documents to which the Warrantors or
any one of them is a party and any other document required to be executed
by the Warrantors or any one of them pursuant to the provisions of this
Agreement or the Operative Documents constitute or will, when executed and
delivered, constitute valid and binding obligations of the Warrantors
enforceable in accordance with their respective terms.
1.3 The execution and delivery of, and the performance by each of the
Warrantors of its obligations under this Agreement or any of the Operative
Documents to which it is a party do not and will not, and each such
document does not and will not:
1.3.1 result in a breach of any provision of the memorandum or articles of
association or bye-laws (or equivalent constitutive documents) of
the Warrantors or any member of the Group; or
1.3.2 result in a breach of, or constitute a default under, any indenture,
mortgage, charge, trust, lease, agreement, instrument or obligation
to which any member of the Group or any of the Warrantors is a party
or by which any member of the Group or any of the Warrantors or any
of their respective assets is bound;
1.3.3 result in a breach of any Laws to which any member of the Group or
any of the Warrantors is subject or by which any member of the Group
or any of the Warrantors or any of their respective assets is bound;
1.3.4 except as disclosed in the Prospectus, the Preliminary Offering
Circular and the Final Offering Circular, require any Approval from
any Government Authority or the sanction or consent of its
shareholders; or
1.3.5 result in the creation or imposition of any Encumbrance or other
restriction upon any assets of any member of the Group.
1.4 Each member of the Group has been duly incorporated and is validly
existing under the laws of the jurisdiction in which it is established and
is capable of suing and being sued.
1.5 Each member of the Group has the legal right and authority to own, use,
lease and operate its assets and to conduct its business in the manner
presently conducted.
1.6 Neither the Company nor any of the Subsidiaries is in violation of any of
its respective constitutive documents.
1.7 None of the Warrantors or any of the Subsidiaries has taken any action nor
have any steps been taken or legal, legislative or administrative
proceedings been started or threatened (i) to wind up, dissolve, make
dormant, or eliminate the Company or (as the case may be) the Selling
Shareholder or (as the case may be) any of the Subsidiaries, or (ii) to
withdraw, revoke or cancel any Approval to conduct business of any member
of the Group.
7
2 THE REORGANISATION
2.1 Each step of the Reorganisation was effected in compliance with all
applicable Laws of all appropriate jurisdictions.
2.2 Neither the Reorganisation (or its implementation) nor any of the
Reorganisation Documents:
2.2.1 resulted or will result in a breach of any of the terms or
provisions of, or in the case of the Company, its Articles of
Association (or its articles of association at the time) or, in the
case of any Subsidiary, its constituent documents; or
2.2.2 resulted or will result in a breach of, or constituted or will
constitute a default under, any indenture, mortgage, charge, trust,
lease, agreement, instrument or obligation to which the Company or
any Subsidiary was or is a party or by which the Company or any
Subsidiary or any of their respective assets was or is bound; or
2.2.3 resulted or will result in a breach of any Laws to which the Company
or any Subsidiary was or is subject or by which the Company or any
Subsidiary or any of their respective assets was or is bound; or
2.2.4 resulted or will result in the creation or imposition of any
Encumbrance or other restriction upon any assets of any member of
the Group; or
2.2.5 has rendered or will render the Company or any of the Subsidiaries
liable to any additional tax, duty, charge, impost or levy of any
amount which has not been provided for in the accounts based upon
which the accountants' report was prepared by the Reporting
Accountants and set out in Appendix I to the Prospectus, or in the
Deed of Indemnity or otherwise described in the Prospectus, the
Preliminary Offering Circular and the Final Offering Circular.
2.3 All Approvals required in connection with the Reorganisation have been
obtained and are in full force and effect and no Approval is subject to
any condition precedent which has not been fulfilled or performed.
2.4 There are no legal or administrative or other proceedings pending anywhere
challenging the effectiveness or validity of the Reorganisation or any of
the Reorganisation Documents and, to the best knowledge, information,
belief and awareness of the Warrantors, no such proceedings are threatened
or contemplated by any Governmental Authority or by any other person.
3 THE GLOBAL OFFERING
3.1 The details of the authorised and issued share capital of the Company and
the Subsidiaries set out in the Prospectus, the Preliminary Offering
Circular and the Final Offering Circular are true and accurate in all
respects.
3.2 There are no outstanding securities convertible into or exchangeable for,
or warrants, rights or options to purchase from the Company, or subscribe
for, or obligations of the Company to issue or sell, or pre-emptive or
other rights to subscribe or acquire, shares or securities in any member
of the Group.
3.3 The Offer Shares conform to the description thereof contained in the
Prospectus, the Preliminary Offering Circular and the Final Offering
Circular and such description is true and correct in all respects.
8
3.4 The Company has obtained an approval in principle for the listing of, and
permission to deal in, the shares of the Company in issue or to be issued,
as described in the Prospectus, the Preliminary Offering Circular and the
Final Offering Circular, on the Stock Exchange.
3.5 The performance by the Company and the Selling Shareholder of their
respective obligations under the Global Offering; the sale and transfer of
the Offer Shares; and the issue, publication, distribution or making
available of the Public Offer Documents, the Formal Notice, the
Preliminary Offering Circular and the Final Offering Circular have been
duly authorised and do not and will not:-
3.5.1 result in a violation or breach of any provision of the Articles of
Association; or
3.5.2 result in a breach of, or constitute a default under, any indenture,
mortgage, charge, trust, lease, agreement or other instrument to
which any member of the Group is a party or by which any member of
the Group or any of its assets is bound; or
3.5.3 result in a breach of any Laws to which any member of the Group is a
party or is subject or by which any member of the Group or any of
their respective assets is bound; or
3.5.4 except as disclosed in the Prospectus, the Preliminary Offering
Circular and the Final Offering Circular, require any Approval from
any Governmental Authority or, in the case of the Company, the
sanction or consent of its shareholders; or
3.5.5 result in the creation or imposition of any Encumbrance or other
restriction upon any assets of any member of the Group.
3.6 All Approvals required for the performance by the Company and the Selling
Shareholder of their respective obligations under the Global Offering; the
sale and transfer of the Offer Shares; and the issue, publication,
distribution or making available of each of the Public Offer Documents,
the Formal Notice, the Preliminary Offering Circular and the Final
Offering Circular have been or will (prior to the Prospectus Date) be
irrevocably and unconditionally obtained and are in full force and effect.
3.7 All of the Offer Shares:
3.7.1 are fully paid up;
3.7.2 have not been issued in violation of or subject to any right of
pre-emptive right, right of first refusal or similar rights; and
3.7.3 are freely transferable by the Selling Shareholder and there are no
restrictions on subsequent transfers of the Offer Shares under the
Laws of the Cayman Islands.
3.8 No holder of Shares is or will be subject to any liability regarding the
Company arising out of his holding of Shares (except to the extent of the
amount payable for such Shares on purchase under the terms of the Global
Offering).
3.9 There are no limitations on the rights of holders of Shares to hold or
vote or transfer their shares.
3.10 All dividends and other distributions declared and payable on the shares
of capital stock of the Company may under the current laws and regulations
of the Cayman Islands be paid to the shareholders of the Company in Hong
Kong dollars, and may be converted into
9
foreign currency that may be freely transferred out of the Cayman Islands
and all such dividends and other distributions will not be subject to
withholding or other taxes under the laws and regulations of the Cayman
Islands and are otherwise free and clear of any other tax, withholding or
deduction in the Cayman Islands and may be so paid without the necessity
of obtaining any Approval from any Governmental Authority in the Cayman
Islands.
3.11 None of the Warrantors nor any of their respective affiliates, agents and
(where applicable) subsidiaries, nor any person acting on its or their
behalf, has taken or will take or caused or authorised or will cause or
authorise any other person to take, directly or indirectly, any
stabilizing action or any action designed to or which constitutes or which
cause or to result in, or that has constituted or which might reasonably
be expected to cause or result in, the stabilization or manipulation, in
violation of applicable Laws, of the price of any security of the Company,
provided that the granting of the Over-allotment Option shall not
constitute a breach of this paragraph 3.11.
4 THE ACCOUNTS
4.1 The audited combined results of the Group for each of the three years
ended the Accounts Date and the audited combined net assets of the Group
as at the Accounts Date contained in the accountants' report prepared by
the Reporting Accountants and set out in Appendix I to the Final Offering
Circular have been prepared in accordance with generally accepted Hong
Kong accounting principles, standards and practices so as to give a true
and fair view of the combined net assets of the Group at the Accounts Date
and of the results of the Group for the accounting reference period of
three years ending on the Accounts Date and:
4.1.1 such accounts are accurate in all respects, make due provision for
any bad or doubtful debts and make appropriate provision for (or
contain a note in accordance with good accounting practice
respecting) all deferred or contingent liabilities, whether
liquidated or unliquidated at the date thereof;
4.1.2 depreciation of fixed assets has been made at rates sufficient to
spread the cost over their respective estimated useful lives to the
Group; and
4.1.3 the profits and losses shown by such accounts and the trend of
profits thereby shown have not been affected by any unusual or
exceptional item or by any other matter which has rendered such
profits or losses unusually high or low.
4.2 The unaudited management accounts of the Group for the 2 months ended 29
February 2004 have been prepared in accordance with generally accepted
Hong Kong accounting principles, standards and practices so as to give a
true and fair view of the state of affairs of the Group as at 29 February
2004 and of the results of the Group for the accounting reference period
of 2 months ended 29 February 2004 and:
4.2.1 such accounts, make proper provision for any bad or doubtful debts
and make appropriate provision for (or contain a note in accordance
with good accounting practice respecting) all deferred or contingent
liabilities, whether liquidated or unliquidated at the date thereof;
4.2.2 depreciation of fixed assets has been made at rates sufficient to
spread the cost over their respective estimated useful lives to the
Group; and
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4.2.3 the profits and losses shown by such accounts and the trend of
profits thereby shown have not been affected by any unusual or
exceptional item or by any other matter which has rendered such
profits or losses unusually high or low.
4.3 The Reporting Accountants, who have certified certain financial statements
of the Company and its Subsidiaries, are qualified independent
professional accountants as required by the Listing Rules, the Companies
Ordinance, the Professional Accountants Ordinance, and the rules and
regulations thereunder.
5 CHANGES SINCE THE ACCOUNTS DATE
5.1 Since the Accounts Date:
5.1.1 each member of the Group has carried on and will carry on business
in the ordinary and usual course so as to maintain it as a going
concern and in the same manner as previously carried on and since
such date has not entered into any contract, transaction or
commitment outside the ordinary course of business or of an unusual
or onerous nature;
5.1.2 there has been no material adverse change, or any development
involving a prospective material adverse change, in the general
affairs, management, financial condition or prospects of the said
business or the earnings, business affairs or net asset value of the
said business or of the Group taken as a whole as compared with the
position or prospects disclosed by the audited combined net assets
of the Group referred to in paragraph 4.1 above and there has been
no damage, destruction or loss (whether or not covered by insurance)
affecting the said business or its assets;
5.1.3 each member of the Group has continued to pay its creditors in the
ordinary course of business;
5.1.4 save as disclosed in the Prospectus, the Preliminary Offering
Circular and the Final Offering Circular, no member of the Group has
acquired, sold, transferred or otherwise disposed of any assets of
whatsoever nature or cancelled or waived or released or discounted
in whole or in part any debts or claims, except in each case in the
ordinary course of business;
5.1.5 save as disclosed in the Prospectus, the Preliminary Offering
Circular and the Final Offering circular, no member of the Group has
purchased or reduced any of its share capital, nor declared, paid or
made any dividend or distribution of any kind on any class of
shares; and
5.1.6 no member of the Group has taken on or become subject to any
material contingent liability.
6 FINANCIAL REPORTING PROCEDURES
The Directors have established procedures which provide a reasonable basis
for them to make proper judgements as to the financial position and
prospects of the Group, taken as a whole, and the Group maintains a system
of internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorisations; (ii) transactions are recorded as necessary to
permit preparation of complete and accurate returns and reports to
regulatory bodies as and when required by them and financial statements in
accordance with the relevant generally accepted accounting principles and
applicable accounting requirements;
11
(iii) access to assets is permitted only in accordance with management's
general or specific authorisation; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate actions taken with respect to any differences. The Group's
current management information and accounting control system has been in
operation for at least three years (or since incorporation, whichever is
shorter) during which none of them has experienced any difficulties with
regard to (i) through (iv) above or with regard to ascertaining at any
point in time the differences in real time between budgeted and actual
expenses.
7 ACCOUNTING AND OTHER RECORDS
The statutory books, books of account and other records of whatsoever kind
of each member of the Group are up-to-date and contain complete and
accurate records required by Law to be dealt with in such books and no
notice or allegation that any is incorrect or should be rectified has been
received. All accounts, documents and returns required by Law to be
delivered or made to the Registrar of Companies in Hong Kong and the
Cayman Islands or any other authority have been duly and correctly
delivered or made.
8 CAPITAL AND CONTRACTUAL COMMITMENTS
8.1 No member of the Group has any capital commitment or any guarantee or
other contingent liabilities.
8.2 No member of the Group is, or has been, party to any unusual, long-term or
onerous commitments, contracts or arrangements not wholly on an arm's
length basis in the ordinary and usual course of business. For these
purposes, a long-term contract, commitment or arrangement is one which is
unlikely to have been fully performed in accordance with its terms more
than six months after the date it was entered into or undertaken or is
incapable of termination by the relevant member of the Group on six
months' notice or less.
8.3 No member of the Group is party to any agency, distributorship, marketing,
purchasing, manufacturing or licensing agreement or arrangement or any
agreement or arrangement which restricts its freedom to carry on its
business in any part of the world in such manner as it thinks fit.
8.4 All the contracts and all leases, tenancies, licences, concessions and
agreements of whatsoever nature to which any member of the Group is a
party are valid, binding and enforceable obligations of the parties
thereto and the material terms thereof have been complied with by the
relevant member of the Group and by all the other parties thereto and
there are no grounds for rescission, avoidance or repudiation of any of
the contracts or such leases, tenancies, licences, concessions or
agreements and no notice of termination or of intention to terminate has
been received in respect of any thereof.
9 LITIGATION AND OTHER PROCEEDINGS
9.1 Save as disclosed in the Prospectus, the Preliminary Offering Circular and
the Final Offering Circular, no litigation, arbitration or governmental
proceedings or investigations directly or indirectly involving any member
of the Group or involving or affecting any of the directors of any member
of the Group or any member of the Group is in progress or, to the best
knowledge, information, belief and awareness of the Warrantors, or any of
them, is threatened or pending and to the best knowledge, information,
belief and awareness of the Warrantors after due and careful enquiry,
there are no circumstances likely to give rise to any such litigation,
arbitration or governmental proceedings or investigations.
12
9.2 No member of the Group which is a party to a joint venture or
shareholders' agreement is in dispute with the other parties to such joint
venture or shareholders' agreement and to the best knowledge, information,
belief and awareness of the Warrantors after due and careful enquiry,
there are no circumstances which may give rise to any dispute or affect
the relevant member's relationship with such other parties which might be
expected to have a material adverse effect on such joint venture or
company or its business or finances.
10 INDEBTEDNESS/DEFAULT
10.1 Save as disclosed in the Prospectus, the Preliminary Offering Circular and
the Final Offering Circular, no member of the Group has any outstanding
liabilities, term loans, other borrowings or indebtedness in the nature of
borrowings, including bank overdrafts and loans, debt securities or
similar indebtedness, hire purchase commitments or any mortgages and
charges.
10.2 No outstanding indebtedness of any member of the Group which is material
taken in the context of the Group as a whole has become repayable before
its stated maturity, nor has any security in respect of such indebtedness
become enforceable by reason of default by any member of the Group
10.3 No person to whom any indebtedness of any member of the Group, which is
material taken in the context of the Group as a whole and which is
repayable on demand, is owed has demanded or threatened to demand
repayment of, or to take steps to enforce any security for, the same.
10.4 No circumstance has arisen such that any person is now entitled to require
payment of any indebtedness or under any guarantee of any liability of any
member of the Group which is material taken in the context of the Group as
a whole by reason of default by any such member or any other person or any
guarantee given by any member of the Group which is material taken in the
context of the Group as a whole.
10.5 No event has occurred and is subsisting or, to the best knowledge,
information, belief and awareness of the Warrantors, is about to occur
which constitutes or would (whether with the expiry of any applicable
grace period or the fulfilment of any condition or the giving of any
notice or the compliance with any other formality or otherwise) constitute
a default under, or result in the acceleration by reason of default of,
any obligations under any agreement, undertaking, instrument or
arrangement to which any member of the Group is a party or by which any of
them or their respective revenues or assets are bound.
10.6 The amounts borrowed by each member of the Group do not exceed any
limitation on its borrowing contained in its articles of association or
bye-laws (or equivalent constituent documents), any debenture or other
deed or document binding upon it and except in the ordinary course of
business, no member of the Group has factored any of its debts, or engaged
in financing of a type which would not be required to be shown or
reflected in its audited accounts.
10.7 All the Group's borrowing facilities have been duly executed and are in
full force and effect. All undrawn amounts under such borrowing facilities
are or will be capable of drawdown. No event has occurred and no
circumstances exist which could cause any undrawn amounts under any such
borrowing facilities to be unavailable for drawing as required.
10.8 No event has occurred and no circumstances exist in relation to any
government, regional, state or local authority investment grants, loan
subsidies or financial assistance received by or pledged to any member of
the Group in consequence of which any of the member of
13
the Group is or may be held liable to forfeit or repay in whole or in part
any such grant or loan.
11 ARRANGEMENTS WITH RELATED PARTIES
11.1 No indebtedness (actual or contingent) and no contract or arrangement is
outstanding between any member of the Group and any director of any member
of the Group or any of his associates (as defined in the Listing Rules).
11.2 Save as disclosed in the Prospectus, the Preliminary Offering Circular and
the Final Offering Circular or for such transactions as may be entered
into by the Company pursuant to any of the Operative Documents, no
indebtedness (actual or contingent) and no contract or arrangement is
outstanding between any member of the Group and the Warrantors (excluding
the Company) or any of them or any company (excluding the members of the
Group) or undertaking which is owned or controlled by the Warrantors
(excluding the Company) or any of them (whether by way of shareholding or
otherwise).
11.3 None of the Warrantors (excluding the Company) nor any of their respective
associates (as defined in the Listing Rules), either alone or in
conjunction with or on behalf of any other person, is engaged in any
business of any member of the Group or any business similar to or in
competition with the business of any member of the Group to the extent
that there could be a conflict of interests between the Warrantors
(excluding the Company) or any of their respective associates (as defined
in the Listing Rules) and the general body of shareholders of the Company,
nor are any of the Warrantors (excluding the Company) or their respective
associates (as defined in the Listing Rules) interested, directly or
indirectly, in any assets which have since the date two years immediately
preceding the Prospectus Date been acquired or disposed of by or leased to
any member of the Group.
11.4 There are no relationships or transactions not in the ordinary course of
business between any member of the Group and their respective customers or
suppliers.
11.5 In respect of the connected transactions (as defined under the Listing
Rules) of the Group (the "CONNECTED TRANSACTIONS"): (A) the statements
contained in the Prospectus, the Preliminary Offering Circular and the
Final Offering Circular relating to the Connected Transactions are true
and accurate and there are no other facts the omission of which would make
any such statements misleading, and there are no other Connected
Transactions which have not been disclosed in the Prospectus, the
Preliminary Offering Circular and Final Offering Circular; (B) all
information (including but not limited to historical figures) and
documentation provided by the Company to HSBC and the International
Placing Underwriters are true and accurate and complete and there is no
other information or document which have not been provided the result of
which would make the information and documents so received misleading; (C)
the transactions mentioned in the section "Connected Transactions" in the
Prospectus, the Preliminary Offering Circular and the Final Offering
Circular have been entered into and will be carried out in the ordinary
course of business, on normal commercial terms and are fair and reasonable
so far as the shareholders of the Company are concerned; (D) each of the
Company and (where applicable) the Selling Shareholder has complied with
and undertakes to continue to comply with the terms of the Connected
Transactions disclosed in the Prospectus, the Preliminary Offering
Circular and the Final Offering Circular so long as the agreement or
arrangement relating thereto is in effect and shall inform HSBC should
there be any breach of any such terms either before or after the listing
of Shares on the Stock Exchange; (E) each of the Connected Transactions
and related agreements and undertakings as
14
disclosed in the Prospectus, the Preliminary Offering Circular and the
Final Offering Circular constitutes a legal, valid and binding agreement
or undertaking of the relevant parties thereto; and (F) each of the
Connected Transactions has been consummated and was and will be effected
in compliance with all applicable Laws.
12 GROUP STRUCTURE
12.1 The Subsidiaries are the only subsidiaries of the Company.
12.2 No member of the Group has any branch, agency, place of business or
permanent establishment outside Hong Kong, the Cayman Islands, Macao and
the PRC.
12.3 No member of the Group acts or carries on business in partnership with any
other person or is a member of any corporate or unincorporated body,
undertaking or association or holds or is liable on any share or security
which is not fully paid up or which carries any liability.
12.4 Each joint venture contract and shareholders' agreement in respect of
which a member of the Group is a party is legal, valid, binding and
enforceable in all respects in accordance with its terms under its
governing law and all relevant Approvals in respect thereof have been
obtained.
12.5 None of the member of the Group is engaged in any business activity or has
any asset or liability (whether actual, contingent or otherwise) which is
not directly or indirectly related to the business of the Group as
described in the Prospectus, the Preliminary Offering Circular and the
Final Offering Circular.
13 ACCURACY AND ADEQUACY OF INFORMATION SUPPLIED
13.1 The recitals to this Agreement are true and accurate in all respects.
13.2 Subject to limitations set out in the Prospectus, the Preliminary Offering
Circular and the Final Offering Circular, the statistical and market
related data included in the Prospectus, the Preliminary Offering Circular
and the Final Offering Circular are based on or derived from sources which
the Warrantors believe to be accurate and reliable.
13.3 All information supplied or disclosed by or on behalf of any member of the
Group and/or any director of any member of the Group and/or any of the
Warrantors to the Underwriters, the Reporting Accountants, the Property
Valuers and other professional advisers to the Underwriters for the
purposes of the Global Offering is true and accurate and not misleading
and was given in good faith and all forward-looking statements so supplied
or disclosed have been made after due and proper consideration and, where
appropriate, are based on the assumptions referred to in the Prospectus,
the Preliminary Offering Circular and the Final Offering Circular.
13.4 All information requested from the Company by the Reporting Accountants
and the Property Valuers for the purposes of their reports, letters, and
certificates to the Company and/or the Underwriters has been supplied to
them. No information was withheld from the Reporting Accountants and the
Property Valuers and the Company does not disagree with any aspect of the
reports, letters or certificates prepared by the Reporting Accountants and
the Property Valuers and the opinions attributed to the Directors in such
reports or letters are honestly held by the Directors and are fairly based
upon facts within their knowledge after due and careful consideration.
15
13.5 The replies to the questions set out in the Verification Notes given by or
on behalf of the Company or the Selling Shareholder or the Directors were
so given by persons having appropriate knowledge and duly authorised for
such purposes and all such replies have been given in full and in good
faith and were, and remain, true and accurate and not misleading and
contain all information and particulars with regard to the subject matter
thereof with no omissions.
13.6 None of the Public Offer Documents, the Preliminary Offering Circular and
the Final Offering Circular contain or will 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
are made, not misleading or which are material for disclosure therein. All
expressions of opinion or intention therein (including but not limited to
the statements regarding the sufficiency of working capital, use of
proceeds, indebtedness, prospects, dividends, material contracts and
litigation) are made on reasonable grounds or, where appropriate,
reasonable assumptions and are truly and honestly held and there are no
other material facts the omission of disclosure therein of which would
make any such statement or expression misleading.
13.7 All forward-looking statements contained in the Prospectus, the
Preliminary Offering Circular and the Final Offering Circular are made
after due and proper consideration, are based on relevant assumptions
referred to therein and represent reasonable and fair expectations
honestly held based on facts known to the Group and/or the Warrantors or
any of them and there will be no other assumptions on which such are based
other than the assumptions referred to in the Public Offer Documents, the
Preliminary Offering Circular and the Final Offering Circular in which
such forward-looking statements are contained. Such forward-looking
statements do not omit or neglect to include or take into account of any
facts or matters which are or may be material to such forward-looking
statements or to the Global Offering.
13.8 Without limiting the generality of the foregoing, each of the Prospectus,
the Preliminary Offering Circular and the Final Offering Circular contains
all particulars and information reasonably necessary to enable an investor
to make an informed assessment of the activities, assets and liabilities,
financial position, management and prospects of the Group and its profits
and losses and of the rights attaching to the Shares and there are no
other facts the omission of which would make any statement in the
Prospectus, the Preliminary Offering Circular or the Final Offering
Circular misleading or which is in the context of the Global Offering
material for disclosure.
13.9 The report prepared by the Company in respect of the adequacy of the
Group's working capital and cash flow for the twelve-month period after
the date of the Prospectus has been properly compiled by the Company on
the basis of the assumptions stated therein and is presented on a basis
consistent with the accounting principles and policies adopted by the
Reporting Accountants in relation to the preparation of the Accountants'
Report contained in the Prospectus, the Preliminary Offering Circular and
the Final Offering Circular after making proper provision for all known
liabilities (whether actual or contingent or otherwise); that the
assumptions upon which the report are based have been made after due and
careful enquiry and are fair and reasonable in the context of the Group
and that there are no facts known or which could on due and careful
enquiry have been known to the Company or the Directors which have not
been taken into account in the preparation of the report or the omission
of which would make any statement made in such report or any
16
expression of opinion or intention contained or assumption made in such
report misleading.
13.10 The Public Offer Documents and the Formal Notice contain and, when each of
them is issued, will contain all information and particulars required to
comply with all statutory and other provisions (including the Companies
Ordinance, the Companies Law and the Listing Rules) so far as applicable.
14 PROPERTIES
14.1 None of the members of the Group owns, operates, manages, leases or has
any other right of interest in any other property of any kind save for
those described in the valuation report set out in the Prospectus, the
Preliminary Offering Circular and the Final Offering Circular.
14.2 With respect to the rights and interests in property and other assets
(including, but not limited to, land and buildings) owned by members of
the Group:
14.2.1 the relevant member of the Group has good and marketable title, or
has the right by Law to good and marketable title, to such property
and other assets or any rights or interests thereto;
14.2.2 there are no mortgages, charges, liens, claims, Encumbrances or
other security interests or third party rights or interests,
conditions, planning consents, orders, regulations or other
restrictions affecting any of such property and other assets which
could have an adverse effect on the value of such property and
other assets or adversely limit, restrict or otherwise affect the
ability of the relevant member of the Group to utilise, develop or
redevelop any such property or other assets; and
14.2.3 the relevant member of the Group is entitled as legal and
beneficial owner of such property and other assets to all rights
and benefits as landlord and/or licensor under the leases,
tenancies or licences to which it is a party as landlord and/or
licensor in respect of such property and other assets, and such
leases, tenancies and licences are and will be in full force and
effect.
14.3 Where any property and other assets are held under lease, tenancy or
licence by any member of the Group:
(i) each lease, tenancy or licence is legal, valid, subsisting and
enforceable by the relevant member of the Group;
(ii) no default (or event which with notice or lapse of time, or
both, would constitute a default) by any member of the Group
has occurred and is continuing under any of such leases,
tenancies or licences; and
(iii) no member of the Group has notice of any claim of any nature
that has been asserted by anyone adverse to the rights of the
relevant member of the Group under such leases, tenancies or
licences or affecting the rights of the relevant member of the
Group to the continued possession of such leased or licensed
property or other assets.
14.4 The ownership of and the right to use the land and buildings as described
in the Prospectus, the Preliminary Offering Circular and the Final
Offering Circular by the relevant member of the Group is not subject to
any unusual or onerous terms or conditions.
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15 INSURANCE
15.1 The description of the Company's insurance coverage contained in the
Prospectus, the Preliminary Offering Circular and the Final Offering
Circular is true, accurate and not misleading. All the assets of each of
the members of the Group which are of an insurable nature have at all
times been and are insured in amounts reasonably regarded as adequate and
prudent against fire and other risks normally insured against by companies
carrying on similar businesses or owning assets of a similar nature and
each member of the Group has at all times been and is adequately covered
against accident, third party injury, defective products, environmental
liabilities, damage and other risks normally covered by insurance by such
companies. Nothing has been done or has been omitted to be done whereby
any such policies have or may become void or are likely to be avoided.
15.2 Save and except for outstanding medical claims made under the Group's
medical insurance policies, no claim under any insurance policies taken
out by any member of the Group is outstanding and there are no
circumstances likely to give rise to such a claim. None of the outstanding
medical claims made under the Group's medical insurance policies is
material in the context of the Group as a whole.
15.3 All premiums due in respect of such insurance policies have been duly paid
in full and all conditions for the validity and effectiveness of the said
policies have been fully observed and performed.
15.4 None of the Warrantors has any reason to believe that any member of the
Group will not be able to renew its existing insurance coverage from
similar insurers as may be necessary to continue its business at a cost
that would not adversely affect the condition, financial or otherwise, or
the earnings, business or operations of the Group, taken as a whole.
16 COMPLIANCE WITH LEGAL AND REGULATORY REQUIREMENTS
16.1 Each member of the Group has carried on and is carrying on its business
and operations in accordance with applicable Laws and all statutory,
municipal and other Approvals necessary or desirable for the carrying on
of the businesses and operations of each of the member of the Group as now
carried on, as previously carried on and as proposed to be carried on have
been obtained and are (or were at the relevant time) valid and subsisting
and all conditions applicable to any such Approval have been and are
complied with and there are no facts or circumstances exist or have in the
past existed which may lead to the revocation, rescission, avoidance,
repudiation, withdrawal, non-renewal or change, in whole or in part, of or
in any existing Approvals or any requirements for additional Approvals
which could prevent, restrict or hinder the operations of any member of
the Group or involve any member of the Group in additional expenditure.
16.2 None of the members of the Group and the businesses now run by any of
them, nor any of their respective officers, directors, supervisors,
managers, agents, or employees have, directly or indirectly, (A) made or
authorised any contribution, payment or gift of funds or property to any
official, employee or agent of any governmental agency, authority or
instrumentality in Hong Kong, the Cayman Islands, Macao, the PRC or any
other jurisdiction or (B) made any contribution to any candidate for
public office, in either case, where either the payment or the purpose of
such contribution, payment or gift was, is, or would be prohibited under
applicable Law, of any locality, including but not limited to the U.S.
Foreign Corrupt Practices Act of 1977, as amended, or the rules and
regulations promulgated thereunder;
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16.3 None of the members of the Group is a party to any agreement, arrangement
or concerted practice or is carrying on an practice which in whole or in
part contravenes or is invalidated by any anti-trust, anti-monopoly,
competition, fair trading, consumer protection or similar Laws in any
jurisdiction where any of the members of the Group has assets or carries
on business or in respect of which any filing, registration or
notification is required or is advisable pursuant to such Laws (whether or
not the same has in fact been made).
17 EMPLOYMENT AND PENSIONS
17.1 There are no amounts owing or promised to any present or former directors,
employees or consultants of any member of the Group other than
remuneration accrued due or for reimbursement of business expenses.
17.2 No directors or senior management or employees of any member of the Group
have given or been given notice terminating their contracts of employment.
17.3 There are no proposals to terminate the employment or consultancy of any
directors, employees or consultants of any member of the Group or to vary
or amend their terms of employment or consultancy (whether to their
detriment or benefit).
17.4 No member of the Group has outstanding any undischarged liability to pay
to any Governmental Authority in any jurisdiction any taxation,
contribution or other impost arising in connection with the employment or
engagement of directors, employees or consultants by it.
17.5 No liability has been incurred by any member of the Group for:
17.5.1 breach of any contract of service, contract for services or
consultancy agreement;
17.5.2 redundancy payments;
17.5.3 compensation for wrongful, constructive, unreasonable or unfair
dismissal;
17.5.4 failure to comply with any order for the reinstatement or
re-engagement of any director, employee or consultant; or
17.5.5 the actual or proposed termination or suspension of employment or
consultancy, or variation of any terms of employment or consultancy
of any present or former employee, director or consultant of any
member of the Group.
17.6 No dispute of material importance with the directors, employees (or any
trade union or other body representing all or any of such employees),
consultants or agents of any member of the Group exists or, to the best
knowledge, information, belief and awareness of the Warrantors, is
imminent or threatened. None of the members of the Group is aware of any
existing or imminent labour disturbance by the directors, employees or
consultants of any of its principal suppliers, customers or contractors
which might be expected to result in an adverse change in the condition,
financial or otherwise, or in the results of operations, business affairs
or business prospects or net worth of the Group.
17.7 The Group has in relation to its directors, employees or consultants (and
so far as relevant to each of its former directors, employees or
consultants) complied in all material respects with all applicable
statutes, regulations and bye-laws and the terms and conditions of such
directors', employees' or consultants' (or former directors', employees'
or consultants') contracts of employment or consultancy.
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17.8 No contributions are being, or have been made by a member of the Group to
any pension, retirement, provident fund or death or disability benefit
scheme or arrangement other than the Pension Schemes and no member of the
Group participates in, or has participated in, or is liable to contribute
to, any pension, retirement, provident fund or death or disability benefit
scheme or arrangement in respect of past or present employees or directors
of the Group other than the Pension Schemes.
17.9 Each of the Pension Schemes complies with and has been operated in all
material respects in accordance with all applicable laws and regulations
and the rules of the relevant scheme. There is no ground upon which any
applicable registrations or exemptions in respect of any of the Pensions
Schemes could be withdrawn or cancelled.
17.10 Other than contributions due to be paid at the next payment date, no
contributions (or contribution surcharge) in respect of any employee or
director of the Group or any other payment due to, or in respect of, the
Pension Schemes is unpaid.
17.11 All defined benefit retirement schemes are adequately funded and no
additional contributions by any member of the Group are currently due to
be made to make up for any shortfall.
17.12 There is no material dispute relating to the Pension Schemes, whether
involving any member of the Group, the trustees or administrators of the
Pension Schemes, any employee or director of a member of the Group, or any
other person and no circumstances exist which may give rise to any such
claims.
18 INTELLECTUAL PROPERTY
18.1 For the purpose of this paragraph 18, "INTELLECTUAL PROPERTY" means all
patents, patent rights, inventions, trade marks, service marks, logos,
get-up, registered or unregistered design rights, trade or business names,
domain names, trade secrets, confidential information, Know-how,
copyrights, semi-conductor topography rights, database rights and any
proprietary or confidential information systems processes or procedures
and of their intellectual property (whether, in each case, registered,
unregistered or unregistrable, and including pending applications for
registration and rights to apply for registration) and all rights of a
similar nature or having similar effect which may subsist in any part of
the world.
18.2 For the purpose of this paragraph 18, "KNOW-HOW" means confidential and
proprietary industrial and commercial information and techniques in any
form (including paper, electronically stored data, magnetic media, film
and microfilm) including without limitation drawings, formulae, test
results, reports, project reports and testing procedures, instruction and
training manuals, tables of operating conditions, market forecasts, lists
and particulars of customers and suppliers.
18.3 All Intellectual Property and all pending applications therefor which have
been, are or are capable of being used in or in relation to or which are
necessary for the business of each member of the Group are (or, where
appropriate in the case of pending applications, will be):
18.3.1 legally and beneficially owned by the relevant member of the Group
or lawfully used under valid licences granted by the registered
proprietor(s) or beneficial owner(s) thereof and such licences are
in full force and effect and have not been revoked or terminated
and there are no grounds on which they might be revoked or
terminated;
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18.3.2 valid and enforceable;
18.3.3 not being infringed or attacked or opposed by any person;
18.3.4 not subject to any Encumbrance or any licence or authority in
favour of another;
18.3.5 in the case of rights in such Intellectual Property as are
registered or the subject of applications for registration, all
renewal fees which are due and steps which are required for their
maintenance and protection have been paid and taken; and
18.3.6 in the case of unregistered trade marks which are likely to be
material to any member of the Group,
and no claims have been made or threatened and no applications are
pending, which if pursued or granted might be material to the truth and
accuracy of any of the above statements in this Clause 18.3.
18.4 No member of the Group has received any notice or is otherwise aware of
(having made due and careful enquiries):
18.4.1 any infringement of or conflict with claimed or asserted rights of
others with respect to any rights mentioned in paragraph 18.3
above; or
18.4.2 any unauthorised use of any Know-how of any third party and no
member of the Group has made disclosure of Know-how to any person
except properly and in the ordinary course of business and on the
basis that such disclosure is to be treated as being of a
confidential character; or
18.4.3 any opposition by any person to any pending applications; or
18.4.4 any assertion of moral rights which would affect the use of any of
the Intellectual Property in the business of any member of the
Group; or
18.4.5 any facts or circumstances which would render any rights mentioned
in paragraph 18.3 above invalid or inadequate to protect the
interests of the relevant member of the Group or unenforceable.
18.5 The rights and interest held by the Group (whether as owner, licensee or
otherwise) in Intellectual Property comprises all the rights and interests
necessary or convenient for the carrying on of the business of each member
of the Group in and to the extent which it is presently conducted.
18.6 The processes employed and the products and services dealt in by a member
of the Group both now and at any time within the last six years do and did
not use, embody or infringe any rights or interests of third parties in
Intellectual Property in any respect (other than those belonging to or
licensed to a member of the Group and no claims of infringement of any
such rights or interests have been made or threatened by any third party.
18.7 All licences and agreements to which any member of the Group is a party
(including all amendments, novations, supplements or replacements to those
licences and agreements) are in full force and effect, no notice having
been given on any party to terminate them; the obligations of the parties
thereto thereunder have been fully complied with; and no disputes have
arisen or are foreseeable in respect thereof; and where such licences are
of such a nature that they could be registered with the appropriate
authorities and where such registration would have the effect of
strengthening the Group's rights, they have been so registered.
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19 INFORMATION TECHNOLOGY
19.1 For the purpose of this paragraph 19, "INFORMATION TECHNOLOGY" means all
computer systems, communications systems, software and hardware owned,
used or licensed by or to any member of the Group.
19.2 The Information Technology comprises all the information technology
systems and related rights necessary to run the business of the Group.
19.3 All Information Technology which has been or which is necessary for the
business of any member of the Group is either legally and beneficially
owned by the relevant member of the Group or lawfully used under valid
licences granted by the registered proprietor(s) or beneficial owner(s)
thereof and such licences are in full force and effect and have not been
revoked or terminated and to the best knowledge, belief, awareness and
information of the Warrantors after due and careful enquiry, there are no
grounds on which they might be revoked or terminated.
19.4 All the records and systems (including but not limited to Information
Technology) material to the business of the Group taken as a whole and all
data and information of each member of the Group are maintained and
operated by a member of the Group and are not wholly or partially
dependent on any facilities not under the exclusive ownership or control
of a member of the Group.
19.5 To the best knowledge, information, belief and awareness of the Warrantors
after due and careful enquiry, there are no bugs or viruses, logic bombs
or other contaminants (including without limitation, "worms" or "trojan
horses") in or failures or breakdowns of any computer hardware or software
or any other Information Technology equipment used in connection with the
business of any member of the Group which have caused any substantial
disruption or interruption in or to the business of any member of the
Group.
19.6 In the event that the persons providing maintenance or support services
for the Group's Information Technology cease or are unable to do so, the
members of the Group have all the necessary rights and information to
continue to maintain and support or have a third party maintain or support
the Information Technology which is material for the operations of the
Group as a whole.
19.7 Each member of the Group has in place procedures to prevent unauthorised
access and the introduction of viruses.
19.8 Each member of the Group has in place adequate back-up policies and
disaster recovery arrangements which enable its Information Technology and
the data and information stored thereon to be replaced and substituted
without material disruption to the business of the Group taken as a whole.
19.9 To the best knowledge, information, belief and awareness of the Warrantors
after due and careful enquiry, there are no defects relating to the
Information Technology owned or used by the business of any member of the
Group and the Information Technology owned or used by any member of the
Group has the capacity and performance necessary to fulfil the present and
foreseeable requirements of the business of any member of the Group.
20 DATA PROTECTION
20.1 Each member of the Group has complied in all material respects with all
applicable data protection legislation, guidelines and industry standards.
22
20.2 No member of the Group has received any notice (including without
limitation any enforcement notice, de-registration notice or transfer
prohibition notice), letter, complaint or allegation from the relevant
data protection regulator alleging breach or non-compliance by it of the
applicable data protection legislation, guidelines and industry standards
or prohibiting the transfer of data to a place outside the territory.
20.3 No member of the Group has received a claim for compensation from any
individual in respect of its business under the applicable data protection
legislation, guidelines and industry standards in respect of inaccuracy,
loss, unauthorised destruction or unauthorised disclosure of data in the
previous three years and there is no outstanding order against any member
of the Group in respect of the rectification or erasure of data.
20.4 No warrant has been issued authorising the data protection regulator (or
any of his officers or servants) to enter any of the premises of any
member of the Group for the purposes of, inter alia, searching them or
seizing any documents or other material found there.
21 ENVIRONMENTAL MATTERS
21.1 For the purposes of this paragraph 21:
21.1.1 "ENVIRONMENT" means all or any part of the air (including, without
limitation, air within buildings or natural or man-made structures
whether above or below ground), water (including, without
limitation, territorial, ocean, coastal and inland waters, surface
water, groundwater and drains and sewers) and land (including,
without limitation, sea bed or river bed under any water as
described above, surface land and sub-surface land, and any natural
or man-made structures), and also includes human, animal and plant
life; and
21.1.2 "ENVIRONMENTAL LAW" means any treaty, national, state, federal or
local law, common law rule or other rule, regulation, ordinance,
by-law, code, decree, demand or demand letter, injunction,
judgement, notice or notice demand, code of practice, order or plan
issued, promulgated or approved thereunder or in connection
therewith pertaining to the protection of the Environment or to
health and safety matters (and shall include, without limitation,
laws relating to workers and public health and safety).
21.2 Each member of the Group has complied and is complying with all
Environmental Laws that are applicable to its business.
21.3 There is no civil, criminal or administrative action, claim, investigation
or other proceeding or suit pending or threatened against any member of
the Group arising from or relating to Environmental Law which is material
in the context of the Group as a whole and there are no circumstances
existing which may lead to any such action, claim, investigation,
proceeding or suit.
21.4 Each member of the Group conducts its operations so as not to lead to a
breach of Environmental Law and in accordance with good operating practice
of the industry in relation to all matters, practices and activities which
could affect or cause harm to the Environment.
21.5 None of the members of the Group occupies, leases, owns, uses or has
previously used, owned, leased or occupied, any property such that it is
or may be wholly or partly responsible for the costs of any clean-up or
other corrective action to any site or any part of the Environment.
23
21.6 There are no circumstances which require or may require any member of the
Group to incur significant expenditure which is material in the context of
the Group as a whole in respect of the Environment or under Environmental
Law.
22 TAXATION
22.1 All returns, reports or filings which ought to have been made by or in
respect of each of the existing member of the Group for taxation purposes
have been made and all such returns are up to date, correct and prepared
with due care and skill and on a proper basis and are not the subject of
any dispute with the relevant revenue or other appropriate authorities and
there are no present circumstances likely to give rise to any such dispute
and the provisions included in the audited combined results of the Group
as at the Accounts Date referred to in paragraph 4.1 above were sufficient
to cover all taxation (if any) in respect of all accounting periods ended
on or before the Accounts Date for which the Group was then liable, and
the provisions included in the unaudited management accounts of the Group
for the 2 months ended 29 February 2004 referred to in paragraph 4.2 above
were sufficient to cover all taxation in respect of the period of 2 months
ended on 29 February 2004 for which the Group was then liable]. There is
no tax deficiency that has been asserted against any member of the Group.
22.2 All information and statements concerning taxation and its application to
members of the Group in the Prospectus, Preliminary Offering Circular and
the Final Offering Circular are true and accurate and not misleading.
22.3 Save as disclosed in the Prospectus, the Preliminary Offering Circular and
the Final Offering Circular (and subject to any reservation made therein),
no tax or duty (including, without limitation, any stamp or issuance or
transfer tax or duty and any tax or duty on capital gains or income,
whether chargeable on a withholding basis or otherwise) is payable to any
Governmental Authority in Hong Kong or the Cayman Islands in connection
with:
22.3.1 the transfer of the Offer Shares;
22.3.2 the execution, delivery and performance of the Underwriting
Documents;
22.3.3 the delivery by the Selling Shareholder of the Offer Shares to or
for the respective accounts of the Public Offer Underwriters and
the International Placing Underwriters or to the initial purchasers
thereof (as the case may be) or from the International Placing
Underwriters to the placees of the International Placing in the
manner contemplated in the Underwriting Documents;
22.3.4 the payment by the Company to, and the receipt by shareholders of,
any dividend in respect of Shares; and
22.3.5 the sale, transfer or other disposition or delivery of any Shares,
including any realised or unrealised capital gains arising in
connection with such sale, transfer or other disposition.
23 IMMUNITY
None of the Warrantors nor any of their respective assets or revenues are
entitled to any right of immunity on the grounds of sovereignty from any
legal action, suit or proceedings, from set-off or counterclaim, from the
jurisdiction of any court, from service of process, from attachment prior
to or in aid of execution of judgement, or from other legal process or
proceedings for the giving of any relief or for the enforcement of any
judgement. The
24
irrevocable and unconditional waiver and agreement of the Warrantors in
Clause 10.14 hereof not to plead or claim any such immunity in any legal
action, suit or proceeding based on this Agreement is valid and binding
under all applicable laws.
24 LAW AND JURISDICTION
24.1 Under the applicable Laws, the courts of the applicable jurisdiction of
each party will recognise and give effect to the choice of law and dispute
resolution provisions set forth in this Agreement and will enforce
judgements of Hong Kong courts obtained against the other parties to
enforce this Agreement, provided that the judgement:
(i) is not obtained by fraud;
(ii) is final and conclusive;
(iii) in the opinion of the relevant court after its review of such
judgement pursuant to international treaties concluded or acceded to
by the relevant jurisdictions or in accordance with the principle of
reciprocity, does not contradict the basic principles of Law of the
relevant jurisdictions;
(iv) in the opinion of the relevant court after its review of such
judgement pursuant to international treaties concluded or acceded to
by the relevant jurisdictions or in accordance with the principle of
reciprocity, does not violate state sovereignty, security or social
and public interest; and
(v) is for a definite sum of money.
25 UNITED STATES ASPECTS
25.1 None of the Warrantors, nor any of its affiliates (as defined in Rule
501(b) of Regulation D nor any person acting on its or their behalf (i)
has made offers or sales of any security, or has solicited or will solicit
offers to buy, or otherwise has negotiated or will negotiate in respect
of, any security, under circumstances that would require the registration
of the Offer Shares under the US Securities Act; or (ii) 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 or sale
of the Offer Shares in the United States.
25.2 The Shares are not of the same class (within the meaning of Rule 144A) as
securities listed on a national securities exchange registered under
Section 6 of the US Exchange Act or quoted on a US automated inter-dealer
quotation system.
25.3 None of the Warrantors nor any of its affiliates (as defined in Rule 405
under the US Securities Act), nor any person acting on its or their behalf
has engaged or will engage in any "directed selling efforts" (as defined
in Regulation S) with respect to the Offer Shares.
25.4 The Company is not an open-end investment company, unit investment trust
or face amount certificate company that is or is required to be registered
under Section 8 of the US Investment Company Act; and the Company is not,
and as a result of the offer and sale of the Offer Shares contemplated
herein will not be, an "investment company" under, and as such term is
defined in, the US Investment Company Act.
25.5 The Company is not, and does not intend to become, and as a result of the
receipt and application of the proceeds of the sale of the Offer Shares
contemplated hereby will not become, a "passive foreign investment
company" within the meaning of Section 1297 of the United States Internal
Revenue Code of 1986, as amended.
25
25.6 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 Shares or in
any securities of the same class as the Shares.
25.7 The Company has implemented the necessary "offering restrictions" (as such
term is defined in Regulation S).
25.8 None of the Warrantors, nor any of their respective affiliates (as defined
in Rule 405 under the US Securities Act), nor any person acting on its or
their behalf has taken or will take, directly or indirectly, 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 stabilization in
violation of applicable Laws or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Offer Shares.
PART 2
1 PROFESSIONAL INVESTOR
The Company has read and understood the Professional Investor Treatment
Notice and acknowledges and agrees to the representations, waivers and
consents contained in the Professional Investor Treatment Notice. For the
purpose of this provision, the words "you" and "your" in the Professional
Investor Treatment Notice shall mean "the Company" and "the Company's"
respectively.
PART 3
1 CAPACITY
The Selling Shareholder has been duly incorporated and is validly existing
under the laws of its place of incorporation and is capable of suing and
being sued.
2 THE GLOBAL OFFERING
2.1 The Selling Shareholder has good and valid title to, and is and will,
prior to the transfer of the International Placing Shares to the
purchasers thereof under the Global Offering, be the legal and beneficial
owner of, the International Placing Shares to be sold by it under the
Global Offering, free and clear of all Encumbrances and with the benefit
of all rights attached thereto and thereafter accruing thereto including
the right to receive all dividends or other distributions which may be
declared, paid or made thereon at or after the Placing Closing Date.
2.2 The execution and delivery by or on behalf of the Selling Shareholder of,
and compliance by the Selling Shareholder with, the terms of this
Agreement, the performance by the Selling Shareholder of its obligations
under the Global Offering; the sale and transfer of the Offer Shares; and
the issue, publication, distribution or making available of the Public
Offer Documents, the Formal Notice and the Placing Documents have been
duly authorised and do not and will not:-
2.2.1 result in a breach of any provision of the memorandum or articles of
association or bye-laws (or equivalent constitutive documents) of
the Selling Shareholder; or
2.2.2 result in a breach of, or constitute a default under, any indenture,
mortgage, charge, trust, lease, agreement, instrument or obligation
to which the Selling
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Shareholder is a party or by which the Selling Shareholder or any of
the Selling Shareholder's assets is bound;
2.2.3 result in a breach of any Laws to which the Selling Shareholder is
subject or by which the Selling Shareholder or any of its assets is
bound;
2.2.4 except as disclosed in the Prospectus, the Preliminary Offering
Circular and the Final Offering Circular, require any Approval from
any Governmental Authority or the sanction or consent of its
shareholders; or
2.2.5 result in the creation or imposition of any Encumbrance or other
restriction upon any assets of the Selling Shareholder.
2.3 All Approvals required for the performance by the Selling Shareholder of
its obligations under the Global Offering; the sale and transfer of the
International Placing Shares; and the issue, publication, distribution or
making available of each of the Public Offer Documents and the
International Placing Documents have been or will (prior to the Prospectus
Date) be irrevocably and unconditionally obtained and are in full force
and effect.
3 PROFESSIONAL INVESTOR
The Selling Shareholder has read and understood the Professional Investor
Treatment Notice and acknowledges and agrees to the representations,
warranties and consents contained in the Professional Investor Treatment
Notice. For the purpose of this provision, the words "you" or "your" in
the Professional Investor Treatment Notice shall mean "the Selling
Shareholder" and "the Selling Shareholder's" respectively.
27
SIGNATURE PAGE
THE COMPANY
SIGNED by
for and on behalf of }
NAM TAI ELECTRONIC &
ELECTRICAL PRODUCTS
LIMITED
THE SELLING SHAREHOLDER
SIGNED by
for and on behalf of }
NAM TAI ELECTRONICS, INC.
THE EXECUTIVE DIRECTORS
SIGNED by
WONG KUEN LING }
SIGNED by
GUY JEAN FRANCOIS BINDELS }
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HSBC
SIGNED by Jonathan Orders
for and on behalf of }
THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED
THE INTERNATIONAL PLACING UNDERWRITERS
SIGNED by Jonathan Orders of
THE HONGKONG AND SHANGHAI }
BANKING CORPORATION LIMITED
as the duly authorised agent or attorney
of:
BNP PARIBAS PEREGRINE CAPITAL LIMITED
NOMURA INTERNATIONAL (HONG KONG)
LIMITED
CAZENOVE ASIA LIMITED
DBS ASIA CAPITAL LIMITED
VC CEF CAPITAL LIMITED
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