Exhibit 1.1
▇▇▇▇▇▇▇▇▇ Telecommunications International Limited
[69,300,000] American Depositary Shares
Representing
[1,039,500,000] Ordinary Shares, par value HK$0.25 per share
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International Underwriting Agreement
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October [.], 2004
▇▇▇▇▇▇▇ Sachs (Asia) L.L.C.
As Representative of the several Underwriters
named in Schedule I hereto
68th Floor
▇▇▇▇▇▇ Kong Center
▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇▇▇▇ Telecommunications Investment Holdings Limited, a company
incorporated under the laws of the British Virgin Islands (the "Selling
Shareholder") and a wholly-owned subsidiary of ▇▇▇▇▇▇▇▇▇ Whampoa Limited, a
company incorporated under the laws of the Hong Kong Special Administrative
Region of the People's Republic of China ("HWL"), proposes, subject to the terms
and conditions stated herein, to sell to the Underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of [69,300,000] American Depositary
Shares (the "Firm ADSs") representing [1,039,500,000] ordinary shares, par value
HK$0.25 per share ("Ordinary Shares"), of ▇▇▇▇▇▇▇▇▇ Telecommunications
International Limited, a company incorporated in the Cayman Islands with limited
liability (the "Company"), and, at the election of the Underwriters, up to
[11,550,000] additional American Depositary Shares (the "Optional ADSs")
representing [173,250,000] Ordinary Shares of the Company. All Ordinary Shares
of the Company are herein collectively called "Stock". The Firm ADSs and the
Optional ADSs that the Underwriters elect to purchase pursuant to Section 2
hereof are herein collectively called the "ADSs". The shares of Stock
represented by the Firm ADSs are hereinafter called the "Firm Shares" and the
shares of Stock represented by the Optional ADSs are hereinafter called the
"Optional Shares". The Firm Shares and the Optional Shares are herein
collectively called the "Shares". Except as the context may otherwise require,
references hereinafter to the Shares shall also include the Reserved Shares (as
defined herein) and the Reallocated Shares (as defined herein).
The ADSs are to be issued pursuant to a deposit agreement (the "Deposit
Agreement"), to be dated as of October [.], 2004, among the Company, Citibank,
N.A., as depositary (the "Depositary"), and holders from time to time of the
American Depositary Receipts (the "ADRs") issued by the Depositary and
evidencing the ADSs. Each ADS will initially represent the right to receive 15
shares of Stock deposited pursuant to the Deposit Agreement. The Underwriters
may elect to take delivery of all or a portion of the ADSs in the form of
Shares. ADSs offered in the Japanese POWL (as defined herein) will be delivered
in the form of Shares.
The Company and the Selling Shareholder have entered into an agreement
dated September [27], 2004 (the "Hong Kong Underwriting Agreement") providing
for the sale by the Selling Shareholder
(the "Hong Kong Public Offering") of a total of [115,500,000] Ordinary Shares
initially (subject to adjustment as provided in the Hong Kong Underwriting
Agreement) (the "Hong Kong Shares") through arrangements with certain
underwriters in Hong Kong (the "Hong Kong Underwriters"), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇
(Asia) L.L.C. is acting as representative.
The Underwriters and the Hong Kong Underwriters are simultaneously entering
into an Agreement between U.S. and Hong Kong underwriting syndicates (the
"Agreement between Syndicates"), which provides, among other things, that
▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. shall act as the global coordinator (the "Global
Coordinator") for the offering of the Shares and ADSs and for the transfer of
shares of Stock between the two syndicates. The Underwriters are simultaneously
entering into an Agreement among Underwriters (the "Agreement among
Underwriters"), which provides, among other things, that ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia)
L.L.C. shall act as the representative (the "Representative") of the
Underwriters.
The offering and sale of ADSs and Shares contemplated hereunder (the
"Offering") includes a preferential offering (the "Preferential Offering")
conducted in accordance with the requirements of the Hong Kong Stock Exchange
(as defined herein) of a reserved allocation of [56,844,944] Ordinary Shares
(the "Reserved Shares") to qualifying holders of ordinary shares in HWL. Any
Reserved Shares not purchased in the Preferential Offering may be reallocated by
the Underwriters for sale in the Offering.
Three forms of prospectus are to be used in connection with the Offering:
(i) one relating to the ADSs offered or sold within the United States (the "U.S.
Prospectus"), (ii) one relating to the "public offering without listing" (the
"Japanese POWL") to be conducted in Japan by registration of Shares in Japan and
(iii) one relating to the ADSs offered or sold outside the United States (the
"International Prospectus"). A prospectus relating to the Hong Kong Shares is to
be used for the Hong Kong Public Offering (the "Hong Kong Prospectus"). The Hong
Kong Prospectus is also to be used in connection with the Preferential Offering.
The International Prospectus will be identical to the U.S. Prospectus except for
certain substitute pages, and copies of these prospectuses have been provided to
you. Except as used in Sections 2, 3, 4, 9 and 11 herein, and except as the
context may otherwise require, references hereinafter to the ADSs shall include
all of the shares of Stock (including the Reserved Shares), whether in the form
of Shares or ADSs, which may be sold pursuant to either this Agreement or the
Hong Kong Underwriting Agreement. References herein to any prospectus whether in
preliminary or final form, and whether as amended or supplemented, shall include
the U.S. Prospectus and the International Prospectus, but shall not include the
Hong Kong Prospectus or the Japanese Prospectus.
1. (a) The Company represents and warrants to, and agrees with, each of the
Underwriters and the Selling Shareholder that:
(i) A registration statement on Form F-1 (File No. 333-118783)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore
delivered to you, and, excluding exhibits thereto, to you for each of
the other Underwriters, have been declared effective by the Commission
in such form; other than a registration statement, if any, increasing
the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed
with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a
"Preliminary Prospectus"); the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including the information
contained in the form of final prospectus filed with
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the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof and deemed by virtue of Rule 430A under the
Act to be part of the Initial Registration Statement at the time it
was declared effective, each as amended at the time such part of the
Initial Registration Statement became effective or such part of the
Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, are hereinafter collectively called the
"Registration Statement"; and such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, is hereinafter called the
"Prospectus";
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. expressly for use
therein;
(iii) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia) L.L.C. expressly for use
therein;
(iv) A registration statement on Form F-6 (File No. 333-[.]) in
respect of the ADSs has been filed with the Commission; such
registration statement in the form heretofore delivered to you and,
excluding exhibits, to you for each of the other Underwriters, has
been declared effective by the Commission in such form; no other
document with respect to such registration statement has heretofore
been filed with the Commission; no stop order suspending the
effectiveness of such registration statement has been issued and to
the best knowledge of the Company, no proceeding for that purpose has
been initiated or threatened by the Commission (the various parts of
such registration statement, including all exhibits thereto, each as
amended at the time such part of the registration statement became
effective, being hereinafter called the "ADS Registration Statement");
and the ADS Registration Statement when it became effective conformed,
and any further amendments thereto will conform, in all material
respects to the requirements of the Act and the rules and regulations
of the Commission thereunder, and did not, as of the applicable
effective date, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading;
(v) The Company has filed with the Director General of the Kanto
Local Finance Bureau of the Ministry of Finance of Japan (the "KLFB")
a securities registration statement with respect to the Japanese POWL
and amendments to such securities registration statement pursuant to
the Securities and Exchange Law of Japan (Law No. 25 of 1948, as
amended, the "Securities and Exchange Law"); a further amendment to
such securities registration statement in the form heretofore
delivered to you shall be
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filed by the Company with the KLFB promptly after the execution of
this Agreement (such securities registration statement and all such
amendments and attachments, collectively, the "Japanese Registration
Statement"); no other document with respect to the Japanese
Registration Statement has heretofore been filed with the KLFB; no
stop order suspending the effectiveness of the Japanese Registration
Statement has been issued and, to the best knowledge of the Company
after due inquiry, no proceeding for that purpose has been initiated
or threatened by the KLFB; and the Japanese Registration Statement
when it becomes effective conforms, and any further amendments thereto
will conform, in all material respects to the requirements of the
Securities and Exchange Law of Japan and the cabinet orders and
ministerial ordinances and other rules and regulations thereunder (the
"Japanese Rules and Regulations "), and does not and will not, as of
the applicable effective date, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of an Underwriter through ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C.
expressly for use therein; for the purposes of this Agreement, "Japan
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which the KLFB or banking institutions in
Japan are generally authorized or obligated by law or executive order
to close;
(vi) The Company has prepared a prospectus with respect to the
Japanese POWL and intends to prepare a supplement or supplements to
such prospectus which together with such prospectus will form a final
prospectus (the "Japanese Prospectus"); and the Japanese Prospectus at
the time of issue or at the time of each supplement thereto will
conform or conformed, in all material respects to the requirements of
the Securities and Exchange Law of Japan and the Japanese Rules and
Regulations, and the Japanese Prospectus at the time of issue or at
the time of each supplement thereto will not or did not, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of an Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇
(Asia) L.L.C. expressly for use therein;
(vii) In the event that any Shares are sold pursuant to the
Preferential Offering, the Hong Kong Offering Documents (as defined in
the Hong Kong Underwriting Agreement) contain all information required
by the applicable requirements of the Companies Ordinance (Chapter 32
of the Laws of Hong Kong), the Securities and Futures Ordinance
(Chapter 571 of the Laws of Hong Kong), the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited (the
"Hong Kong Stock Exchange", and such rules, the "Hong Kong Listing
Rules") (together with other rules and regulations of the Hong Kong
Stock Exchange), any other applicable Hong Kong regulations or
legislation and the Company Law (2003 Revision) of the Cayman Islands;
(viii) In the event that any Shares are sold pursuant to the
Preferential Offering, the Hong Kong Prospectus (together with the
Application Forms (as defined in the Hong Kong Underwriting Agreement)
and the other documents specified in the section headed "Documents
Delivered to the Registrar of Companies" in Appendix XI of the Hong
Kong Prospectus) has been registered by the Registrar of Companies in
Hong Kong as required by section 342C of the Companies Ordinance
(Chapter 32 of the Laws of Hong Kong);
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(ix) Neither the Company nor any of its subsidiaries or
associated companies ("subsidiaries" and "associated companies" as
used in this Agreement shall have the meanings ascribed to them in the
notes of the Company's combined accounts as set forth in the
Prospectus) has sustained since the date of the latest audited
financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, which would,
individually or in the aggregate, have a material adverse effect on
the business, prospects, operations, condition (financial or
otherwise), shareholders' equity or results of operations of the
Company, its subsidiaries and associated companies taken as a whole (a
"Material Adverse Effect"), otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock,
short-term debt or long-term debt of the Company or any of its
subsidiaries or associated companies or any change, or any development
involving a prospective change, which would, individually or in the
aggregate, have a Material Adverse Effect, otherwise than as set forth
or contemplated in the Prospectus;
(x) Except as set forth in the Prospectus, each of the Company
and its subsidiaries and associated companies set forth in Schedule II
attached hereto (the "Significant Subsidiaries", it being understood
that each representation concerning Significant Subsidiaries contained
in Section 1(a) or Section 1(b) shall, with respect to Partner (as
defined below), be construed as modified by the qualifier "to the best
knowledge of the Company after due inquiry") owns, leases or licenses
all such property as is necessary to the conduct of its operations as
presently conducted, and to the Company's best knowledge, there are no
liens, encumbrances or defects upon or in any such real or personal
property except such as are described in the Prospectus or such as do
not, individually or in the aggregate, have a Material Adverse Effect;
and any real property and buildings held under lease or license by the
Company and the Significant Subsidiaries are held by them under valid,
subsisting and enforceable leases or licenses with such exceptions
which would not, individually or in the aggregate, have a Material
Adverse Effect;
(xi) The Company has been duly incorporated and is validly
existing as a company with limited liability in good standing under
the laws of the Cayman Islands, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; and
each Significant Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(xii) The articles of association of the Company have been
validly approved by the Company in accordance with the requirements of
the laws and regulations of the Cayman Islands;
(xiii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are
fully (or credited as fully) paid and non assessable and conform to
the description of the Stock contained in the Prospectus; and all of
the issued shares of capital stock of each Significant Subsidiary have
been duly and validly authorized and issued, are fully paid and non
assessable and (except for directors' qualifying shares and except as
set forth in the Prospectus) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims;
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the holders of outstanding shares of capital stock of the Company or
any of the Significant Subsidiaries are not entitled to preemptive or
other rights to acquire the Shares or the ADSs; there are no
outstanding securities convertible into or exchangeable for, or
warrants, rights or options to purchase from the Company, or
obligations of the Company to issue, the Stock or any other class of
capital stock of the Company; the Shares may be freely deposited by
the Selling Shareholder with the custodian for the Depositary against
issuance of ADRs evidencing ADSs; the ADSs are freely transferable by
the Selling Shareholder to or for the account of the several
Underwriters and (to the extent described in the Prospectus) the
initial purchasers thereof; and there are no restrictions on
subsequent transfers of the Shares or ADSs under the laws of Hong
Kong, the Cayman Islands and the United States except as described in
the Prospectus under "Description of Share Capital", "Description of
American Depositary Shares" and "Shares Eligible for Future Sale";
(xiv) The Shares have been duly and validly authorized and are
duly and validly issued and fully (or credited as fully) paid and
non-assessable and conform in all material respects to the description
of the Stock contained in the Prospectus;
(xv) Each of this Agreement and the Hong Kong Underwriting
Agreement has been duly authorized, executed, and delivered by the
Company and constitutes a valid and legally binding agreement of the
Company, enforceable in accordance with its terms, subject, as to
enforceability, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(xvi) The Deposit Agreement has been duly authorized, executed
and delivered by the Company, and constitutes a valid and legally
binding agreement of the Company, enforceable in accordance with its
terms, subject, as to enforceability, to bankruptcy, insolvency,
reorganization and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles; upon
issuance by the Depositary of ADRs evidencing ADSs against the deposit
of Shares in respect thereof in accordance with the provisions of the
Deposit Agreement, such ADRs will be duly and validly issued and the
persons in whose names the ADRs are registered will be entitled to the
rights specified therein and in the Deposit Agreement; and the Deposit
Agreement and the ADRs conform in all material respects to the
descriptions thereof contained in the Prospectus;
(xvii) All consents, approvals, authorizations, orders,
registrations, clearances and qualifications of or with any court or
governmental agency or body or any stock exchange authorities
(hereinafter referred to as a "Governmental Agency") having
jurisdiction over the Company or any of the Significant Subsidiaries
or any of their properties or any stock exchange authorities
(hereinafter referred to as "Governmental Authorizations") required
for the deposit of Shares, the issuance of ADSs in respect thereof,
the sale and delivery of the Shares and ADSs to be sold by the Selling
Shareholder hereunder and Shares of Stock to be sold by the Selling
Shareholder under the Hong Kong Underwriting Agreement and for the
execution and delivery by the Company of this Agreement, the Hong Kong
Underwriting Agreement and the Deposit Agreement to be duly and
validly authorized have been obtained or made and are in full force
and effect, except (A) the registration under the Act of the Shares
and the ADSs and (B) such Governmental Authorizations as may be
required under state securities or Blue Sky laws;
(xviii) 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
Depositary, and all such dividends and other distributions will not be
subject to withholding or other taxes under the laws and regulations
of the
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Cayman Islands and are otherwise free and clear of any other tax,
withholding or deduction in the Cayman Islands and without the
necessity of obtaining any Governmental Authorization in the Cayman
Islands;
(xix) The deposit of the Shares being deposited with the
Depositary against issuance of the ADRs evidencing the ADSs and the
compliance by the Company with all of the provisions of this
Agreement, the Hong Kong Underwriting Agreement and the Deposit
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
(A) any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of the Significant
Subsidiaries is a party or by which the Company or any of the
Significant Subsidiaries is bound or to which any of the property or
assets of the Company or any of the Significant Subsidiaries is
subject, (B) the respective constituent documents of the Company and
the Significant Subsidiaries or (C) any statute or any order, rule or
regulation of any Governmental Agency having jurisdiction over the
Company or any of the Significant Subsidiaries or any of their
respective properties;
(xx) Neither the Company nor any of the Significant Subsidiaries
is in violation of its respective constituent documents; and neither
the Company nor any of its subsidiaries or associated companies is (A)
in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement lease or other
agreement or instrument to which it is a party or by which it or any
of its properties may be bound or (B) in violation or contravention of
any law or statute or any order, rule or regulation of any
Governmental Agency having jurisdiction over the Company, any of its
subsidiaries or associated companies or any of their respective
properties, except, with respect to (A) and (B) above, any such
default, violation or contravention which would not, individually or
in the aggregate, have a Material Adverse Effect;
(xxi) Other than as set forth in the Prospectus, no stamp or
other issuance or transfer taxes or duties and no capital gains,
income, withholding or other taxes are payable in Hong Kong, the
Cayman Islands or any political subdivision or taxing authority
thereof or therein by or on behalf of the Underwriters, other than on
the income, profits or gains of any Underwriters where such
Underwriters are otherwise subject to income taxation on a net basis
in such jurisdiction in connection with (A) the deposit with the
custodian for the Depositary of Shares by the Selling Shareholder
against the issuance of ADRs evidencing ADSs, (B) the sale and
delivery by the Selling Shareholder of the Shares and ADSs to or for
the respective accounts of the Underwriters in the manner contemplated
herein, (C) the sale and delivery by the Underwriters of the Shares
and ADSs to the initial purchasers thereof in the manner contemplated
herein or (D) the execution, delivery and performance of this
Agreement, the Hong Kong Underwriting Agreement and the Deposit
Agreement (except that stamp duty may be payable in the Cayman Islands
if this Agreement is executed in, or after execution the originals are
brought within, the Cayman Islands);
(xxii) Neither the Company nor any of its subsidiaries, or to the
best knowledge of the Company after due inquiry, any of its associated
companies, has taken, directly or indirectly, any action which was
designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Shares and ADSs, provided, however, that this representation
and warranty shall not apply to the Stock Borrowing Agreement (as
defined in the Hong Kong Underwriting Agreement) or to anything done
or to be done by or on behalf of the Underwriters;
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(xxiii) The statements set forth in the Prospectus under the
caption "Description of Share Capital", insofar as they purport to
constitute a summary of the terms of the Stock and the ADSs,
respectively, and under the captions "Taxation", "Regulation" and
"Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are true, accurate and
complete in all material respects;
(xxiv) Other than as set forth in the Prospectus, there are no
(or in the case of Israel, to the best knowledge of the Company after
due inquiry, there are no) legal or governmental proceedings pending
and, to the Company's best knowledge after due inquiry, no such
proceedings threatened or contemplated by any Governmental Agency or
threatened by others to which the Company or any of its subsidiaries
or associated companies is a party or of which any property of the
Company or any of its subsidiaries or associated companies is the
subject which, if determined adversely to the Company or any of its
subsidiaries or associated companies, would individually or in the
aggregate have a Material Adverse Effect;
(xxv) The Company is not and, after giving effect to the offering
and sale of the ADSs, will not be an "investment company", as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xxvi) (A) Except as set forth in the Prospectus, the Company and
each of its subsidiaries and associated companies have all licenses,
consents, franchises, permits, authorizations, approvals, certificates
and orders and other concessions of and from all Governmental Agencies
that are necessary to own, lease, license and use their respective
properties and conduct their respective businesses in the manner as
set forth in the Prospectus; (B) neither the Company nor any
Significant Subsidiary has received, nor does the Company have any
reason to believe that it or any Significant Subsidiary will receive,
any notice relating to any actual or proposed modification, suspension
or revocation of any such licenses, consents, franchises, permits,
authorizations, approvals, certificates, orders or concessions; and
(C) the Company and its subsidiaries and associated companies are in
compliance with the provisions of all such licenses, consents,
franchises, permits, authorizations, approvals, orders and
concessions, except, with respect to (A), (B) and (C), where the
failure to have or maintain such licenses, consents, franchises,
permits, authorizations, approvals, certificates, orders or
concessions or to comply with the provisions thereof would not,
individually or in the aggregate, have a Material Adverse Effect;
(xxvii) Based on current information and the Company's current
plans and expectations regarding the value and nature of its assets
and the sources and nature of its income, the Company believes that it
should not be a Passive Foreign Investment Company ("PFIC") within the
meaning of Section 1297(a) of the United States Internal Revenue Code
of 1986, as amended, [in its 2004 taxable year,] and does not intend
to become or anticipate becoming a PFIC;
(xxviii) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(xxix) PricewaterhouseCoopers, who have certified certain
financial statements of the Company and its subsidiaries, are, to the
best knowledge of the Company after due inquiry, independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder; and the Company maintains a system of
internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with
management's general or specific authorizations; (B) access to assets
is permitted only in accordance with management's
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general or specific authorization; (C) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate actions taken with respect to any differences; and (D) the
Company has made and kept books, records and accounts, in reasonable
detail, which accurately and fairly reflect the transactions and
dispositions of assets of such entity and provide a sufficient basis
for the preparation of financial statements in conformity with
generally accepted accounting principles in Hong Kong ("Hong Kong
GAAP") as well as the reconciliation of such financial statements in
accordance with generally accepted accounting principles in the United
States ("U.S. GAAP");
(xxx) The Registration Statement, the Preliminary Prospectus, the
Prospectus, the ADS Registration Statement, the Japanese Registration
Statement, the Japanese Prospectus and the Hong Kong Prospectus, the
filing of the Registration Statement, the Prospectus and the ADS
Registration Statement with the Commission, the filing of the Japanese
Registration Statement with the KLFB and the filing of the Hong Kong
Prospectus with the Registrar of Companies in Hong Kong have each been
duly authorized by and on behalf of the Company, and the Registration
Statement, the ADS Registration Statement and the Japanese
Registration Statement have each been duly executed pursuant to such
authorization by and on behalf of the Company;
(xxxi) Each of the Company and its subsidiaries and associated
companies owns or has had licensed to it or otherwise has the benefit
of use under the authority of the owners or licensees thereof of all
patents, patent licenses, inventions, copyrights, trademarks, service
marks, trade names, domain names, technology and know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), information,
proprietary rights and processes or other confidential information
("Intellectual Property") that are necessary to conduct its business
as currently conducted, except where the failure to so own or have the
right to use or acquire would not, individually or in the aggregate,
have a Material Adverse Effect; and except as set forth in the
Prospectus, (A) none of the Intellectual Property owned or, to the
best knowledge of the Company having made due inquiry, licensed by the
Company or any of its subsidiaries and associated companies is
unenforceable or invalid; (B) neither the Company nor any of its
subsidiaries or associated companies has received any notice of
violation or conflict with rights of others with respect to the
Intellectual Property; (C) there are no pending or threatened actions,
suits, proceedings or claims by others that allege the Company or any
of its subsidiaries or associated companies is infringing any patent,
trade secret, trademark, service ▇▇▇▇, copyright or other intellectual
property or proprietary right; (D) the discoveries, inventions,
products or processes of the Company and its subsidiaries and
associated companies do not, to the Company's best knowledge after due
inquiry, violate or conflict with any intellectual property or
proprietary right of any third person; and (E) the Company and its
subsidiaries and associated companies are not in breach of any license
or other agreement relating to the Intellectual Property, in the case
of any of (A) through (E) which would, or in the case of (C), if
determined adversely to the Company or any of its subsidiaries or
associated companies would, individually or in the aggregate, have a
Material Adverse Effect;
(xxxii) Other than as set forth in the Prospectus, no labor
dispute, work stoppage, slow down or other conflict with the employees
of the Company or any of its subsidiaries or associated companies
exists or, to the best knowledge of the Company after due inquiry, is
threatened which would individually or in the aggregate have a
Material Adverse Effect;
(xxxiii) Each of this Agreement, the Hong Kong Underwriting
Agreement and the Deposit Agreement is in proper form to be
enforceable against the Company in the Cayman Islands or Hong Kong, as
the case may be, in accordance with its terms; and to
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ensure the legality, validity, enforceability or admissibility into
evidence in the Cayman Islands or Hong Kong of this Agreement, the
Hong Kong Underwriting Agreement or the Deposit Agreement, as the case
may be, it is not necessary that this Agreement, the Hong Kong
Underwriting Agreement or the Deposit Agreement, as the case may be,
be filed or recorded with any court or other authority in the Cayman
Islands or Hong Kong or that any stamp or similar tax in the Cayman
Islands or Hong Kong be paid on or in respect of this Agreement, the
Hong Kong Underwriting Agreement, the Deposit Agreement or any other
documents to be furnished hereunder;
(xxxiv) No holder of any of the Shares or the ADSs after the
consummation of the transactions contemplated by this Agreement, the
Hong Kong Underwriting Agreement or the Deposit Agreement is or will
be subject to any liability in respect of any liability of the Company
by virtue only of its holding of any such Shares or ADSs; except as
set forth in the Prospectus, there are no limitations on the rights of
holders of the Shares or the ADSs to hold, vote or transfer their
securities;
(xxxv) Except as disclosed in the Prospectus, since June 30,
2004, neither the Company nor any of the Significant Subsidiaries has
(A) entered into or assumed any material contract, (B) incurred or
agreed to incur any material liability (including contingent
liability) or other obligation, (C) acquired or disposed of or agreed
to acquire or dispose of any business or asset material to the Company
or any of the Significant Subsidiaries, or (D) assumed or acquired or
agreed to assume or acquire any material liabilities (including
contingent liabilities);
(xxxvi) The audited financial statements (and the notes thereto)
of the Company included in the Prospectus present fairly and
accurately the financial position of the Company and its subsidiaries
as of the dates specified and the results of operations and changes in
financial position of the Company and its subsidiaries for the periods
specified, and such financial statements have been prepared in
conformity with Hong Kong GAAP applied on a consistent basis
throughout the periods presented (other than as described therein);
and the summary and selected financial data included in the Prospectus
present fairly the information shown therein and have been compiled on
a basis consistent with that of the audited financial statements
included therein;
(xxxvii) To the best knowledge of the Company after due inquiry,
the audited financial statements (and the notes thereto) of Partner
Communications Company Ltd., an Israeli company ("Partner"), included
in the Prospectus present fairly and accurately the financial position
of Partner for the periods specified and such financial statements
have been prepared in conformity with U.S. GAAP applied on a
consistent basis throughout the periods presented (other than as
described therein); and any summary and selected financial data
included in the Prospectus present fairly and accurately the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included therein;
(xxxviii) In the event that any Shares are sold pursuant to the
Preferential Offering, the unaudited pro forma financial information
included in Appendix VI to the Hong Kong Prospectus has been duly and
carefully prepared in accordance with Listing Rule 4.29 and on the
bases set out in the Hong Kong Prospectus, is presented therein on a
basis consistent with the accounting policies normally applied by the
Company and is not misleading; all assumptions on which such
information is based are set out therein and are reasonable and, so
far as the Company is aware, there are no other material assumptions
or sensitivities which should reasonably be taken into account in the
preparation of such information; and such pro forma financial
information takes into account (to the extent relevant) all matters of
which the Company is aware concerning the Company or the markets in
which it carries on business and has been compiled after due and
careful inquiry;
-10-
(xxxix) All returns, reports or filings which ought to have been
made by or in respect of each of the Company and its subsidiaries and,
to the best knowledge of the Company after due inquiry, each of the
Company's associated companies for taxation purposes have been made,
and are not the subject of any dispute with the relevant revenue or
other appropriate authorities that is not being contested in good
faith; the provisions included in the audited accounts as set out in
the Prospectus included appropriate provisions required under Hong
Kong GAAP for all taxation in respect of accounting periods ended on
or before the accounting reference date to which such audited accounts
relate for which the Company was then or might reasonably be expected
thereafter to become or have become liable; and neither the Company
nor any of its subsidiaries or, to the best knowledge of the Company
after due inquiry, any of its associated companies has received notice
of any tax deficiency that has been asserted by the relevant
regulatory authorities and is not being contested in good faith,
except, in each case, any failure to so file or provide or any such
deficiency that would not have a Material Adverse Effect;
(xl) The section entitled "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the Prospectus
accurately and fully describes (A) accounting policies which the
Company believes are the most important in the portrayal of the
Company's financial condition and results of operations and which
require management's most difficult, subjective or complex judgments
("critical accounting policies"); (B) judgments and uncertainties
affecting the application of critical accounting policies; and (C) the
likelihood that materially different amounts would be reported under
different conditions or using different assumptions and an explanation
thereof;
(xli) The descriptions of the events and transactions set forth
in (A) the Prospectus under the caption "The Restructuring" and (B)
Appendix IX to the Hong Kong Prospectus (collectively, the
"Restructuring") are true and correct in all material respects;
(xlii) Each of the significant documents or agreements executed
in connection with the Restructuring (collectively the "Restructuring
Documents") by any of the Company, its subsidiaries or its associated
companies (collectively, the "Company Restructuring Subsidiaries") has
been duly authorized, executed and delivered by that party and
constitutes a valid and legally binding agreement of that party,
enforceable in accordance with its terms, subject, as to
enforceability, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(xliii) The Restructuring and the execution, delivery and
performance of the Restructuring Documents do not (A) contravene any
provision of applicable law or statute, rule or regulation of any
Governmental Agency having jurisdiction over the Company, any of the
Significant Subsidiaries or any of the Company Restructuring
Subsidiaries or any of their respective properties, (B) contravene the
respective constituent documents or business licenses of the Company,
any of the Significant Subsidiaries or any of the Company
Restructuring Subsidiaries or (C) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, any license, indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to which the
Company is a party or by which the Company, any of the Significant
Subsidiaries or any of the Company Restructuring Subsidiaries is bound
or to which any of the property or assets of the Company, any of the
Significant Subsidiaries or any of the Company Restructuring
Subsidiaries is subject, and will not result in the creation or
imposition of any lien, charge, encumbrance or other restriction upon
any material assets of the Company, any of the Significant
Subsidiaries or any of the Company Restructuring Subsidiaries, except,
with respect to (A) or (C), any such contravention, conflict, breach,
violation, default or restriction which would not,
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individually or in the aggregate, have (i) a Material Adverse Effect
or (ii) a material adverse effect on the Company's ability to perform
its obligations under this Agreement, the Deposit Agreement or the
Hong Kong Underwriting Agreement;
(xliv) Except as disclosed in the Prospectus, all consents,
approvals, authorizations, orders, registrations and qualifications
required in connection with the Restructuring and the execution,
delivery and performance of the Restructuring Documents have been made
or unconditionally obtained in writing, and no such consent, approval,
authorization, order, registration or qualification has been withdrawn
or is subject to any condition precedent which has not been fulfilled
or performed;
(xlv) There are no (or, in the case of Israel, to the best
knowledge of the Company after due inquiry, there are no) legal or
governmental proceedings that challenge the effectiveness or validity
of the events and transactions set forth in the Prospectus under the
caption "The Restructuring" and, to the Company's best knowledge
without having made any specific inquiry of any Governmental Agency,
no such proceedings are threatened or contemplated by any Governmental
Agencies;
(xlvi) The Company's [audit committee and] senior management have
reviewed and agreed with the selection, application and disclosure of
critical accounting policies and have consulted with its legal
advisers and independent accountants with regards to such disclosure;
(xlvii) The section entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity
and Capital Resources" in the Prospectus accurately and fully
describes all material trends, demands, commitments, events and
uncertainties, and the potential effects thereof, that the Company
believes would materially affect liquidity and are reasonably likely
to occur; and neither the Company nor any of the Significant
Subsidiaries are engaged in any transactions with, or have any
obligations to, its unconsolidated entities (if any) that are
contractually limited to narrow activities that facilitate the
transfer of or access to assets by the Company or the Significant
Subsidiaries, including, without limitation, structured finance
entities and special purpose entities, or otherwise engage in, or have
any obligations under, any off-balance sheet transactions or
arrangements. As used herein in this Section 1, the phrase "reasonably
likely" refers to a disclosure threshold lower than "more likely than
not";
(xlviii) Except as disclosed in the Prospectus, no indebtedness
(actual or contingent) and no contract or arrangement (other than
employment contracts or arrangements) is outstanding between the
Company or any of its subsidiaries or, to the best knowledge of the
Company, any of its associated companies and any director of the
Company or any person connected with such director (including his
spouse, infant children or any company or undertaking in which he
holds a controlling interest);
(xlix) Except as set forth in the Prospectus, the Company is not
engaged in any material transactions with its directors, officers,
management, shareholders, or any other person, including persons
formerly holding such positions, on terms that are not available to
other parties on an arm's length basis;
(l) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company or any of
its subsidiaries and any person or entity that would give rise to any
claim against the Company, any of its subsidiaries or any of the
Underwriters for brokerage commissions, finder's fees or other
payments in connection with the offer and sale of Shares and the ADSs;
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(li) There are no debt securities of the Company outstanding as
of the date of this Agreement;
(lii) To the Company's best knowledge after due inquiry, none of
the Company or any of its Significant Subsidiaries, nor any director,
officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its Significant Subsidiaries, has used
any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to a political activity; made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment; and
(liii) The Company and each of its Significant Subsidiaries is
validly insured against such losses and risks in such amounts as are
prudent and customary in the businesses in which it is engaged and as
may be required by law; the Company and each of its Significant
Subsidiaries has duly paid in full all premiums due in respect of such
policies and instruments; there are no claims by the Company or any of
its Significant Subsidiaries under any such policy or instrument as to
which any insurance company is denying any liability with respect
thereto or is defending under a reservations of rights clause that, if
determined adversely to the Company or any Significant Subsidiary,
would have a Material Adverse Effect;.
(b) The Selling Shareholder represents and warrants to, and agrees
with, each of the Underwriters and the Company that:
(i) Such Selling Shareholder has been duly organized and is
validly existing as a company in good standing in the British Virgin
Islands;
(ii) All Governmental Authorizations required for the deposit of
the Shares being deposited with the custodian for the Depositary
against issuance of the ADRs evidencing the ADSs to be delivered at
each Time of Delivery (as defined in Section 4 hereof), for the sale
and delivery of the Shares, the ADSs and the Hong Kong Shares, as the
case may be, to be sold by the Selling Shareholder hereunder and under
the Hong Kong Underwriting Agreement and for the execution and
delivery by the Selling Shareholder of this Agreement and the Hong
Kong Underwriting Agreement, have been obtained and are in full force
and effect, except (A) the registration under the Act of the Shares
and the ADSs and (B) such Governmental Authorizations as may be
required under state securities or Blue Sky laws; and the Selling
Shareholder has power and authority (corporate or other) to enter into
this Agreement and the Hong Kong Underwriting Agreement and to sell,
assign, transfer and deliver the Shares, the ADSs and the Hong Kong
Shares, as the case may be, to be sold by the Selling Shareholder
hereunder and under the Hong Kong Underwriting Agreement;
(iii) The sale of the Shares, the ADSs and the Hong Kong Shares,
as the case may be, to be sold by the Selling Shareholder hereunder
and under the Hong Kong Underwriting Agreement, the deposit of the
Shares with the custodian for the Depositary against issuance of the
ADRs evidencing the ADSs to be delivered at each Time of Delivery, the
compliance by the Selling Shareholder with all of the provisions of
this Agreement and the Hong Kong Underwriting Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, (A) any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Selling Shareholder is a party or by which
the Selling Shareholder is bound, or to which any of the property or
assets of the Selling Shareholder is subject (B) the constituent
documents of the Selling Shareholder or (C) any statute or any order,
rule or
-13-
regulation of any Governmental Agency having jurisdiction over the
Selling Shareholder or its properties or assets;
(iv) The Selling Shareholder has good and valid title to the
Shares represented by the ADSs to be sold hereunder and the Hong Kong
Shares to be sold under the Hong Kong Underwriting Agreement, and
immediately prior to each Time of Delivery the Selling Shareholder
will have good and valid title to the Shares represented by the ADSs
to be sold by the Selling Shareholder hereunder and the Hong Kong
Shares to be sold under the Hong Kong Underwriting Agreement, free and
clear of all liens, encumbrances, equities or claims; and upon
delivery of the ADSs representing the Shares to be sold hereunder and
delivery of the Hong Kong Shares to be sold under the Hong Kong
Underwriting Agreement and payment therefor pursuant to this Agreement
and the Hong Kong Underwriting Agreement, good and valid title to such
ADSs, Shares and Hong Kong Shares, free and clear of all liens,
encumbrances, equities or claims, will pass to the several
Underwriters, the Hong Kong Underwriters and/or the initial
purchasers, as the case may be;
(v) Neither the Selling Shareholder nor any of its subsidiaries,
nor any person acting on its or their behalf has taken or will take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares and the ADSs,
provided, however, that this representation and warranty shall not
apply to the Stock Borrowing Agreement or to anything done or to be
done by or on behalf of the Underwriters;
(vi) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(vii) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(viii) The Japanese Registration Statement conforms, and the
Japanese Prospectus and any further amendments or supplements to the
Japanese Registration Statement or the Japanese Prospectus will
conform, in all material respects to the requirements of the
Securities and Exchange Law of Japan and the Japanese Rules and
Regulations, and do not and will not, as of the applicable effective
date as to the Japanese Registration Statement and any amendment
thereto and as of the applicable date of the Japanese Prospectus and
any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
and no stop order suspending the effectiveness of the Japanese
Registration Statement has been issued by the KLFB;
(ix) The Hong Kong Prospectus, the Formal Notice (as defined in
the Hong Kong Underwriting Agreement) and the Application Forms (as
such term is defined in the
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Hong Kong Underwriting Agreement) and the documents filed pursuant to
Rule 9.11 and 9.12 of the Hong Kong Listing Rules contain all
information required by the applicable requirements of the Companies
Ordinance (Chapter 32 of the Laws of Hong Kong), the Securities and
Futures Ordinance (Chapter 571 of the Laws of Hong Kong), the Hong
Kong Listing Rules (together with other rules and regulations of the
Hong Kong Stock Exchange), any other applicable Hong Kong regulations
or legislation and the Company Law (2003 Revision) of the Cayman
Islands;
(x) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Shareholder will deliver to you prior to or
at the First Time of Delivery (as defined in Section 4 hereof) a
properly completed and executed United States Treasury Department Form
W-8BEN (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof);
(xi) Other than as set forth in the Prospectus, no stamp or other
issuance or transfer taxes or duties and no capital gains, income,
withholding or other taxes are payable by or on behalf of the
Underwriters to any Hong Kong, British Virgin Islands or Cayman
Islands or any political subdivision or taxing authority thereof or
therein in connection with (A) the deposit with the Depositary of
Shares by the Selling Shareholder against the issuance of ADRs
evidencing ADSs, (B) the sale and delivery by the Selling Shareholder
of the Shares and ADSs to or for the respective accounts of the
Underwriters in the manner contemplated herein, (C) the sale and
delivery by the Underwriters of the Shares and ADSs to the initial
purchasers thereof in the manner contemplated herein or (D) the
execution, delivery and performance of this Agreement, the Hong Kong
Underwriting Agreement and the Deposit Agreement;
(xii) Each of this Agreement and the Hong Kong Underwriting
Agreement has been duly authorized, executed and delivered by the
Selling Shareholder and constitutes a valid and legally binding
agreement of the Selling Shareholder, enforceable in accordance with
its terms, subject, as to enforceability, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles, and is in proper form to be enforceable
against the Selling Shareholder in accordance with its terms; and to
ensure the legality, validity, enforceability or admissibility into
evidence in the British Virgin Islands or Hong Kong, as the case may
be, of this Agreement or the Hong Kong Underwriting Agreement, as the
case may be, it is not necessary that this Agreement or the Hong Kong
Underwriting Agreement, as the case may be, be filed or recorded with
any court or other authority in the British Virgin Islands or Hong
Kong, as the case may be, or that any stamp or similar tax in the
British Virgin Islands or Hong Kong, as the case may be, be paid on or
in respect of this Agreement, the Hong Kong Underwriting Agreement or
any other documents to be furnished hereunder;
(xiii) The Shares may be freely deposited by the Selling
Shareholder with the Depositary against issuance of ADRs evidencing
ADSs; the Shares and the ADSs delivered at each Time of Delivery by
the Selling Shareholder will be freely transferable by the Selling
Shareholder to or for the account of the several Underwriters and (to
the extent set forth in the Prospectus) the initial purchasers
thereof; and there are no restrictions on subsequent transfers of the
Shares or the ADSs under the laws of Hong Kong, the Cayman Islands or
the United States except as set forth in the Prospectus under the
captions "Description of Share Capital" and "Description of American
Depositary Shares";
(xiv) There are no contracts, agreements or understandings
between the Selling Shareholder and any person that would give rise to
a valid claim against the
-15-
Selling Shareholder or any Underwriter for a brokerage commission,
finder's fee or other like payment in connection with the offer and
sale of the Shares and the ADSs;
(xv) Each Restructuring Document executed by the Selling
Shareholder has been duly authorized, executed and delivered by or on
behalf of the Selling Shareholder and constitutes a valid and legally
binding agreement of the Selling Shareholder, enforceable in
accordance with its terms, subject, as to enforceability, to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and
(xvi) The Restructuring and the execution, delivery and
performance of the Restructuring Documents do not (A) contravene any
provision of applicable law or statute, rule or regulation of any
Governmental Agency having jurisdiction over the Selling Shareholder
or any of its properties, (B) contravene the respective constituent
documents or business licenses of the Selling Shareholder or (C)
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any license,
indenture, mortgage, deed of trust, loan agreement, note, lease or
other agreement or instrument to which the Selling Shareholder is a
party or by which the Selling Shareholder is bound or to which any of
the property or assets of the Selling Shareholder is subject, and will
not result in the creation or imposition of any lien, charge,
encumbrance or other restriction upon any material assets of the
Selling Shareholder, except, with respect to (A) or (C), any such
contravention, conflict, breach, violation, default or restriction
which would not, individually or in the aggregate, have (i) a Material
Adverse Effect or (ii) a material adverse effect on the Selling
Shareholder's ability to perform its obligations under this Agreement.
2. Subject to the terms and conditions herein set forth, (a) the Selling
Shareholder agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Selling
Shareholder, at a purchase price per ADS of U.S.$[.], the number of Firm ADSs
(to be adjusted by you so as to eliminate fractional ADSs) determined by
multiplying the aggregate number of Firm ADSs to be sold by the Selling
Shareholder by a fraction, the numerator of which is the aggregate number of
Firm ADSs to be purchased by such Underwriter as set forth opposite the name of
such Underwriter in Schedule I hereto and the denominator of which is the
aggregate number of Firm ADSs to be purchased by all of the Underwriters from
the Selling Shareholder and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional ADSs as provided
below, the Selling Shareholder agrees to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Selling Shareholder at the purchase price per ADS set forth in clause (a) of
this Section 2, that portion of the number of Optional ADSs as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional ADSs) determined by multiplying such number of Optional ADSs by a
fraction the numerator of which is the maximum number of Optional ADSs which
such Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional ADSs that all of the Underwriters are entitled to purchase
hereunder.
The Selling Shareholder hereby grants to the Underwriters the right to
purchase at their election up to [11,550,000] Optional ADSs, at the purchase
price per ADS set forth in the paragraph above, for the sole purpose of covering
sales of ADSs (or underlying Shares) in excess of the number of Firm ADSs (or
underlying Shares). Any such election to purchase Optional ADSs may be exercised
only by written notice from you to the Selling Shareholder, given within a
period of 30 calendar days after the date of the commencement of trading of the
Hong Kong Shares on the Hong Kong Stock Exchange and setting forth the aggregate
number of Optional ADSs to be purchased and the date on which such Optional ADSs
are to be delivered, as determined by you but in no event earlier than the First
Time of Delivery (as defined in Section 4 hereof) or, unless you and the Selling
Shareholder otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
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The Underwriters may, in their discretion, require that Shares be delivered
in lieu of ADSs. The purchase price per Share shall be HK$[.]. Any Hong Kong
Securities and Futures Commission ("SFC") transaction levy, investor
compensation levy and Hong Kong Stock Exchange trading fee payable on Shares
underlying the ADSs or Shares delivered in lieu of ADSs pursuant to this Section
2 in the Offering shall be paid by the Selling Shareholder in respect of the
ADSs or Shares delivered by it, and the Selling Shareholder hereby authorizes
the Underwriters to deduct an amount equal to such SFC transaction levy,
investor compensation levy and Hong Kong Stock Exchange trading fee (equal to
0.01%, 0.004% and 0.01%, respectively, of the price to be paid per Hong Kong
Share by public investors in the Hong Kong Public Offering) from the proceeds of
the International Offering in respect of the ADSs or Shares delivered by it, and
the Underwriters shall pay such amount to the SFC and the Hong Kong Stock
Exchange, respectively. The price for each Hong Kong Share in the Hong Kong
Public Offering to be paid by investors, inclusive of a 1% brokerage fee and a
0.005% SFC transaction levy, a 0.002% investor compensation levy and a 0.005%
Hong Kong Stock Exchange trading fee, and subject to any necessary rounding,
will be effectively equivalent to the price to the public per Share in the
Offering.
Pursuant to the Agreement between Syndicates, under the direction of the
Global Coordinator, if the number of Hong Kong Shares validly applied for in the
Hong Kong Public Offering exceeds the number of Hong Kong Shares initially
offered in the Hong Kong Public Offering, Shares shall be reallocated to the
Hong Kong Public Offering from the Offering in accordance with the clawback
mechanism described in the Hong Kong Underwriting Agreement. In addition, the
Global Coordinator has (after prior consultation with the Company) a general
discretion to reallocate Shares to the Hong Kong Public Offering from the
Offering as described in the Hong Kong Underwriting Agreement. Shares
reallocated to the Hong Kong Public Offering pursuant to the preceding sentences
are referred to as the "Reallocated Shares". In each such case, the number of
Shares offered in the Offering will be correspondingly reduced. An amount equal
to the aggregate underwriting discounts on the Reallocated Shares reallocated
from the Offering (which underwriting discount, expressed as a percentage, shall
be the same per Reallocated Share as per ADS or Share) shall be deducted and
withheld by the Underwriters from the amount otherwise payable hereunder to the
Selling Shareholder. Underwriting discounts with respect to such Reallocated
Shares shall be allocated among the Underwriters and the Hong Kong Underwriters
pursuant to the Agreement between Syndicates. The Underwriters shall have no
other payment obligations to the Selling Shareholder with respect to the
Reallocated Shares reallocated from the Offering.
It is understood and agreed that the Global Coordinator may reallocate all
or some of the unpurchased Hong Kong Shares to one or more of the Underwriters
hereunder in such amounts as the Global Coordinator and each such Underwriter
may agree, whereupon such Underwriter will become obligated to pay the purchase
price payable hereunder for such unpurchased Hong Kong Shares to the Selling
Shareholder. Underwriting discounts with respect to such reallocated unpurchased
Hong Kong Shares (which underwriting discount, expressed as a percentage, shall
be the same per unpurchased Hong Kong Share as per ADS or Share) shall be
allocated among the Underwriters pursuant to the Agreement between Syndicates.
3. Upon the authorization by you of the release of the Firm ADSs, the
several Underwriters propose to offer the Firm ADSs or the Firm Shares, as
applicable, for sale upon the terms and conditions set forth in the Prospectus,
the Japanese Prospectus and the Hong Kong Prospectus, as applicable.
4. (a) With respect to all or a portion of the ADSs to be purchased and
sold hereunder at each Time of Delivery (as defined below), ▇▇▇▇▇▇▇ ▇▇▇▇▇
(Asia) L.L.C., on behalf of the several Underwriters, may elect to have
Shares delivered and paid for hereunder in lieu of, and in satisfaction of,
the Selling Shareholder's obligation to sell to the several Underwriters
and the several Underwriters' obligations to purchase ADSs. Notice of such
election shall be given by ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. to the Selling
Shareholder at least forty-eight hours prior to such Time of Delivery (the
"Notification Time"). The number of Shares to be purchased by the
Underwriters as a result of the making of such election shall be adjusted
by ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia) L.L.C. so as to eliminate any fractional Shares and
the purchase price for any Shares so delivered as a result of making such
election shall be the purchase price which would have been
-17-
applicable hereunder to ADSs adjusted to reflect the ratio of Shares to
ADSs (whether greater or lesser than one to one).
(b) The ADSs to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in
such names as ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. may request upon notice to the
Selling Shareholder prior to the Notification Time, shall be delivered by
or on behalf of the Selling Shareholder to ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia) L.L.C.,
through the facilities of The Depository Trust Company ("DTC"), for the
account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account designated by the Selling Shareholder in
writing (which shall be designated to ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. by the
Selling Shareholder prior to the Notification Time), at the Time of
Delivery specified in Section 4(d).
The Shares underlying the ADSs to be delivered hereunder shall be
transferred on the principal register of members of the Company in the
Cayman Islands to the Hong Kong office of the Depositary, as custodian for
the Depositary, against delivery to the Selling Shareholder of a copy of a
letter confirming that the Global Coordinator has given irrevocable
instructions to its correspondent bank in Hong Kong to make the wire
transfer of payments for the ADSs at the Time of Delivery specified in
Section 4(d). Immediately after such transfer of Shares underlying the ADSs
to the Hong Kong office of the Depositary, but prior to the commencement of
dealings in Shares on the Hong Kong Stock Exchange, the Company shall
procure the establishment in Hong Kong of a branch register of members and
the Company shall procure that such Shares underlying the ADSs delivered
hereunder shall be removed (against payment for such Shares) from the
Company's principal register of members maintained in the Cayman Islands
and shall be entered in the Company's branch register of members in Hong
Kong by the Company's branch share registrar. The Company shall procure
that share certificates in the name of the Hong Kong office of the
Depositary, as custodian for the Depositary, shall be issued and dispatched
on the New York Business Day prior to the Time of Delivery. Such share
certificates will only become valid in the circumstances described in the
Hong Kong Prospectus.
(c) If the election has been made in accordance with subsection (a)
above, the Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in
such names as ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia) L.L.C. may request upon notice to the
Company prior to the Notification Time, shall be transferred by the Selling
Shareholder to ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. or such names as ▇▇▇▇▇▇▇ ▇▇▇▇▇
(Asia) L.L.C. may have requested (which may, among others, include HKSCC
Nominees Limited) on the principal register of members of the Company in
the Cayman Islands and subsequently (but prior to the commencement of
dealings in Shares on the Hong Kong Stock Exchange) the Company shall
procure that such Shares shall be removed (against payment for such Shares)
from the Company's principal register of members maintained in the Cayman
Islands and shall be entered in the Company's branch register of members in
Hong Kong by the Company's branch share registrar, for onward delivery, in
the case of Shares transferred to HKSCC Nominees Limited, through the
facilities of the Hong Kong Central Clearing and Settlement System
("CCASS") to such CCASS participant's stock account or accounts specified
by ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer to, or, to the
extent Hong Kong Securities Clearing Company Limited ("HKSCC") procedures
permit, official bank check or checks payable to the order of the Selling
Shareholder, in Hong Kong dollars at each Time of Delivery specified in
Section 4(d). The Selling Shareholder and the Company will cause the form
of the certificates representing the Shares to be made available for
checking at least one New York Business Day prior to the Time of Delivery
with respect thereto at the office of the HKSCC. Delivery of the Shares by
the Selling Shareholder will be made to such CCASS participant's stock
account or accounts specified by ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia) L.L.C., in such
respective portions as ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. may designate, upon
notice given to the Selling Shareholder prior to the Notification Time.
-18-
(d) The time and date of the deliveries and payments described in this
Section 4 shall be (i) with respect to the Shares delivered pursuant to
subsection (c), 8.00 a.m., Hong Kong time; (ii) with respect to the Shares
underlying the ADSs to be delivered pursuant to subsection (b), 8.00 a.m.,
Hong Kong time; and (iii) with respect to the ADSs to be delivered pursuant
to subsection (b), 8.00 a.m., Hong Kong time, for payments and 9.30 a.m.,
New York City time, for deliveries, in each case on October [15], 2004 or
such other time and date as ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia) L.L.C. and the Selling
Shareholder may agree upon in writing. The time and date of delivery and
payment shall be (i) with respect to the Optional Shares delivered pursuant
to subsection (c), 8.00 a.m., Hong Kong time; (ii) with respect to the
Shares underlying the Optional ADSs to be delivered pursuant to subsection
(b), 8.00 a.m., Hong Kong time; and (iii) with respect to the Optional ADSs
to be delivered pursuant to subsection (b), in the event that such delivery
occurs at the First Time of Delivery (as defined below), 8.00 a.m., Hong
Kong time, for payments and 9.30 a.m., New York City time, for deliveries,
and in the event such delivery occurs at the Second Time of Delivery (as
defined below), 9:30 a.m., New York City time for deliveries and payments,
in each case on the date specified by ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. in the
written notice given by ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia) L.L.C. of the Underwriters'
election to purchase such Optional ADSs, or such other time and date as
▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. and the Selling Shareholder may agree upon in
writing. At or around 9:00 a.m., Hong Kong time, on the date on which the
Time of Delivery occurs (or such other time and date as ▇▇▇▇▇▇▇ ▇▇▇▇▇
(Asia) L.L.C. and the Selling Shareholder may agree upon in writing), the
Company shall provide ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. with copies of
irrevocable instructions to HKSCC regarding the delivery of the Shares
underlying the ADSs and the Shares elected to be delivered pursuant to
subsection (a) above, respectively, as provided in Section 4(b) and Section
4(c) above.
Such time and date for delivery of the Firm ADSs (whether in the form
of Shares or ADSs) is herein called the "First Time of Delivery", such time
and date for delivery of the Optional ADSs (whether in the form of Shares
or ADSs), if not the First Time of Delivery, is herein called the "Second
Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
The Underwriters shall deduct from the amount so payable to the
Selling Shareholder pursuant to this Section 4(d): (i) moneys paid by the
Underwriters by way of brokerage fees, transaction levies, investor levies
and trading fees described in the third paragraph of Section 2; (ii) all
stamp duty, if any, payable by the Selling Shareholder (including any stamp
duty otherwise payable by initial purchasers of Shares hereunder); and
(iii) any amounts payable by the Selling Shareholder to the Global
Coordinator and/or the Underwriters pursuant to the International Fee
Letter referred to in Section 6 hereof.
At each Time of Delivery, to the extent any amounts payable to the
Underwriters pursuant to this Agreement (including pursuant to the
International Fee Letter) at such Time of Delivery are not deducted from
each or wire transfer or official bank check, as the case may be, the
Company or the Selling Shareholder (as the case may be) shall pay, or cause
to be paid, such amounts to ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia) L.L.C. on behalf of the
Underwriters by wire transfer of Federal (same-day) funds to the account or
accounts specified by ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. Any amounts payable to
the Underwriters pursuant to this Agreement (including pursuant to the
International Fee Letter) which are not so deducted from payments made to
the Selling Shareholder at each Time of Delivery, shall be paid, or cause
to be paid, by the Company or the Selling Shareholder (as the case may be)
to ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia) L.L.C. on behalf of the Underwriters by wire
transfer of Federal (same-day) funds to the account or accounts specified
by ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. within [.] New York Business days of receipt
by the Company or the Selling Shareholder (as the case may be) of
appropriate documents, receipts or invoices relating to such amounts.
(e) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipts for the Shares and the ADSs and any additional documents
requested by the Underwriters, will be delivered at the
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offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇ (the "Closing Location"), and the Shares and the ADSs will be
delivered as specified in subsections (b) and (c) above, all at such Time
of Delivery. A meeting will be held at the Closing Location at 8:00 p.m.,
Hong Kong time, on the New York Business Day immediately preceding such
Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review
by the parties hereto. For the purposes of this Agreement, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York or Hong
Kong are generally authorized or obligated by law or executive order to
close.
5. (a) The Company agrees with each of the Underwriters, and the Selling
Shareholder agrees with each of the Underwriters to cause the Company:
(i) To prepare the Prospectus in a form reviewed by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; not to file any amendment or supplement to the
Registration Statement, the Prospectus, the Japanese Registration
Statement, the Japanese Prospectus or the Hong Kong Prospectus unless
the Company has furnished you a copy for your review prior to filing;
not to file any such Prospectus or proposed amendment or supplement to
which you object; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement
or the Japanese Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended
Prospectus has been filed or any supplement to the Japanese Prospectus
has been made and to furnish you copies thereof; to file promptly all
reports required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering
or sale of the Shares and the ADSs; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus, the issuance by the KLFB of any
stop order or of any order preventing or suspending the registration
made under the Japanese Registration Statement or the issuance by the
Hong Kong Stock Exchange or the SFC of any stop order or of any order
preventing or suspending the use of the Hong Kong Prospectus, of the
suspension of the qualification of the Shares or the ADSs for offering
or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information, or any request by the KLFB
for the amending or supplementing of the Japanese Registration
Statement or for additional information, or any request by the Hong
Kong Stock Exchange or the SFC for the amending or supplementing of
the Hong Kong Prospectus or for additional information, and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or
suspending the registration under the Japanese Registration Statement
or suspending the use of the Hong Kong Prospectus or suspending any
such qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares and the ADSs for offering and
sale under the securities laws of such jurisdictions as you may
request and to comply with such laws so as to permit the continuance
of sales and dealings therein in such jurisdictions for as long as may
be necessary to complete the distribution of the Shares and the ADSs,
provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
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(iii) Prior to [10:00 A.M.], New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with written and electronic
copies of the Prospectus in New York City in such quantities as you
may reasonably request, and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the
time of issue of the Prospectus in connection with the offering or
sale of the Shares and the ADSs and if at such time any events shall
have occurred as a result of which the Prospectus as then amended or
supplemented 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 Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such period to amend
or supplement the Prospectus in order to comply with the Act, to
notify you and upon your request to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many written
and electronic copies as you may from time to time reasonably request
of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance, and in
case any Underwriter is required to deliver a prospectus in connection
with sales of any of the Shares and the ADSs at any time nine months
or more after the time of issue of the Prospectus, upon your request
but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many written and electronic copies as you may request
of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(iv) Prior to 10:00 A.M., Tokyo time, on the [next] [second]
Japan Business Day succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with written [and electronic
copies] of the Japanese Prospectus in such quantities as you may
reasonably request, and, if the delivery of a prospectus is required
at any time prior to the expiration of the earlier of three months
after the effectiveness of the Japanese Registration Statement and the
time when delivery of the Japanese Prospectus is no longer required
under the Securities and Exchange Law of Japan and the Japanese Rules
and Regulations in connection with the Japanese POWL and if during
such time any events shall have occurred as a result of which the
Japanese Prospectus as then amended or supplemented 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 Japanese Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Japanese
Prospectus in order to comply with the Securities and Exchange Law of
Japan and the Japanese Rules and Regulations, to notify you and upon
your request to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many written [and electronic
copies] as you may from time to time reasonably request of an amended
Japanese Prospectus or a supplement to the Japanese Prospectus which
will correct such statement or omission or effect such compliance;
(v) To cause the registration under the Japanese Registration
Statement to be declared effective by the KLFB on or prior to the
first Business Day following the date of this Agreement; and to comply
with all the applicable provisions of the Securities and Exchange Law
of Japan and the Japanese Rules and Regulations in connection with the
Japanese POWL, including (but without limiting the generality of the
foregoing) the filing of all securities reports, extraordinary reports
(if any) and other periodic reports, as well as the filing of any
amendment to any such reports to correct the same if such report shall
contain any untrue statement of a material fact or omit to state a
material fact which is required to be stated therein or which is
necessary to make the statements therein not misleading, or if the
filing of such amendment is required by the KLFB or is otherwise
necessary;
-21-
(vi) To comply with all the applicable provisions of the
Companies Ordinance (Chapter 32 of the Laws of Hong Kong), the
Securities and Futures Ordinance (Chapter 571 of the Laws of Hong
Kong), the Hong Kong Listing Rules (together with other rules and
regulations of the Hong Kong Stock Exchange), any other applicable
Hong Kong regulations or legislation and the Company Law (2003
Revision) of the Cayman Islands in connection with the Hong Kong
Public Offering and the Preferential Offering, including (but without
limiting the generality of the foregoing) the requirement to file and
issue any supplementary listing document pursuant to Rule 11.13 of the
Hong Kong Listing Rules.
(vii) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(viii) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, not to, and to cause its subsidiaries and associated
companies not to, offer, sell, contract to sell or otherwise dispose
of any securities of the Company that are substantially similar to the
Shares or ADSs, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive, Stock or any such substantially similar securities (other
than pursuant to employee stock option plans existing on, or upon the
conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement), without your prior
written consent;
(ix) So long as the laws of the countries where the Shares and
the ADSs are listed effectively prohibits persons in such countries
from, directly or indirectly, financing or investing in
telecommunications or related projects in certain countries, not to
purchase, acquire, receive or otherwise cause to be transferred to the
Company or any of its subsidiaries or associated companies any assets,
or any interests in any assets, in any such countries.
(x) To furnish to its shareholders as soon as practicable after
the end of each fiscal year an annual report (in English) (including a
balance sheet and statements of income, shareholders' equity and cash
flows of the Company and its subsidiaries certified by independent
public accountants and prepared in conformity with Hong Kong GAAP
together with a reconciliation to U.S. GAAP of net income,
shareholders' equity and, as necessary, other selected balance sheet
and income statement items) and, as soon as practicable after the end
of the second quarter of each fiscal year prepared in accordance with
Hong Kong GAAP (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), to make available to
its shareholders consolidated summary financial information of the
Company and its subsidiaries for such period in reasonable detail;
(xi) During a period of three years from the effective date of
the Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to shareholders,
and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission or any securities exchange on which any class of securities
of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as you
may from time to time reasonably request (such financial statements to
be on a consolidated basis to the extent the accounts of the Company
and its subsidiaries are consolidated in reports furnished to its
shareholders generally or to the Commission);
-22-
(xii) Not to (and to cause its subsidiaries not to) take,
directly or indirectly, any action which is designed to or which
constitutes or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company or facilitate the sale or resale of the Shares and the ADSs,
provided, however, that this representation and warranty shall not
apply to the Stock Borrowing Agreement or to anything done or to be
done by or on behalf of the Underwriters;
(xiii) To use its best efforts to list, subject to notice of
issuance, the Shares on the Hong Kong Stock Exchange and the ADSs on
the New York Stock Exchange;
(xiv) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act;
(xv) To file with the Commission such information on Form 20-F as
may be required by Rule 463 under the Act;
(xvi) The Company will (A) comply with the Hong Kong Stock
Exchange's rules or other requirements to publish and disseminate to
the public, under certain circumstances, information affecting any
estimated financial information in the Prospectus and (B) announce in
a press release (delivered to The Wall Street Journal/Dow ▇▇▇▇▇ News
Service or other news service acceptable to ▇▇▇▇▇▇▇ Sachs (Asia)
L.L.C.) any information so required by the Hong Kong Stock Exchange to
be published and disseminated to the public; provided, however, that
no such press release shall be issued by the Company within one year
of the date of this Agreement without having been submitted to ▇▇▇▇▇▇▇
Sachs (Asia) L.L.C. for its review not less than three business days
prior to such issuance, or such lesser period of time as is necessary
for the Company to avoid violation of any law or regulation applicable
to it. Such press release shall also be filed with the Commission on
Form 6-K under the Exchange Act;
(xvii) For so long as the Shares or the ADSs are outstanding, to
file with the New York Stock Exchange, the Commission, the Hong Kong
Stock Exchange, the SFC and any other relevant governmental agency,
authority or instrumentality in the United States or Hong Kong such
relevant reports, documents, agreements and other information which
may from time to time be required by applicable law or regulation to
be so filed because the Shares or the ADSs are outstanding;
(xviii) Upon request of any Underwriter, to furnish, or cause to
be furnished, to such Underwriter an electronic version of the
Company's trademarks, servicemarks and corporate logo for use on the
website, if any, operated by such Underwriter for the purpose of
facilitating the on-line offering of the ADSs (the "License");
provided, however, that the License shall be used solely for the
purpose described above, is granted without any fee and may not be
assigned or transferred; and
(xix) To cause HWL to enter into a letter agreement (the
"International HWL Letter"), dated the date hereof, with you (a draft
of the International HWL Letter is attached as Annex III hereto).
(b) The Selling Shareholder agrees with each of the Underwriters:
(i) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, not to, and to cause its
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subsidiaries and controlled affiliates not to, offer, sell, contract
to sell or otherwise dispose of, except as provided hereunder and
under the Hong Kong Underwriting Agreement, any securities of the
Company that are substantially similar to the Shares or ADSs,
including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive, Stock or
any such substantially similar securities (other than pursuant to
employee stock option plans existing on, or upon the conversion or
exchange of convertible or exchangeable securities outstanding as of,
the date of this Agreement), without your prior written consent;
(ii) Prior to each Time of Delivery, to deposit, or cause to be
deposited on its behalf, shares of Stock with the Depositary in
accordance with the provisions of the Deposit Agreement and otherwise
to comply with the Deposit Agreement so that ADRs evidencing ADSs will
be executed (and, if applicable, countersigned) and issued by the
Depositary against receipt of such Shares and delivered to the
Underwriters at such Time of Delivery;
(iii) Not to (and to cause its affiliates not to) take, directly
or indirectly, any action which is designed to or which constitutes or
which might reasonably be expected to cause or result in stabilization
or manipulation of the price of any security of the Company or
facilitate the sale or resale of the Shares or the ADSs, provided,
however, that this representation and warranty shall not apply to the
Stock Borrowing Agreement or to anything done or to be done by or on
behalf of the Underwriters;
(iv) Not to use the net proceeds received by it from the sale of
the Shares and the ADSs to fund any operations in, finance any
investments in or make any payments to any country, or to make
payments to any person, targeted by any of the economic sanctions of
the United States administered by the U.S. Treasury Department's
Office of Foreign Assets Control; and
(v) To indemnify and hold the Underwriters harmless against any
documentary, stamp or similar issuance or transfer taxes, duties or
fees and any transaction levies, commissions or brokerage charges,
including any interest and penalties, payable in Hong Kong, the
British Virgin Islands or the Cayman Islands which are or may be
required to be paid in connection with the offer and distribution of
the Shares and the ADSs under this Agreement or the execution and
delivery of this Agreement, the Hong Kong Underwriting Agreement or
the Deposit Agreement; and to indemnify and hold the Underwriters
harmless against any SFC transaction levy, investor compensation levy
or Hong Kong Stock Exchange trading fee which may be required to be
paid in connection with the sale of the Shares and the listing of such
Shares on the Hong Kong Stock Exchange.
6. The Company and the Selling Shareholder, jointly and severally, covenant
and agree with the several Underwriters that the Company and the Selling
Shareholder will pay or cause to be paid the fees, disbursements and expenses of
the Offering contemplated herein in accordance with the fee letter dated the
date hereof among the Company, the Selling Shareholder and ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia)
L.L.C. (the "International Fee Letter").
7. The obligations of the Underwriters hereunder, as to the Shares or the
ADSs to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company and the Selling Shareholder herein are, and all
representations and warranties and other statements of HWL contained in the
International HWL Letter are, at and as of such Time of Delivery, true and
correct, the condition that the Company and the Selling Shareholder shall have
performed all of its and their obligations hereunder theretofore to be
performed, and the following additional conditions (provided, however, that with
respect to the First Time of Delivery, the latest time for the Underwriters to
exercise their discretion with respect to the conditions set forth in this
Section 7 shall be 8:00 a.m., Hong Kong time, on the day of the First Time of
Delivery;
-24-
provided further that all agreements and documents to be delivered at the First
Time of Delivery pursuant to this Agreement shall be placed in escrow at the
Closing Location prior to 8:00 a.m., Hong Kong time, on the date of the First
Time of Delivery):
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction; the registration made under
the Japanese Registration Statement shall have been declared effective by
the KLFB on or prior to the first Japan Business Day following the date of
this Agreement; and no stop order suspending the effectiveness of the
Japanese Registration Statement has been issued and no proceeding for that
purpose has been initiated or threatened by the KLFB;
(b) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, U.S. counsel for the Underwriters, shall
have furnished to you such written opinion, dated such Time of Delivery,
with respect to such matters as you may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Freshfields Bruckhaus ▇▇▇▇▇▇▇▇, Hong Kong counsel for the
Underwriters, shall have furnished to you such written opinion, dated such
Time of Delivery, with respect to such matters as you may reasonably
request, and such counsel shall have received such papers and information
as they may reasonably request to enable them to pass upon such matters;
(d) Nagashima Ohno & Tsunematsu, Japan counsel for the Underwriters,
shall have furnished to you such written opinion, dated such Time of
Delivery, with respect to such matters as you may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(e) Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, U.S. counsel for the Company
and the Selling Shareholder, shall have furnished to you their written
opinion, dated such Time of Delivery, in form and substance satisfactory to
you, to the effect that:
(i) This Agreement and the International Fee Letter has been duly
executed and delivered by each of the Company and the Selling
Shareholder under the law of the State of New York;
(ii) The International HWL Letter has been duly executed and
delivered by HWL under the law of the State of New York;
(iii) The Deposit Agreement has been duly executed and delivered
by the Company under the law of the State of New York and is a valid,
binding and enforceable agreement of the Company (except such counsel
need express no opinion with respect to Section 5.8 of the Deposit
Agreement providing for indemnification); and the statements set forth
under the heading "Description of American Depositary Shares" in the
Prospectus, insofar as such statements purport to summarize certain
provisions of the Deposit Agreement and the ADS, provide a fair
summary of such provisions;
(iv) Upon due issuance, execution and delivery by the Depositary
of the ADRs (including any master ADR issued in connection therewith)
evidencing the ADSs against the deposit by the Selling Shareholder of
the Shares in respect thereof in
-25-
accordance with the terms of the Deposit Agreement, such ADRs will be
duly and validly issued and the persons in whose name the ADRs are
registered will be entitled to the rights specified therein and in the
Deposit Agreement;
(v) Under the laws of the State of New York relating to
submission to jurisdiction, the Company, pursuant to Section 14 of
this Agreement and Section 7.7 of the Deposit Agreement, has (a)
validly and irrevocably submitted to the personal jurisdiction of any
New York State or U.S. federal court located in the Borough of
Manhattan, The City of New York, New York (each a "New York Court") in
any action arising out of or relating to this Agreement or the Deposit
Agreement, (b) to the fullest extent permitted by law, validly and
irrevocably waived any objection to the venue of a proceeding in any
such court, and (c) validly appointed the Authorized Agent (as defined
herein) as its initial authorized agent for the purpose described in
Section 14 hereof and Section 7.7 of the Deposit Agreement; and
service of process effected in the manner set forth in Section 14
hereof and Section 7.7 of the Deposit Agreement will be effective to
confer valid personal jurisdiction over the Company in any such
action;
(vi) Under the laws of the State of New York relating to
submission to jurisdiction, the Selling Shareholder, pursuant to
Section 14 of this Agreement, has (a) validly and irrevocably
submitted to the personal jurisdiction of any New York Court in any
action arising out of or relating to this Agreement, (b) to the
fullest extent permitted by law, validly and irrevocably waived any
objection to the venue of a proceeding in any such court, and (c)
validly appointed the Authorized Agent (as defined herein) as its
initial authorized agent for the purpose described in Section 14
hereof; and service of process effected in the manner set forth in
Section 14 hereof will be effective to confer valid personal
jurisdiction over the Selling Shareholder in any such action;
(vii) Upon payment of the purchase price for the ADSs to the
Selling Shareholder by the Underwriters and the delivery by the
Selling Shareholder to DTC or its agent of the ADSs registered in the
name of Cede & Co. or such other nominee designated by DTC, both as
provided for in this Agreement, and the crediting of the ADSs to the
Underwriters' account with DTC, Cede & Co. or such other nominee
designated by DTC will be a "protected purchaser" (as defined in
Section 8-303 of the Uniform Commercial Code as adopted in the State
of New York (the "Code")) of the ADSs, the Underwriters will acquire a
valid "security entitlement" (within the meaning of Section 8-501 of
the Code) to the ADSs, and no action whether framed in conversion,
replevin, constructive trust, equitable lien or other theory based on
an "adverse claim" (as defined in Section 8-102 of the Code) may be
asserted against the Underwriters with respect to such security
entitlement, assuming that the Underwriters are without notice of any
such adverse claim;
(viii) The performance by the Company of its obligations in this
Agreement and the Deposit Agreement, the sale by the Selling
Shareholder of the ADSs and the Shares to the Underwriters pursuant to
this Agreement, the deposit of the Shares against the issuance of the
ADRs pursuant to the Deposit Agreement, the performance by the Selling
Shareholder of its obligations in this Agreement, the performance by
the Company and the Selling Shareholder of their respective
obligations under the International Fee Letter and the performance by
HWL of its obligations under the International HWL Letter will not (a)
require any consent, approval, authorization, registration or
qualification of or with any governmental authority of the United
States or the State of New York [that in our experience normally would
be applicable to such performance, offering, sale or deposit], except
such as have been obtained or effected under the Securities Act and
the Securities Exchange Act of 1934, as amended (but we express no
opinion relating to any state securities or Blue Sky laws), or (b)
result in a violation of any United States federal or New York State
law or published rule or regulation [that in our experience normally
would be applicable to such issuance, sale or
-26-
performance] (but we express no opinion relating to the United States
federal securities laws (except to the extent set forth in paragraph
(xi) below) or any state securities or Blue Sky laws);
(ix) The statements set forth in the Prospectus under the heading
"Underwriting", insofar as such statements purport to summarize
certain provisions of this Agreement, provide a fair summary of such
provisions;
(x) The statements set forth in the Prospectus under the heading
"Taxation--United States Federal Income Taxation", insofar as such
statements purport to summarize certain federal income tax laws of the
United States, constitute a fair summary of the principal U.S. federal
income tax consequences of an investment in the ADSs or the Shares;
(xi) The Company is not an "investment company", as such term is
defined in the Investment Company Act; and
(xii) Each of the Registration Statement (except the financial
statements and schedules and other financial data included therein),
as to which such counsel need express no opinion) and the ADS
Registration Statement, at the time it became effective, and the
Prospectus (except as aforesaid), as of the date thereof, appeared on
their face to be appropriately responsive in all material respects to
the requirements of the Securities Act and the rules and regulations
thereunder; such counsel does not know of any contracts or other
documents of a character required to be filed as exhibits to the
Registration Statement or the ADS Registration Statement or required
to be described in the Registration Statement, the ADS Registration
Statement or the Prospectus that are not filed or described as
required; no information has come to such counsel's attention that
causes it to believe that [each of] the Registration Statement (except
the financial statements and schedules and other financial data
included therein, as to such counsel need express no opinion) [or the
ADS Registration Statement], at the time it became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and no information has come to such
counsel's attention that causes it to believe to that the Prospectus
(except the financial statements and schedules and other financial
data included therein, as to which such counsel need express no
opinion), as of the date thereof, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than U.S. federal law or
New York State law;
(f) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, Cayman Islands counsel for the Company
and British Virgin Islands Counsel for the Selling Shareholder, shall have
furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Company is duly incorporated with limited liability and
validly existing under the laws of the Cayman Islands in good standing
(meaning that it has not failed to make any filing with any Cayman
Islands Governmental Agency or to pay any Cayman Islands government
fee or tax which might make it liable to be struck off the Register of
Companies and thereby cease to exist under the laws of the Cayman
Islands). The Company is a separate legal entity capable of suing and
being sued under its own name under the laws of the Cayman Islands and
has the corporate power and authority required to carry on its
business in accordance with the Memorandum and Articles of Association
of the Company and to own, lease and operate its properties as
described in the Registration Statement and the Hong Kong Prospectus.
-27-
(ii) The Company has the authorized and issued share capital set
forth in the Registration Statement and the Hong Kong Prospectus, and
all issued shares in the share capital of the Company (including the
Shares) have been duly and validly authorized and issued, are not
subject to any pre-emptive or similar rights under Cayman Islands law
or the Memorandum and Articles of Association and conform to the
description thereof contained in the Registration Statement and the
Hong Kong Prospectus.
(iii) Based solely on such counsel's review of the register of
members of the Company, all the issued shares in the share capital of
the Company including the Shares to be sold by the Selling Shareholder
under the International Underwriting Agreement and the Hong Kong
Underwriting Agreement are validly issued, fully paid and
non-assessable (meaning that no further sums are payable to the
Company on such Shares). Based solely on such counsel's review of the
register of members of the Company, the Selling Shareholder is the
sole registered member of the Company and registered holder of the
Shares. The Shares may be freely deposited by the Selling Shareholder
with the Depositary against issuance of ADRs evidencing ADSs.
(iv) The Company has the necessary corporate power and authority
to enter into and perform its obligations under each of the Hong Kong
Underwriting Agreement, the Deposit Agreement and this Agreement. The
execution and delivery of each of the Hong Kong Underwriting
Agreement, the Deposit Agreement and this Agreement by the Company and
the performance by the Company of its obligations thereunder, the sale
by the Selling Shareholder of the Shares and ADSs being delivered on
the date hereof, the deposit of the Shares with the Depositary against
the issuance of the ADRs evidencing the ADSs to be delivered by the
Selling Shareholder at the date hereof, and the performance by the
Company of its obligations under the Hong Kong Underwriting Agreement,
the Deposit Agreement and this Agreement will not violate, conflict
with or result in a breach of the Memorandum or Articles of
Association of the Company nor any provision of the laws of the Cayman
Islands or any order, rule or regulation of any Governmental Agency.
(v) The Company has taken all corporate action required to
authorize its execution, delivery and performance of each of the Hong
Kong Underwriting Agreement, the Deposit Agreement and this Agreement
and the sale, assignment, transfer and delivery to the Underwriters of
the Shares and the ADSs to be sold by the Selling Shareholder pursuant
to this Agreement and the Hong Kong Underwriting Agreement. Each of
the Hong Kong Underwriting Agreement, the Deposit Agreement and this
Agreement have been duly executed and delivered by or on behalf of the
Company and constitute valid and binding obligations of the Company
enforceable in accordance with the respective terms thereof.
(vi) The sale, assignment, transfer or delivery to the
Underwriters of the Shares to be sold by the Selling Shareholder
pursuant to this Agreement upon delivery and payment as specified in
this Agreement will give good and valid legal title to the Shares to
the Underwriters free and clear of all restrictions or transfer,
liens, encumbrances, security interests and claims whatsoever. The
sale, assignment, transfer or delivery to the Underwriters of the
Shares to be sold by the Selling Shareholder pursuant to the Hong Kong
Underwriting Agreement upon delivery and payment and registration of
the persons specified in the Hong Kong Underwriting Agreement in the
register of members of the Company as holders of such Shares in
accordance with the Hong Kong Underwriting Agreement and Deposit
Agreement will give good and valid legal title to the Shares to the
Underwriters. A subsequent transfer of the Shares will be subject to
the transfer provisions set out in articles 46 to 51 of the Articles
of Association of the Company.
-28-
(vii) No order, consent, approval, license, registration,
authorization or validation of or exemption by any Governmental Agency
is required to authorize or is required in connection with the sale of
the Shares and the ADSs being delivered on the date hereof, the
deposit of the Shares with the Depositary against issuance of the ADRs
evidencing ADSs being delivered on the date hereof, the execution,
delivery, performance and enforcement (other than court filings if
legal proceedings are brought in the Cayman Islands) of the Hong Kong
Underwriting Agreement, the Deposit Agreement and this Agreement, the
performance by the Company of its obligations under the Hong Kong
Underwriting Agreement, the Deposit Agreement and this Agreement and
the declaration and payment of dividends to holders of the shares of
the Company (including the Shares) including to the Depositary (so
long as such shares are registered in the name of the Depositary).
(viii) It is not necessary or desirable to ensure the
enforceability, legality, validity or admissibility in evidence in the
Cayman Islands of the Hong Kong Underwriting Agreement, the Deposit
Agreement and this Agreement that they be registered in any register
kept by, or filed with, any Governmental Agency (other than court
filings in the ordinary course of proceedings at the time of such
proceedings).
(ix) There is no income, capital gains or other tax of the Cayman
Islands imposed by withholding or otherwise on any payment to be made
to or by the Company pursuant to the Hong Kong Underwriting Agreement,
the Deposit Agreement or this Agreement. There is no stamp,
registration, transfer or similar tax or duty to be paid on or in
relation to the execution or delivery of the Hong Kong Underwriting
Agreement, the Deposit Agreement or this Agreement or performance by
any of the parties of their respective obligations or enforcement of
any of the Hong Kong Underwriting Agreement, the Deposit Agreement or
this Agreement, provided that they are executed and kept outside the
Cayman Islands (other than court filings if legal proceedings are
brought in the Cayman Islands). If it becomes necessary to bring the
Hong Kong Underwriting Agreement, the Deposit Agreement or this
Agreement into the Cayman Islands for enforcement or otherwise,
nominal stamp duty will be payable on such agreements. Apart from the
payment of stamp duty, there are no acts, conditions or things
required by the laws and regulations of the Cayman Islands to be done,
fulfilled or performed in order to make any of the Hong Kong
Underwriting Agreement, the Deposit Agreement or this Agreement
admissible in evidence in the Cayman Islands.
(x) The statements in the Registration Statement under the
captions "Description of Share Capital", "Enforcement of Civil
Liabilities" and "Taxation -- Cayman Islands" and in the Hong Kong
Prospectus under the captions "Summary", "Risk Factors" and "Summary
of the Constitution of the Company and Cayman Islands Companies Law",
insofar and to the extent that they constitute a summary or
description of the laws and regulations of the Cayman Islands, or a
summary or description of the Memorandum & Articles of Association,
are true and correct in all respects and nothing has been omitted from
such statements which would make them misleading in any material
respect.
(xi) The Registration Statement, the Hong Kong Prospectus and the
ADS Registration Statement, as well as the filing of the Registration
Statement and the ADS Registration Statement with the SEC and the Hong
Kong Prospectus with the Registrar of Companies in Hong Kong, have
been duly authorized by and on behalf of the Company, and the
Registration Statement, the Hong Kong Prospectus and the ADS
Registration Statement have been duly executed pursuant to such
authorization by and on behalf of the Company.
(xii) Except as described in the Registration Statement and the
Hong Kong Prospectus, no taxes, imposts or duties of any nature
(including, without limitation, stamp
-29-
or other issuance or transfer taxes or duties and capital gains,
income, withholding or other taxes) are payable to the Cayman Islands
or any political subdivision or taxing authority thereof or therein in
connection with (i) the initial sale of the Shares and ADSs by the
Selling Shareholder to the Underwriters in the manner contemplated in
the Hong Kong Underwriting Agreement, the Deposit Agreement and this
Agreement; (ii) the resale and delivery of the Shares and ADSs by the
Underwriters in the manner contemplated by the Hong Kong Underwriting
Agreement, the Deposit Agreement and this Agreement; (iii) the
declaration and payment of dividends on the shares of the Company
(including the Shares); (iv) the deposit with the Depositary of Shares
by the Selling Shareholder against the issuance of ADRs evidencing
ADSs; (v) the entering of the Custodian (as defined in the Deposit
Agreement) or any purchaser as the registered holder of the Shares; or
the issuance of ADRs evidencing the ADSs for the account of the
Underwriters on the date hereof.
(xiii) All dividends and other distributions declared and payable
on the shares of the Company (including the Shares) may under the
current laws and regulations of the Cayman Islands be paid to the
Depositary as a registered holder of the Shares, and where they are to
be paid from the Cayman Islands, may be freely transferred out of the
Cayman Islands.
(xiv) The choice of the Foreign Laws as the governing law of each
of the Hong Kong Underwriting Agreement, the Deposit Agreement and
this Agreement is a valid choice of law and would be recognised and
given effect to in any action brought before a court of competent
jurisdiction in the Cayman Islands, except for those laws (i) which
such court considers to be procedural in nature, (ii) which are
revenue or penal laws or (iii) the application of which would be
inconsistent with public policy, as such term is interpreted under the
laws of the Cayman Islands. The submission in this Agreement to the
exclusive jurisdiction of the New York Courts and the waiver by the
Company of any objection to the laying of the venue of a proceeding in
the New York Courts is valid and binding on the Company. The
submission in the Deposit Agreement to the non-exclusive jurisdiction
of the New York Courts is valid and binding upon the Company. The
submission in the Hong Kong Underwriting Agreement to the exclusive
jurisdiction of the Hong Kong Courts and the agreement to submit any
disputes to arbitration pursuant to Clause 24.2 of the Hong Kong
Underwriting Agreement is valid and binding on the Company. The
service of process effected in the manner set forth in Section 14 of
this Agreement and Section 7.7 of the Deposit Agreement will be
effective, insofar as the laws of the Cayman Islands are concerned, to
confer valid personal jurisdiction over the Company save that in
connection with Cayman court proceedings, leave of the Cayman courts
would be required to effect such service outside the jurisdiction.
(xv) The courts of the Cayman Islands would recognise as a valid
judgment a final and conclusive judgment in personam obtained in the
Foreign Courts against the Company based upon the Hong Kong
Underwriting Agreement, the Deposit Agreement or this Agreement under
which a sum of money is payable (other than a sum of money payable in
respect of multiple damages, taxes or other charges of a like nature
or in respect of a fine or other penalty) (a "Foreign Judgment") and
would give a judgment based thereon provided that (a) such Foreign
Courts had proper jurisdiction over the parties subject to such
Foreign Judgment; (b) such Foreign Courts did not contravene the rules
of natural justice of the Cayman Islands; (c) such Foreign Judgment
was not obtained by fraud; (d) the enforcement of the Foreign Judgment
would not be contrary to the public policy of the Cayman Islands; (e)
no new admissible evidence relevant to the action underlying such
Foreign Judgment is submitted prior to the rendering of a judgment by
the courts of the Cayman Islands; and (f) there is due compliance with
the correct procedures under the laws of the Cayman Islands.
-30-
(xvi) Based solely upon a search of the Register of Writs and
other Originating Process of the Grand Court of the Cayman Islands
conducted at [.] on [.], 2004 (which would not reveal details of
matters which have been filed but not actually entered in the Register
of Writs and other Originating Process at the time of our search), no
legal or governmental proceedings were pending against the Company and
no petitions to wind up the Company had been filed in the Grand Court
of the Cayman Islands as at the date and time of such counsel's
search.
(xvii) The Restructuring (as defined in this Agreement and the
Hong Kong Prospectus) does not (i) contravene any provision of the
laws of the Cayman Islands or any rule or regulation of any
Governmental Agency or (ii) contravene the Memorandum and Articles of
Association of the Company.
(xviii) The indemnification and contribution provisions set forth
in Section 8 of this Agreement, Clause 13 of the Hong Kong
Underwriting Agreement and Section 5.8 of the Deposit Agreement do not
contravene the public policy or laws of the Cayman Islands.
(xix) The Underwriters will not be deemed to be resident,
domiciled or carrying on or transacting business or subject to
taxation in the Cayman Islands or in violation of any law thereof
solely by reason of the negotiation, preparation or execution of the
Hong Kong Underwriting Agreement, the Deposit Agreement or this
Agreement or the entering into of or the exercise of their rights or
the performance of their obligations under this Agreement and the Hong
Kong Underwriting Agreement.
(xx) The Underwriters will not be required to be licensed,
qualified or otherwise entitled to carry on business in the Cayman
Islands in order to enforce their rights under, or as a consequence of
the execution, delivery and performance of the Hong Kong Underwriting
Agreement, the Deposit Agreement and this Agreement.
(xxi) No holder of Shares outstanding after completion of the
Global Offering contemplated by this Agreement and the Hong Kong
Underwriting Agreement is or will be subject to any liability in the
Cayman Islands in respect of any liability of the Company by virtue
only of holding any such Shares. There are no restrictions on the
holders of the Shares on the transfer of any of the Shares under
Cayman Islands law or the Memorandum and Articles of Association
provided such transfer is effected in the manner set forth in the
Articles of Association and under Cayman Islands law or the Memorandum
and Articles of Association, the Company does not hold a lien over
such Shares. There are no limitations on the rights of any holders of
Shares to hold or vote such Shares in accordance with the Memorandum
and Articles of Association.
(xxii) The Underwriters have standing to bring an action or
proceedings before the appropriate courts in the Cayman Islands for
the enforcement of this Agreement and the Hong Kong Underwriting
Agreement, and the Depositary has standing to bring an action or
proceeding before the appropriate courts in the Cayman Islands for the
enforcement of the Deposit Agreement for and on behalf of the
beneficial owners of the ADSs.
(xxiii) There are no Cayman Islands statutes or regulations that
are required by Cayman Islands law to be described in the Registration
Statement, ADS Registration Statement and the Hong Kong Prospectus
that are not described as required.
(xxiv) The Company is free to acquire, hold and sell foreign
currency and securities without restriction.
-31-
(xxv) The Selling Shareholder is duly incorporated with limited
liability and validly existing under the laws of the British Virgin
Islands in good standing (meaning that it has not failed to make any
filing with any British Virgin Islands Governmental Agency or to pay
any British Virgin Islands government fee or tax which would make it
liable to be struck off the Register of Companies and thereby cease to
exist under the laws of the British Virgin Islands). The Selling
Shareholder is a separate legal entity capable of suing and being sued
under its own name under the laws of the British Virgin Islands and
has the corporate power and authority required to carry on its
business in accordance with the memorandum of association and the
articles of association of the Selling Shareholder and to own, lease
and operate its properties as described in the Registration Statement
and the Hong Kong Prospectus.
(xxvi) The Selling Shareholder has the necessary corporate power
and authority to enter into and perform its obligations under each of
the Hong Kong Underwriting Agreement, and this Agreement. The
execution and delivery of each of the Hong Kong Underwriting Agreement
and this Agreement by the Selling Shareholder and the performance by
the Selling Shareholder of its obligations thereunder will not
violate, conflict with or result in a breach of the memorandum of
association or articles of association of the Selling Shareholder nor
any provision of the laws of the British Virgin Islands or any order,
rule or regulation of any Governmental Agency.
(xxvii) The sale of the Shares or ADSs to be sold by the Selling
Shareholder under the Registration Statement, the ADS Regulation
Statement, the Hong Kong Prospectus, the Hong Kong Underwriting
Agreement and this Agreement, the deposit of the Shares with Citibank,
N.A., as depositary (the "Depositary"), and the compliance by the
Selling Shareholder with all of the provisions of the Registration
Statement, the ADS Regulation Statement, the Hong Kong Prospectus, the
Hong Kong Underwriting Agreement, this Agreement and the Deposit
Agreement, thereunder will not violate the memorandum and articles of
association of the Selling Shareholder nor any provision of the laws
of the British Virgin Islands or any order, rule or regulation of any
Governmental Agency.
(xxviii) The Selling Shareholder has taken all corporate action
required to authorise its execution, delivery and performance of each
of the Hong Kong Underwriting Agreement and this Agreement and the
sale, assignment, transfer and delivery to the Underwriters of the
Shares and the ADSs to be sold by the Selling Shareholder pursuant to
the Hong Kong Underwriting Agreement and this Agreement. Each of the
Hong Kong Underwriting Agreement and this Agreement has been duly
executed and delivered by or on behalf of the Selling Shareholder, and
constitute valid and binding obligations of the Selling Shareholder in
accordance with the respective terms thereof.
(xxix) Based solely on a search of the public records of the
Selling Shareholder at the offices of the Registrar of Corporate
Affairs, no register of mortgages, charges and other encumbrances of
the Selling Shareholder has been filed at the offices of the Registrar
of Companies. It should be noted that the creation of such a register
is not mandatory and, if such a register is created and maintained at
the registered office of the Selling Shareholder, the filing of such
register at the offices of the Registrar of Corporate Affairs is
further not mandatory. Based upon such counsel's review of the records
of the Selling Shareholder at the registered office of the Selling
Shareholder, the Selling Shareholder does not maintain a register of
mortgages, charges and other encumbrances.
(xxx) No order, consent, approval, licence, registration,
authorisation or validation of or exemption by any Governmental Agency
is required to authorise or is required in connection with the sale of
the Shares and the ADSs being delivered on the date hereof, the
deposit of the Shares with the Depositary against its name of the ADRs
-32-
evidencing ADSs being delivered on the date hereof, or the execution,
delivery, performance and enforcement of the Hong Kong Underwriting
Agreement and this Agreement (other than court filings if legal
proceedings are brought in the British Virgin Islands).
(xxxi) It is not necessary or desirable to ensure the
enforceability, legality, validity or admissibility in evidence in the
British Virgin Islands of the Hong Kong Underwriting Agreement and
this Agreement that they be registered in any register kept by, or
filed with, any Governmental Agency.
(xxxii) The Hong Kong Underwriting Agreement and this Agreement
will not be subject to ad valorem stamp duty in the British Virgin
Islands. No stamp or other issuance or transfer taxes or duties and no
capital gains, income or other withholding or other taxes are payable
by or on behalf of the holder of the Shares to any Governmental
Authority in the British Virgin Islands or any sub-division thereof in
connection with (i) the execution or delivery of the Hong Kong
Underwriting Agreement and this Agreement or performance by any of the
parties of their respective obligations or enforcement of the Hong
Kong Underwriting Agreement and this Agreement; (ii) the compliance by
the Selling Shareholder with the provisions of the Deposit Agreement;
(iii) the initial sale of the Shares and ADSs by the Selling
Shareholder to the Underwriters in the manner contemplated in the Hong
Kong Underwriting Agreement and this Agreement; (iv) the resale and
delivery of the Shares and ADSs by the Underwriters in the manner
contemplated by the Hong Kong Underwriting Agreement and this
Agreement; (v) the deposit with the Depositary of Shares by the
Selling Shareholder against the issuance of ADRs evidencing ADSs; (vi)
the entering of the Custodian (as defined in the Deposit Agreement) or
any purchaser as the registered holder of the Shares; (vii) the
issuance of ADRs evidencing the ADSs for the account of the
Underwriters on the date hereof; or (viii) the sale of the Shares
outside of the British Virgin Islands by a holder of the Shares. Apart
from the payment of stamp duty, there are no acts, conditions or
things required by the laws and regulations of the British Virgin
Islands to be done, fulfilled or performed in order to make any of the
Hong Kong Underwriting Agreement or this Agreement admissible in
evidence in the British Virgin Islands.
(xxxiii) The choice of the Foreign Laws as the governing law of
each of the Hong Kong Underwriting Agreement and this Agreement is a
valid choice of law and would be recognised and given effect to in any
action brought before a court of competent jurisdiction in the British
Virgin Islands, except for those laws (i) which such court considers
to be procedural in nature, (ii) which are revenue or penal laws or
(iii) the application of which would be inconsistent with public
policy, as such term is interpreted under the laws of the British
Virgin Islands. The submission in this Agreement to the exclusive
jurisdiction of the New York Courts and the waiver by the Selling
Shareholder of any objection to the laying of the venue of a
proceeding in the New York Courts is valid and binding upon the
Selling Shareholder. The submission in the Hong Kong Underwriting
Agreement to the exclusive jurisdiction of the Hong Kong Courts and
the agreement to submit any disputes to arbitration pursuant to Clause
24.2 of the Hong Kong Underwriting Agreement to the exclusive
jurisdiction of the Hong Kong Courts and the agreement to submit any
disputes to arbitration pursuant to Clause 24.2 of the Hong Kong
Underwriting Agreement is valid and binding on the Selling
Shareholder. The service of process effected in the manner set forth
in Section 14 of this Agreement and Clause 24.3 of the Hong Kong
Underwriting Agreement will be effective, insofar as the laws of the
Cayman Islands are concerned, to confer valid personal jurisdiction
over the Selling Shareholder save that in connection with British
Virgin Islands court proceedings, leave of the British Virgin Islands
courts would be required to effect such service outside the
jurisdiction.
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(xxxiv) The courts of the British Virgin Islands would recognise
as a valid judgment a final and conclusive judgment in personam
obtained in the Foreign Courts against the Selling Shareholder based
upon the Hong Kong Underwriting Agreement and this Agreement under
which a sum of money is payable (other than a sum of money payable in
respect of multiple damages, taxes or other charges of a like nature
or in respect of a fine or other penalty) and would give a judgment
based thereon provided that (a) such Foreign Courts had proper
jurisdiction over the parties subject to such Foreign Judgment, (b)
such Foreign Courts did not contravene the rules of natural justice of
the British Virgin Islands, (c) such Foreign Judgment was not obtained
by fraud, (d) the enforcement of the Foreign Judgment would not be
contrary to the public policy of the British Virgin Islands, (e) no
new admissible evidence relevant to the action is submitted prior to
the rendering of the judgment by the courts of the British Virgin
Islands and (f) there is due compliance with the correct procedures
under the laws of the British Virgin Islands.
(xxxv) The Restructuring does not (i) contravene any provision of
the laws of the British Virgin Islands law or any rule or regulation
of any Governmental Agency or (ii) contravene the memorandum and
articles of association of the Selling Shareholder.
(xxxvi) The indemnification and contribution provisions set forth
in Section 8 of this Agreement and Clause 13 of the Hong Kong
Underwriting Agreement do not contravene the public policy or laws of
the British Virgin Islands.
(xxxvii) Based solely upon a search of the Cause Book of the
Supreme Court of the British Virgin Islands conducted at [.] on
October, 2004 (which would not reveal details of proceedings which
have been filed but not actually entered in the Cause Book at the time
of our search), there are no judgments against the Selling
Shareholder, nor any legal or governmental proceedings pending in the
British Virgin Islands to which the Selling Shareholder is subject.
In giving such opinion, such counsel may state that with respect to
all matters of United States federal and New York law they have relied upon
the opinions of United States counsel for the Company delivered pursuant to
paragraph (e) of this Section 7;
(g) Linklaters, Hong Kong counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect set forth in Annex
II(a) hereto;
(h) Mitsui, Yasuda, Wani & Maeda, Japan counsel for the Company, shall
have furnished to you their written opinion, dated such Time of Delivery,
in form and substance satisfactory to you, to the effect set forth in Annex
II(b) hereto;
(i) P&A Law Offices, India counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect forth in Annex II(c)
hereto;
(j) Gross, Kleinhendler, Hodak, Halevy, ▇▇▇▇▇▇▇▇▇ & Co., Israel
counsel for Partner, shall have furnished to you their written opinion,
dated such Time of Delivery, in form and substance satisfactory to you, to
the effect set forth in Annex II(d) hereto;
(k) ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Thailand counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect set forth in Annex
II(e) hereto;
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(l) Counsel for the Depositary shall have furnished to you their
written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Deposit Agreement has been duly authorized, executed and
delivered by the Depositary and is a valid and binding agreement of
the Depositary, enforceable against the Depositary in accordance with
its terms;
(ii) Upon issuance by the Depositary of ADRs evidencing ADSs
against the deposit of Shares by the Company in respect thereof in
accordance with the provisions of the Deposit Agreement, such ADRs
will be duly and validly issued and persons in whose names such ADRs
are registered will be entitled to the rights of holders of ADRs
specified therein and in the Deposit Agreement; and
(iii) The ADS Registration Statement [and each amendment thereof,
as of their respective effective dates,] appeared on its face to be
appropriately responsive in all material respects to the requirements
of the Securities Act and the rules and regulations thereunder.
In rendering each such opinion in each of sections 7(f) through 7(l),
such counsel may state that they express no opinion as to the laws of any
jurisdiction other than the law of the jurisdiction where such counsel in
qualified, and that such opinions are subject to such qualifications,
assumptions and exceptions as deemed appropriate by such counsel;
(m) On the date of the Prospectus of a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed subsequent
to the date of this Agreement and also at each Time of Delivery, (i)
PricewaterhouseCoopers shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I(a) hereto and (ii)
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, who have certified certain financial statements of
Partner, shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to
you, to the effect set forth in Annex I(b) hereto;
(n) (i) Neither the Company nor any of its subsidiaries or associated
companies shall have sustained since the date of the latest audited
financial statements included in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of
which information is given in the Prospectus there shall not have been any
change in the capital stock, short-term debt or long-term debt of the
Company or any of its subsidiaries or associated companies or any change,
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries and associated
companies, otherwise than as set forth or contemplated in the Prospectus,
the effect of which, in any such case described in clause (i) or (ii), is
in the judgment of the Representative so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares and the ADSs being delivered at such Time of
Delivery on the terms and in the manner contemplated in the Prospectus;
(o) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, the Hong Kong Stock
Exchange and/or the London Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities in
New York, London or Hong Kong declared by the relevant authorities, or a
material disruption in commercial banking or securities settlement or
clearance services in the United States, the United Kingdom or Hong Kong;
(iv) a
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change or development involving a prospective change in Hong Kong or Cayman
Islands taxation adversely affecting the Company, the Shares or the ADSs or
the transfer thereof; (v) the outbreak or escalation of hostilities
involving the United States, the United Kingdom or Hong Kong or the
declaration by the United States, the United Kingdom or Hong Kong of a
national emergency or war or (vi) the occurrence of any other calamity or
crisis or any change in the existing financial, political or economic
conditions or currency exchange rates or controls in the United States, the
United Kingdom, Hong Kong or elsewhere, if the effect of any such event
specified in clause (iv), (v) or (vi) in the judgment of the Representative
makes it impracticable or inadvisable to proceed with the public offering
or the delivery of the Shares or the ADSs being delivered at such Time of
Delivery on the terms and in the manner contemplated in the Prospectus;
(p) The ADSs to be sold by the Selling Shareholder at such Time of
Delivery shall have been duly listed, subject to notice of issuance, on the
New York Stock Exchange, the listing agreement between the Company and the
Hong Kong Stock Exchange shall be in full force and effect; and the listing
of and permission to deal in all the Shares on the Main Board of the Hong
Kong Stock Exchange shall have been granted (subject only to dispatch of
share certificates) by the Hong Kong Stock Exchange and such listing and
permission have not subsequently been revoked or suspended prior to such
Time of Delivery;
(q) The Depositary shall have furnished or caused to be furnished to
you at such Time of Delivery certificates satisfactory to you evidencing
the deposit with the Hong Kong office of the Depositary, as custodian for
the Depositary, of the Shares being so deposited against issuance of ADRs
evidencing the ADSs to be delivered by the Selling Shareholder at such Time
of Delivery, and the execution, countersignature (if applicable), issuance
and delivery of ADRs evidencing such ADSs pursuant to the Deposit
Agreement;
(r) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement;
(s) The Hong Kong Underwriting Agreement shall have been executed by
the parties thereto and shall have become unconditional in accordance with
its terms (except for any condition therein with respect to the
unconditionality of this Agreement) and not have been terminated;
(t) Each of the Company and the Selling Shareholder shall have duly
and validly executed and delivered the International Fee Letter, and the
International Fee Letter shall remain in full force and effect as of such
Time of Delivery;
(u) HWL shall have duly and validly executed and delivered the
International HWL Letter, and the International HWL Letter shall remain in
full force and effect as of such Time of Delivery;
(v) The Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to
the performance by the Company of all of their respective obligations
hereunder to be performed at or prior to such Time of Delivery, and as to
such other matters as you may reasonably request, and the Company shall
have furnished or caused to be furnished certificates as to the matters set
forth in subsections (a) and [(n)] of this Section, and as to such other
matters as you may reasonably request;
(w) The Selling Shareholder shall have furnished or caused to be
furnished to you at such Time of Delivery certificates of officers of the
Selling Shareholder satisfactory to you as to the accuracy of the
representations and warranties of the Selling Shareholder herein at and as
of such Time of Delivery, as to the performance by the Selling Shareholder
of all of their respective
-36-
obligations hereunder to be performed at or prior to such Time of Delivery,
and as to such other matters as you may reasonably request, and the Selling
Shareholder shall have furnished or caused to be furnished certificates as
to such other matters as you may reasonably request; and
(x) HWL shall have furnished or caused to be furnished to you at such
Time of Delivery certificates of officers of HWL satisfactory to you as to
the accuracy of the representations and warranties of HWL in the
International HWL Letter at and as of such Time of Delivery, and as to such
other matters as you may reasonably request, and HWL shall have furnished
or caused to be furnished certificates as to such other matters as you may
reasonably request.
8. (a) The Company and the Selling Shareholder, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement,
the ADR Registration Statement or the Prospectus, the Japanese Prospectus
or the Hong Kong Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company and the Selling
Shareholder shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement,
the ADR Registration Statement or the Prospectus, the Japanese Prospectus
or the Hong Kong Prospectus, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through ▇▇▇▇▇▇▇ Sachs (Asia) L.L.C. expressly
for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company and
the Selling Shareholder against any losses, claims, damages or liabilities
to which the Company or the Selling Shareholder may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the
ADR Registration Statement or the Prospectus, the Japanese Prospectus or
the Hong Kong Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement, the ADR Registration Statement or the Prospectus,
the Japanese Prospectus or the Hong Kong Prospectus, or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Underwriter through
▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia) L.L.C. expressly for use therein; and will reimburse
the Company, and the Selling Shareholder for any legal or other expenses
reasonably incurred by the Company or the Selling Shareholder in connection
with investigating or defending any such action or claim as such expenses
are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
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indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (which shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to
such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act,
by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company and
the Selling Shareholder on the one hand (it being understood that for
purposes of this subsection (d), any benefit received by the Selling
Shareholder shall also be deemed to have been received by the Company) and
the Underwriters on the other from the offering of the ADSs. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and the Selling
Shareholder on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by
the Company and the Selling Shareholder on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering of the ADSs purchased under this
Agreement (before deducting expenses) received by the Selling Shareholder
bear to the total underwriting discounts and commissions received by the
Underwriters with respect to the ADSs purchased under this Agreement, in
each case as set forth in the table on the cover page of the U.S.
Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Shareholder on the
one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Shareholder and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the ADSs underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise
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been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and Selling Shareholder under this
Section 8 shall be in addition to any liability which the Company and the
Selling Shareholder may otherwise have and shall extend, upon the same
terms and conditions, to the respective affiliates and selling agents of
each Underwriter and to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters
under this Section 8 shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director (as applicable) of the
Company (including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company), and
to each person, if any, who controls the Company or the Selling
Shareholder, as the case may be, within the meaning of the Act.
(f) The maximum aggregate amount of the liability of the Selling
Shareholder under this Section 8, when aggregated with the aggregate amount
of liability of the Selling Shareholder under Section 13.7 of the Hong Kong
Underwriting Agreement, shall not exceed the sum of (i) the gross proceeds
of the Offering (determined by multiplying the purchase price per ADS set
forth in Section 2 hereof by the total number of ADSs sold hereunder) and
(ii) the gross proceeds of the Hong Kong Public Offering (determined by
multiplying the Offer Price (as defined in the Hong Kong Underwriting
Agreement) by the total number of Hong Kong Shares.
9. (a) If any Underwriter shall default in its obligation to purchase the
ADSs which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such ADSs on the terms contained herein. If within thirty-six
hours after such default by any Underwriter you do not arrange for the
purchase of such ADSs, then the Selling Shareholder shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such ADSs on such terms. In
the event that, within the respective prescribed periods, you notify the
Selling Shareholder that you have so arranged for the purchase of such
ADSs, or the Selling Shareholder notifies you that they have so arranged
for the purchase of such ADSs, you or the Selling Shareholder shall have
the right to postpone such Time of Delivery for a period of not more than
seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your
opinion may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to this Agreement
with respect to such ADSs.
(b) If, after giving effect to any arrangements for the purchase of
the ADSs of a defaulting Underwriter or Underwriters by you and the Selling
Shareholder as provided in subsection (a) above, the aggregate number of
such ADSs which remains unpurchased does not exceed one-eleventh of the
aggregate number of all of the ADSs to be purchased at such Time of
Delivery, then the Selling Shareholder shall have the right to require each
non-defaulting Underwriter to purchase the number of ADSs which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro
rata share (based on the number of ADSs which such Underwriter agreed to
purchase hereunder) of the ADSs of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its
default.
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(c) If, after giving effect to any arrangements for the purchase of
the ADSs of a defaulting Underwriter or Underwriters by you and the Selling
Shareholder as provided in subsection (a) above, the aggregate number of
such ADSs which remains unpurchased exceeds one-eleventh of the aggregate
number of all of the Shares to be purchased at such Time of Delivery, or if
the Selling Shareholder shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
ADSs of a defaulting Underwriter or Underwriters, then this Agreement (or,
with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Selling Shareholder to sell the
Optional ADSs) shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Selling Shareholder, except for the
expenses to be borne by the Company and the Selling Shareholder and the
Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the Selling Shareholder and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company or the Selling Shareholder, or any officer or
director or controlling person of the Company or the Selling Shareholder, and
shall survive delivery of and payment for the ADSs.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Shareholder shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any ADSs are not delivered by or on behalf of the
Selling Shareholder as provided herein, the Company will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
ADSs not so delivered, but the Company and the Selling Shareholder shall then be
under no further liability to any Underwriter in respect of the ADSs not so
delivered except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the Representative at c/o Goldman ▇▇▇▇▇ (Asia)
L.L.C., ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
facsimile number: (▇▇▇) ▇▇▇▇ ▇▇▇▇, Attention: Special Execution Group; if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Registration Statement, Attention:
Secretary; and if to the Selling Shareholder shall be delivered or sent by mail,
telex or facsimile transmission to [.]; provided, however, that any notice to an
Underwriter pursuant to Section 8 (c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire or telex constituting such Questionnaire, which
address will be supplied to the Company or the Selling Shareholder by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Shareholder and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and the Selling Shareholder and each person who controls the Company, the
Selling Shareholder or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
ADSs from any Underwriter shall be deemed a successor or assign by reason merely
of such purchase.
-40-
14. Each of the parties hereto irrevocably (i) agrees that any legal suit,
action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in any New York court, (ii)
waives, to the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such proceeding and
(iii) submits to the exclusive jurisdiction of such courts in any such suit,
action or proceeding. Each of the Company and the Selling Shareholder has
appointed [.], New York, New York, as its authorized agent (the "Authorized
Agent") upon whom process may be served in any such action arising out of or
based on this Agreement or the transactions contemplated hereby which may be
instituted in any New York Court by any Underwriter or by any person who
controls any Underwriter, expressly consents to the jurisdiction of any such
court in respect of any such action, and waives any other requirements of or
objections to personal jurisdiction with respect thereto. Such appointment shall
be irrevocable. Each of the Company and the Selling Shareholder represents and
warrants that the Authorized Agent has agreed to act as such agent for service
at process and agrees to take any and all action, including the filing of any
and all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of such service to the Company or the
Selling Shareholder, as the case may be, shall be deemed, in every respect,
effective service of process upon the Company or the Selling Shareholder, as the
case may be.
15. In respect of any judgment or order given or made for any amount due
hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company or the Selling Shareholder, as the
case may be, will indemnify each Underwriter against any loss incurred by such
Underwriter as a result of any variation as between (i) the rate of exchange at
which the United States dollar amount is converted into the judgment currency
for the purpose of such judgment or order and (ii) the rate of exchange at which
an Underwriter is able to purchase United States dollars with the amount of the
judgment currency actually received by such Underwriter. The foregoing indemnity
shall constitute a separate and independent obligation of the Company and the
Selling Shareholder and shall continue in full force and effect notwithstanding
any such judgment or order as aforesaid. The term "rate of exchange" shall
include any premiums and costs of exchange payable in connection with the
purchase of or conversion into United States dollars.
16. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
17. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
18. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
19. The Company is authorized, subject to applicable law, to disclose any
and all aspects of the tax treatment or tax structure of this potential
transaction as well as any and all aspects that are necessary to support any
U.S. federal income tax benefits expected to be claimed with respect to such
transaction, and all materials of any kind (including tax opinions and other tax
analyses) related to the tax treatment or tax structure or to those benefits,
without the Underwriters imposing any limitation of any kind.
-41-
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
the Selling Shareholder It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the authority set forth in the
Agreement among Underwriters, the form of which shall be submitted to the
Company and the Selling Shareholder for examination upon request, but without
warranty on your part as to the authority of the signers thereof.
Very truly yours,
▇▇▇▇▇▇▇▇▇ Telecommunications
International Limited
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇ Telecommunications
Investment Holdings Limited
By:
-----------------------------------
Name:
Title:
Accepted as of the date hereof, on behalf
of the Underwriters
▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia) L.L.C.
By:
-------------------------------------
Name:
Title:
-42-
SCHEDULE I
Number of Optional
ADSs to be
Total Number of Purchased if
Firm ADSs Maximum Option
Underwriter to be Purchased Exercised
----------- --------------- ------------------
▇▇▇▇▇▇▇ Sachs (Asia) L.L.C..............................
ABN AMRO Bank N.V.......................................
Citigroup Global Markets Limited........................
Daiwa Securities SMBC Hong Kong Limited.................
The Hongkong and Shanghai Banking Corporation Limited...
▇.▇. ▇▇▇▇▇▇ Limited.....................................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated......
First Shanghai Securities Limited.......................
Kotak Mahindra (International) Limited..................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited..............
--------------- ------------------
Total...............................................
=============== ==================
-43-
SCHEDULE II
SIGNIFICANT SUBSIDIARIES
▇▇▇▇▇▇▇▇▇ Global Communications Holdings Limited
▇▇▇▇▇▇▇▇▇ Global Communications Limited
▇▇▇▇▇▇▇▇▇ 3G HK Limited
▇▇▇▇▇▇▇▇▇ 3G Services (HK) Limited
▇▇▇▇▇▇▇▇▇ Telephone Company Limited
Partner Communications Company Ltd.
▇▇▇▇▇▇▇▇▇ ▇▇▇ Telecom Private Limited
▇▇▇▇▇▇▇▇▇ Telecom East Ltd.
Aircel Digilink India Limited
Fascel Limited
▇▇▇▇▇▇▇▇▇ Essar Telecom Limited
▇▇▇▇▇▇▇▇▇ Essar South Limited
▇▇▇▇▇▇▇▇▇ CAT Wireless Multimedia Limited
BFKT (Thailand) Limited
-44-
ANNEX I (a)
[FORM OF COMFORT LETTER]
Pursuant to Section 7(m)(i) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder adopted by the
Commission and the Public Company Accounting Oversight Board (United
States);
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included in the Prospectus or the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder adopted by
the Commission; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the unaudited consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
separately furnished to the representative of the Underwriters (the
"Representative");
(iii) To the extent applicable, they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus as indicated in their reports thereon copies of
which [have been separately furnished to the Representative][are attached
hereto]; and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (vi)(A)(i) below comply as to
form in all material respects with the applicable accounting requirements
of the Act and the related published rules and regulations, nothing came to
their attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published rules and regulations;
(iv) The selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus agrees
with the corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements for each of the three years ended
December 31, 2001, 2002 and 2003 and the unaudited financial statements for
each of the two years ended December 31, 1998 and 1999;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included in the Prospectus, inquiries
of officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
I-A-1
(A) to the extent applicable, (i) the unaudited consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements
of the Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus for them
to be in conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included in the
Prospectus;
(C) to the extent applicable, the unaudited financial statements which
were not included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a basis
substantially consistent with the basis for the audited consolidated
financial statements included in the Prospectus;
(D) to the extent applicable, any unaudited pro forma consolidated
condensed financial statements included in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options and
stock appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest financial statements included in the Prospectus)
or any increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the Representative, or any
increases in any items specified by the Representative, in each case as
compared with amounts shown in the latest balance sheet included in the
Prospectus, except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which are described
in such letter; and
(F) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenues or operating profit
or the total or per share amounts of consolidated net income or other items
specified by the Representative, or any increases in any items specified by
the Representative, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Representative, except in each case for decreases or
increases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vi) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representative, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the
I-A-2
Registration Statement specified by the Representative, and have compared
certain of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found them
to be in agreement.
I-A-3
ANNEX I (b)
[FORM OF COMFORT LETTER]
Pursuant to Section 7(m)(ii) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
Partner and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder adopted by the
Commission and the Public Company Accounting Oversight Board (United
States);
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included in the Prospectus or the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder adopted by
the Commission; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the unaudited consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of Partner for the periods specified in such letter,
as indicated in their reports thereon, copies of which have been separately
furnished to the representatives of the Underwriters (the
"Representative");
(iii) To the extent applicable, they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus as indicated in their reports thereon copies of
which [have been separately furnished to the Representative][are attached
hereto]; and on the basis of specified procedures including inquiries of
officials of Partner who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (vi)(A)(i) below comply as to form in
all material respects with the applicable accounting requirements of the
Act and the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published rules and regulations;
(iv) The selected financial information with respect to the
consolidated results of operations and financial position of Partner for
the five most recent fiscal years included in the Prospectus agrees with
the corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements for each of the three years ended
December 31, 2001, 2002 and 2003 and the unaudited financial statements for
each of the two years ended December 31, 1998 and 1999;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of Partner and its subsidiaries, inspection of the
minute books of Partner and its subsidiaries since the date of the latest
audited financial statements included in the Prospectus, inquiries of
officials of Partner and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
I-B-1
(A) to the extent applicable, (i) the unaudited consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements
of the Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus for them
to be in conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included in the
Prospectus;
(C) to the extent applicable, the unaudited financial statements which
were not included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a basis
substantially consistent with the basis for the audited consolidated
financial statements included in the Prospectus;
(D) to the extent applicable, any unaudited pro forma consolidated
condensed financial statements included in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options and
stock appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest financial statements included in the Prospectus)
or any increase in the consolidated long-term debt of Partner and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the Representative, or any
increases in any items specified by the Representative, in each case as
compared with amounts shown in the latest balance sheet included in the
Prospectus, except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which are described
in such letter; and
(F) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenues or operating profit
or the total or per share amounts of consolidated net income or other items
specified by the Representative, or any increases in any items specified by
the Representative, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Representative, except in each case for decreases or
increases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vi) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representative, which are derived from the
general accounting records of Partner and its subsidiaries, which appear in
the Prospectus, or in Part II of, or in exhibits and schedules to, the
I-B-2
Registration Statement specified by the Representative, and have compared
certain of such amounts, percentages and financial information with the
accounting records of Partner and its subsidiaries and have found them to
be in agreement.
I-B-3
ANNEX II (a)
Form of Opinion of Linklaters
pursuant to Section 7(g) of the Underwriting Agreement
(i) Each of the International HWL Letter and the Hong Kong HWL Letter
(collectively, the "HWL Letters") has been duly authorized, executed and
delivered by HWL and the Hong Kong HWL Letter constitutes a valid and legally
binding agreement of HWL, enforceable in accordance with its terms, subject, as
to enforceability, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and each of the
Hong Kong Underwriting Agreement and the Hong Kong Fee Letter constitutes a
valid and legally binding agreement of each of the Company and the Selling
Shareholder, enforceable in accordance with its terms, subject, as to
enforceability, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(ii) Each of the Company and the Selling Shareholder has been duly
registered as an overseas company under Part XI of the Hong Kong Companies
Ordinance (Chapter 32 of the laws of Hong Kong) to carry on business under the
laws of Hong Kong; and all the shares of Stock (including the Shares, the
Reserved Shares and the Reallocated Shares) have been duly listed and admitted
for trading on the Hong Kong Stock Exchange;
(iii) No Governmental Authorization of or from any Hong Kong Governmental
Agency for (A) the issue and sale of the Shares and the ADSs being delivered at
such Time of Delivery, (B) the deposit of the Shares being deposited by the
Selling Shareholder with the Depositary against issuance of the ADRs evidencing
the ADSs to be delivered at such Time of Delivery by the Selling Shareholder,
(C) the execution, delivery, performance of each of the International
Underwriting Agreement and the Hong Kong Underwriting Agreement (collectively,
the "Underwriting Agreements"), as well as each of the Hong Kong Fee Letter and
the International Fee Letter (collectively, the "Fee Letters") by the Company,
the execution, delivery, performance of each of the Underwriting Agreements and
each of the Fee Letters by the Selling Shareholder and the compliance with the
provisions of the Deposit Agreement by the Selling Shareholder, (D) the
execution, delivery, performance of each of the HWL Letters by HWL, (E) the
issue, circulation or distribution of the Hong Kong Prospectus in Hong Kong in
the manner described in the Hong Kong Prospectus, (F) the initial offering or
sale of the Hong Kong Shares in Hong Kong under the Hong Kong Public Offering as
described in the Hong Kong Prospectus or the placing of the Shares and the ADSs
in Hong Kong as described in the Prospectus, or (G) the consummation of the
transactions contemplated under the Restructuring or the Restructuring
Documents, except for those which have been duly obtained and are in full force
and effect;
(iv) The execution and delivery by each of the Company and the Selling
Shareholder of each of the Underwriting Agreements and each of the Fee Letters
and the compliance by each of the Company and the Selling Shareholder of the
provisions thereunder, the execution and delivery by the Company of the Deposit
Agreement and the compliance by each of the Company and the Selling Shareholder
of the provisions thereunder, the execution and delivery by HWL of the HWL
Letters and the compliance by the HWL of the provisions thereunder, the issue
and sale of the Shares and the ADSs being delivered at such Time of Delivery,
the deposit of the Shares with the Depositary against the issuance of the ADRs
evidencing ADSs to be delivered at such Time of Delivery by the Selling
Shareholder will not (A) result in any violation of any provision of the laws of
Hong Kong or statute of Hong Kong, (B) result in a breach or violation of any of
the terms or provisions of, or constitute a default under, the Rules Governing
the Listing of Securities on the Hong Kong Stock Exchange, [(C) conflict or
result in a breach or violation of any terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or any
agreement or instrument governed by the laws of Hong Kong known to such counsel
to which any of HWL, the Company or the Selling Shareholder is a party, or to
which any of the property or assets of any of HWL, the Company or the Selling
Shareholder is subject,], (D) result in any violation of any provision of the
constituent documents of the Company, the
II-A-1
Selling Shareholder or HWL, as the case may be, or (F) result in a violation of
any order, rule or regulation of any Hong Kong Governmental Agency having
jurisdiction over the Company, the Selling Shareholder or HWL, as the case may
be;
(v) No stamp or other issuance or transfer taxes or duties and no capital
gains, income, withholding or other taxes are payable to Hong Kong or any
political subdivision or taxing authority thereof or therein in connection with
(A) the creation, allotment and issuance of the Shares, (B) the deposit with the
Depositary of the Shares against issuance of the ADRs evidencing ADSs, (C) the
issue, sale and delivery of the Shares and the ADSs to or for the respective
accounts of the Underwriters in the manner contemplated by each of the
Underwriting Agreements, (D) the execution, delivery and performance of each of
the Underwriting Agreements, each of the Fee Letters, each of the HWL Letters
the Deposit Agreement and (E) the sale and delivery of Hong Kong Shares and the
Reallocated Shares to successful applicants and, if applicable, the Hong Kong
Underwriters, under the Hong Kong Public Offering and the sale and delivery of
Reserved Shares to relevant applicants in the Preferential Offering, in each
case other than the SFC transaction and investor compensation levies and the
Hong Kong Stock Exchange trading fee as described in the Hong Kong Prospectus
and any liability to pay profits tax which may arise in respect of persons
carrying on a trade, profession or business in Hong Kong;
(vi) Each of ▇▇▇▇▇▇▇▇▇ Telecommunications (HK) Holdings Limited, ▇▇▇▇▇▇▇▇▇
3G HK Holdings Limited ▇▇▇▇▇▇▇▇▇ Global Communications Investment Holding
Limited, ▇▇▇▇▇▇▇▇▇ Global Communications Holdings Limited (each a "Hong Kong
Company", and collectively, the "Hong Kong Companies") has been duly registered
as an overseas company under Part XI of the Hong Kong Companies Ordinance
(Chapter 32 of the laws of Hong Kong) to carry on business under the laws of
Hong Kong; each ▇▇▇▇▇▇▇▇▇ 3G HK Limited, ▇▇▇▇▇▇▇▇▇ 3G Services (HK) Limited,
▇▇▇▇▇▇▇▇▇ Telephone Company Limited and ▇▇▇▇▇▇▇▇▇ Global Communications Limited
(collectively, the "Hong Kong Subsidiaries") has been duly incorporated as a
company with limited liability under the laws of Hong Kong and each Hong Kong
Subsidiary and all of the issued shared capital of each Hong Kong Subsidiary
have been duly authorized and validly issued and are fully paid; [the holders of
outstanding shares of capital stock of the Hong Kong Subsidiaries are not
entitled to preemptive or other rights to acquire such shares of capital stock
which have not been complied with; and except as disclosed in the Prospectus,
all issued shares of capital stock of each of the Hong Kong Subsidiaries are
owned by the Hong Kong Companies free and clear of all liens, encumbrances,
equities or claims;]
(vii) [The shareholding structure of each of the Hong Kong Companies and
each of the Hong Kong Subsidiaries does not contravene the applicable laws and
regulations of Hong Kong, including any applicable ownership restrictions;]
(viii) All Governmental Authorizations of or from any Hong Kong
Governmental Agency required for the carrying on of the business of the Hong
Kong Companies in the manner described in the Prospectus have been obtained and
are in full force and effect; such counsel has no reason to believe that any
Governmental Agency is considering modifying, suspending or revoking such
Governmental Authorizations for any reason, including the consummation of any
transaction contemplated under the Restructuring; and each of the Hong Kong
Companies and each of the Hong Kong Subsidiaries is in compliance with the
provisions of such Governmental Authorizations in all material respects;
(ix) Based and relying upon searches conducted on and made at [causebook
search], there are no legal or governmental proceedings pending in Hong Kong to
which any of the Company, the Selling Shareholder, any of the Hong Kong
Companies or any of the Hong Kong Subsidiaries is a party or of which any
property of any their respective properties is subject which (a) if determined
adversely, would individually or in the aggregate have a material adverse effect
on the Company or (b) challenges the effectiveness or validity of the
Restructuring or the Offering;
II-A-2
(x) Each of the documents listed in Schedule 1 to this letter (the
"Restructuring Documents") has been duly authorized, executed and delivered by
each party thereto which is incorporated in Hong Kong (the "HK Restructuring
Companies"), and assuming due authorization, execution and delivery by each
party thereto which is not incorporated in Hong Kong, each of the Restructuring
Documents which is governed under the laws of Hong Kong (the "HK Restructuring
Documents") constitutes valid, legal and binding obligations of the HK
Restructuring Parties and the other parties thereto and are enforceable in
accordance with their terms , subject, as to enforceability, to bankruptcy,
insolvency, reorganization and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(xi) The Restructuring and the execution, delivery and performance of the
HK Restructuring Documents will not (A) result in any violation of any provision
of the laws of Hong Kong or statute of Hong Kong, (B) result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange,
(C) result in any violation of any provision of the constituent documents of any
of the HK Restructuring Companies or (D) result in a violation of any order,
rule or regulation of any Hong Kong Governmental Agency having jurisdiction over
the Company, the Selling Shareholder, HWL or any of the HK Restructuring
Companies, as the case may be;
(xii) The statements in the Prospectus under the caption "Regulation - Hong
Kong", to the extent such statements purport to constitute a summary of Hong
Kong law or regulation or the provisions of documents therein described, are
accurate, fair and complete in all material respects;
(xiii) The statements in the Prospectus under the caption "The
Restructuring" and in Appendix IX to the Hong Kong Prospectus, to the extent
such statements purport to constitute a summary of the Restructuring and the
documents or proceedings therein described, are accurate, fair and complete in
all material respects;
(xiv) All dividends and other distributions declared and payable on the
shares of capital stock of each of the Hong Kong Companies, its subsidiaries and
associated companies may under the current laws and regulations of Hong Kong be
paid in Hong Kong dollars and may be converted into foreign currency that may be
freely transferred out of Hong Kong, and all such dividends and other
distributions will not be subject to withholding or other taxes under the laws
and regulations of Hong Kong and are otherwise free and clear of any other tax,
withholding or deduction in Hong Kong and without the necessity of obtaining any
Governmental Authorization in Hong Kong;
(xv) The statements in the Prospectus under the captions "Taxation - Hong
Kong", and "Certain Relationships and Related Party Transactions", insofar as
they purport to constitute a summary of the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(xvi) Based and relying on searches conducted on and made at the Hong Kong
Companies Registry, the Official Receiver's Office in Hong Kong and the Winding
Up Cause Book kept at the High Court of Hong Kong, no order, petition or
resolution has been filed for the winding up of, and no receiver has been
appointed with respect to any property or asset of, the Company, the Selling
Shareholder or any of the Hong Kong Companies; and
(xvii) The indemnification and contribution provisions set forth in Section
8 of the Underwriting Agreement and Section 5.8 of the Deposit Agreement do not
contravene the public policy or laws of Hong Kong.
II-A-3
ANNEX II (b)
Form of Opinion of Mitsui, Yasuda, Wani & Maeda
pursuant to Section 7(h) of the Underwriting Agreement
(i) The registration made under the Japanese Registration Statement became
effective on [.], 2004 and has remained effective to and including the date
hereof; to the best of such counsel's knowledge after due inquiry, no order
suspending the effectiveness of such registration, nor notice of a hearing from
which an order suspending such effectiveness may result, has been issued or
given under the Securities and Exchange Law of Japan;
(ii) Except for the registration made under the Japanese Registration
Statement (and provided that such registration has become effective), no
consent, approval, authorization or other order is required to be obtained, or
filing to be made, by the Company under the laws of Japan in connection with the
Japanese POWL;
(iii) The forms of the Japanese Registration Statement and the Japanese
Prospectus conform in all material respects to the requirements of the
Securities and Exchange Law of Japan and the Japanese Rules and Regulations;
(iv) All statements with respect to matters of the laws of Japan set forth
in the Japanese Registration Statement and the Japanese Prospectus are true and
correct in all material respects.
II-B-1
ANNEX II (c)
Form of Opinion of P&A Law Offices
pursuant to Section 7(i) of the Underwriting Agreement
(i) The consummation of the Offering contemplated under the Underwriting
Agreement or the Restructuring will not contravene any provision of, or
constitute a default under (a) the agreements set forth in Schedule I hereto,
(b) any provision of applicable Indian law relating to foreign investment in the
Republic of India ("India") or (c) the Memorandum or Articles of Association of
any Indian Company.
(ii) Except as described in the Prospectus under the caption "Regulation -
India", we are not aware of any restrictions under applicable Indian law with
respect to foreign investment in the Indian Companies.
(iii) The shareholding structure of each of the Indian Companies does not
contravene the applicable laws and regulations of India, including applicable
foreign investment regulations, except that such counsel express no opinion as
to compliance with (A) the applicable laws and regulations governing the
consents or approvals required under the Indian Foreign Investment Promotion
Board, the Reserve Bank of India, the Department of Telecommunications,
Government of India or (B) the applicable foreign investment regulations
relating to the telecommunications sector in India under the Industrial Policy
of India and the Indian Foreign Exchange Management Act, 1999, as amended;
(iv) Except as disclosed in the Prospectus, all Governmental Authorizations
of or from any Governmental Agency required for the carrying on of the business
of the Company in the manner described in the Prospectus have been obtained and
are in full force and effect, except that such counsel express no opinion as to
whether any consents or approvals are required under the Indian Foreign
Investment Promotion Board, the Reserve Bank of India or the Department of
Telecommunications, Government of India; such Governmental Authorizations
contain no materially burdensome restrictions or conditions not described in the
Prospectus; such counsel has no reason to believe that any Governmental Agency
is considering modifying, suspending or revoking such Governmental
Authorizations for any reason, including the consummation of any transaction
contemplated under the Restructuring; and each of the Indian Companies is in
compliance with the provisions of such Governmental Authorizations in all
material respects;
(v) No consent, approvals, authorizations, orders, registrations,
clearances and qualifications of or with any court or governmental agency or
stock exchange authority in India (each a "Governmental Agency") having
jurisdiction over any Indian Company ("Governmental Authorizations") is required
for the consummation of (a) the Offering contemplated under the Underwriting
Agreement and (b) the Restructuring.
(vi) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending in India to which any of the Indian Companies
is a party or to which any of the properties of any of the Indian Companies is
subject which (a) if determined adversely, would individually or in the
aggregate have a material adverse effect on the Indian Companies or (b)
challenges the effectiveness or validity of the Restructuring or any transaction
therein contemplated; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by any Governmental Agency or
threatened by others.
(vii) Any dividends that have been legally declared and are payable on the
shares of the Indian Companies may be paid to the holder thereof in Indian
Rupees and, in case of the shareholders of the Indian Companies that are
resident outside India, may be converted into foreign currency that may be
freely transferred out of India without the necessity of obtaining any
Governmental Authorization in India.
II-C-1
(viii) The statements in the Prospectus under the captions "Regulation -
India" and "Business - India - Ownership", in so far as such statements
constitute summaries of matters of Indian law or regulation, or the provisions
of documents referred to therein, accurately, fairly and completely summarize
such matters in all material respects.
(ix) We reaffirm to the Underwriters the matters and/or opinions set forth
in (A) the last paragraph of the letter dated May 20, 2004 (attached as Appendix
1 hereto) addressed to HWL, subject to the same assumptions and qualifications
made in such letter, as if such letter has been addressed to the Underwriters;
(B) the last paragraph of the letter dated May 23, 2004 (attached as Appendix 2
hereto) addressed to HWL, subject to the same assumptions and qualifications
made in such letter, as if such latter has been addressed to the Underwriters;
and (C) Part IX of the memorandum dated June 10, 2004 (attached as Appendix 3
hereto) addressed to HWL, subject to the same assumptions and qualifications
made by such counsel in such memorandum, as if such memorandum has been
addressed to the Underwriters.
II-C-2
ANNEX II (d)
Form of Opinion of Gross, Kleinhendler, Hodak, Halevy, ▇▇▇▇▇▇▇▇▇ & Co.
pursuant to Section 7(j) of the Underwriting Agreement
(i) Partner has been duly incorporated and is validly existing as a company
with limited liability under the laws of Israel, with corporate power and
authority to own its properties and conduct its business as described in the
Prospectus;
(ii) Partner has an authorized capitalization as set forth in its most
recent Annual Report on Form 20-F filed with the Commission, and all of the
issued shares of capital stock of Partner have been duly and validly authorized
and issued and are fully paid and non-assessable; and, solely on the basis of a
review made on October [.], 2004 of filings under the names of Advent
Investments Pte Limited and ▇▇▇▇▇▇▇▇▇ Telecommunications (Amsterdam) BV with the
Israeli Registrar of Pledges, except for the 54,733,017 ordinary shares of
Partner pledged in favor of lenders to Partner, the issued shares of capital
stock of Partner owned by the Company is free and clear of all liens,
encumbrances, equities or claims;
(iii) Except as disclosed in the Prospectus or in Partner's most recent
Annual Report on Form 20-F filed with the Commission, or in any subsequent
filings with the Commission by Partner on Form 6-K, (a) all Governmental
Authorizations of or from any Israeli Governmental Agency required for the
carrying on of the business of the Company in the manner described in the
Prospectus and the absence of which would materially and adversely affect the
Partner, have been obtained and, to such counsel's knowledge after due inquiry,
are in full force and effect; (b) counsel has no knowledge after due inquiry,
that any Governmental Agency is considering suspending or revoking such
Governmental Authorizations for any reason, including the consummation of any
transaction contemplated under the Restructuring or the Offering; and (c) to
such counsel's knowledge after due inquiry, Partner is in compliance with the
provisions of such Governmental Authorizations in all material respects;
(iv) To such counsel's knowledge without making any inquiry, and except as
set forth in the Prospectus or in Partner's most recent Annual Report on Form
20-F filed with the Commission or in any subsequent filings with the Commission
by Partner on Form 6-K, there are no legal or governmental proceedings pending
in Israel to which Partner is a party or of which any material property of
Partner is the subject which, if determined adversely, would individually or in
the aggregate have a material adverse effect on Partner;
(v) To such counsel's knowledge after due inquiry, there are no legal or
governmental proceedings pending in Israel to which Partner is a party or of
which any material property of Partner is the subject which challenges the
effectiveness or validity of the Restructuring or any transaction therein
contemplated; and, to such counsel's knowledge after due inquiry, no such
proceedings are threatened or contemplated by any Governmental Agency or
threatened by others;
(vi) No Governmental Authorization of or from any Israeli Governmental
Agency is required for the consummation of the Restructuring or the Offering,
except any such consent, approval, authorization or order which has been duly
obtained and, to such counsel's knowledge after due inquiry, are in full force
and effect;
(vii) The statements in the Prospectus under the captions "Regulation -
Israel" and "Business - Israel - Ownership", to the extent such statements
purport to summarize matters of Israeli law or regulation or the provisions of
documents therein described, are accurate, fair and complete in all material
respects.
(viii) All dividends and other distributions declared and payable on the
shares of capital stock of Partner may under the current laws and regulations of
Israel be paid in New Israeli Shekels and be
II-D-1
converted into foreign currency that may be freely transferred out of Israel,
and all such dividends and other distributions to shareholders not otherwise
subject to tax in Israel will be subject to withholding of Israeli income tax
under the laws and regulations of Israel but are otherwise free and clear of any
other tax, withholding or deduction in Israel without the necessity of obtaining
any Governmental Authorization in Israel; and
(ix) Partner is not in violation of its constituent documents or, to such
counsel's knowledge after due inquiry and except as set forth in the Prospectus
or in Partner's most recent Annual Report on Form 20-F filed with the
Commission, or in any subsequent filings with the Commission by Partner on Form
6-K, any statute or any material order, rule or regulation of any Israeli
Governmental Agency.
II-D-2
ANNEX II (e)
Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
pursuant to Section 7(k) of the Underwriting Agreement
(i) All of the issued shares of capital stock of each of the Thai
Subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable; the holders of outstanding shares of capital stock of the
Thailand Subsidiaries are not entitled to preemptive or other rights to acquire
such shares of capital stock which have not been complied with and except as
disclosed in the Prospectus;
For the purposes of the opinions in paragraph (i) above, we have
assumed that the term "non-assessable" in relation to all of the shares of
capital stock of the Thai Subsidiaries means under the laws of Thailand that
holders of such shares, having fully paid up all amounts due on such shares as
to nominal amount and premium thereon, are under no further personal liability
to contribute to the assets or liabilities of the respective Thai Subsidiary in
their capacities purely as holders of such shares.
(ii) The shareholding structure of the Thai Subsidiaries does not
contravene the applicable laws and regulations of Thailand, including applicable
foreign investment regulations;
(iii) All Governmental Authorizations of or from any Thai Governmental
Agency required for the carrying on of the business of the Thai Subsidiaries in
the manner described in the Prospectus have been obtained and are in full force
and effect; such Governmental Authorizations contain no materially burdensome
restrictions or conditions not described in the Prospectus; we have no reason to
believe that any Governmental Agency is considering modifying, suspending or
revoking such Governmental Authorizations for any reason, including the
consummation of any transaction contemplated under the Restructuring; and each
of the Thai Subsidiaries is in compliance with the provisions of such
Governmental Authorizations in all material respects;
(iv) To the best of our knowledge after due inquiry, there are no legal or
governmental proceedings pending in Thailand to which any of the Thai
Subsidiaries is a party or of which any property of any of the Thai Subsidiaries
is the subject which (a) if determined adversely, would individually or in the
aggregate have a material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of the Thai
Subsidiaries or (b) challenges the effectiveness or validity of the
Restructuring or any transaction therein contemplated; and, to the best of our
knowledge, no such proceedings are threatened or contemplated by any
Governmental Agency or threatened by others;
(v) No Governmental Authorization of or from any Thai Governmental Agency
is required for the consummation of the transactions contemplated by the
Restructuring Documents or contemplated under the Restructuring or the Offering,
except any such consent, approval, authorization or order which has been duly
obtained and is in full force and effect;
(vi) The statements in the Prospectus under the captions "Regulation -
Thailand" and "Business - Thailand - Ownership", to the extent such statements
relate to matters of law or regulation or to the provisions of documents therein
described, are true and accurate in all material respects, and nothing has been
omitted from such statements which would make the same misleading in any
material respect;
(vii) The statements in the Prospectus under the caption "The
Restructuring", to the extent such statements relate to Thailand legal matters,
documents or proceedings therein described, are true and accurate in all
material respects, and nothing has been omitted from such statements which would
make the same misleading in any material respect; all the transactions
contemplated under the Restructuring have been effected in compliance with all
applicable laws of Thailand; and to the extent
II-E-1
governed or affected by the laws of Thailand, the transactions contemplated
under the Restructuring constitute binding and irrevocable transactions
completed by the parties thereto;
(viii) All dividends and other distributions declared and payable on the
shares of capital stock of each of the Thai Subsidiaries may under the current
laws and regulations of Thailand be paid in Thai Baht and may be converted into
foreign currency that may be transferred out of Thailand subject to the
applicable exchange control regulations, and, other than withholding tax payable
on the dividends and/or distributions payable on the shares pursuant to the laws
of Thailand, all such dividends and other distributions will not be subject to
any other withholding or other taxes under the laws and regulations of Thailand
and are otherwise free and clear of any other tax, withholding or deduction in
Thailand;
(ix) Each of the Thai Subsidiaries is not in violation of its respective
constituent documents or any statute or any order, rule or regulation of any
Thai Governmental Agency; and
(x) We reaffirm to the Underwriters the matters and/or opinions set forth
in the letter dated May 28, 2004 (attached as Appendix 1 hereto) addressed to
HWL, subject to the same assumptions and qualifications made by us in such
letter, as if such letter had been addressed to the Underwriters.
II-E-2
ANNEX III
FORM OF INTERNATIONAL HWL LETTER
▇▇▇▇▇▇▇▇▇ Telecommunications International Limited
Letter Agreement
., 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ (Asia) L.L.C.,
As representative of the several Underwriters
named in Schedule I to the Underwriting Agreement (as defined below),
68th Floor
▇▇▇▇▇▇ Kong Center
▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Re: ▇▇▇▇▇▇▇▇▇ Telecommunications International Limited - Letter Agreement
Ladies and Gentlemen:
The undersigned understands that you propose to enter into an underwriting
agreement (the "Underwriting Agreement"), as representative on behalf of the
several Underwriters named in Schedule I to such Underwriting Agreement
(collectively, the "Underwriters"), with ▇▇▇▇▇▇▇▇▇ Telecommunications
International Limited, a company incorporated in the Cayman Islands with limited
liability (the "Company") and ▇▇▇▇▇▇▇▇▇ Telecommunications Investment Holdings
Limited, a company incorporated under the laws of the British Virgin Islands
(the "Selling Shareholder"), providing for a public offering of American
depositary shares ("ADSs") representing ordinary shares of the Company, par
value [HK$0.25] per share (the "Shares"), pursuant to a Registration Statement
on Form F-1 and a Registration Statement on Form F-6 to be filed with the U.S.
Securities and Exchange Commission. Capitalized terms used herein and not
otherwise defined shall have the meaning given to them in the Underwriting
Agreement.
In consideration of the agreement by the Underwriters to offer and sell the
ADSs, and of other good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, HWL hereby:
(a) represents and warrants to, and agrees with, each of the
Underwriters that:
(i) Each Restructuring Document executed by any of its
subsidiaries other than the Company, the Company Restructuring
Subsidiaries and the Selling Shareholder (collectively, the "HWL
Restructuring Subsidiaries") has been duly authorized, executed and
delivered by or on behalf of such HWL Restructuring Subsidiary and
constitutes a valid and legally binding agreement of such HWL
Restructuring Subsidiary, enforceable in accordance with its terms,
subject, as to enforceability, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;
(ii) The Restructuring and the execution, delivery and
performance of the Restructuring Documents do not (A) contravene any
provision of applicable law or statute, rule or regulation of any
Governmental Agency having jurisdiction over HWL or any of the HWL
Restructuring Subsidiaries or any of their respective properties, (B)
contravene the respective constituent documents or business licenses
of HWL or any of the HWL Restructuring Subsidiaries or (C) conflict
with or result in a breach or violation
III-1
of any of the terms or provisions of, or constitute a default under,
any license, indenture, mortgage, deed of trust, loan agreement, note,
lease or other agreement or instrument to which HWL is a party or by
which HWL is bound or to which any of the property or assets of HWL is
subject, and will not result in the creation or imposition of any
lien, charge, encumbrance or other restriction upon any material
assets of HWL, except, with respect to (A) or (C), any such
contravention, conflict, breach, violation, default or restriction
which would not, individually or in the aggregate, have (x) a Material
Adverse Effect or (y) a material adverse effect on the ability of any
HWL Restructuring Subsidiaries to effect the Restructuring, provided
that the representation and warranty in this paragraph (ii) shall in
the case of Israel by given to the best knowledge of the Company after
due inquiry; and
(iii) Neither HWL nor any of its subsidiaries, nor any person
acting on its or their behalf has taken or will take, directly or
indirectly, any action which is designed to or which has constituted
or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares and the ADSs
except pursuant to the Stock Borrowing Agreement (as defined in the
Hong Kong Underwriting Agreement); and
(b) agrees with each of the Underwriters:
(i) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, not to, and to use all commercially reasonable efforts to
cause its subsidiaries and controlled affiliates not to, offer, sell,
contract to sell or otherwise dispose of, except as provided under the
Underwriting Agreement, the Hong Kong Underwriting Agreement, the
Stock Borrowing Agreement and the DoCoMo Acquisition (as defined in
the Hong Kong Underwriting Agreement), any securities of the Company
that are substantially similar to the Shares or ADSs, including but
not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any
such substantially similar securities (other than pursuant to employee
stock option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of
the Underwriting Agreement), without your prior written consent (for
yourself and on behalf of the Underwriters); and
(ii) During the period from the date hereof and ending 30 days
thereafter, not to (and to use all commercially reasonable efforts to
cause its controlled affiliates not to) take, directly or indirectly,
any action which is designed to or which constitutes or which might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company or facilitate
the sale or resale of the Shares or the ADSs except pursuant to the
Stock Borrowing Agreement.
III-2
The undersigned understands that the Company, the Selling Shareholder and
the Underwriters are relying upon this Letter Agreement in proceeding toward
consummation of the offering. The undersigned further understands that this
Letter Agreement is irrevocable and shall be binding upon the undersigned's
heirs, legal representatives, successors, and assigns.
Very truly yours,
▇▇▇▇▇▇▇▇▇ Whampoa Limited
--------------------------
Authorized Signature
--------------------------
Title
III-3
