Exhibit 8
Dated: 19 January 2005 EXECUTION COPY
Shareholders' Agreement
between
Pacific Century Diversified Limited
as the Shareholder
and
China Network Communications Group Corporation
(graphic omitted)
as China Netcom
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
THIS AGREEMENT is dated 19 January 2005 and made
BETWEEN:
(1) PACIFIC CENTURY DIVERSIFIED LIMITED, (the "Shareholder"), a company
incorporated in the Cayman Islands with limited liability and whose
registered office is at Scotia Centre, 4th Floor, P.O. Box 2804,
▇▇▇▇▇▇ Town, Grand Cayman, Cayman Islands; and
(3) CHINA NETWORK COMMUNICATIONS GROUP CORPORATION
(graphic omitted), ("China Netcom"), a state-owned enterprise
established under the laws of the People's Republic of China and
whose registered office is at ▇▇.▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, PRC.
Background:
(A) The Company has agreed to issue and the Subscriber has agreed to
subscribe for the Subscription Shares on the terms and subject to the
conditions set out in the Subscription Agreement.
(B) The Shareholder has agreed to undertake, among other things, that it
will not, prior to the first anniversary of the completion of the
Subscription, sell the ordinary shares in the Company held by it to
any third party.
THE PARTIES AGREE THAT:
1. Definitions and Interpretation
1.1 Definitions
In this Agreement (including the recitals above), the following
expressions shall, unless the context requires otherwise, have the
following meanings:
"Business Day" means any day (excluding a Saturday) on which banks
generally are open for business in Hong Kong.
"Company" means PCCW Limited.
"Completion" means completion of the Subscription Agreement.
"Fund" means JL Strategic Fund, an exempted company incorporated in
the Cayman Islands with limited liability.
"HK$" means Hong Kong dollars, the lawful currency of Hong Kong.
"Hong Kong" means the Hong Kong Special Administrative Region of the
People's Republic of China.
"Listing Rules" means the Rules Governing the Listing of Securities on
the Stock Exchange.
"Other Substantial Shareholders" means Pacific Century Regional
Developments Limited and Pacific Century Group Holdings Limited and
"Other Substantial Shareholder" shall mean either of them, as the case
may be.
"Parties" means the named parties to this Agreement and their
respective successors and permitted assigns and the expression "Party"
shall be construed accordingly.
"Relevant Shares" means the 167,656,824 Shares in which the
Shareholder is, as at the date of this Agreement, interested or deemed
to be interested for the purposes of Part XV of the SFO.
"SFC" means the Securities and Futures Commission of Hong Kong.
"SFO" means the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong).
"Shares" means ordinary shares of HK$0.25 each in the capital of the
Company.
"Stock Exchange" means The Stock Exchange of Hong Kong Limited.
"Subscriber" means China Netcom Group Corporation (BVI) Limited, and
shall include, where the context so requires, any Alternate Subscriber
(as such term is defined in the Subscription Agreement).
"Subscription" means the subscription for shares in the Company by the
Subscriber on the terms and subject to the conditions set out in the
Subscription Agreement.
"Subscription Agreement" means an agreement of even date herewith
between the Company, China Netcom and the Subscriber relating to the
Subscription.
"Takeovers Code" means the Hong Kong Code on Takeovers and Mergers.
1.2 Construction and Certain References
In this Agreement:
(A) references to the singular shall include the plural and vice
versa and references to the masculine, the feminine and the
neuter shall include each other such gender;
(B) "person" includes any individual, partnership, body
corporate, corporation sole or aggregate, state or agency of
a state, and any unincorporated association or organisation,
in each case whether or not having separate legal
personality;
(C) "company" includes any body corporate, wherever incorporated
or existing; and
(D) references to recitals, clauses, sub-clauses and schedules
are references to the recitals, clauses and sub-clauses of,
and schedules to, this Agreement.
1.3 Headings
Headings are inserted for convenience only and shall not affect the
interpretation of this Agreement.
2. Undertakings Conditional
The undertakings in clauses 5.1(B) and 6.3 are conditional on
Completion.
3. Consideration
In consideration of the sum of HK$1.00 now paid by China Netcom to the
Shareholder (receipt of which the Shareholder hereby acknowledges) the
Shareholder undertakes to China Netcom the matters referred to in
clause 5, 6 and 7 below.
4. Representations and Warranties of the Shareholder
The Shareholder hereby represents and warrants to China Netcom as
follows:
(A) It has the full right, power and authority to enter into, and
to perform its obligations under, this Agreement and this
Agreement constitutes its legal, valid and binding
obligations enforceable in accordance with its terms.
(B) It has obtained all governmental, regulatory or similar
consents required to enter into, and to perform its
obligations under, this Agreement.
(C) The execution, delivery and performance by it of this
Agreement does not and will not:
(1) violate the provisions of any laws, rules, regulations
or orders as currently in effect to which it is
subject;
(2) require the consent of its shareholders or of any
other person;
(3) result in a material breach of any provision in its
memorandum or articles of association or other
constitutional documents or any other agreement to
which it is a party;
(4) result in the breach of any order, judgement or
decree of any court or governmental agency to which
it is a party or by which it is bound.
(D) Except for 162,947,224 of the Relevant Shares which are held
by the Fund, it is, at the date of this Agreement, the
registered holder and beneficial owner of (or is otherwise
able to control the exercise of all rights attaching to,
including the ability to exercise the voting rights) the
Relevant Shares.
(E) As at the date of this Agreement it is not the registered
holder and beneficial owner of (or is otherwise able to
control the exercise of all rights attaching to, including
the ability to exercise the voting rights) any Shares other
than the Relevant Shares.
5. Non-disposal Undertaking
5.1 The Shareholder hereby irrevocably undertakes to China Netcom that it
shall not, and it shall exercise such rights and powers as it may have
(including, if such other person is required to comply with the same,
giving instructions to such person) to procure, so far as it is able
to do so, that no other person shall, directly or indirectly, offer,
pledge, sell, contract to sell (whether or not subject to conditions),
transfer, charge, encumber, grant or agree to grant any option over,
right or warrant to purchase, lend or otherwise transfer, distribute
(including, for the avoidance of doubt by way of dividend in specie)
all or any of the Relevant Shares or interest, including without
limitation any voting interest (collectively, "Transfer") in such
Relevant Shares:
(A) on or before the date of Completion; and
(B) for a period of 12 months from the date of Completion.
5.2 The undertakings in clause 5.1 applies mutatis mutandis:
(A) to any shares in the Company ("Shares") subsequently allotted
to the Shareholder pursuant to a Bonus Issue or a
Capitalisation Distribution. For the purposes of this clause,
a "Bonus Issue" means an issue of Shares to the holders of
Shares credited as fully paid up by way of capitalisation of
profits or reserves (other than Shares issued in lieu of a
cash dividend); and a "Capitalisation Distribution" means any
distribution of assets to the holders of Shares in specie;
and
(B) to any Shares subsequently acquired by the Shareholder,
including by way of purchases of existing Shares on-market or
off-market, and any Shares allotted pursuant to any
conversion rights or a Rights Issue, where a "Rights Issue"
means an offer to holders of Shares of new shares by way of
rights or otherwise or the offer or grant to holders of
Shares of options, rights or warrants to subscribe or
purchase new Shares.
5.3 The undertakings in clause 5.1 shall not apply to:
(A) a Transfer of any Relevant Shares to which China Netcom has
given its prior written consent;
(B) the Transfer of any Relevant Shares by way of acceptance of
any offer made by any third party for all the shares of the
Company not already owned or agreed to be acquired by such
third party or persons acting in concert with such third
party (provided that for the purposes of this clause 5.3(B):
(1) the publication of a scheme of arrangement under
Section 166A of the Companies Ordinance (Chapter 32 of
the Laws of Hong Kong) providing for the acquisition by
such third party or person acting in concert with such
third party of the whole or any part of the shares of
the Company (whether by way of transfer, or pursuant to
a cancellation, of all or part of the shares of the
Company) shall be deemed to be the making of an offer;
and
(2) any person acting, or deemed to be acting, in concert
(as such term is defined in the Takeovers Code) with
the Shareholder shall not be taken to be a third party
offeror);
(C) the Transfer of any Relevant Shares by way of Repurchase,
where a "Repurchase" means an offer or invitation made by the
Company to all the holders of shares in the Company in
accordance with the Takeovers Code;
(D) the Transfer of any Relevant Shares to any company controlled
by, or under common control with, the Shareholder, provided
that the transferee shall first have entered into and
delivered to China Netcom an undertaking in substantially the
same form as this undertaking. For the purposes of this
clause, an entity shall be considered to `control' another
entity if the first entity has a right to exercise more than
50% of the votes exercisable at a general meeting of the
latter entity or to appoint a majority of the board of
directors of the latter entity;
(E) a Transfer of any Relevant Shares pursuant to a placing and
top-up subscription of Shares (provided that the Shareholder
subscribes in full for such number of new Shares as are
Transferred by it pursuant to such placing and top-up
subscription);
(F) the Transfer of a maximum of 4,322,000 Relevant Shares to the
senior management of the Company in accordance with
arrangements in place at the date of this Agreement between
the Shareholder and such persons; and
(G) a Transfer of any of the 162,947,224 Relevant Shares which
are currently held by the Fund in circumstances where the
manager of the Fund determines in its discretion and in
accordance with the terms on which it is holding such of the
Relevant Shares to dispose of any of such Relevant Shares,
provided always that the Shareholder shall exercise such
rights and powers as it may have (including, to the extent
that the manager of the Fund is required to comply with the
same, giving instructions to the manager of the Fund) to
procure, so far as it is able to do so, that the manager does
not transfer any of such Relevant Shares in the periods
referred to in clauses 5.1(A) and (B) above.
6. Undertaking to Vote
6.1 The Shareholder hereby irrevocably and unconditionally undertakes,
represents and warrants to China Netcom that:
(A) unless it is required to abstain from voting on such matters
pursuant to the Listing Rules, the Takeovers Code or by the
Hong Kong Stock Exchange or the SFC, it will, to the extent
that it is permitted or able to do so, and having regard to
its rights and obligations in relation to the Relevant Shares
held by the Fund, exercise, or use its reasonable endeavours
to cause the exercise of, the voting rights (whether on a
show of hands, a poll or otherwise) attaching to the Relevant
Shares (and any Shares issued pursuant to clause 5.2) in
favour of any resolution or resolutions as may be required
and proposed by the Company to approve and implement the
matters and transactions as described in the Subscription
Agreement; and
(B) prior to the Completion, it shall not, without the consent of
China Netcom, requisition or join in requisitioning any
general or class meeting of the Company.
6.2 Without prejudice to clause 6.1 above, the Shareholder hereby
undertakes that from the time of this undertaking to the Completion,
it will not exercise, or direct the exercise of, any rights attaching
to the Relevant Shares and any Shares issued pursuant to clause 5.2
(including, without limitation, any voting rights) in a manner which
is or may be inconsistent with the terms of this Agreement and/or the
completion of the transactions contemplated by the Subscription
Agreement.
6.3 The Shareholder hereby irrevocably undertakes, represents and warrants
to China Netcom that, subject to Completion, it will exercise such
rights and powers as it may have and give all such instructions, where
the recipient is required to comply with the same (including as a
shareholder of the Company, where relevant) to procure, so far as it
is able to do so, that the Company's obligations under clauses 4.1(B)
(Board and Committee Nominations) and 8.6 (Replacement of Directors)
of the Subscription Agreement are complied with from time to time for
so long as China Netcom is entitled to exercise the rights under such
clauses in accordance with the Subscription Agreement.
7. No "acting in concert"
(A) Nothing in this Agreement nor any action taken or proposed to
be taken by China Netcom and/or the Shareholder under or in
connection with this Agreement is intended to result in the
Shareholder "acting in concert" (as defined in the Takeovers
Code) with China Netcom (or vice versa).
(B) The Shareholder and China Netcom each agree that if at any
time any of the Shareholder, the Other Substantial
Shareholders, the Subscriber or China Netcom (collectively,
"Relevant Shareholders") considers that anything in or in
connection with this Agreement, or any of the actions or
proposed actions of any of the Relevant Shareholders, mean
that the Subscriber and/or China Netcom are or will be
"acting in concert" (as defined in the Takeovers Code) with
the Shareholder and/or the Other Substantial Shareholders (or
vice versa) ("Concert Party Issue"), it will notify the other
Relevant Shareholders of the Concert Party Issue (including
reasonable details of the issue and reasons for its concern),
and each of the Shareholder and China Netcom agree that:
(1) it will consult with each other on a timely basis and
in good faith to discuss whether the proposed action
or actions can be undertaken in a manner or to an
extent that will not have such a result; and
(2) no action will be taken directly or indirectly by it
until the Concert Party Issue, together with the
proposed action(s) (if any), have been resolved to the
satisfaction of each of the Relevant Shareholders
Provided That if the SFC confirms that any of China
Netcom or any of the Shareholder or the Other
Substantial Shareholders shall not itself or themselves
be under an obligation to make a mandatory general
offer for the shares in the Company not held by them
(or parties acting in concert with them) (regardless of
whether any of the Other Relevant Shareholders may be
under such an obligation), then the relevant Concert
Party Issue shall be deemed for the purposes of this
provision to have been resolved to the satisfaction of
that or those Relevant Shareholders.
8. Confidentiality
8.1 Confidentiality
Subject to clauses 8.2 and 8.3 each Party:-
(A) shall treat as strictly confidential the provisions of this
Agreement and the process of their negotiation and all
information about the other Parties obtained or received by
it as a result of entering into or performing its obligations
under this Agreement ("Confidential Information"); and
(B) shall not, except with the prior written consent of the other
Party make use of (save for the purposes of performing its
obligations under this Agreement) or disclose to any person
any Confidential Information.
8.2 Permitted disclosure or use
Clause 8.1 shall not apply if and to the extent that the Party using
or disclosing Confidential Information can demonstrate that:
(A) such disclosure is required by law or by any supervisory,
regulatory or governmental body having jurisdiction over it
(including the Stock Exchange, the SFC, the regulatory
authorities in the People's Republic of China and Singapore
Exchange Securities Trading Limited) and whether or not the
requirement has the force of law; or
(B) such disclosure is to its professional advisers in relation
to the negotiation, entry into or performance of this
Agreement or any matter arising out of the same; or
(C) in the case of disclosure or use, the Confidential
Information concerned was lawfully in its possession (as
evidenced by written records) prior to its being obtained or
received as described in clause 8.1(A); or
(D) in the case of disclosure or use, the Confidential
Information concerned has come into the public domain other
than through its fault or the fault of any person to whom
such Confidential Information has been disclosed in
accordance with clause 8.1(B).
Any information to be disclosed pursuant to sub-clause (A) above shall
be disclosed only after prior consultation to the extent reasonably
practicable with the other Party.
8.3 The Shareholder hereby consents to references to it and to this
undertaking being incorporated by China Netcom and/or the Company and
their respective advisers in any press announcements to be made in
connection with the transactions contemplated by the Subscription
Agreement (such references to be consistent with the terms of this
Agreement) and the Shareholder further agrees to the disclosure and/or
publication of this undertaking in or in connection with any circular
or other document to be published by the Company in relation to the
transactions contemplated by the Subscription Agreement.
8.4 The Shareholder undertakes to provide China Netcom and the Company
with all such further information in relation to its holding of
Relevant Shares and the interests of any person acting in concert with
it as China Netcom and/or the Company may reasonably require in order
to comply with the requirements of the Takeovers Code, the Listing
Rules and any other legal or regulatory requirements for inclusion in
any circular or other document referred to in clause 8.3 above.
8.5 Continuance of restrictions
The restrictions contained in this clause 8 (except for clause 8.4)
shall continue without limit of time.
9. Termination
Without prejudice to any accrued rights and liabilities of the
Parties, the obligations of the Shareholder pursuant to this Agreement
will terminate upon the Subscription Agreement being terminated.
10. Notices
10.1 Any notice (which term shall in this clause include any other
communication) required to be given under this Agreement or in
connection with the matters contemplated by it shall, except where
otherwise specifically provided, be in writing in the English
language.
10.2 Any such notice shall be addressed as provided in sub-clause 10.3
and may be:
(A) personally delivered, in which case it shall be deemed to
have been given upon delivery at the relevant address; or
(B) if within Hong Kong, sent by pre-paid post, in which case it
shall be deemed to have been given two Business Days after
the date of posting; or
(C) if from or to any place outside Hong Kong, sent by pre-paid
airmail, in which case it shall be deemed to have been given
seven Business Days after the date of posting; or
(D) sent by facsimile, in which case it shall be deemed to have
been given when despatched, subject to confirmation of
uninterrupted transmission by a transmission report provided
that any notice despatched by facsimile after 5:00 p.m. on
any day shall be deemed to have been received at 9:00 a.m. on
the next Business Day.
10.3 The addresses and other details of the Parties referred to in clause
10.2 are, subject to 10.4:
If to China Netcom, to:
China Network Communications Group Corporation
(graphic omitted)
Address: 59/F, Bank of ▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
Attention: Head of Business Development
If to the Shareholder, to:
Pacific Century Diversified Limited
Address: ▇/▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Plaza, ▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
Attention: Company Secretary
10.4 Any Party may notify the other Parties of any change to the address or
any of the other details specified in clause 10.2, provided that such
notification shall only be effective on the date specified in such
notice or five Business Days after the notice is given, whichever is
later.
11. Law and Arbitration
11.1 Law
This Agreement shall be governed by and construed in accordance with
the laws of England for the time being in force.
11.2 Arbitration
(A) Any dispute, controversy or claim arising out of or in
connection with this Agreement, including any question
regarding its existence, validity or termination, shall be
referred to and finally resolved by arbitration under the
LCIA Rules, which Rules are deemed to be incorporated by
reference into this clause. The arbitration commission shall
be the LCIA.
(B) The number of arbitrators shall be three.
(C) The seat of the arbitration shall be London.
(D) The language to be used in the arbitral proceedings shall be
English.
(E) By agreeing to arbitration pursuant to this clause, the
Parties waive irrevocably their right to any form of appeal,
review or recourse to any state court or other judicial
authority, insofar as such waiver may validly be made. In
particular, no Party may apply to the court to determine any
question of law arising in the course of the arbitration
pursuant to section 45 of the Arbitration ▇▇▇ ▇▇▇▇ or
otherwise, and no Party may appeal to the court on a question
of law arising out of an award made in the arbitration
pursuant to section 69 of the Arbitration ▇▇▇ ▇▇▇▇ or
otherwise.
(F) The Parties shall have the right to seek interim injunctive
relief from a court of competent jurisdiction, both before
and after the arbitrators have been appointed, at any time up
until the arbitrators have made the final award.
12. Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇
No person who is not for the time being a Party to this Agreement
shall have any right under the Contracts (Rights of Third Parties) ▇▇▇
▇▇▇▇ to enforce any term of this Agreement.
13. Provisions Relating to this Agreement
13.1 Counterparts
This Agreement may be executed in any number of counterparts, which
shall together constitute one Agreement. Either Party may enter into
this Agreement by signing any such counterpart.
13.2 Whole agreement
(A) This Agreement, together with any documents referred to in
it, constitutes the whole agreement between the Parties
relating to its subject matter and supersedes and
extinguishes any prior drafts, agreements, and undertakings,
whether in writing or oral, relating to such subject matter,
except to the extent that the same are repeated in this
Agreement.
(B) Each of the Parties acknowledges that it has not been induced
to enter into this Agreement by any representation, warranty,
promise or assurance by any of the others or any other person
save for those contained in this Agreement.
13.3 Variations
No variation of this Agreement shall be effective unless made in
writing and signed by each of the Parties.
13.4 Costs
Each Party shall bear its own costs arising out of or in connection
with the preparation, negotiation and implementation of this
Agreement.
13.5 Time Of The Essence
Any time, date or period mentioned in this Agreement may be extended
by written agreement between the Parties but otherwise and except as
expressly provided, as regards any time, date or period originally
fixed or any date or period so extended as aforesaid, time shall be of
the essence.
13.6 Agreement Binding and Assignment
This Agreement shall be binding on and enure for the benefit of each
Party's respective successors and permitted assigns. Neither Party
shall assign any of its rights under this Agreement (all of which
shall be incapable of assignment) or purport to do so without the
prior written consent of the other Party.
13.7 Waiver
No failure or delay by either Party in exercising any right, power or
remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of the same preclude any further
exercise thereof or the exercise of any other right, power or remedy.
Without limiting the foregoing, no waiver by either Party of any
breach of any provision hereof shall be deemed to be a waiver of any
subsequent breach of that or any other provision hereof.
13.8 Invalidity and Severance
If any provision of this Agreement shall be held to be illegal, void,
invalid or unenforceable under the laws of any jurisdiction, the
legality, validity and enforceability of the remainder of this
Agreement in that jurisdiction shall not be affected, and the
legality, validity and enforceability of the whole of this Agreement
in any other jurisdiction shall not be affected.
AS WITNESS the hands of the duly authorised representatives of the Parties on
the day and year first before written.
SIGNED by LI TZAR KAI, ▇▇▇▇▇▇▇ ) /s/ Li Tzar Kai, ▇▇▇▇▇▇▇
for and on behalf of )
PACIFIC CENTURY DIVERSIFIED )
LIMITED )
in the presence of: )
SIGNED by ZHANG CHUNJIANG ) /s/ Zhang Chunjiang
for and on behalf of )
CHINA NETWORK COMMUNICATIONS )
GROUP CORPORATION )
in the presence of: )
