Exhibit 3
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21 December, 2005
SHAREHOLDERS' AGREEMENT
between
XXXXXXXXX TELECOMMUNICATIONS INVESTMENT
HOLDINGS LIMITED
and
XXXXXXXXX WHAMPOA LIMITED
and
ORASCOM TELECOM EURASIA LIMITED
and
ORASCOM TELECOM HOLDING S.A.E.
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THIS AGREEMENT is made on the 21st day of December, 2005
BETWEEN:
(1) XXXXXXXXX TELECOMMUNICATIONS INVESTMENT HOLDINGS LIMITED, a company
incorporated in the British Virgin Islands whose registered office is at
P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, the
British Virgin Islands (together with its assigns permitted under this
Agreement, the "Seller");
(2) XXXXXXXXX WHAMPOA LIMITED, a company incorporated in Hong Kong whose
registered office is at 00xx Xxxxx, Xxxxxxxxx Xxxxx, 00 Xxxxxxxx Xxxx,
Xxxx Xxxx ("HWL");
(3) ORASCOM TELECOM EURASIA LIMITED, a company incorporated in the British
Virgin Islands whose registered office is at c/o Trident Trust Company
(B.V.I.) Limited, Trident Xxxxxxxx, Wickhams Cay, Road Town, Tortola,
the British Virgin Islands (together with its assigns permitted under
this Agreement, the "Purchaser"); and
(4) ORASCOM TELECOM HOLDING S.A.E., a company established in accordance with
the laws of the Arab Republic of Egypt with its principal place of
business at 2005A Nile City Towers, Cornish El Nile, Ramlet Xxxxxxx,
Cairo, Egypt ("OTH").
WHEREAS:
(A) The Purchaser will acquire the Sale Shares (as defined in Clause 1.1)
from the Seller on Share Purchase Closing under the terms of the Share
Purchase Agreement (as defined in Clause 1.1).
(B) The Purchaser and the Seller have agreed that their relationship as
shareholders in HTIL will be governed by the terms and conditions
contained in this Agreement.
(C) HWL has agreed to join as a party to this Agreement to undertake certain
obligations as well as to ensure the performance of certain of the
Seller's obligations under this Agreement, the Seller being a wholly
owned subsidiary of HWL.
(D) OTH has agreed to join as a party to this Agreement to undertake certain
obligations as well as to ensure the performance of certain of the
Purchaser's obligations under this Agreement, the Purchaser being a
wholly owned subsidiary of OTH.
IT IS AGREED:
1. INTERPRETATION
1.1 In this Agreement:
"ADS Programme" means the programme as described in
HTIL's prospectus dated 7 October, 2004,
by which American depositary shares
representing underlying Shares, are
issued and traded on the New York Stock
Exchange, Inc.
1
"Adjustment" means an adjustment to be made in
accordance with Schedule 3.
"Affiliate" means, with respect to any Person which
is a company, its subsidiaries and
holding companies and any subsidiaries
of such holding companies, and with
respect to any Person which is not a
company, any other Person directly or
indirectly controlling, controlled by,
or under common control with, such
Person; provided that, for the purposes
of this definition, "control"
(including, with correlative meanings,
the terms "controlled by" and "under
common control with"), as used with
respect to any Person, means the
possession, directly or indirectly, of
the power to direct or cause the
direction of the management and policies
of such Person, whether through the
ownership of voting securities, by
contract or otherwise.
"Aggregate Holding" means as at the relevant time of the
determination, the aggregate number of
Shares held by the Seller, such persons
permitted to hold Shares pursuant to
Clause 17.2, the Purchaser and such
Persons permitted to hold Shares
pursuant to Clause 17.3.
"AGM" means an annual general meeting of HTIL.
"Alternates" means the Indian Alternate, the
Indonesian Alternate and the Vietnamese
Alternate.
"Amended and Restated means the amended and restated
Registration Rights Agreement" registration rights agreement of even
date herewith to be entered into by and
amongst the Seller, HTIL, Xxxxxx Kong
(Holdings) Limited and the Purchaser.
"Articles" means the articles of association of
HTIL as from time to time amended,
varied, supplemented or replaced.
"associated companies" means, with respect to any Person, any
company in which that Person is the
beneficial owner of 20% or more of that
company's voting share capital.
"Authority" means any international, supranational,
national, provincial, regional, federal,
state, municipal or local government,
any instrumentality, subdivision, court,
administrative or regulatory agency or
commission or other authority thereof,
or any quasi-governmental,
self-regulatory or private body
exercising any
2
regulatory, taxing, importing or other
governmental or quasi-governmental
authority, which shall include where
applicable, the Stock Exchange, the
Cairo and Alexandria Stock Exchange, the
Hong Kong Securities and Futures
Commission and the SEC.
"Board" means the board of Directors from time
to time.
"Board Papers" has the meaning given to it in Clause
5.4.
"Business Cooperation means the business cooperation agreement
Agreement" dated 12 July 2004 entered into between
Vietnam Co. and Luxco.
"Business Day" means a day (other than a Saturday or
Sunday or a public holiday) when
commercial banks are open for business
in Hong Kong and in the Arab Republic of
Egypt, and, for the purposes of Clauses
11.7 and 13.9, New York.
"the Companies" means India Co., Indonesia Co. and
Vietnam Co.; and "Company" means any one
of them.
"Companies Ordinance" means the Companies Ordinance, Chapter
32 of the Laws of Hong Kong.
"Confidential Information" means any information disclosed by a
disclosing party, any of that party's
Affiliates or any of its advisers of
consultants or Representatives, whether
disclosed orally, in writing or in any
other medium, relating to any aspect of
the business of the disclosing party or
any of its Affiliates including without
limitation marketing plans, commercial
or financial information, trade secrets,
know-how, demonstrations, drawings,
samples, devices, specifications,
proprietary data and any information
belonging to the disclosing party or its
Affiliates (as the case may be) and
materials of whatever description,
whether protected by copyright, patent
or other intellectual property rights.
"Co-operation Agreement" means the co-operation agreement of even
date herewith entered into between OTH
and HTIL.
"Co-ordinating Committee" means the Co-ordinating Committee
established under the terms of the
Business Cooperation Agreement.
"Deed of Adherence" means a deed of adherence substantially
in the form set out in Schedule 1.
3
"Director" means a director for the time being of
HTIL, including where applicable any
alternate Director; and "Directors"
shall be construed accordingly.
"Effective Time" means the time at which this Agreement
will come into effect being at Share
Purchase Closing.
"Election Notice" has the meaning given to it in Clause
13.4.
"Encumbrance" means liens, security interests,
options, rights of first refusal, rights
of first offer, tag along rights,
claims, easements, mortgages, charges,
indentures, deeds of trust, rights of
way, restrictions on the use of real
property, encroachments, licenses to
third parties, leases to third parties,
security agreements, or any other
encumbrances and other restrictions or
limitations on the use of real or
personal property (tangible and
intangible) or irregularities in title
thereto.
"Event of Termination" means the occurrence of any of the
events set out in Clauses 8.1, 18.3,
18.4 or 18.5.
"Exercise Notice" means a notice in the form set out in
Schedule 2.
"Financing Parties" means those banks, financial
institutions, institutional and
professional investors (other than the
Seller) that provide finance from time
to time to OTH and/or any of its
Affiliates; and "Financing Party" shall
be construed accordingly.
"Floor Option Price" means the minimum amount of the Option
Price referred to in Clause 11.2(ii).
"HK$" means Hong Kong dollars, being the
lawful currency of Hong Kong.
"holding company" has the meaning given to it in the
Companies Ordinance.
"Hong Kong" means the Hong Kong Special
Administrative Region of the People's
Republic of China.
"HTIL" means Xxxxxxxxx Telecommunications
International Limited, a company
incorporated under the laws of the
Cayman Islands, and whose shares are
listed on the Stock Exchange (Stock
Code: 2332), and whose American
depositary shares are listed on the New
York Stock Exchange Inc. (Ticker: HTX).
4
"HTIL Businesses" has the meaning given to it in Clause
3.5.
"HTIL Group" means HTIL and its subsidiaries, and the
expression "member of the HTIL Group"
shall be construed accordingly.
"HTIL Licensee" means any member of the HTIL Group that
is currently a party to an IP Rights
Licence; and "HTIL Licensees" shall be
construed accordingly.
"HTIL Securities" shall have the same meaning as that
given to "Company Securities" in the
Amended and Restated Registration Rights
Agreement.
"HWL Group" means HWL and its subsidiaries, and the
expression "member of the HWL Group"
shall be construed accordingly.
"HWL IPR Licensing Entity" means HWL, and any subsidiary of HWL
that has granted an IP Rights Licence to
an HTIL Licensee in connection with the
telecommunications operations of that
HTIL Licensee in the territory in which
it operates; and "HWL IPR Licensing
Entities" shall be construed
accordingly.
"India Co." means Xxxxxxxxx Essar Limited, being the
holding company of the Indian
Subsidiaries and a current subsidiary of
HTIL, and which is incorporated in
India.
"Indian Alternate" means any person nominated to act as an
alternate director of any Purchaser
Nominee on the board of directors of
India Co.
"Indian Nominee" means any person recommended by the
Purchaser to be nominated by HTIL for
appointment to the board of directors of
India Co.
"Indian Opcos" means each of Xxxxxxxxx Essar Mobile
Services Limited, Xxxxxxxxx Telecom East
Limited, Fascel Limited, Aircel Digilink
India Limited and Xxxxxxxxx Essar South
Limited, each being a current subsidiary
of India Co. and incorporated in India.
"Indonesia Co." means PT. Xxxxxxxxx XX
Telecommunications, being a subsidiary
of HTIL that is incorporated in
Indonesia.
"Indonesian Alternate" means any person nominated to act as a
alternate director of any Purchaser
Nominee on the board of commissioners of
Indonesia Co.
5
"Indonesian Nominee" means any person recommended by the
Purchaser to be nominated by HTIL for
appointment to the board of
commissioners of Indonesia Co.
"IP Rights" means trade marks, service marks, trade
names, domain names, logos, get-up,
patents, inventions, registered and
unregistered design rights, copyrights,
semi-conductor topography rights,
database rights and all other similar
rights in any part of the world
(including Know-how) including, where
such rights are obtained or enhanced by
registration, any registration of such
rights and applications and rights to
apply for such applications, which shall
include the brands "Hutch", "Orange" and
"3" in their various forms.
"IP Rights Licence" means a licence entered into by an HWL
IPR Licensing Entity with respect to the
licensing and usage of the IP Rights.
"Know-how" means confidential industrial and
commercial information and techniques in
any form including drawings, formulae,
test results, reports, project reports
and testing procedures, instruction and
training manuals, tables of operating
conditions, market forecasts, lists and
particulars of customers and suppliers.
"Listing Rules" means the Rules Governing the Listing of
Securities on the Stock Exchange.
"Losses" means any and all losses, liabilities,
damages, proceedings, arbitration,
assessments, charges, fines and
penalties, and reasonable costs and
expenses, and reasonable expenses of
investigation and enforcement of any
indemnity and all reasonable legal and
other professional fees and expenses.
"Luxco" means Xxxxxxxxx Telecommunications
(Vietnam) S.a.r.l., currently a wholly
owned subsidiary of HTIL.
"MOC" means the Ministry of Communications of
the State of Israel or any other
Authority that may from time to time
exercise jurisdiction, whether
concurrently or separately, over the
direct or indirect control of Partner.
6
"MOC Consent" has the meaning given to it in Clause
10.
"NEC" has the meaning give to it in Clause
17.1(ii).
"New Brilliant" New Brilliant Holdings Limited, a wholly
owned subsidiary of the Seller.
"Non-Exercise Notice" has the meaning given to it in Clause
13.5.
"No Tag-Along Notice" has the meaning given to it in Clause
14.4.
"NTT" has the meaning give to it in Clause
17.1(ii).
"Offer Period" has the meaning given to it in Clause
13.4.
"Offered Shares" has the meaning given to it in Clause
13.2.
"Offeree" has the meaning given to it in Clause
13.2.
"Offeror" has the meaning given to it in Clause
13.2.
"Off-market Transaction" means a transaction involving Shares
which is not (i) required to be recorded
from time to time on any stock market on
which the Shares are traded, from time
to time, or (ii) for the ADS Programme.
"On-market Transaction" means a transaction involving Shares
which is not an Off-market Transaction,
but shall not include any transaction
involving Shares that has been
pre-arranged (including any placement of
Shares) with a third party buyer of the
Shares prior to that transaction being
entered into through the facilities of
the relevant stock market.
"Option Closing" means the closing of the sale and
purchase of the Option Shares as
referred to in Clause 11.7.
"Option Price" means the price payable per Option Share
as stated in Clause 11.2;
"Option Shares" means 175,326,456 Shares or such number
of Shares as is equal to 3.68910576 per
cent of the total number of Shares in
issue at the date of the Exercise
Notice.
"OTH Financing" means any finance from time to time
provided by Financing Parties.
"Partner" means Partner Communications Company
Ltd., a company incorporated under the
laws of the State of Israel, and any
successor corporation or assign thereof.
7
"Partner Licence" means the general licence granted to
Partner by the MOC to establish and
operate a mobile telephone network in
the State of Israel.
"Percentage Ratios" means each of the five percentage ratios
set out in rule 14.07 of the Listing
Rules which shall apply as if set out in
full in this Agreement together with all
other relevant provisions of the Listing
Rules from time to time that apply for
the purposes of the interpretation of
rule 14.07, and for the avoidance of
doubt references in that rule to the
listed issuer shall be read as
references to HTIL.
"Person" means and includes an individual, a
partnership, a joint venture, a
corporation, a limited liability
company, a limited liability
partnership, a trust, an incorporated
organization and an Authority.
"Principal Subsidiary means each of the subsidiaries of HTIL
Companies" listed in Schedule 3 (Principal
Subsidiary Companies); and "Principal
Subsidiary Company" shall be construed
accordingly.
"Promissory Note" means the promissory note from the
Purchaser to the Seller dated on or
about the date of this Agreement.
"Proposed Transferee" has the meaning given to it in Clause
13.3.
"Purchaser Directors" means any Directors nominated for such
position by the Purchaser.
"Purchaser Nominees" means the Indian Nominee, the Indonesian
Nominee and the Vietnamese Nominee and
"Purchaser Nominee" means any of them.
"Purchaser Tag-Along Shares" has the meaning given to it in Clause
14.3.
"Qualification Shares" means with respect to any company, any
shares required to be held in that
company by any Person(s) to satisfy any
qualification requirement.
"Relevant Securities" means Shares, any securities convertible
into or exchangeable into Shares or any
options, warrants or other rights to
subscribe for Shares.
"Representatives" means with respect to any Person, any
director, officer, employee, personnel,
member, agent and legal, financial or
tax advisers and accountants of that
Person.
8
"Retained Shares" has the meaning given to it in Clause
13.3.
"Sale Period Commencement has the meaning given to it in Clause
Date" 13.5.
"Sale Period Expiry Date" has the meaning given to it in Clause
13.6.
"Sale Shares" means 917,759,172 Shares, representing
immediately following Share Purchase
Closing approximately 19.31 per cent of
the total number of Shares in issue.
"SEC" means the U.S. Securities and Exchange
Commission.
"Security Agent" means a security agent of any Financing
Party, or any successor or replacement
security agent.
"Seller's Directors" means any Directors nominated for such
position by the Seller under this
Agreement.
"Seller's Indian Nominees" means the number of persons from time to
time appointed to the board of directors
of India Co., less the number of
directors on the board of directors
nominated by Kotak Mahindra Capital Co.
and Essar Teleholdings Limited from time
to time, and the one director nominated
by the Purchaser.
"Seller's Indonesian Nominees" means the number of persons from time to
time appointed to the board of directors
of Indonesia Co., less the number of
directors on the board of directors
nominated by PT Asia Mobile and Asia
Telecommunication Technology Ltd from
time to time, and the one director
nominated by the Purchaser.
"Seller's Nominees" means the Seller's Indian Nominees, the
Seller's Indonesian Nominees and the
Seller's Vietnamese Nominees and
"Seller's Nominee" means any of them.
"Seller's Vietnamese Nominees" means the number of persons from time to
time appointed to the Co-ordinating
Committee, less the number of persons
nominated by Vietnam Co. for appointment
to the Co-ordinating Committee and the
one person recommended by the Purchaser.
"Share Option" means the option granted by the Seller
to the Purchaser to purchase the Option
Shares, referred to in Clause 11.1.
9
"Share Purchase Agreement" means the share purchase agreement of
even date herewith and entered into by
and amongst the Seller, the Purchaser,
OTH and HWL in relation to the sale and
purchase of the Sale Shares.
"Share Purchase Closing" means the closing of the Share Purchase
Agreement in accordance with its terms.
"Shares" means ordinary shares of nominal value
HK$0.25 each in the issued share capital
of HTIL.
"Standstill Period" means the period commencing on the date
of the Share Purchase Closing and ending
on the second anniversary thereof.
"Stock Exchange" means The Stock Exchange of Hong Kong
Limited.
"Subsequent Indian Opcos" means each of BPL Mobile Communications
Limited, BPL Mobile Cellular Limited and
Essar Spacetel Limited, each of which is
incorporated in India.
"subsidiary" has the meaning given to it in the
Companies Ordinance.
"Subsidiary Boards" means the board of directors of India
Co., the board of Commissioners of
Indonesia Co. and the Co-ordinating
Committee and "Subsidiary Board" means
any of them.
"Tag-Along Acceptance Period" has the meaning given to it in Clause
14.1.
"Tax" means any income, gross receipts,
employment, payroll, windfall profits,
profits, withholding, social security
(or similar), unemployment, disability,
real property, personal property, sales
or value added tax.
"Telecommunications Operator" means any Person who owns or operates
mobile or fixed line telecommunications
networks or infrastructure or provides
mobile, fixed line telecommunications,
IDD or Internet services or who is a
mobile virtual network operator or who
is a re-seller of such services in any
jurisdiction.
"Transaction Documents" means each of this Agreement, the Share
Purchase Agreement, the Co-operation
Agreement, and the Amended and Restated
Registration Rights Agreement.
10
"Transfer" includes, in relation to any Share, a
sale, transfer, assignment, creation of
a trust or grant of an option over, or
alienation of the right to exercise the
vote attached to, pledge, hypothecation,
or otherwise creation of or grant of an
Encumbrance in relation to or over, the
legal or beneficial ownership of, or
economic interest therein (including any
voting rights) or any right relating to,
such Share; and "Transferred" and the
noun "Transfer" shall be construed
accordingly.
"Transfer Notice" has the meaning given to it in Clause
13.3.
"Unregistered Offering" a transaction involving, or an offering
of, Shares which is not a Registered
Offering.
"U.S." or "United States" means the United States of America.
"US$" means United States dollars, being the
lawful currency of the United States of
America.
"Vietnam Co." means Hanoi Telecommunications Joint
Stock, a company incorporated in
Vietnam.
"Vietnamese Alternate" means any person nominated by HTIL to
act as an alternate to the Vietnamese
Nominee on the Co-ordinating Committee.
"Vietnamese Nominee" means any person recommended by the
Purchaser to be nominated by HTIL for
appointment as a member of the
Co-ordinating Committee.
"Voting and Procurement means for any party all rights they have
Rights" as shareholders of any company to vote
at general meetings or on written
resolutions of such companies and all
powers, whether legal or otherwise, to
procure that any directors of any
company who have been nominated by that
party or any Affiliate of that party for
their post as a director of such company
(including where appropriate, the
Purchaser Directors, the Purchaser
Nominees, the Seller's Directors and/or
the Seller's Nominees) vote at board
meetings or on written resolutions of
such company in accordance with the
wishes of the party which nominated them
(in all cases subject to the relevant
director's respective fiduciary duties
and in compliance with any applicable
laws, regulations, by-laws or statutes).
11
1.2 In this Agreement, unless the context otherwise requires:
(i) any reference in this Agreement to "writing" or comparable
expressions includes a reference to facsimile transmission or
comparable means of communication;
(ii) words expressed in the singular number shall include the plural
and vice versa, words expressed in the masculine shall include
the feminine and neuter gender and vice versa;
(iii) references to Clauses, Schedules and Recitals are references to
clauses, schedules and recitals of this Agreement;
(iv) reference to "day" or "days" are to calendar days;
(v) this "Agreement" or any other agreement or document shall be
construed as a reference to this Agreement or, as the case may
be, such other agreement or document as the same may have been,
or may from time to time be, amended, varied, novated or
supplemented;
(vi) "include," "includes," and "including" are deemed to be followed
by "without limitation" whether or not they are in fact followed
by such words or words of similar import;
(vii) the table of contents and headings are inserted for convenience
only and do not affect the construction of this Agreement;
(viii) references herein to statutory provisions shall be construed as
references to those provisions as amended or re-enacted or as
their application is modified by other provisions (whether
before or after the date hereof) and shall include any
provisions of which they are re-enactments (whether with or
without modification);
(ix) references to a "company" include any company, corporation or
other body corporate wherever and however incorporated or
established;
(x) references to "party" or "parties" are to a party to or the
parties to this Agreement;
(xi) references to any English legal term for any action, remedy,
method of financial proceedings, legal document, legal status,
court, official or any legal concept or thing shall, in respect
of any jurisdiction other than England, be deemed to include
what most nearly approximates in that jurisdiction to the
English legal term; and
(xii) for the purposes of determining whether any company referred to
herein is a "wholly owned subsidiary" of another company, any
Qualification Shares held in that company by any Person(s) shall
be ignored provided that the existence of any Qualification
Shares does not prejudice the ability of any relevant holding
company to control the actions of that company in all material
respects as if it were a wholly owned subsidiary.
12
1.3 The Schedules to this Agreement are incorporated into and form an
integral part of this Agreement.
2. SUPPORT
Each of the Purchaser and the Seller undertakes to exercise its Voting
and Procurement Rights to support HTIL delivering to the Purchaser, upon
payment by the Purchaser to the Seller of the amount due and payable
under the Promissory Note, a certified extract of a written resolution
of the Directors approving and authorising the removal from time to time
from HTIL's Cayman Islands Register of Members to its Hong Kong branch
Register of Members in respect of all or any of the Sale Shares held by
the Purchaser (or held in the name of a Security Agent pursuant to any
security) from time to time following receipt of the amount due and
payable under the Promissory Note and following delivery of a written
notice by the Purchaser or a Security Agent to HTIL requesting that a
removal be effected and declaring that the holder of the relevant Sale
Shares (if someone other than the Purchaser or the Security Agent) is an
Affiliate of the Purchaser.
3. CORPORATE GOVERNANCE RIGHTS AT HTIL LEVEL
HTIL BOARD COMPOSITION
3.1 The Purchaser and the Seller shall each be entitled to nominate two (2)
non-executive Directors for election to the Board.
3.2 The Seller shall procure that upon this entire Agreement coming into
full force and effect:
(i) the two (2) non-executive Directors nominated by the Purchaser
as referred to in Clause 3.1 shall be appointed to the Board;
(ii) the composition of the Board shall comprise of not more than
nine (9) Directors (excluding alternates), consisting of two (2)
executive Directors, four (4) non-executive Directors (two (2)
of whom shall be the Directors nominated by the Purchaser and
two (2) of whom shall be non-executive Directors nominated by
the Seller, in each case, referred to in Clause 3.1) and three
(3) independent non-executive Directors; and
(iii) such existing Directors as shall be necessary to resign to
achieve the Board composition set out in Clause 3.2(ii), shall
resign.
3.3 Each of the Purchaser and the Seller shall be entitled to nominate any
person(s) from time to time in place of any of the person(s) nominated
by them respectively for appointment to the Board under Clause 3.1, and
upon receipt of such nominations the Purchaser and the Seller shall use
their Voting and Procurement Rights to support the prompt appointment of
such person(s) to the Board.
3.4 Each of the Purchaser and the Seller undertakes to exercise its Voting
and Procurement Rights to ensure that at all times after the Effective
Time the provisions of Clauses 3.1 and 3.3 continue to be complied with
and that they exercise their Voting and Procurement Rights to support
both the continued presence of two (2) non-executive Directors nominated
by the Purchaser and two (2) Directors nominated by the Seller and the
continuing composition of the Board comprising, at all times, a total of
nine (9) Directors (excluding alternates).
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OTHER GOVERNANCE PROVISIONS AT HTIL LEVEL
3.5 The Seller and the Purchaser shall exercise their Voting and Procurement
Rights to support the formation of a committee of the Board, no later
than two weeks from the Effective Time, to be called the "Finance
Committee" which shall have the following terms of reference:
(i) to review the proposed budget and 5 year business plan for the
business of HTIL and all other members of the HTIL Group and the
business co-operation arrangement under the Business
Co-operation Agreement (collectively the "HTIL Businesses")
prior to the recommendation to the Board for the annual approval
("Approved Budget");
(ii) to review the quarterly forecasts for the HTIL Businesses prior
to the submission to the Board;
(iii) to review the monthly performance of the HTIL Businesses against
the Approved Budget, and to report to the Board on a regular
basis;
(iv) to review any new business proposals or opportunities that may
materialise for significant investment in new ventures,
acquisitions, disposals, any other equity or asset transactions
or any material investment or divestment to be made by HTIL or
the HTIL Businesses in any existing jurisdiction or market in
which they operate or in any other jurisdiction or market in
which they do not yet operate or have a presence;
(v) to review any proposal relating to any share repurchases or
share issuances or the establishment or creation of any employee
incentive or share option scheme (including any proposals
relating to the issue of options or rights in connection with
incentivising employees or management of any of the HTIL
Businesses pursuant to share schemes or option schemes, but
recognising that any decision on these issues will be a matter
for the remuneration committee) by HTIL or any of the HTIL
Businesses, or any mergers, acquisitions or divestitures not
already included within the terms of sub-Clause (iv);
(vi) to review any proposals to relating to any major debt, equity or
other financing (whether a new financing or a refinancing) for
HTIL or the HTIL Group;
(vii) to review any proposal for the payment of dividends by HTIL
and/or any of the HTIL Businesses (excluding any proposal for
the payment of dividends by any listed company within the HTIL
Businesses, other than HTIL); and
(viii) to review any proposals being considered with respect to the
reorganisation or restructuring of the shareholdings and board
of directors of HTIL Businesses (including India Co. due to the
recently enacted foreign direct investment regulations),
14
and to make such recommendations to the Board as may be appropriate with
respect thereto.
3.6 Each of the Seller and the Purchaser undertakes to use its Voting and
Procurement Rights in support of the following:
(i) that the composition of the Finance Committee shall at all times
comprise of four Directors; two of whom shall be Directors who
shall have been nominated by the Purchaser and two of whom shall
be Directors nominated by the Seller, each in accordance with
Clause 3.1;
(ii) that the Finance Committee shall hold regular meetings at least
once in every calendar quarter, with the intention that so far
as practicable, it shall meet once every month;
(iii) that the regulations that shall apply to the meetings and
proceedings of the Finance Committee shall at all times be the
same as those set out in the Articles for regulating the
meetings and proceedings of the Board (so far as applicable),
and except with the consent of the Directors nominated by the
Purchaser for election to the Board, those regulations shall not
be superseded by any regulations imposed by the Board; and
(iv) that the quorum for meetings of the Finance Committee shall be
two Directors, one of whom shall be a Director nominated by the
Purchaser and one of whom shall be a Director nominated by the
Seller.
3.7 If at any time it is proposed that HTIL or any Principal Subsidiary
Company undertake any sale, disposal or other divestment of any shares
(including any voting or economic interest attaching thereto) or of any
other assets (other than in respect of any matter related to the
requirements for India Co. to comply with any applicable law relating to
foreign direct investment requirements in India, or in relation to the
listing of India Co.) and the application of each of the Percentage
Ratios thereto (to the extent applicable) yields a percentage figure
equal to or greater than 5 per cent, ("Substantial Disposal(s)"), and
the Finance Committee is unable to reach consensus with respect to such
Substantial Disposal within 14 days of its being tabled before the
Finance Committee, the matter will be referred to the Chairman and Chief
Executive Officer of OTH and the Group Managing Director of HWL who
shall consult together in good faith to reach an agreed position in
relation to the proposed Substantial Disposal. If the consultation
process produces an agreed outcome, the Seller and the Purchaser shall
exercise their respective Voting and Procurement Rights to support the
attainment of the agreed outcome.
3.8 In the event that an agreed outcome cannot be achieved under Clause 3.7
within 10 days, the matter will be referred to the Board for
determination, and each of the Seller and the Purchaser shall be free to
exercise its Voting and Procurement Rights as it sees fit in relation to
the matter.
4. RIGHTS TO PROPOSE NOMINEES
4.1 Subject to and on the terms of this Agreement, the Purchaser may propose
at any time one Indian Nominee, one Indonesian Nominee and one
Vietnamese Nominee.
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4.2 Subject to and on the terms of this Agreement, the Seller may propose at
any time up to the maximum number of individuals permitted as Seller's
Nominees.
5. OBLIGATIONS OF THE PURCHASER AND THE SELLER TO PROCURE THE APPOINTMENT
OF NOMINEES
5.1 Upon any proposal being received pursuant to Clauses 4.1 or 4.2, each of
the Purchaser and the Seller shall exercise its Voting and Procurement
Rights to support the appointment of the relevant Indian Nominee,
Indonesia Nominee or Seller's Nominee. Upon a proposal being received to
appoint a Vietnamese Nominee, the Seller shall use its best endeavours
to effect the appointment of the relevant Vietnamese Nominee, provided
that the Seller shall not be required to take any action that would
jeopardise its relationship with Vietnam Co.
5.2 The obligations of the parties under Clause 5.1 in respect of the
initial Purchaser Nominees shall be complied with as soon as reasonably
practicable, and in any event no later than 31 March 2006. If any of the
appointments of the Indian Nominee, the Indonesian Nominee and the
Vietnamese Nominee have not been made by 31 March, 2006, the Seller and
the Purchaser shall continue to exercise their respective Voting and
Procurement Rights to support the appointments of such nominees as soon
as practicable thereafter, and this shall be without prejudice to any
rights the Purchaser may have as the result of any failure by the Seller
to exercise its Voting and Procurement Rights in accordance with this
Agreement to support the appointment of such nominees by 31 March, 2006.
5.3 The obligations of the parties under Clause 5.1 in respect of any
proposals of nominees other than the initial Purchaser Nominees under
Clauses 4.1 or 4.2 shall be complied with as soon as reasonably
practicable.
5.4 In the period prior to any initial appointment of each of the Indian
Nominee and the Indonesian Nominee, the Seller shall exercise its Voting
and Procurement Rights to have a director on each relevant Subsidiary
Board (i) invite one individual nominated by the Purchaser in respect of
each of India Co. and Indonesia Co., to attend and/or participate as an
observer at all board meetings of India Co. and at the meetings of the
board of commissioners of Indonesia Co.; and (ii) send to the Purchaser
(or a person nominated by the Purchaser to the Seller in writing) copies
of all notices of meetings, board papers, written resolutions, minutes
or other written communications (together "Board Papers") sent to the
directors or commissioners of those Subsidiary Boards. Any obligations
under this Clause 5.4 in respect of a Company shall terminate upon the
appointment of a Purchaser Nominee to the Subsidiary Board of that
Company.
5.5 At any time when the Purchaser does not have a person nominated by it on
the board of directors of an Indian Opco or on the board of directors of
Indonesia Co., the Seller shall exercise its Voting and Procurement
Rights (and upon compliance by the Seller with Clause 3 and the
appointment of any Purchaser Nominees, the Purchaser shall exercise its
Voting and Procurement Rights) to support the sending of all Board
Papers of that Indian Opco or of Indonesia Co. (as may be the case) and
all Board Papers which relate to such board to any one individual
(notified by the Purchaser to the Seller in writing) at the same time
and in the same manner as such Board Papers are sent to the directors of
such board.
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5.6 The Purchaser shall have the right, for a period of three months
commencing on 1 July 2006, to require the Seller to exercise its Voting
and Procurement Rights (and upon compliance by the Seller with Clause 3
and the appointment of any Purchaser Nominees, the Purchaser shall
exercise its Voting and Procurement Rights) to support that an
individual recommended by the Purchaser is placed on the board of
directors of some or all of the Indian Opcos and/or the board of
directors of Indonesia Co. as soon as reasonably commercially
practicable. Any appointment under this Clause 5.6 shall be made on the
basis that this Agreement (other than Clause 5.2) applies to such
appointments as if such appointments were an appointment of an Indian
Nominee or, as appropriate, an Indonesian Nominee.
5.7 Where after the Effective Time, the HTIL Group acquires a Subsequent
Indian Opco, then:
(i) if that acquisition occurs on or before 1 July, 2006, the
provisions of Clause 5.6 shall apply thereto; or
(ii) if that acquisition occurs after 1 July, 2006, the provisions of
Clause 5.6 shall apply thereto, provided that the commencement
date of the three month period referred to shall be deferred
until the date of such acquisition.
5.8 If for any reason other than the occurrence of an event that is an Event
of Termination under this Agreement, the Purchaser loses its right to
recommend the nomination of a director to a Subsidiary Board, the
Purchaser shall as from that time, be entitled to the full benefit of
the provisions of Clauses 5.4 and 5.5 with respect to that Company.
6. CONDITIONS OF SUBSIDIARY BOARD APPOINTMENTS
6.1 The obligations of the Seller under Clauses 4 and 5 of this Agreement
are subject to the following conditions having been complied with by the
Purchaser in relation to any Purchaser Nominee prior to any nomination
of such Purchaser Nominee being made by HTIL under this Agreement and to
the continuing compliance by the Purchaser with such conditions
throughout any period during which a Purchaser Nominee is a director of
any Company:
(i) the Purchaser shall ensure that any Indian Nominee shall (i) be
a resident Indian Citizen eligible to hold the post of a
director of India Co. under applicable laws and regulations, and
(ii) shall be in compliance with all applicable Indian legal and
regulatory requirements necessary for his or her appointment and
continuation as a director of India Co. including executing all
necessary documents and taking all necessary actions to effect
and maintain the valid appointment;
(ii) the Purchaser shall ensure that any Indonesian Nominee shall be
in compliance with all applicable legal and regulatory
requirements necessary for his or her appointment and
continuation as a director of the relevant Company including
executing all necessary documents and taking all necessary
actions to effect and maintain the valid appointment;
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(iii) the Purchaser shall ensure that any Vietnamese Nominee shall be
in compliance with all legal and regulatory requirements
(including any relevant contractual requirements under the
Business Cooperation Agreement) necessary for his or her
appointment to the Co-ordinating Committee and continued
membership thereof, including executing all necessary documents
and taking all necessary actions to effect and maintain the
valid appointment.
(iv) the Purchaser shall be in compliance with its undertakings under
Clause 7 (the "Purchaser Undertakings") and no Purchaser Nominee
shall have taken any action which would constitute a breach by
the Purchaser of such undertaking;
(v) the Purchaser shall ensure that each Purchaser Nominee shall
have delivered to the Seller a valid and binding deed of
undertaking acknowledging to the Seller that he or she is aware
of the Purchaser Undertakings and agreeing (i) to act at all
times in a manner that will not cause the Purchaser to be in
breach of the Purchaser Undertakings; and (ii) that, to the
extent that he or she does not so act (in the reasonable opinion
of the Seller), he or she will resign from the board of the
relevant Company upon the request of the Seller with immediate
effect; (iii) in the circumstances described in (ii) of this
sub-Clause (v) or upon any breach by the Purchaser of the
Purchaser undertaking, that he or she irrevocably authorises the
Seller as his or her attorney to date and deliver, on his or her
behalf, the letter of resignation referred to in Clause 6.1(vi)
below upon a request by the Seller that he or she resigns; and
(iv) that he or she will be bound by the terms of the
confidentiality undertaking contained in Clause 19. The deed of
undertaking shall also contain an acknowledgement and
confirmation from the Seller that the only remedy available to
it against the Purchaser Nominee under the deed of undertaking
shall be specific performance;
(vi) each Purchaser Nominee shall have delivered to the Seller a
signed but undated letter of resignation from any Subsidiary
Board to which they are to be appointed waiving any claims or
rights against the relevant Company (including any right to
compensation); and
(vii) where permitted by local law and regulation an Alternate shall
have been validly appointed by HTIL and be able to act as an
alternate director in relation to each Purchaser Nominee.
6.2 In the event that the Seller reasonably believes that any Purchaser
Nominee is, (applying objective commercial criteria on a basis that HTIL
would apply equally to any nominee of HTIL appointed to any Subsidiary
Board), unsuitable to become, or has become unsuitable to remain, a
Purchaser Nominee, the Seller shall, after consultation with OTH, have
the right to require, by written notice, that the Purchaser procure the
resignation of such Purchaser Nominee and provide a new Purchaser
Nominee for that Company to be appointed in accordance with this
Agreement.
6.3 If the Purchaser disagrees with the removal of a Purchaser Nominee under
Clause 6.2, the managing director of the Seller shall consult with the
managing director (or equivalent) of the Purchaser and both parties
shall act in good faith to attempt to resolve any disagreement, provided
that time shall be of the essence in relation to such consultation
(taking into account the commercial circumstances at the time).
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6.4 A Purchaser Nominee or Seller's Nominee shall be, in all respects, an
appointment made by HTIL and shall be a nominee of HTIL acting in its
best interests, and any such nominees shall be appointed on the same
basis as any other director of a Company nominated by HTIL (including
any Seller's Nominee) in relation to any duties to account to HTIL for
any remuneration, fees, expenses, founder's shares, share options or
other benefits of any nature to which they may be entitled by reason of
their appointment as a Purchaser Nominee or Seller's Nominee.
7. PURCHASER UNDERTAKINGS
7.1 The Purchaser undertakes and agrees with the Seller that the Purchaser
shall at all times procure that any Purchaser Nominee who is a director
of any Company shall:
(i) subject to Clause 7.2, at all times vote or abstain from voting
at board meetings and in respect of written resolutions (in
which case the vote on a written resolution shall be delivered
promptly), in accordance with the Seller's Nominees; and
(ii) subject to Clause 7.3, ensure that they attend all board
meetings and promptly vote on all written resolutions, or that
their Alternate, if any, is given sufficient notice to enable
such Alternate to attend and vote at such meetings or to vote on
written resolutions.
7.2 If, for any reason, the relevant Purchaser Nominee is unwilling or
unable to act in accordance with the requirements of Clauses 7.1, the
Purchaser shall take, or procure the taking of, all steps necessary to
ensure that the relevant Purchaser Nominee does not attend or vote at
the relevant board meeting in respect of the issue(s) on which they are
unable to vote in accordance with Clause 7.1(i), and is instead
represented at such board meeting by the relevant Alternate in respect
of such matter and that the Alternate is able validly to vote on such
matter.
7.3 In the event that a Purchaser Nominee is unable or unwilling to act in
accordance with the requirements of Clause 7.1 and no Alternate has been
appointed who is able to vote in place of that Purchaser Nominee in
relation to any resolution, the Purchaser Nominee (if in attendance at
the meeting) shall abstain and express no view or opinion on the
relevant matter. In such circumstances, the Purchaser shall be in breach
of its undertakings under this Clause 7 unless:
(i) the Purchaser Nominee, acting reasonably, considers that the
casting of any vote (including by written resolution) as
required by Clause 7.1(i) would constitute a breach of (a)
his/her fiduciary duties or (b) any applicable laws,
regulations, by-laws or statutes, and the Purchaser Nominee has
within 14 days of the date of the relevant act required by
Clause 7.1(i), delivered a notice to the Seller setting out
his/her reasons for his conduct with respect to such act;
(ii) the Purchaser Nominee resigns as a director for a reason that is
related to a matter referred to in Sub-Clause 7.3(i); or
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(iii) the failure of the Purchaser Nominee to comply with any
provision of Clause 7.1 was the result of his/her incapacity
through illness, evidenced within 14 days by a doctor's report
to that effect reasonably acceptable to the Seller.
7.4 If a Purchaser Nominee is required to resign in accordance with this
Agreement, the Seller will give both the Purchaser and OTH notice
requiring that the Purchaser Nominee resign within 14 days of the date
of service of such notice, save that where the circumstances relating to
the requirement for the Purchaser Nominee's resignation are exceptional,
the Seller shall have an immediate right to require the resignation of
that Purchaser Nominee, and, in such circumstances, the Seller shall
provide to the Purchaser promptly a written explanation of the
circumstances requiring it to cause the immediate resignation of such
Nominee. If by the expiry of that 14 day period, the Purchaser or OTH
has not procured such resignation, the Seller shall have an immediate
right to require the resignation of that Purchaser Nominee.
7.5 Subject to Clause 7.6, in the event that a Purchaser Nominee is required
to resign in accordance with this Agreement, the resigning Purchaser
Nominee shall take all actions reasonably necessary of him or her to
ensure the appointment of a replacement director nominated by HTIL in
accordance with this Agreement and to avoid a vacancy arising upon his
or her resignation.
7.6 Where a Purchaser Nominee has resigned, or his/her position has
otherwise become vacant, in circumstances where there has been no event
of termination under this Agreement, the Purchaser shall be entitled to
recommend for nomination any person(s) from time to time become a
Purchaser Nominee in accordance with this Agreement in place of any of
the person(s) recommended by it for appointment to a Subsidiary Board
under Clause 4.1, and upon receipt of such recommendation from the
Purchaser, each of the Purchaser and the Seller shall use its Voting and
Procurement Rights to support the appointment of such Purchaser Nominee.
7.7 OTH and the Purchaser undertake to use their Voting and Procurement
Rights at all times in accordance with the provisions of this Agreement.
8. TERMINATION OF RIGHTS TO APPOINT NOMINEES
8.1 The Purchaser's rights (but not its obligations) under Clauses 4, 5, 6
and 7 of this Agreement shall terminate:
(i) in the event of any breach of the terms of the Purchaser
Undertakings, but such termination shall be without prejudice to
any rights the Seller may have as a result of such breach
whether under this Agreement or otherwise; and
(ii) in the event that any Company is seeking to list on a stock
exchange and, in the view of any reputable investment bank
managing the listing the continuation of Clauses 4, 5, 6 and 7
of this Agreement in relation to such Company would cause the
Company to be in breach of any applicable laws, regulations,
by-laws or statutes, or otherwise prevent the implementation of
the listing, provided that any termination under this Clause
8.1(ii) shall take effect in relation only to the Purchaser
Nominee on the relevant Subsidiary Board and not in relation to
any rights or obligations relevant to any other Purchaser
Nominee.
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8.2 In the event of any termination pursuant to Clause 8.1(ii), the parties
shall work together and use their best endeavours to find, as soon as
reasonably practicable, a mutually acceptable means of conferring upon
the Purchaser and OTH the nearest reasonably practicable equivalent
rights to those which the Purchaser and OTH had in relation to their
Purchaser Nominee.
9. ANTI-DILUTION RIGHTS
9.1 Each of the Seller and the Purchaser shall exercise its Voting and
Procurement Rights to oppose the issue of any Relevant Securities to any
Person who is, or who is an Affiliate of, a Telecommunications Operator,
other than in circumstances where:
(i) the issue of any Relevant Securities is as consideration (in
part or in whole) in return for acquiring a minority interest
(so far as HTIL is concerned) in any company in the HTIL Group;
or
(ii) as consideration for the sale or transfer to any member of the
HTIL Group of any asset (including shares), Relevant Securities
are issued with no rights attaching to them other than such
rights as attach to the Relevant Securities pursuant to the
Articles and general law, provided that the number of Relevant
Securities permitted to be issued under this proviso, in one or
more transactions, shall not exceed (whether upon their
immediate issue or subsequent conversion or exchange or
otherwise, into Shares) in aggregate five per cent. of the total
number of Shares in issue from time to time.
9.2 The parties acknowledge and the Seller and HWL covenant that the level
of the general mandate of HTIL currently in force as granted by the
shareholders of HTIL to the Directors at the 2005 AGM will, with respect
to future general mandates of HTIL, be reduced from 20 per cent to 10
per cent of the Shares in issue as at the date of the approval of the
relevant general mandate, at such time as to be agreed, and each of the
Seller and the Purchaser undertakes to use its Voting and Procurement
Rights to procure, so far as it is able, the proposed reduction in the
general mandate at that time.
10. ACTION WITH RESPECT TO PARTNER
Each of the Purchaser and the Seller covenant to use its Voting and
Procurement Rights to procure that HTIL and Partner co-operate with the
Purchaser to pursue, as soon as reasonably practicable after the Share
Purchase Closing, an application for MOC's consent to the increase in
the Purchaser's attributable shareholding in Partner to a percentage
that is equal to or greater than 10 per cent., resulting from the
acquisition of the Option Shares, and the Purchaser agrees to give HTIL
and Partner all reasonable assistance to obtain the MOC Consent ("MOC
Consent").
11. PURCHASER'S SHARE OPTION
11.1 In consideration of the payment by the Purchaser to the Seller of the
sum of HK$100, receipt of which is acknowledged, the Seller grants to
the Purchaser an option to purchase the Option Shares at the Exercise
Price on the terms and subject to the conditions of this Clause 11.
21
11.2 The price payable by the Purchaser for each Option Share shall be the
higher of:
(i) the average of the closing traded price of a Share for the
thirty (30) trading days on the Stock Exchange immediately prior
to the date of service of the Exercise Notice, and
(ii) HK$11.00 (subject to Adjustment) ("Floor Option Price"), being
the price per Share payable under the Share Purchase Agreement.
11.3 The Purchaser may exercise the Share Option by serving an Exercise
Notice on the Seller during the period beginning on the date that the
Purchaser receives written notice of the MOC Consent or the date of the
Transfer by HTIL (or its subsidiary) of its shareholding in Partner,
whichever occurs first, and ending at midnight on the first anniversary
of the date of Share Purchase Closing. The Share Option may only be
exercised in respect of all (and not some only) of the Option Shares.
11.4 The Option Shares shall be sold by the Seller with all rights as at the
date of Option Closing or in the future thereafter attaching to them
(including the right to receive all dividends, distributions or any
return of capital declared, made or paid on or after that date by
reference to a record date occurring on or after Option Closing).
Additionally, the Seller shall covenant and confirm to the Purchaser (or
its nominee referred to in Clause 11.6) that (i) it has the right to
transfer legal and beneficial title to the Option Shares, and (ii) the
Option Shares are sold and purchased free from all Encumbrances.
11.5 The exercise of the Share Option shall be conditional on the grant of
the MOC Consent or the Transfer by HTIL (or its subsidiary) of its
entire shareholding in Partner, whichever occurs first. The Seller may
waive such condition at any time by notice in writing to the Purchaser.
If the condition has not been fulfilled or waived or HTIL's interest in
Partner is not sold or otherwise disposed of, by the date which falls on
the first anniversary of the date of Share Purchase Closing (or such
later date as the Parties may agree in writing), the Share Option shall
lapse and cease to be of effect, and neither Party shall (provided it
shall have satisfied its obligations in Clause 10) have any rights or
liabilities in respect of the Share Option under this Agreement.
11.6 The Purchaser shall be entitled to nominate a wholly owned subsidiary of
the Purchaser or OTH to purchase the Option Shares, provided that it
shall be a condition of the transfer of Option Shares that the
Purchaser's nominee executes a Deed of Adherence.
11.7 Closing of the sale and purchase of the Option Shares shall take place
at the offices of HWL in Hong Kong at 3.00 p.m. on the date which is the
tenth Business Day after the date of service of the Exercise Notice (or
at such other place and/or time and/or date as the Seller and the
Purchaser may agree). At that time the Seller shall procure the delivery
to the Purchaser of:
(i) a duly executed instrument of transfer or transfers in respect
of the Option Shares in favour of the Purchaser (or its
nominee);
(ii) the share certificate(s) representing the Option Shares; and
(iii) such other documents as may be necessary to enable the Purchaser
(or its nominee) to obtain good title to the Option Shares.
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The Seller's obligation to deliver all of the above documents is subject
to the Seller receiving a written confirmation from the bank nominated
by it to receive the proceeds payable in respect of the Option Shares,
that the full amount of the Option Price for the Option Shares in US$
has been received in immediately available funds. If the Option Price is
the price referred to in Clause 11.2(i), the amount in U.S. Dollars to
be paid at closing shall be determined applying the spot rate of
exchange of Bloomberg at or about 11 am (Hong Kong time) on the Business
Day prior to the Exercise Notice.
11.8 Each of the Purchaser and the Seller undertakes to exercise its Voting
and Procurement Rights to support HTIL delivering to the Purchaser on
Option Closing a certified extract of a written resolution of the
directors of HTIL approving and authorising (i) the Transfer of the
Option Shares pursuant to the exercise of the Share Option and (ii) the
removal from time to time from HTIL's Cayman Islands Register of Members
to its Hong Kong branch Register of Members in respect of all or any of
the Option Shares held by the Purchaser (or held in the name of a
Security Agent pursuant to any security) from time to time following
receipt of the Option Price for the Option Shares by the Seller pursuant
to Clause 11.7 and following delivery of a written notice by the
Purchaser or a Security Agent to HTIL requesting that a removal be
effected and declaring that the holder of the relevant Option Shares (if
someone other than the Purchaser or the Security Agent) is an Affiliate
of the Purchaser.
11.9 For the avoidance of doubt, nothing contained in this Agreement shall
prohibit the Purchaser from buying additional Shares on the market in
accordance with the terms of this Agreement, provided that OTH and the
Purchaser acknowledge that, with reference to a letter dated 30 May,
2004 from the MOC to Partner (a copy of which has been made available to
OTH and the Purchaser) indirect transfers or acquisitions of 10 per cent
or more of the Means of Control (as defined in that letter) in Partner
through the transfer or acquisition of Shares, as a result of public
trading, shall not be considered a breach of the Partner Licence,
subject to full compliance with the conditions set out in articles 3 and
4 of a letter from HTIL dated 27 May, 2004, a copy of which has also
been made available to OTH and the Purchaser shall comply with such
conditions where compliance has the effect of avoiding a breach of the
Partner Licence.
12. STANDSTILL ON DISPOSALS OF SHARES
Subject to Clauses 15.1 and 15.2, each of the Seller and the Purchaser
undertakes with the other that it shall not, and the Seller shall
procure that New Brilliant will not, at any time during the Standstill
Period Transfer any Shares held by it during that period. Any attempt to
effect a Transfer of Shares which is not in compliance with this
Agreement shall be null and void as regards this Agreement.
13. RIGHTS OF FIRST REFUSAL
13.1 Following the Standstill Period, neither the Seller nor the Purchaser
shall, and the Seller shall procure that New Brilliant will not,
directly or indirectly, Transfer any Shares (or solicit any offers to
buy or otherwise Transfer any Shares), except as permitted by Clauses
13, 14 and 15.
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13.2 Subject to Clauses 14 and 15, if at any time either the Seller (which
shall include New Brilliant) or the Purchaser (the "Offeror") desires to
Transfer any Shares (the "Offered Shares"), the other party(ies) (the
"Offeree(s)") shall have a right of first refusal to purchase the
Offered Shares, upon the terms and subject to the conditions of this
Clause 13.
13.3 Prior to any Transfer of Offered Shares, the Offeror shall have
delivered to the Offeree a notice (a "Transfer Notice") containing the
following:
(i) where such Transfer is to be effected as an Off-market
Transaction, (a) a statement to that effect, and (b) a written
bona fide offer which is binding and is not subject to any
condition precedent that is related to the financing of the
acquisition of the Offered Shares, from a third party to
purchase the Offered Shares, stating the name and address of the
proposed purchaser(s) (including the name of any wider group of
companies to which it belongs) (the "Proposed Transferee"), the
number of Shares to be Transferred pursuant to such bona fide
written offer, the purchase price, the terms and conditions upon
which such Shares are proposed to be Transferred, the date of
the proposed Transfer of the Shares and the number of Shares
(the "Retained Shares") that would continue to be held by the
Seller (expressed as a percentage of the total number of Shares
in issue immediately prior to service of the Transfer Notice) on
the assumption that the Transfer of such Shares to the Proposed
Transferee(s) was consummated; or
(ii) where such Transfer is to be effected as an On-market
Transaction, (a) a statement to that effect and (b) the number
of Shares to be sold, and (c) the price at which it is proposed
the Shares be sold.
13.4 After receipt of a Transfer Notice, the Offeree shall have the following
period (the "Offer Period") within which to elect to accept the offer
contained in the Transfer Notice to purchase the Offered Shares on the
same terms and conditions as those set out in the Transfer Notice, which
election shall be made by a written notice delivered by the Offeree to
the Offeror (an "Election Notice"):
(i) where the Transfer of Shares is to be effected as an Off-market
Transaction, 45 days from the date of service of the Transfer
Notice;
(ii) where the Transfer of Shares is to be an On-market Transaction
that would constitute an Unregistered Offering, 10 days from the
date of service of the Transfer Notice; or
(iii) where the Transfer of Shares is proposed to be an On-market
Transaction that would constitute a Registered Offering, 30 days
from the date of service of the Transfer Notice,
provided that if as a consequence of the Transfer of the Offered Shares
to a Proposed Transferee, the Aggregate Holding would thereby be reduced
to 50 per cent. or less of the Shares in issue from time to time, then
the Offeree shall be entitled, with the object of maintaining the
Aggregate Holding above that percentage figure, to accept the offer
contained in the Transfer Notice in respect of part only of the Offered
Shares.
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13.5 If by the expiry of the Offer Period, the Offeree has not served an
Election Notice on the Offeror, or if before that time, the Offeree has
served on the Offeror a written notice that the Offeree does not intend
to exercise its rights of first refusal ("Non-Exercise Notice"), the
Offeror may, within the period commencing on the date of expiry of the
Offer Period, or if earlier, the date of service of a Non-Exercise
Notice (if served) (the "Sale Period Commencement Date"), and ending on
the Sale Period Expiry Date:
(i) where such Transfer is to be effected as an Off-market
Transaction, Transfer the Offered Shares to the Proposed
Transferee on the same terms and conditions as those contained
in the Transfer Notice; or
(ii) where such Transfer is to be effected as an On-market
Transaction, Transfer the Offered Shares on the same terms and
conditions as those set out in the Transfer Notice, save that
that the Transfer shall be effected through an internationally
recognized broker on a best price and best execution basis and
the price at which the Offered Shares shall be Transferred shall
be not less than the sale price set out in the Transfer Notice.
13.6 For the purposes of this Clause 13, the "Sale Period Expiry Date" shall
mean:
(i) where the Transfer of Shares is to be effected as an Off-market
Transaction, the date which is 60 days after the Sale Period
Commencement Date;
(ii) where the Transfer of Shares is to be effected as an On-market
Transaction that would constitute an Unregistered Offering, the
date which is 10 days after the Sale Period Commencement Date;
or
(iii) where the Transfer of Shares is to be effected as an On-market
Transaction that would constitute a Registered Offering, the
date which is 60 days after the Sale Period Commencement Date.
13.7 In the event that:
(i) with respect to a Transfer of Shares that is to be effected
either as an Off-market Transaction or an On-market Transaction,
the Offeror does not Transfer the Offered Shares to the Proposed
Transferee before the expiry of the relevant Sale Period Expiry
Date;
(ii) with respect to a Transfer of Shares that is to be effected as
an Off-market Transaction, the Offeror desires to Transfer the
Offered Shares to a Person other than the Proposed Transferee;
or
(iii) with respect to a Transfer of Shares that is to be effected
either as an Off-market Transaction or an On-market Transaction,
the Offeror desires to Transfer the Offered Shares on terms and
conditions (including as to price) more favourable to the
Proposed Transferee (if any) than those set forth in the
Transfer Notice,
then the Offered Shares shall only be sold by the Offeror by again
complying with all the terms and procedures set forth in this Clause 13.
25
13.8 Upon the giving of an Election Notice, the Offeree will be obligated to
purchase (subject to its rights of nomination referred to in Clause
13.11) and the Offeror will be obligated to sell the Offered Shares to
the Offeree on the same terms and conditions as those contained in the
Transfer Notice.
13.9 The closing of any sale and purchase of Offered Shares under this Clause
13 shall be held at the offices of HWL in Hong Kong at 3.00 p.m. on the
date which is the tenth Business Day after the date that the Offeror and
the Offeree become obligated to buy and to sell the Offered Shares the
subject of any agreement to buy and sell under this Clause 13 (or at
such other place and/or time and/or date as the Offeror and Offeree may
agree).
13.10 At the closing referred to in Clause 13.9, the Offeror shall sell the
Offered Shares with the same covenants and confirmations as are set out
in Clause 11.4 (with respect to the Option Shares), and for the purposes
of such closing, the provisions of Clause 11.7 shall apply mutatis
mutandis, as if incorporated into this Clause.
13.11 The Offeree shall be entitled to nominate any wholly owned subsidiary of
the Offeree or of any holding company of the Offeree that wholly owns
the Offeree, to purchase the Offered Shares, provided that it shall be a
condition of the transfer of the Offered Shares that the Offeree's
nominee executes a Deed of Adherence.
13.12 The Offeror shall promptly notify the Offeree in writing if any Shares
are sold to a Proposed Transferee pursuant to this Clause 13, and shall
confirm in its notice, the name and address of the Proposed Transferee,
the date of the sale of the Offered Shares and the price per Share at
the which they were sold.
14. TAG-ALONG RIGHTS.
14.1 Subject to:
(i) Clause 15.2; and
(ii) the number of Offered Shares comprised in a Transfer Notice
served by the Seller being equal to 10 per cent or more of the
total number of Shares in issue immediately prior to service of
the Transfer Notice,
the Purchaser shall have the right during the Offer Period (which for
clarity shall mean the relevant period referred to in Clause 13.4), to
deliver a written notice to the Seller (a "Tag-Along Acceptance Notice")
requiring the Seller to include in its sale (to the Proposed
Transferee(s) (if the case)), an aggregate number of Shares held by the
Purchaser equal to the number of Purchaser Tag-Along Shares referred to
in Clause 14.3, exercisable by delivering a written notice to the Seller
within the Offer Period, stating therein the number of Shares held by
the Purchaser to be included in such sale. The Seller shall procure that
the sale of the Purchaser Tag-Along Shares shall be effected at the same
price per Share and otherwise on no less favourable terms than those
that apply to the Offered Shares upon their sale by the Seller.
14.2 In the event that the Purchaser has delivered a Tag-Along Acceptance
Notice to the Seller before the expiry of the Offer Period stating that
it desires to include in the Seller's sale (to the Proposed
Transferee(s) (if the case)) its Shares to the extent
26
provided in Clause 14.3, the Seller shall be entitled to sell the
Offered Shares and the Purchaser Tag Along Shares at a price not lower
than that contained in the Transfer Notice and on terms not more
favourable to the Proposed Transferee(s) than were contained in the
Transfer Notice, provided that:
(i) the Purchaser shall not be required to sell the Purchaser Tag
Along Shares unless the Offered Shares are sold to the Proposed
Transferee at the same time; and
(ii) the sale of the Offered Shares and the Purchaser Tag Along
Shares shall have been completed by the expiry of the relevant
period referred to in Clause 14.4 which shall commence on
delivery of a Tag-Along Acceptance Notice, such period to be
determined by whether the sale is to be effected as an
Off-market Transaction, or as an On-market Transaction, and if
by an On-market Transaction, whether it is to be a Registered
Offering or an Unregistered Offering.
14.3 For the purposes of this Clause 14, the maximum number of Shares held by
the Purchaser which it may require the Seller to include in its sale
(the "Purchaser Tag-Along Shares"), shall be as follows:
(i) subject to sub-Clause (ii), where the number of Retained Shares
will be equal to 30 per cent or more of the total number of
Shares in issue immediately prior to service of the Transfer
Notice, such number of Shares as shall be equal to the number of
Shares that the Proposed Transferee actually proposes to
purchase multiplied by a fraction, the numerator of which shall
be the number of Shares owned by the Purchaser and the
denominator of which shall be the number of Shares owned by the
Seller, in each case immediately prior to the date of service of
the Transfer Notice; and
(ii) where the number of Retained Shares will be less than 30 per
cent of the total number of Shares in issue immediately prior to
service of the Transfer Notice, or if the Proposed Transferee is
a Telecommunications Operator, the Purchaser's then entire
holding of Shares.
14.4 If by the expiry of the Offer Period, the Purchaser has not served a
Tag-Along Acceptance Notice on the Seller or HWL (as appropriate) in
accordance with this Clause 14, or if before that time, the Purchaser
has served on the Seller or HWL a written notice that the Purchaser does
not intend to exercise its tag along rights ("No Tag-Along Notice"),
then the Seller may sell the Offered Shares to the Proposed
Transferee(s) on the terms and conditions set out in the Transfer
Notice, provided that such sale is completed within the period
commencing on the date of expiry of the Offer Period, or if earlier, the
date of service of a No Tag-Along Notice (if served), and ending on the
expiry of the relevant period referred to in Clause 13.6, such period to
be determined by whether the sale is to be effected as an Off-market
Transaction, or as an On-market Transaction, and if by an On-market
Transaction, whether it is to be a Registered Offering or an
Unregistered Offering.
14.5 The Seller shall promptly notify the Purchaser in writing of any Shares
that comprised Offered Shares that are sold to a Proposed Transferee
pursuant to this Clause 14, and shall confirm in its notice, the name
and address of the Proposed Transferee, the date of the sale of the
Seller Tag-Along Shares and the price per Share at which they were sold.
27
14.6 If by the expiry of the relevant period provided for in Clause 14.4, the
Seller has not completed the sale of the Offered Shares, the Seller
shall no longer be permitted to sell such Shares pursuant to this Clause
14 without again fully complying with the provisions hereof, and all the
other restrictions on Transfer contained in this Agreement shall again
be in effect.
15. EXCEPTIONS TO THE STANDSTILL, RIGHT OF FIRST REFUSAL AND TAG-ALONG
15.1 Subject to Clause 13, each of the Seller and the Purchaser shall be
entitled during the Standstill Period in one or more transactions, to
Transfer such number of Shares as shall be equal to not more than five
(5) per cent in aggregate of the total number of Shares in issue from
time to time during the Standstill Period, provided that:
(i) the minimum number of Shares that may be Transferred in any
single transaction shall be one per cent of the total number of
Shares in issue as at immediately prior to such Transfer;
(ii) any such Transfer shall be subject to the rights of first
refusal and the rights of first offer set out in Clause 13; or
(iii) any such sale or disposal which is effected as an On-market
Transaction, shall be effected through an internationally
recognized broker on a best price and best execution basis.
15.2 The provisions of Clauses 12, 13 and 14 shall not apply to each of the
following circumstances:
(i) a Transfer of any Shares by OTH or any of its Affiliates or by
any Financing Party, in each case as security for or pursuant to
the exercise by any Financing Party of any right or remedy of
any Financing Party arising out of or in connection with any OTH
Financing, provided that:
(a) any such Transfer of Shares shall not give rise to the
assignment or transfer to a third party buyer or
transferee of the benefit of this Agreement; and
(b) any such third party buyer or transferee of Shares shall
not (in the reasonable opinion of the Financing
Party(ies)) be a Telecommunications Operator; and
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(ii) a Transfer of any Shares by:
(a) the Purchaser to OTH or a direct or indirect wholly
owned subsidiary of OTH; or
(b) the Seller to HWL or a direct or indirect wholly owned
subsidiary of HWL,
provided that:
(A) the transferor of the Shares shall have given to the
Purchaser and OTH or the Seller and HWL (as appropriate)
not less than seven (7) days prior written notice of
such proposed Transfer; and
(B) in the event that the transferee is to cease to be a
direct or indirect wholly owned subsidiary of OTH or HWL
(as the case may be), OTH or HWL (as appropriate) shall
procure that the transferee shall, prior thereto,
transfer all Shares held by the transferee to another
direct or indirect wholly owned subsidiary of OTH or HWL
(as the case may be).
15.3 It shall be a condition of any transfer of Shares under Clause 15.2(ii)
that the transferee of the Shares execute a Deed of Adherence.
15.4 Each of OTH and the Purchaser undertakes to the Seller:
(i) OTH will procure that any financing documentation entered into
by it or any of its Affiliates in connection with any financing
or refinancing of the acquisition of the Sale Shares and/or the
Option Shares that includes the creation of a pledge over the
Sale Shares and/or the Option Shares, shall comply with Clause
15.2(i); and
(ii) it shall give notice to the Seller as soon as practicable when,
in the Purchaser's or OTH's reasonable opinion, there will be an
acceleration of any security in connection with any Sale Shares
and/or Option Shares, or in any situation in which either the
Purchaser or OTH has been notified by the Security Agent or a
Financing Party that such security will be enforced, and in the
same notice the Purchaser shall provide sufficient identity and
contact details of the Security Agent, and so far as either of
them is aware, the Person(s) who represent the interests of the
Financing Parties entitled to benefit from the enforcement of
the security as will enable the Seller to commence discussions
with such Person(s) should the Seller be interested in acquiring
some or all of such Sale Shares and/or Option Shares.
16. HWL's COVENANT WITH RESPECT TO LICENSING OF IP RIGHTS
HWL undertakes that it shall exercise its Voting and Procurement Rights
to procure that none of the licences to use the IP Rights granted by any
HWL IPR Licensing Entity to the HTIL Licensees as are in force as at the
date of this Agreement is terminated or varied or modified to the
detriment of the HTIL Licensees (including the charging of any
royalties) as a consequence of Share Purchase Closing or the exercise of
the Share Option or Share Option Closing.
29
17. ADDITIONAL COVENANTS
THE SELLER AND HWL
17.1 Each of the Seller and, in the case of (i) only, HWL, covenants with the
Purchaser and OTH that:
(i) in the event that any agreement for the sale or purchase of
Shares as between the Purchaser and the Seller (or any of their
respective Affiliates), shall be considered to be a connected
transaction under Chapter 14A of the Listing Rules, that sale or
purchase of Shares shall not be made subject to any term that
its consummation be conditional upon the approval of HWL's
shareholders in general meeting, and the Purchaser's rights
under Clauses 12, 13, 14 and 15 shall not be affected thereby;
and
(ii) neither OTH nor the Purchaser shall incur any obligation or
liability to purchase any shares of any company as a consequence
of the exercise of, or otherwise to comply with, the tag-along
rights granted to NTT DoCoMo, Inc. ("NTT") or NEC Corporation
("NEC") under:
(a) the shareholders' agreement dated 8 November, 2002
entered into by and between HWL, NTT and NEC in relation
to Xxxxxxxxx 3G HK Holdings Limited, Xxxxxxxxx 3G HK
Limited and Xxxxxxxxx 3G Services (HK) Limited, as
amended by agreement of the parties from time to time
including by a letter dated 26 June, 2004 entered into
between NEC and HWL; and
(b) the shareholders' agreement dated 8 November 2002
entered into by and between HWL, NTT and NEC in relation
to Xxxxxxxxx Telephone Company Limited, as amended by
agreement of the parties from time to time including by
a letter dated 26 June 2004 entered into between NEC and
HWL,
and the Seller agrees to indemnify, defend and hold harmless OTH
and the Purchaser from and against any Losses suffered, incurred
or paid, directly or indirectly as a result of, in connection
with or arising out of or relating to such tag along rights and
any claims made thereunder; provided that any such Losses will
not include any costs, expenses, loss or damage incurred by HTIL
which arise as a consequence of the exercise of such tag along
rights.
17.2 HWL covenants with OTH and the Purchaser that it shall at all times take
all such steps as may be required to ensure that:
(i) the Seller complies fully with its obligations under this
Agreement; and
(ii) other than as permitted in accordance with Clauses 11, 13, 14
and 15, the Shares held by the Seller as at the date hereof less
the number of Sale Shares, shall after the Share Purchase
Closing, continue at all times hereafter to be held legally and
beneficially by:
30
(a) the Seller which shall at all times remain a direct or
indirect wholly owned subsidiary of HWL;
(b) one or more other direct or indirect wholly owned
subsidiaries of HWL that will remain at all times direct
or indirect wholly owned subsidiaries of HWL; and/or
(c) HWL directly.
OTH
17.3 OTH covenants with HWL and the Seller that it shall at all times take
all such steps as may be required to ensure that:
(i) the Purchaser complies fully with its obligations under this
Agreement; and
(ii) following the Share Purchase Closing, other than as permitted in
accordance with Clauses 11, 13, 14 and 15, the Sale Shares (and
Options Shares if acquired under Clause 11) shall continue at
all times to be held legally and beneficially by:
(a) the Purchaser, which shall remain a direct or indirect
wholly owned subsidiary of OTH;
(b) one or more other direct or indirect wholly owned
subsidiaries of OTH that will remain at all times direct
or indirect wholly owned subsidiaries of the Purchaser;
and/or
(c) OTH directly.
18. DURATION AND TERMINATION/CESSATION OF RIGHTS
18.1 Subject to this Clause 18, the term of this Agreement shall extend until
terminated by operation of law or by mutual agreement of the parties.
18.2 Termination of this Agreement howsoever occurring shall be without
prejudice to the rights, obligations and liabilities of any party
accrued prior to the termination, and such of the Clauses of this
Agreement as are expressed or designed to have effect after termination
shall continue to be enforceable notwithstanding termination of this
Agreement.
18.3 Subject to Clause 18.5, if at any time the Purchaser and such Persons
permitted to hold Shares pursuant to Clause 17.3, hold less than
570,305,545 Shares (equitably adjusted to take account of any Share
consolidation, sub-division or other event having a similar effect), by
reason of sales or Transfers of Shares by OTH or its Affiliates ("Deemed
12 per cent.") but the Seller and its Affiliates continue to hold not
less than 30 per cent. of the Shares, the rights and the obligations of
the parties under this Agreement shall terminate other than the Seller's
rights under Clauses 11 to 15 and 17 to 32 (all inclusive) and the
relative obligations of the Purchaser and/or its Affiliates thereunder
which shall remain in full force and effect.
31
18.4 This Agreement shall terminate if either the Seller and its Affiliates
or OTH and its Affiliate cease to hold Shares.
18.5 If at any time, the Aggregate Holding is reduced to 50 per cent. or less
of the Shares in issue from time to time, the rights and the obligations
of the parties under Clauses 3, 4, 5, 6, 7, 8 and 9 shall immediately
terminate, but for the avoidance of doubt all other provisions hereof
shall remain in full force and effect.
18.6 Subject to Clause 18.5, if at any time the Seller and its Affiliates
cease to own 30 per cent. or more in aggregate of the Shares but the
Purchaser and its Affiliates continue to hold not less than a Deemed 12
per cent., the rights and the obligations of the parties under this
Agreement shall terminate other than the Purchaser's rights under
Clauses 11 to 15 and 17 to 32 (all inclusive) and the relative
obligations of the Seller and/or its Affiliates thereunder which shall
remain in full force and effect.
18.7 In the event the Purchaser is in default under the Promissory Note, the
Seller shall have the right but not the obligation to terminate this
Agreement.
19. CONFIDENTIALITY AND ANNOUNCEMENTS
19.1 The parties shall (and shall procure that their Representatives and
Affiliates shall), at all times keep confidential and not disclose,
divulge, furnish or make accessible to any Person or use for his or its
own purpose, the Confidential Information. Each Party may disclose any
information relating to this Agreement to its investors, legal advisers,
accountants and other professional advisers, but such Party shall
procure that such Persons comply with the foregoing undertaking of
confidentiality. Such undertaking shall not be applicable to information
that is already in the public domain through no fault of the disclosing
party, nor shall it prevent any party from disclosing information either
as required by applicable laws, by any court of competent jurisdiction
or by any Authority having jurisdiction over it; provided that, if
disclosure of any Confidential Information is required by any such laws
or any such authority, the party which is required to make such
disclosure shall give the other parties prompt written notice of such
requirement prior to such disclosure.
19.2 No party shall make or release to any Person any announcement concerning
this Agreement or the transactions contemplated by this Agreement
without the prior consent in writing (such consent not to be
unreasonably withheld or delayed) of the other parties to this Agreement
as to the contents thereof and the place, manner and timing of its
presentation and publication; provided that nothing shall restrict the
making by any party (even in the absence of agreement by the other
parties) of any announcement which may be required by applicable law, by
any court of competent jurisdiction or by any Authority; provided
further that, if an announcement is required by any such laws or any
such Authority, the party which is required to make such announcement
shall give the other Parties prompt written notice of such requirement
prior to such disclosure and assistance in obtaining an order resisting
such public announcement.
20. ASSIGNMENT
20.1 No party may assign or transfer any of the rights or obligations of that
party under this Agreement except to the extent expressly permitted
under this Clause 20.
32
20.2 Subject to Clause 15.2(i), the Purchaser shall be entitled to assign the
full benefit of this Agreement, to the fullest extent lawfully
permissible:
(i) to a Proposed Transferee of the Purchaser where prior to the
expiry of the Offer Period, the Purchaser (as Offeror) has not
received either an Election Notice or a Non-Exercise Notice from
the Seller; and/or
(ii) to OTH or a direct or indirect wholly owned subsidiary of OTH as
referred to in Clause 15.2(ii).
20.3 The Seller shall be entitled to assign the full benefit of this
Agreement, to the fullest extent lawfully permissible, to a direct or
indirect wholly owned subsidiary of HWL as referred to in Clause
15.2(ii).
20.4 It shall be a condition of an assignment made under the terms of Clauses
20.2(ii) or 20.3 that the assignee of the benefit of this Agreement
shall execute a Deed of Adherence, failing which any attempted
assignment hereof shall be null and void.
21. FURTHER ASSURANCE
Each of the parties shall from time to time and at their own cost do,
execute and deliver or procure to be done, executed and delivered all
such further acts, documents and things required by, and in a form
satisfactory to, another party or the other parties to give full effect
to this Agreement and to the respective rights, powers and remedies of
the parties under this Agreement.
22. ENTIRE AGREEMENT
This Agreement, together with each other Transaction Documents,
constitutes the whole agreement between the parties and supersedes any
previous arrangements or agreements between them relating to the Shares.
23. SEVERANCE AND VALIDITY
If any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, such
provision shall be deemed to be severed from this Agreement and the
parties shall replace such provision with one having an effect as close
as possible to the deficient provision. The remaining provisions will
remain in full force in that jurisdiction and all provisions will
continue in full force in any other jurisdiction.
24. VARIATIONS
No variation of this Agreement shall be effective unless in writing and
signed by the parties.
25. REMEDIES AND WAIVERS
25.1 It is hereby agreed and acknowledged by the parties that it will be
impossible to measure in money the damages that would be suffered by any
party if another party fails to comply with any of the obligations
herein imposed on it and that in the event
33
of any such failure, the innocent party(ies) will be irreparably damaged
and will not have an adequate remedy at law. The innocent party(ies)
shall, therefore, be entitled to injunctive relief, including, specific
performance, to enforce such obligations, and if any action should be
brought in equity to enforce any of the provisions of this Agreement,
the party(ies) in default shall not raise the defence, that there is an
adequate remedy at law. Such remedies shall not be deemed to be
exclusive remedies for the breach of this Agreement but shall be in
addition to all other remedies available at law or in equity.
25.2 No waiver of any right under this Agreement or any other Transaction
Document shall be effective unless in writing. Unless expressly stated
otherwise a waiver shall be effective only in the circumstances for
which it is given.
25.3 No delay or omission by any party in exercising any right or remedy
provided by law or under this Agreement shall constitute a waiver of
such right or remedy.
25.4 The single or partial exercise of a right or remedy under this Agreement
shall not preclude any other nor restrict any further exercise of any
such right or remedy.
25.5 The rights and remedies provided in this Agreement are cumulative and do
not exclude any rights or remedies provided by law.
26. THIRD PARTY RIGHTS
This Agreement is made for the benefit of the parties, their successors
and permitted assigns and is not intended to benefit or be enforceable
by any other person.
27. PAYMENTS
27.1 Any amount payable by the Seller or HWL to the Purchaser or OTH, or by
the Purchaser or OTH to the Seller or HWL shall be made in full without
set-off or counter-claim and free from any deduction or withholding
whatsoever, except as required by law.
27.2 If any payment to be made under this Agreement is subject to any
deduction or withholding, the payer shall increase the amount of the
payment to the recipient to the extent necessary to ensure that the net
amount received and retained by the recipient (after taking into account
all deductions or withholdings) is equal to the amount it would have
received had the payment not been subject to any such deductions,
withholdings or Tax.
28. COSTS AND EXPENSES
Except as provided otherwise, each party shall pay its own costs and
expenses in connection with the negotiations, preparation and
performance of this Agreement and the other Transaction Documents.
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29. NOTICES
29.1 Any notice or other communication to be given under or in connection
with this Agreement ("Notice") shall be in the English language in
writing and signed by or on behalf of the party giving it and marked for
the attention of the relevant party. A Notice may be delivered
personally or sent by fax, pre-paid recorded delivery or pre-paid
registered airmail to the address or fax number provided in Clause 29.3.
29.2 A Notice shall be deemed to have been received:
(i) at the time of delivery if delivered personally;
(ii) at the time of transmission if sent by fax;
(iii) two Business Days after the time and date of posting if sent by
pre-paid recorded delivery; or
(iv) five Business Days after the time and date of posting if sent by
pre-paid registered airmail,
provided that if deemed receipt of any Notice occurs after 6.00 p.m. or
is not on a Business Day, deemed receipt of the Notice shall be 9.00
a.m. on the next Business Day. References to time in this Clause 29 are
to local time in the country of the addressee.
29.3 The addresses and fax numbers for service of Notice are:
Seller:
Name: Xxxxxxxxx Telecommunications Investment
Holdings Limited
Address: x/x 00xx Xxxxx, Xxxxxxxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxxx Xxxx
For the attention of: The Company Secretary
Fax number: (000) 0000 0000
HWL:
Name: Xxxxxxxxx Whampoa Limited
Address: 00xx Xxxxx, Xxxxxxxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxxx Xxxx
For the attention of: The Company Secretary
Fax number: (000) 0000 0000
Purchaser:
Name: Orascom Telecom Eurasia Limited
Address: c/o 2005A Nile City Towers
Cornish El Xxxx
Xxxxxx Xxxxxxx - 00000
Xxxxx
Xxxxx
35
For the attention of: Xx. Xxxxxx Xxxxxxx
Fax number: 000 000 0000
With a copy to: Orascom Telecom Holding S.A.E.
Address: 2005A Nile City Towers - South Tower
Cornish El Xxxx
Xxxxxx Xxxxxxx - 00000
Xxxxx
Xxxxx
Attn: Legal Department
Fax number: 000 000 0000
OTH
Name: Orascom Telecom Holding S.A.E.
Address: 2005A Nile City Towers
Cornish El Xxxx
Xxxxxx Xxxxxxx - 00000
Xxxxx
Xxxxx
For the attention of: Xx. Xxxxxx Xxxxxxx, Chairman & CEO
Fax number: 000 000 0000
With a copy to: Orascom Telecom Holding S.A.E.
Address: 2005A Nile City Towers - South Tower
Cornish El Xxxx
Xxxxxx Xxxxxxx - 00000
Xxxxx
Xxxxx
Attn: Legal Department
Fax number: 000 000 0000
29.4 A party shall notify the other parties of any change to its address in
accordance with the provisions of this Clause 29 provided that such
notification shall only be effective on the later of the date specified
in the notification and 5 (five) Business Days after deemed receipt.
30. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
parties on different counterparts, but shall not be effective until each
party has executed and delivered at least one counterpart. Each
counterpart shall constitute an original of this Agreement but all the
counterparts shall together constitute one and the same Agreement.
Delivery of a facsimile executed counterpart of the signature page of
this Agreement shall be effective as delivery of an original executed
counterpart of this Agreement.
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31. GOVERNING LAW AND JURISDICTION
31.1 This Agreement shall be governed by and construed in accordance with
English law.
31.2 The parties irrevocably agree that the courts of England are to have
non-exclusive jurisdiction to settle any dispute which may arise out of
or in connection with this Agreement and proceedings in respect of any
dispute may be brought in such courts.
32. AGENT FOR SERVICE OF PROCESS
32.1 Each of the Seller and HWL irrevocably appoints Xxxxxxxxx Whampoa Agents
(UK) Limited of Xxxxxxxxx House, 0 Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxx XX00
0XX, Xxxxxx Xxxxxxx. Each of the Purchaser and OTH irrevocably appoints
Law Debenture Corporate Services Limited of Xxxxx Xxxxx, 000 Xxxx
Xxxxxx, Xxxxxx, Xxxxxxx XX0X 0XX, in each case as its agent for service
of process in England.
32.2 If any person appointed as agent for service of process ceases to act as
such the relevant party shall immediately appoint another person to
accept service of process on its behalf in England and notify the other
parties of such appointment. If it fails to do so within 10 (ten)
Business Days any other party shall be entitled by notice to the other
parties to appoint a replacement agent for service of process.
IN WITNESS WHEREOF each party has signed under hand or executed this Agreement
(as appropriate), or caused this Agreement to be signed under hand or executed
(as appropriate) by its duly authorised representatives on the day and year
first above written.
37
SCHEDULE 1
(Clauses 11.6, 13.15, 15.3 and 20.4)
DEED OF ADHERENCE
THIS DEED OF ADHERENCE is made on the [ ]
BY [ ] of [ ] (the "New Shareholder")
SUPPLEMENTAL to a Shareholders' Agreement (the "Agreement") dated 21 December,
2005 and made between (1) Xxxxxxxxx Telecommunications Investment Holdings
Limited ("HTIHL"),(2) Xxxxxxxxx Whampoa Limited ("HWL"), (3) Orascom Telecom
Eurasia Limited ("OTEL") and (4) Orascom Telecom Holding S.A.E. ("OTH").
BACKGROUND
(A) The New Shareholder wishes to acquire from [ ] (the "Transferor") [ ]
Shares (the "Shares") in Xxxxxxxxx Telecommunications International
Limited (the "Company").
(B) The Agreement governs the relationship between HTIHL, HWL, OTEL and OTH,
in the case of HTIHL and OTEL as shareholders in HTIL.
(C) Under the terms of the Agreement, the New Shareholder is obliged to
execute a Deed of Adherence in the form of this Deed prior to being
registered as the holder of the Shares.
NOW THIS DEED WITNESSES as follows:
1. DEED SUPPLEMENTAL TO SHAREHOLDERS AGREEMENT
1.1 This Deed is supplemental to the Agreement.
1.2 Terms defined in the Agreement shall have the same meanings when used in
this Deed.
2. INTRODUCTION OF THE NEW SHAREHOLDER
2.1 The New Shareholder confirms that it has received a copy of the
Agreement.
2.2 The effect of execution of this Deed by the New Shareholder shall be to
constitute the New Shareholder an additional party to the Agreement with
effect from its registration as the holder of the Shares, having the
rights and benefits given by the Agreement to the Transferor immediately
prior to the transfer of the Shares to the New Shareholder.
2.3 In consideration of the benefits to be acquired by the New Shareholder
arising from its execution of this Deed, the New Shareholder hereby
undertakes that with effect from its registration as the holder of the
Shares it shall be bound by, and shall observe and perform, the
obligations and restrictions applicable to, or imposed by the Agreement
on, him as the holder of the Shares to the extent that they fall to be
observed or performed upon or after such registration.
38
2.4 This Deed is made for the benefit of the parties and every person who,
on or after the date of this Deed, adheres to the Agreement.
3. NOTICES
The address to which any notice to be served on the New Shareholder in
accordance with Clause 29 of the Agreement may be sent shall be the
address specified in respect of the New Shareholder at the head of this
Deed (or such other address as it may specify by notice to the other
Parties in accordance with that Clause).
4. GOVERNING LAW
4.1 This Deed shall be governed by and construed in accordance with English
law.
4.2 The parties irrevocably agree that the courts of England are to have
non-exclusive jurisdiction to settle any dispute which may arise out of
or in connection with this Deed and proceedings in respect of any
dispute may be brought in such courts.
IN WITNESS the New Shareholder has duly executed this Deed Poll on the above
date.
THE COMMON SEAL of )
[ ] LIMITED )
was hereunto affixed )
in the presence of: )
39
SCHEDULE 2
FORM OF EXERCISE NOTICE
(Clause 11.3)
[ ], 200[ ]
To: Xxxxxxxxx Telecommunications Investment
Holdings Limited
EXERCISE NOTICE
Dear Sirs,
We, refer to the Agreement dated 21 December, 2005 (the "Shareholders
Agreement") entered into by and between you and us, and HWL and OTH. Capitalised
terms used herein and not otherwise defined herein shall have the meanings given
to them in the Shareholders Agreement.
This notice constitutes an Option Notice served under clause 11.3 of the
Shareholders Agreement. We hereby give notice of exercise of the Option pursuant
to Clause 11.3.
The price per Option Share shall be US$[ ], being [the average of the
closing traded price of a Share for the thirty (30) trading days on the Stock
Exchange immediately prior to the date of service of this Notice. The Option
Price has been determined applying an exchange rate of HK$[ ]:US$1.00, being the
spot rate of exchange of Bloomberg at or about 11 am (Hong Kong time) on [ ]
[the Business Day prior to the Exercise Notice]]
OR
[the price per Share paid under the Share Purchase Agreement].
Closing of the sale and purchase of the Option Shares will take place on [ ].
Yours faithfully
For and on behalf of
Orascom Telecom Eurasia Limited
--------------------------------------
[Name of signatory]
[Title]
40
SCHEDULE 3
ADJUSTMENT PROVISIONS
(Clause 11.2(ii))
1. If any of the events in paragraph 2 occurs, such adjustments (if any)
shall be made as may be required to the amount of the Floor Option
Price, so as to preserve as far as possible the equivalent economic
value of the rights of the Purchaser immediately prior to the relevant
event having regard to any diluting or concentrating effect of the
relevant event and the redesignation of, or replacement with any other
securities of, the Shares.
2. The events referred to in paragraph 1 are the occurrence of any of the
following in relation to the Shares:
(a) a sub-division, consolidation or reclassification of, or
a change in, the Shares;
(b) a distribution (whether by way of bonus, capitalisation
or similar issue or otherwise) by HTIL to existing
holders of the Shares of (i) additional Shares or (ii)
other share capital or securities or (iii) securities,
rights or warrants granting the right to a distribution
of Shares or to purchase, subscribe or receive Shares or
any other shares or securities or assets (other than the
payment of a cash dividend);
(c) an issue of Shares or other securities at a price that
is less than the then market price for those Shares or
securities;
(d) the consolidation, amalgamation or merger of HTIL with
or into another entity; or
(e) any event in respect of the Shares analogous to any of
the foregoing events or otherwise having a diluting or
concentrating effect on the market value of the Shares.
3. If any event or circumstance as described in paragraph 2 shall occur or
arise which in the Purchaser's opinion, should result in an adjustment
to the amount of the Floor Option Price, the Purchaser may notify the
Seller in writing of its proposed adjustment with respect thereto
("Adjustment Notice") and the date from which it should become
effective.
4. The nature and the amount of any adjustment required to be made in
accordance with paragraph 1 above shall be agreed between the parties
within 21 days of the date of service of an Adjustment Notice, or,
failing such agreement, such amount as shall be determined by a
reputable international investment bank ("Bank"), agreed upon between
them, to be fair and reasonable applying then current market practice
for the making of any such determination (the "Determination"). If the
Purchaser and the Seller cannot agree upon the appointment of a Bank
within 14 days of the expiry of the 21 day period referred to above, the
appointment shall, upon request by either the Purchaser or the Seller,
be made by the President of the Hong Kong Institute of Certified Public
Accountants.
41
5. Whenever a matter is, in accordance with paragraph 4, referred for a
Determination, such matter shall be determined by the Bank acting as
expert and its determination shall, in the absence of manifest error, be
conclusive and binding on the Purchaser and the Seller.
6. Any adjustment made to the amount of the Floor Option Price shall have
effect from the date of the relevant event in paragraph 2 or, if
earlier, the record date for that event.
7. The fees and expenses of the Bank shall be borne by the party whom the
Bank decides against. If the Determination does not confirm the proposed
amount of the adjustment submitted to the Bank by either of the Seller
or the Purchaser (a "Proposed Adjustment Amount"), but falls between the
parties' Proposed Adjustment Amounts (the "Determination Amount"), the
fees and expenses of the Bank for making its Determination shall be
apportioned between the Seller and the Buyer on a pro-rata basis
determined with reference to the difference between the each party's
Proposed Adjustment Amount and the Determination Amount relative to
overall difference between the each party's Proposed Adjustment Amount.
42
SCHEDULE 4
PRINCIPAL SUBSIDIARY COMPANIES
1. Xxxxxxxxx Essar Limited
2. Xxxxxxxxx Essar Mobile Services Limited
3. Xxxxxxxxx Telecom East Limited
4. Fascel Limited
5. Aircel Digilink India Limited
6. Xxxxxxxxx Essar South Limited
7. Xxxxxxxxx Telecommunications (Hong Kong) Limited
8. Xxxxxxxxx Global Communications Holdings Limited
9. BFKT (Thailand) Limited
10. Xxxxxxxxx CAT Wireless MultiMedia Limited
11. Partner Communications Company Limited
12. PT Xxxxxxxxx XX Telecommunications
13. Xxxxxxxxx Telecommunications (Vietnam) S.a.r.l.
14. PKNS (Thailand) Limited
15. Xxxxxxxxx Wireless Multimedia Holdings Limited
16. Xxxxxxxxx Telephone Company Limited
17. Xxxxxxxxx 3G Services (HK) Limited
18. Xxxxxxxxx Telephone (Macau) Company Limited
43
SHAREHOLDERS' AGREEMENT SIGNATURE PAGE (1)
SIGNED by /s/ Xxxxx X. Xxxx )
----------------------------
)
for and on behalf of )
XXXXXXXXX TELECOMMUNICATIONS )
INVESTMENT HOLDINGS LIMITED )
in the presence of: ) Signature: /s/ Xxxxx X. Xxxx
--------------------------
Witness
Signature: /s/ Xxxx Xxxx
---------------------------
Name: Xxxx Xxxx
---------------------------
Address: Linklaters London /s/ Xxxxx Xxxx [SEAL]
--------------------------- --------------------------
Xxxxx Xxxx
--------------------------- Director
Occupation: Trainee Solicitor
---------------------------
THE COMMON SEAL OF )
)
) Name: Xxxxx Xxxx
--------------------------
XXXXXXXXX WHAMPOA LIMITED )
was hereunto affixed in the presence of:) Signature: /s/ Xxxxx Xxxx
--------------------------
Company Secretary
Witness
Signature: /s/ Xxx Sin Xx, Xxxxxxxxx
---------------------------
Name: Xxx Sin Xx, Xxxxxxxxx
---------------------------
Address: Solicitor, Hong Kong SAR
---------------------------
---------------------------
Occupation:
---------------------------
SIGNED by /s/ Aldo Mareuse )
---------------------------
)
for and on behalf of )
ORASCOM TELECOM EURASIA LIMITED )
in the presence of: ) Signature: /s/ Aldo Mareuse
--------------------------
Witness
Signature: /s/ F. Xxxxx Xxxxxxx
---------------------------------
Name: F. Xxxxx Xxxxxxx
---------------------------------
Address: White & Case, 0 Xxx Xxxxx Xxxxxx
---------------------------------
Xxxxxx XX0X XXX
---------------------------------
Occupation: Attorney
---------------------------------
44
SHAREHOLDERS' AGREEMENT SIGNATURE PAGE (2)
SIGNED by /s/ Xxxxxx Xxxxxxx )
)
for and on behalf of )
ORASCOM TELECOM HOLDING S.A.E. )
in the presence of: ) Signature: /s/ Xxxxxx Xxxxxxx
--------------------------
Witness
Signature: /s/ Xxxx X. Xxxxxxx Elfaham
---------------------------
Name: Xxxx X. Xxxxxxx Elfaham
---------------------------
Address: 00 Xx Xxxxx Xxxxxx
---------------------------
Xxxxxxxxxx, Xxxxx, Xxxxx
---------------------------
Occupation: Attorney At Law
---------------------------
45
TABLE OF CONTENTS
Page
----
1. INTERPRETATION............................................................1
2. SUPPORT..................................................................13
3. CORPORATE GOVERNANCE RIGHTS AT HTIL LEVEL................................13
4. RIGHTS TO PROPOSE NOMINEES...............................................15
5. OBLIGATIONS OF THE PURCHASER AND THE SELLER TO PROCURE THE
APPOINTMENT OF NOMINEES..................................................16
6. CONDITIONS OF SUBSIDIARY BOARD APPOINTMENTS..............................17
7. PURCHASER UNDERTAKINGS...................................................19
8. TERMINATION OF RIGHTS TO APPOINT NOMINEES................................20
9. ANTI-DILUTION RIGHTS.....................................................21
10. ACTION WITH RESPECT TO PARTNER...........................................21
11. PURCHASER'S SHARE OPTION.................................................21
12. STANDSTILL ON DISPOSALS OF SHARES........................................23
13. RIGHTS OF FIRST REFUSAL..................................................23
14. TAG-ALONG RIGHTS.........................................................26
15. EXCEPTIONS TO THE STANDSTILL, RIGHT OF FIRST REFUSAL AND TAG-ALONG.......28
16. HWL'S COVENANT WITH RESPECT TO LICENSING OF IP RIGHTS....................29
17. ADDITIONAL COVENANTS.....................................................30
18. DURATION AND TERMINATION/CESSATION OF RIGHTS.............................31
19. CONFIDENTIALITY AND ANNOUNCEMENTS........................................32
20. ASSIGNMENT...............................................................32
21. FURTHER ASSURANCE........................................................33
22. ENTIRE AGREEMENT.........................................................33
23. SEVERANCE AND VALIDITY...................................................33
24. VARIATIONS...............................................................33
25. REMEDIES AND WAIVERS.....................................................34
26. THIRD PARTY RIGHTS.......................................................34
27. PAYMENTS.................................................................34
28. COSTS AND EXPENSES.......................................................34
29. NOTICES..................................................................35
30. COUNTERPARTS.............................................................36
31. GOVERNING LAW AND JURISDICTION...........................................37
32. AGENT FOR SERVICE OF PROCESS.............................................37
i
SCHEDULE 1 (CLAUSES 11.6, 13.15, 15.3 AND 20.4)...............................38
SCHEDULE 2 FORM OF EXERCISE NOTICE............................................40
SCHEDULE 3 ADJUSTMENT PROVISIONS..............................................41
SCHEDULE 4 PRINCIPAL SUBSIDIARY COMPANIES.....................................43
ii
