Dated 4 June 2014 SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION and DEUTSCHE BANK AG, HONG KONG BRANCH and J.P. MORGAN SECURITIES PLC SUBSCRIPTION AGREEMENT relating to US$95,000,000 Zero Coupon Convertible Bonds due 2018 convertible into...
Exhibit 4.12
Dated 4 June 2014
SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION
and
DEUTSCHE BANK AG, HONG KONG BRANCH
and
X.X. XXXXXX SECURITIES PLC
relating to
US$95,000,000 Zero Coupon Convertible Bonds due 2018
convertible into ordinary shares of Semiconductor Manufacturing International Corporation
(to be consolidated and form a single series with the US$200,000,000 Zero Coupon Convertible Bonds due 2018 issued on 7 November 2013)
00xx Xxxxx, Xxxxxxxxx Xxxxx
Xxxxxx Xxxx
Xxxx Xxxx
Telephone (000) 0000 0000
Facsimile (000) 0000 0000/2810 1695
Ref: L-215340
Table of Contents
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1 |
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Issue of the Further Bonds and Publicity |
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2 |
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Agreements by the Managers |
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3 |
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Listing |
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4 |
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Representations, Warranties and Indemnity |
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5 |
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Undertakings of the Issuer |
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14 |
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6 |
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Conditions Precedent |
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17 |
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Closing |
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18 |
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8 |
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Commissions and Concession |
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19 |
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9 |
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Expenses |
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19 |
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10 |
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Termination |
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20 |
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11 |
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Survival of Representations and Obligations |
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21 |
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12 |
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Communications |
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13 |
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Currency Indemnity |
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22 |
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14 |
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Contracts (Rights of Third Parties) Xxx 0000 |
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22 |
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15 |
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Governing Law and Jurisdiction |
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16 |
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Counterparts |
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SCHEDULE 1 SELLING RESTRICTIONS |
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SCHEDULE 2 FORM OF CERTIFICATE CONFIRMING NO MATERIAL ADVERSE CHANGE |
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SCHEDULE 3 UNDERWRITING COMMITMENTS FOR THE FURTHER BONDS |
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THIS SUBSCRIPTION AGREEMENT is made on 4 June 2014, BETWEEN:
1 SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION (the “Issuer” or the “Company”);
0 XXXXXXXX XXXX XX, XXXX XXXX BRANCH (“DB”); and
3 X.X. XXXXXX SECURITIES PLC (“JPM”, and together with DB, the “Managers”).
WHEREAS:
(A) The Issuer and the Managers wish to record the arrangements agreed between them in relation to an issue of US$95,000,000 Zero Coupon Convertible Bonds due 2018 (the “Further Bonds”), to be consolidated and from the date of issue of the Further Bonds form a single series with (i) the US$200,000,000 Zero Coupon Convertible Bonds due 2018 issued on 7 November 2013 (the “Original Bonds”) (ii) the US$54,600,000 Zero Coupon Convertible Bonds due 2018 issued to Datang pursuant to a subscription agreement dated 18 December 2013 between Datang and the Issuer and the US$32,200,000 Zero Coupon Convertible Bonds due 2018 issued to CHL pursuant to a subscription agreement dated 18 December 2013 between CHL and the Issuer (the “Original Pre-emptive Bonds” and, together with the Original Bonds and the Further Bonds, the “Bonds”). The Bonds shall, where the context so admits, include Bonds evidenced by a global certificate (the “Global Certificate”) representing the Bonds). Definitive Certificates, if required to be issued, will be in registered form in amounts of US$200,000 and integral multiples of US$100,000 thereof.
(B) The Further Bonds will be convertible at the option of the holder thereof into fully paid ordinary shares of par value US$0.0004 each of the Issuer (the “Shares”) at an initial conversion price of HK$0.7965 per Share.
(C) The Further Bonds are being offered and sold in an institutional offering (the “Offering”) outside the United States in reliance on Regulation S (“Regulation S”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”).
1 Issue of the Further Bonds and Publicity
1.1 Agreement to Issue the Further Bonds: The Issuer agrees to issue the Further Bonds on 24 June 2014, or such later date, not being later than 8 July 2014, as the Issuer and the Managers may agree (the “Closing Date”) to the Managers or as they may direct. The Further Bonds will be subscribed at a price equal to 101.50 per cent. of the principal amount of the Further Bonds (the “Issue Price”) subject to the adjustments referred to in Clause 8 and Clause 9.
1.2 The Contracts: The Issuer will, not later than the Closing Date, enter into (and provide the Managers with a copy of) (1) a supplemental trust deed (the “Supplemental Trust Deed”) amendments as approved by the Managers of the trust deed dated 7 November 2013 (as so amended, the “Trust Deed”) with The Bank of New York Mellon, London Branch as Trustee (the “Trustee”) and (2) a supplemental agency agreement (the “Supplemental Agency Agreement”) as approved by the Managers of a paying, conversion and transfer agency agreement dated 7 November 2013 (as so amended, the “Agency Agreement”) with The Bank of New York Mellon, London Branch (the “Principal Paying Agent”), the Trustee and the agents named in it. The Further Bonds will be issued in accordance with the terms of the Trust Deed and will be in the respective forms set out in its Schedules 1
and 2. This Agreement, the Supplemental Trust Deed and the Supplemental Agency Agreement are together referred to as the “Contracts”.
1.3 Offering Circular: The Issuer undertakes to prepare an offering circular (the “Offering Circular”) to be dated not later than three business days prior to the Closing Date or such other date as may be agreed between the Issuer and the Managers (the “Publication Date”) for use in connection with the offering of the Further Bonds and the listing of the Further Bonds on the Singapore Exchange Securities Trading Limited (the “Singapore Stock Exchange”) and hereby authorises the Managers and their respective affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act (“Regulation D”)) to distribute copies thereof in connection with the offering and sale of the Further Bonds.
1.4 Publicity: The Issuer confirms the arrangements made on its behalf by the Managers for announcements in respect of the Further Bonds to be published on such dates and in such newspapers or other publications as the Issuer may agree with the Managers.
1.5 Conditions: The terms and conditions of the Bonds (the “Terms and Conditions”) are as set out in Schedule 1 of the Trust Deed as will be summarised in the Offering Circular.
1.6 Definitions: In this Agreement (including the recitals), the following expressions shall, unless the context requires otherwise, have the following meanings:
“Announcements” means the First Announcement and the Second Announcement;
“business day” means a day on which banks are open for business in Xxxxxx, Xxx Xxxx Xxxx, Xxxxxxxxx and Hong Kong;
“Company Information” has the meaning given to it in Clause 4.1.9;
“First Announcement” means the announcement dated the date hereof issued by the Company regarding the potential exercise of pre-emptive rights by Datang Holdings (Hongkong) Investment Company Limited (“Datang”) and Country Hill Limited (“CHL”) and the potential participation of Shanghai Industrial Investment (Holdings) Co., Ltd. in the issue of Shares under the Placing Agreement;
“Further Pre-emptive Securities” means any Shares or Bonds to be issued to Datang or CHL pursuant to their respective pre-emptive rights in connection with the issue of Shares and Bonds under this Agreement and the Placing Agreement;
“Material Adverse Effect” has the meaning given to it in Clause 4.1.18;
“Placing Agreement” means a placing and subscription agreement for the issue of 2,590,000,000 Shares entered into between the Issuer, Datang and the Managers on or about the date of this agreement; and
“Second Announcement” means the announcement in relation to the offering of the Further Bonds in the agreed form to be issued by the Company as soon as possible following the execution of this Agreement pursuant to the requirements under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “HK Listing Rules”).
2 Agreements by the Managers
2.1 Subscription: Each Manager agrees to severally (and not jointly) subscribe and pay for, or to procure subscribers to subscribe and pay for, the Further Bonds at the Issue Price less the deductions referred to in Clause 8 and Clause 9 on the Closing Date on the terms of
this Agreement. Each Manager shall subscribe for such amount of Further Bonds as set out opposite its name in Schedule 3 herein.
2.2 Restrictions: Each Manager severally (and not jointly) represents, warrants and agrees that it has complied and will comply with the terms set forth in Schedule 1.
2.3 Agreement Among Managers: The Managers agree as between themselves that they will be bound by and will comply with the International Capital Market Association Standard Form Agreement Among Managers version 2 (the “Agreement Among Managers”) save that Clause 3 thereof shall not apply and as amended in the manner set out below and further agree that references in the Agreement Among Managers to the “Manager” shall mean DB and JPM.
3 Listing
3.1 Application for Listing: The Issuer confirms that it has made or cause to be made an application for the Further Bonds to be listed on the Singapore Stock Exchange and that it will, in accordance with the terms of this Agreement, make or cause to be made an application for the Shares to be issued on conversion of the Further Bonds (the “New Shares”) to be listed on The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”).
3.2 Supply of Information: The Issuer agrees to deliver to the Singapore Stock Exchange copies of the Offering Circular and to take such other steps as may be required for the purpose of obtaining such listing, provided that if such listing has not been obtained by the Closing Date, the Issuer agrees that it shall use reasonable endeavours to obtain a listing of the Further Bonds on the Singapore Stock Exchange or such other stock exchange mutually acceptable to the Managers and the Issuer as soon as practicable following the Closing Date, which shall include the preparation of listing particulars based on the Offering Circular and containing the relevant information required by the relevant stock exchange to obtain such listing.
3.3 Maintenance of Bond Listing: The Issuer will use reasonable endeavours to obtain and maintain such listing for as long as any Bond is outstanding and pay all fees and supply any and all documents, information and undertakings and publish all announcements as required by the Singapore Stock Exchange for such purpose. If, however, they are unable to maintain such listing, having used such endeavours, or if the maintenance of such listing is unduly onerous, the Issuer will instead use reasonable endeavours as soon as reasonably practicable to obtain and thereafter to maintain a listing for the Bonds on such other stock exchange, as is commonly used for the quotation or listing of debt securities, prior to the Closing Date as it may (with the approval of the Managers) decide or, failing such decision, as the Managers may reasonably determine and after the Closing Date in accordance with the terms of the Trust Deed.
3.4 Share Listing: The Issuer will use reasonable endeavours to maintain the listing of the Shares on the Hong Kong Stock Exchange, and to pay all fees and supply any and all documents, information and undertakings and publish all announcements as required by the Hong Kong Stock Exchange for such purpose. If, however, it is unable to maintain such listing, having used such endeavours, the Issuer will instead use reasonable endeavours to obtain and thereafter to maintain a listing for the New Shares on such other stock exchange as it may decide.
4 Representations, Warranties and Indemnity
4.1 The Issuer represents and warrants to and (where applicable) agree with, the Managers that:
4.1.1 Validity of the Further Bonds: the Further Bonds have been duly authorised by the Issuer and, when duly executed, authenticated, issued and delivered in accordance with the other Contracts, the Further Bonds will constitute valid and legally binding obligations of the Issuer;
4.1.2 Status: the Further Bonds (when issued) will constitute direct, unconditional, unsecured and unsubordinated obligations of the Issuer and will at all times rank pari passu without any preference among themselves and with all other present and future direct, unconditional, unsecured and unsubordinated obligations of the Issuer other than those preferred by statute or applicable law and subject to the Terms and Conditions;
4.1.3 Authorised Share Capital: the Issuer has or, prior to the Closing Date will have, sufficient authorised but unissued share capital to satisfy the issue of such number of New Shares as would be required to be issued on conversion of all the Further Bonds at the initial conversion price and shall maintain at all times sufficient authorised but unissued share capital to satisfy the issue of sufficient New Shares at the prevailing conversion price of the Further Bonds;
4.1.4 New Shares: the New Shares, when issued and delivered in the manner contemplated by the Further Bonds and the Trust Deed:
(i) will be duly and validly issued, fully-paid and non-assessable;
(ii) will conform in all material respects to the description thereof to be contained in the Offering Circular;
(iii) will rank pari passu and carry the same rights and privileges in all respects as any other class of ordinary share capital of the Issuer and shall be entitled to all dividends and other distributions declared, paid or made thereon save as provided for in the Terms and Conditions; and
(iv) will be freely transferable, free and clear of all liens, charges, encumbrances, security interests or claims of third parties; and will not be subject to calls for further funds;
4.1.5 Restrictions: there are no restrictions on transfers of the Further Bonds or the voting or transfer of any of the Shares or payments of dividends with respect to the Shares under laws or regulations of the Cayman Islands or Hong Kong, or pursuant to the Issuer’s constitutional documents, or pursuant to any agreement or other instrument to which the Issuer is a party or by which it may be bound;
4.1.6 Capitalisation: the Issuer has an authorised capitalisation as will be set forth in the Offering Circular under the heading “Capitalisation”; and all the outstanding shares of capital stock or other equity interests of each subsidiary of the Issuer have been duly and validly authorised and issued, are fully paid and non-assessable, and all such equity interests are owned directly or indirectly by the Issuer, free and clear of all liens, charges, encumbrances, security interests, restrictions on voting or transfer or claims of any third party;
4.1.7 Listing: all of the currently issued Shares have been duly listed on the Hong Kong Stock Exchange;
4.1.8 Announcements: all statements of fact contained in the Announcements (including but not limited to the disclosure on the use of proceeds) are true and accurate in all material respects as at the respective dates of their publication and all statements of opinion, intention, expectation or estimates of the Directors in relation to the Company and/or any of the Company’s subsidiaries (together with the Company, the “Group”) contained therein (if any) are truly and honestly held and have been made on reasonable grounds after due and careful consideration, and the Announcements do not include an untrue statement of a material fact or omit to state a fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect;
4.1.9 No non-public information: save for the matters set out in the Announcements, the Company is not in possession of any non-public information relating to the Company, any other member of the Group or their respective businesses the release of which could materially affect the trading price of the Shares and there is not in existence any material or information relating to the Company which will be required to be but has not been disclosed by the Company under the HK Listing Rules or the Exchange Act. Without prejudice to the generality of the foregoing, there is no material information (including, without limitation, any information regarding any material adverse change or prospective material adverse change in the condition of, or any actual, pending or threatened litigation, arbitration or similar proceeding involving, the Group) that is not described in the Company’s most recent annual report or subsequent public information releases (the “Company Information”) which information is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Group; the Company Information does not include any untrue statement of a material fact or omit to state any fact necessary in order to make the statements therein not misleading in any material respect;
4.1.10 Information: all information (whether oral, written, electronic or in any other form) supplied by or on behalf of the Company, any other member of the Group or any of their respective officers, directors, employees or advisers, for the purpose of or in connection with the Offering or the Company and all publicly available information and records of the Company since 1 January 2012 (including information contained in annual reports, statutory filings and registrations) is and was, when supplied or published, true and accurate in all material respects and not misleading in any material respect;
4.1.11 Litigation: save as disclosed in the Company Information, there is no claim, litigation, arbitration, prosecution or other legal proceedings or police, legal or regulatory investigation or enquiry in progress or pending or threatened against any member of the Group or any of its properties or (as far as the Company is aware) the Company’s executive directors, officers, properties or employees nor, so far as the Company is aware, is there any claim or any facts or circumstances of a material nature which would give rise to a claim against any member of the Group or any of its properties or the Company’s executive directors, which in any such case would result in a Material Adverse Effect;
4.1.12 No Material Adverse Change: save as disclosed in the Company Information, there has been no material adverse change, or any development involving or reasonably likely to involve a prospective material adverse change, in the condition, financial or otherwise, or the earnings, net assets, business affairs or business prospects (whether or not arising in the ordinary course of business) of the Company or the Group as a whole since 31 December 2013;
4.1.13 Incorporation: each member of the Group is duly incorporated and validly existing under the laws of the place of its incorporation and each member of the Group has power to own its assets and to conduct its business in the manner presently conducted and there has been no petition filed, order made or effective resolution passed for the liquidation or winding up of any member of the Group;
4.1.14 Approvals:
(i) each member of the Group has obtained such certificates, authorisations, licences, orders, consents, approvals or permits (“Approvals”) issued by, and has made all declarations and filings with, all appropriate national, state, local and other governmental agencies or bodies, all exchanges and all courts and other tribunals, domestic or foreign, as are required under the provisions of any applicable law in connection with the operation of its business;
(ii) there is no breach by any member of the Group of the Approvals or provisions of any ordinance, statute or regulation governing such authorisations or licences which would result in a Material Adverse Effect nor is there any reason why any such Approvals should be withdrawn, revoked, modified or cancelled;
4.1.15 Laws and Listing Rules: the Company is not in breach of any rules, regulations or requirements of the Hong Kong Stock Exchange or any applicable laws and, in particular, the Company has complied at all times with the applicable rules and requirements under the Listing Rules and all applicable laws, save for any breach or non-compliance which is not material in the context of the issue and offering of the Further Bonds;
4.1.16 No order or judgment: save as disclosed in the Company Information, there is no order, decree or judgement of any court or governmental agency or regulatory body outstanding or anticipated against any member of the Group which would result in a Material Adverse Effect;
4.1.17 Contingent Liabilities: no material outstanding indebtedness of any member of the Group has become payable or repayable by reason of any default of any member of the Group and no event has occurred or is impending which may result in such indebtedness becoming payable or repayable prior to its maturity date, in a demand being made for such indebtedness to be paid or repaid or in any step being taken to enforce any security for any such indebtedness of any member of the Group which would result in a Material Adverse Effect;
4.1.18 No default: save as disclosed in the Company Information, no member of the Group is a party to or under any obligation which is material and which is of an unusual or unduly onerous nature; no member of the Group is in breach of or in default (nor has event occurred which, with the giving of notice and/or lapse of time
and/or fulfillment of any other requirement would result in a default by the Issuer or any member of the Group) of its constitutional documents or any contract or agreement which, individually or in the aggregate may have or has had a material adverse effect upon the condition, financial or otherwise or the earnings, business affairs or business prospects (whether or not arising in the ordinary course of business) or properties of the Company or of the Group (taken as a whole) or would adversely affect the ability of the Issuer to perform its obligations under the Contracts or which is material in the context of the issue and offering of the Further Bonds (“Material Adverse Effect”);
4.1.19 Offering Circular: on the Publication Date:
(i) the Offering Circular will contain all information with respect to the Issuer, the Group, the New Shares and the Bonds which is material in the context of the issue and offering of the Further Bonds (including the information which, is required by applicable laws of Cayman Islands and according to the particular nature of the Issuer, the Shares and the Further Bonds, is necessary to enable investors and their investment advisers to make an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of the Issuer and of the rights attaching to the Shares and the Bonds);
(ii) the statements contained in the Offering Circular relating to the Issuer and to the Group, will be true and accurate in all material respects and not misleading;
(iii) the opinions and intentions expressed in the Offering Circular with regard to the Issuer and to the Group will be honestly held, have been reached after considering all relevant circumstances and will be based on reasonable assumptions;
(iv) there will be no other facts in relation to the Issuer, the Group, the New Shares or the Further Bonds the omission of which would, in the context of the issue and offering of the Further Bonds make any statement in the Offering Circular misleading in any material respect;
(v) all reasonable enquiries will have been made by the Issuer to ascertain such facts and to verify the accuracy of all such information and statements; and
(vi) the Offering Circular will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
4.1.20 Financial Statements: the consolidated audited financial statements of the Issuer and its consolidated subsidiaries taken as a whole (the “Consolidated Group”) as at and for the three years ended 31 December 2011, 2012 and 2013 and the consolidated financial statements of the Consolidated Group as at and for the three months ended 31 March 2014 provided to the Managers and to be included in the Offering Circular were prepared in accordance with International Financial Reporting Standards (“IFRS”), and pursuant to the relevant laws of, Hong Kong consistently applied and present a true and fair view of the financial position of the
Issuer and of the Consolidated Group as at the dates, and the results of operations and changes in financial position of the Issuer and of the Consolidated Group for the periods in respect of which they have been prepared;
4.1.21 Title:
(i) the Issuer and each member of the Group has good and marketable title to all real property, personal property and any other assets owned by it (including such property or assets as will be described in the Offering Circular) or any rights or interests thereto, in each case as is necessary to conduct the business now operated by it (“Assets”);
(ii) the Issuer and each member of the Group has received all necessary approvals in order to have good and marketable title to its Assets, including without limitation approvals relating to the evaluation, acquisition and perfection of such title; and
(iii) there are no charges, liens, encumbrances or other security interests or third party rights or interests, conditions, planning consents, orders, regulations, defects or other restrictions affecting any of such Assets which could have a material adverse effect on the value of such Assets, or limit, restrict or otherwise have a material adverse effect on the ability of the relevant member of the Group to utilise or develop any such Assets and, where any such Assets are held under lease, each lease is a legal, valid, subsisting and enforceable lease,
in each case except for such defects in title, lack of approvals or lack of leases which would individually or in the aggregate have a Material Adverse Effect;
4.1.22 Validity of Contracts: (i) the Company has power under its constitutional documents to permit its entry into, and perform its obligations under, this Agreement in the manner set out herein and the other Contracts, and (ii) this Agreement (and its performance) has been duly authorised (such authorisation remaining in full force and effect) and executed by and constitutes, and the other Contracts (and their performance) will be duly authorised by the Company prior to the Closing Date and upon execution and delivery prior to or on the Closing Date will constitute, legally binding and enforceable obligations of the Company in accordance with their respective terms, subject to the laws relating to bankruptcy, insolvency, liquidation, possessory liens, rights of set off, reorganisation, amalgamation, merger, consolidation, moratorium or any other laws or legal procedures, whether of a similar nature or otherwise, generally affecting the rights of creditors, and general principles of equity;
4.1.23 Consents: there is no authorisation, consent, approval, licence or notification required for the purposes of or as a consequence of the issue of the Further Bonds, the issue of the New Shares on conversion of the Further Bonds, the carrying out of the other transactions contemplated by the Contracts and the Further Bonds, or the compliance by the Issuer with the terms of the Bonds or the Contracts, either from governmental, regulatory or other public bodies or authorities or courts or from any third party pursuant to any contractual or other arrangement to which the Company or any other member of the Group is a party, except for those which have been, or will on or prior to the Closing Date be,
obtained (including but not limited to the approval for the listing of the Further Bonds on the Singapore Stock Exchange and the approval for the listing of and permission to deal in the New Shares by the Hong Kong Stock Exchange);
4.1.24 Compliance: the execution and delivery of the Contracts, the issue and offering of the Further Bonds, the compliance by the Company with all of the provisions of the Contracts, the issue of the New Shares on conversion of the Further Bonds as well as the consummation of the transactions contemplated in the Contracts do not and will not:
(i) conflict with or result in a breach of any of the provisions of or under, the documents constituting the Issuer or its subsidiaries;
(ii) conflict with or result in a breach or violation of, or result in any third party consent being required under, or constitute a default (nor has any event occurred which, with the giving of notice and/or the lapse of time and/or the fulfillment of any other requirement would result in a default) by the Issuer or any member of the Group under any of the terms or provisions of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant, instrument, to which any member of the Group is a party or by which any of the property or assets of any member of the Group is subject; or
(iii) infringe any existing applicable law, order, rule or regulation, including, without limitation, to the extent applicable, the Companies Ordinance, the Listing Rules, the Takeovers Code or any judgment, authorization decree or order of any court or governmental agency or body or court, domestic or foreign, having jurisdiction over any member of the Group or the property or assets of any member of the Group;
4.1.25 Pre-emptive Rights and Options: except for (i) the issue of Shares under the Placing Agreement (ii) the issue of any Bonds or Shares to be issued upon conversion of Bonds pursuant to any pre-emptive rights arising from the share subscription agreement entered into between the Issuer and CHL dated 18 April 2011 or the share subscription agreement entered into between the Issuer and Datang dated 6 November 2008 (including without limitation the Further Pre-emptive Securities); and (iii) the issue of Shares upon conversion of the Bonds and the Further Bonds; and (iv) the issue of any share options and restricted share units pursuant to any share option schemes adopted in compliance with the Hong Kong Listing Rules and any publicly disclosed equity incentive plans of the Issuer:
(i) there are no outstanding securities issued by the Issuer or its subsidiaries convertible into or exchangeable for, or warrants, rights or options, or agreements to grant warrants, rights or options, to purchase or to subscribe for Shares from the Issuer or its subsidiaries; and
(ii) there are no other or similar arrangements approved by the Board of Directors of the Issuer or a general meeting of shareholders of the Issuer providing for the issue or purchase of Shares or the subscription for Shares;
4.1.26 No Repurchases: the Issuer has not made any repurchases of shares (as defined in the Hong Kong Stock Exchange listing rule 10.06(6)(c))in the 30 day period prior to the date of this Agreement;
4.1.27 No Fiduciary Relationship: the Issuer acknowledges and agrees that (i) the purchase and sale of the Further Bonds pursuant to this Agreement, including the determination of the issue of the Further Bonds and any related discounts and commissions, is an arm’s-length commercial transaction between the Issuer, on the one hand, and the Managers, on the other hand; (ii) in connection with the Offering, the Managers are and have been acting solely as principal and are not the agent or fiduciary of the Issuer or any of its stockholders, creditors, employees or any other party; (iii) the Managers have not assumed nor will it assume an advisory or fiduciary responsibility in favour of the Issuer with respect to the Offering or the process leading thereto (irrespective of whether the Managers have advised or are currently advising the Issuer on other matters) and the Managers have no obligation to the Issuer with respect to the Offering except the obligations expressly set forth in this Agreement; (iv) the Managers and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Issuer; and (v) the Managers have not provided any legal, accounting, regulatory or tax advice with respect to the Offering and the Issuer has consulted its own legal, accounting, regulatory and tax advisors to the extent they deemed appropriate. This Agreement supersedes any prior agreement or understanding (whether written or oral) between the Issuer and the Managers with respect to the subject matter of this Clause;
4.1.28 Anti-Money Laundering: the operations of the Issuer and each member of the Group (except for Brite Semiconductor, Inc) and, to the best of the knowledge of the Issuer (after due and careful enquiry), Brite Semiconductor, Inc and any of the Issuer’s jointly controlled entities are and have been conducted at all times in compliance with all applicable anti-money laundering laws, regulations, rules and guidelines in its jurisdiction and in each other jurisdiction in which such entity, as the case may be, conducts business (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Issuer or any member of the Group and any of their jointly controlled entities with respect to the Money Laundering Laws is pending or, to the best knowledge of the Issuer (after due and careful enquiry), threatened;
4.1.29 No Unlawful Payments: neither the Issuer nor any member of the Group nor any director, officer or employee of, nor, to the best of the knowledge of the Issuer (after due and careful enquiry), any agent, affiliate of or other person acting on behalf of the Issuer or any member of the Group, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), or any other applicable anti-bribery or anti-corruption law or regulation similar to the FCPA (including but not limited to, the UK Bribery Act of 2010), in any other jurisdiction in which the Issuer or any member of the Group operates including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorisation of the payment of any money, or other property, gift, promise to give, or authorisation of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA or any other similar applicable anti-bribery or anti-corruption law or regulation of any such other jurisdiction; and the Issuer and every member of the Group has conducted their businesses in compliance with the FCPA and any other similar applicable anti-bribery or anti-corruption law or regulation of any such other jurisdiction and have instituted and maintain policies and procedures designed to ensure continued compliance with, and prevent violation of, such laws, rules and regulations;
4.1.30 Sanctions: neither the Issuer nor any member of the Group nor any director, officer, or employee of, nor, to the best of the knowledge of the Issuer (after due and careful enquiry), any agent, affiliate of or other person acting on behalf of the Issuer or any member of the Group:
(i) is an individual or entity (a “Person”) currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Government (including but not limited to the designation as a “specially designated national” or “blocked person” thereunder) or any sanctions or requirements imposed by, or based upon the obligations or authorisations set forth in, the U.S. Trading With The Enemy Act, the U.S. International Emergency Economic Powers Act, the U.S. United Nations Participation Act, the Iran Sanctions Act, the Comprehensive Iran Sanctions Accountability and Divestment Act and Section 1245 of the National Defense Authorization Act for Fiscal Year 2012, the U.S. Syria Accountability and Lebanese Sovereignty Act, or the Iran Threat Reduction and Syria Human Rights Act of 2012, all as amended, or any Executive Orders issued in relation to the imposition of sanctions, or any sanctions or measures imposed by the United Nations Security Council, the European Union or Her Majesty’s Treasury (“HMT”) (collectively, the “Sanctions”);
(ii) is located, organised or operating in a country or territory that is the subject of Sanctions;
(iii) has for the past five years engaged in, and is now engaged in any dealings or transactions with any government, person, entity or project targeted by, or located in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions;
(iv) is or has been in violation of or subject to an investigation relating to any Sanctions; and neither the Issuer, the Guarantor nor any member of the Group will directly or indirectly use the proceeds of the offering of the Further Bonds hereunder, or lend, contribute or otherwise make available all or part of such proceeds to any subsidiary, joint venture partner or other Person, for the purpose of financing the activities of or business with any Person currently subject to any Sanctions or operating in any country or territory that is the subject of Sanctions where such operations are in violation of such Sanctions or in any other manner that would result in a violation by any Person (including any Person participating in the offering, whether as underwriter, adviser, investor or otherwise) of Sanctions;
4.1.31 Stabilisation: the Issuer has not issued and will not issue, without the prior consent of the Managers, any press or other public announcement referring to the proposed issue of Further Bonds unless the announcement adequately discloses the fact that the stabilising action may take place in relation to the Further Bonds to be issued and neither the Issuer nor any of its affiliates (as defined in Rule 501(b) of Regulation D), nor any person acting on behalf of any of them has taken or will take, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to cause or result in, the stabilisation in violation of applicable laws or manipulation of the price of any security to facilitate the sale or resale of the Further Bonds;
4.1.32 Foreign Issuer and U.S. Market Interest: the Issuer is a “foreign issuer” (as such term is defined in Regulation S) which reasonably believes that there is no “substantial U.S. market interest” (as defined in Regulation S) in the Issuer’s debt securities or in the Shares or any securities of the same class or series as the Shares;
4.1.33 Directed Selling Efforts: neither the Issuer nor any of its affiliates (as defined in Rule 405 under the Securities Act) nor any persons acting on behalf of any of them (other than the Managers, their affiliates or any person acting on their behalf, as to which no representation is being made) has engaged in any “directed selling efforts” (as defined in Regulation S) with respect to the Further Bonds or the New Shares to be issued upon conversion of the Further Bonds;
4.1.34 No Registration: assuming the compliance by the several Managers with the terms set forth in Schedule 1 under the caption “United States” no registration of the Further Bonds or the New Shares under the Securities Act will be required for the offer, sale and delivery of the Further Bonds by the Managers in the manner contemplated by this Agreement;
4.1.35 Environmental Laws: each member of the Group has complied in all respects with all applicable Environmental Laws, save where any non-compliance would not have a Material Adverse Effect. For the purpose of this Clause 4.1.35, “Environmental Laws” means any and all supra-national, national, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licences, agreements or other governmental restrictions relating to the protection of the environment (including, without limitation, human, animal and plant life, ambient air, surface water, ground water, or land), the protection of property and proprietary rights or for the compensation of harm to the environment whether by clean-up, remediation, containment or other treatment or the payment of monies to any competent authority;
4.1.36 Insurance: the Issuer and each member of the Group has in place all insurance policies necessary and customary for the conduct of their businesses as currently operated and for compliance with all requirements of law, such policies are in full force and effect, and all premiums with respect thereto have been paid, and no notice of cancellation or termination has been received with respect to any such policy, and each member of the Group has complied in all material respects with the terms and conditions of such policies, except where breach of this provision would not have a Material Adverse Effect;
4.1.37 Intellectual Property: the Issuer and each member of the Group owns or possesses, or can acquire on reasonable terms, adequate patents, patent rights, licences, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by it in each country in which it operates as described in the Offering Circular, and neither the Issuer nor any member of the Group has received any notice or is otherwise aware of any infringement of or conflict in any jurisdiction with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Issuer or any member of the Group therein, and which infringement or conflict (if the subject of any unfavourable decision, ruling or finding) or invalidity or inadequacy, individually or in the aggregate, would have a Material Adverse Effect; and
4.1.38 Events of Default or Relevant Event: no event has occurred or circumstance arisen which, had the Further Bonds already been issued, could reasonably be expected to (whether or not with the giving of notice and/or the passage of time and/or the fulfilment of any other requirement): (i) constitute an event described under “Events of Default” in the Terms and Conditions; (ii) a Relevant Event (as defined in the Terms and Conditions) resulting in the entitlement of the Bondholders to exercise the put option under the Bonds; or (iii) require an adjustment of the initial conversion price of the Bonds.
4.2 Repetition: Subject to Clause 10, the representations and warranties contained in, or given pursuant to, Clause 4.1 shall be deemed to have been repeated at the Publication Date and on the Closing Date taking into account facts and circumstances subsisting at such date, references to the “Publication Date” shall be deemed to be the Closing Date.
4.3 Indemnity:
4.3.1 The commitment of each of the Managers under this Agreement being made on the basis of the foregoing representations and warranties and agreements of the Issuer with the intention that such representations and warranties shall remain true and accurate in all respects up to and including the Closing Date and that the agreements shall have been performed on or before the Closing Date and the Issuer undertakes to pay each Manager on demand an amount which on an after tax basis is equal to any liability, damages, cost, claim, loss or expense (including, without limitation, legal fees, costs and expenses) (a “Loss”) incurred by it, its respective subsidiaries, affiliates or any person who controls any of them or any of their respective directors, officers, employees or agents (each an “Indemnified Person”) in respect of or in connection with:
(i) any breach or alleged breach of any of the representations, warranties, undertakings or agreements contained in, or deemed to be made pursuant to, this Agreement or any certificate issued by the Issuer, including (without limitation) the failure by the Issuer to issue the Further Bonds;
(ii) any untrue statement or alleged untrue statement of a material fact contained in the Offering Circular (or any supplement to it), or any omission
or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading;
(iii) the issue and publication of the Offering Circular and any supplementary offering circular and/or any other documentation relating to the offering and sale of the Bonds;
(iv) the performance by the Managers of their respective obligations under this Agreement in relation to the Offering and which do not in any such case arise primarily from that Manager’s own gross negligence, fraud or wilful default as determined by final judgment of a court of competent jurisdiction; or
(v) the failure or alleged failure by the Issuer or any member of the Group or any of their respective directors or officers to comply with any requirements of statute or regulation in relation to the offering and sale of the Further Bonds.
Loss shall include (without limitation) all Losses which an Indemnified Person may incur in investigating, preparing, disputing or defending, or providing evidence in connection with, any litigation, claim, action, proceeding, investigation, demand, judgment or award (each a “Claim”) (whether or not the Indemnified Person is an actual or potential party to such Claim) or in establishing any Claim or mitigating any Loss on its part or otherwise enforcing its rights under this Clause 4.3, which shall be additional and without prejudice to any rights which the Indemnified Person may have at common law or otherwise.
4.3.2 None of the Managers shall have any duty or obligation, whether as fiduciary or trustee for any Indemnified Person or otherwise, to recover any such payment or to account to any other person for any amounts paid to it under this Clause 4.3 and save to the extent notified in writing to an Indemnified Person by that Manager, each Manager (without obligation) will have the sole conduct of any action to enforce such rights on behalf of the Indemnified Person. This Agreement may be terminated, amended or varied in any way and at any time by the parties hereto without the consent of any Indemnified Person.
4.3.3 For the avoidance of doubt, the amount of any claim by the Managers against the Issuer pursuant to Clause 4.3.1 shall be reduced by any amount recovered by an Indemnified Person pursuant to Clause 4.3.2 and vice versa, in respect of the same Loss where it has recovered such Loss from the Issuer under any such Clause.
5 Undertakings of the Issuer
The Issuer undertakes with the Managers that:
5.1 Taxes: the Issuer will pay:
(i) any stamp, issue, registration, documentary or other taxes and duties, including interest and penalties in the Cayman Islands, the United Kingdom, Singapore, Hong Kong, the Grand Duchy of Luxembourg or Belgium and all other relevant jurisdictions payable on or in connection with the creation, issue and offering of the Further Bonds or the execution or delivery of the Contracts; and
(ii) in addition to any amount payable by it under this Agreement, any value added, service, turnover or similar tax payable in respect thereof (and references in this Agreement to such amount shall be deemed to include any such taxes so payable in addition to it);
5.2 Offering Circular: in connection with the offering and sale of the Further Bonds, the Issuer will use reasonable endeavours to co-operate with and participate in the due diligence procedures required to prepare the Offering Circular and prepare an Offering Circular which will enable the Issuer to make the representation in Clause 4.1.19;
5.3 Delivery of Offering Circular: the Issuer will deliver to the Managers, without charge, on the Publication Date and thereafter from time to time as reasonably requested, such number of copies of the Offering Circular and all amendments and supplements thereto as the Managers may reasonably request;
5.4 Amendment: if at any time prior to the date falling the later of (i) 40 days after the Closing Date or (ii) the completion of the distribution of the Further Bonds in the view of the Managers, any event shall have occurred as a result of which the Offering Circular, as then amended or supplemented, would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they are made when such Offering Circular is delivered, not misleading, or if for any other reason it shall be necessary to amend or supplement the Offering Circular, the Issuer will notify the Managers, and, upon reasonable request from the Managers, will prepare and furnish without charge to the Managers as many copies as the Managers may from time to time reasonably request of such amendment or a supplement to the Offering Circular which will correct such statement or omission and the representations and warranties contained in, or given pursuant to, Clause 4.1 will be true and accurate with respect to such amendment or supplement to the Offering Circular as if repeated as at its date;
5.5 Warranties: the Issuer will as soon as reasonably practicable, notify the Managers if at any time prior to payment of the net subscription moneys to the Issuer on the Closing Date anything occurs which renders or may render untrue or incorrect in any respect any of its representations, warranties, agreements and indemnities herein and will as soon as reasonably practicable, take such steps as the Managers may reasonably require to remedy and/or publicise the fact;
5.6 Lock-up: neither the Issuer nor any person acting on its or their behalf will (a) issue, offer, sell, pledge, contract to sell or otherwise dispose of or grant options, issue warrants or offer rights entitling persons to subscribe or purchase any interest in any Shares or securities of the same class as the Bonds or the Shares or any securities convertible into, exchangeable for or which carry rights to subscribe or purchase the Bonds, the Shares or securities of the same class as the Bonds, the Shares or other instruments representing interests in the Bonds, the Shares or other securities of the same class as them, (b) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of the ownership of the Shares, (c) enter into any transaction with the same economic effect as, or which is designed to, or which may reasonably be expected to result in, or agree to do, any of the foregoing, whether any such transaction of the kind described in (a), (b) or (c) is to be settled by delivery of Shares or other securities, in cash or otherwise or (d) announce or otherwise make public an intention to do any of the foregoing, in any such case without the prior written consent of the Managers between the date hereof and the date which is 90 days after the date hereof (both dates inclusive);
except for (i) the issue of any Shares under the Placing Agreement and (ii) the issue of any Bonds or Shares to be issued upon conversion of Bonds pursuant to any pre-emptive rights arising from the share subscription agreement entered into between the Issuer and CHL dated 18 April 2011 or the share subscription agreement entered into between the Issuer and Datang dated 6 November 2008 (including but not limited to the Further Pre-emptive Securities); and (iii) the issue of any Shares to be issued upon conversion of the Bonds; and (iv) the issue of any share options and restricted share units pursuant to any share option schemes adopted in compliance with the Hong Kong Listing Rules and any publicly disclosed equity incentive plans of the Issuer, and (v) the issue of any Shares which are issued as consideration for any merger or acquisition provided that (1) the aggregate value of the Shares issued (as calculated by the Current Market Price (as defined in the Terms and Conditions) is less than US$100,000,000 and (2) the Issuer procures that the person receiving such Shares executes a shareholder lock-up undertaking on substantially the same terms as provided in this Clause prior to any such issue. For the avoidance of doubt, any additional lock-up undertaking entered into pursuant to the above shall only be for a period of 90 days from the date of this Agreement;
5.7 Conversion: the Issuer will issue, in accordance with the Terms and Conditions, New Shares (which rank pari passu with the other Shares then outstanding) free and clear of all liens, claims, charges, security, encumbrances or like interests upon conversion of Further Bonds pursuant to the Terms and Conditions;
5.8 Conversion Price: Except for the issue of any Shares under the Placing Agreement, the issue of Shares under the Original Pre-emptive Bonds, the Further Bonds or Shares to be issued upon conversion of the Bonds as described in the Announcements (including any potential exercise of pre-emptive rights by CHL and Datang), the issue of the Further Pre-emptive Securities, or the issue of share options and restricted share units issued pursuant to any share option schemes adopted in compliance with the Hong Kong Listing Rules and any publicly disclosed equity incentive plans of the Issuer, (i) between the date hereof and the Closing Date (both dates inclusive), neither the Issuer nor any person acting on its or their behalf will take, directly or indirectly, any action designed to or which constitutes or which might reasonably be expected to cause or result in an adjustment of the initial conversion price of the Bonds and (ii) the Issuer will not take any action that would reduce the conversion price of the Bonds below a level that may be prescribed by applicable laws and regulations from time to time (if any);
5.9 Approvals and Filing: the Issuer will use reasonable endeavours to obtain all approvals and consents and as soon as reasonably practicable make all notifications, registrations and filings as may from time to time be required in relation to the Further Bonds and/or the New Shares;
5.10 Clearing Systems: the Issuer shall co-operate with the Managers and use reasonable endeavours to permit the Further Bonds to be eligible for clearance and settlement through the facilities of Euroclear and Clearstream, Luxembourg;
5.11 Use of Proceeds: the Issuer shall use the net proceeds from the issue of the Further Bonds in the manner as will be specified in the Offering Circular under “Use of Proceeds”;
5.12 Sanctions: Neither the Issuer nor any member of the Group will directly or indirectly use the proceeds of the offering of the Further Bonds hereunder, or lend, contribute or otherwise make available all or part of such proceeds to any subsidiary, joint venture partner or other Person, for the purpose of financing the activities of or business with any
Person currently subject to any Sanctions or operating in any country or territory that is the subject of Sanctions where such operations are in violation of such Sanctions or in any other manner that would result in a violation by any Person (including any Person participating in the offering, whether as underwriter, adviser, investor or otherwise) of Sanctions;
5.13 Announcements: between the date hereof and a period of 40 days after the Closing Date (both dates inclusive), the Issuer will, and will cause its subsidiaries and affiliates and all other parties acting on its or their behalf to, without the prior consent of the Managers (unless prevented by applicable law or regulations), not issue any announcement concerning, or which could be material in the context of, the offering and distribution of the Further Bonds except as required by applicable law, regulations or rules (including the HK Listing Rules and Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong));
5.14 Financial Information: so long as any of the Bonds remains outstanding the Issuer will furnish to the Managers, copies of financial statements and other periodic reports that the Issuer may furnish generally to holders of its debt securities;
5.15 Directed Selling Efforts: neither the Issuer nor any of its affiliates (as defined in Rule 405 under the Securities Act), nor any person acting on behalf of any of them (other than the Managers, as to which no representation is being made) will engage in any “directed selling efforts” (as defined in Regulation S) with respect to the Further Bonds or the New Shares to be issued upon the conversion of the Further Bonds; and
5.16 Section 3(a)(9) Compliance: in connection with the conversion of the Further Bonds into the New Shares, neither the Issuer nor any person acting on its behalf will take any action which would result in the New Shares being exchanged by the Issuer other than with the Issuer’s existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange.
6 Conditions Precedent
6.1 The obligations of the Managers to subscribe and pay for the Further Bonds are conditional on:
6.1.1 Due Diligence: the Managers being satisfied with the results of its due diligence investigations with respect to the Issuer and the Group and the Offering Circular shall have been prepared in form and content satisfactory to the Managers;
6.1.2 Other Contracts: the execution and delivery (on or before the Closing Date) of the other Contracts, each in a form reasonably satisfactory to the Managers, by the respective parties;
6.1.3 Lock-up: Datang and CHL shall have executed shareholder lock-up undertakings in the form agreed by the Managers;
6.1.4 Auditors’ Letters: upon the Publication Date and on the Closing Date, there having been delivered to the Managers letters, in form and substance reasonably satisfactory to the Managers, dated the Publication Date in the case of the first letter and dated the Closing Date in the case of the subsequent letters, and addressed to the Managers from Deloitte Touche Tohmatsu, Certified Public Accountants to the Issuer;
6.1.5 Compliance: at the Closing Date:
(i) the representations and warranties of the Issuer in this Agreement being true, accurate and correct at, and as if made on such date;
(ii) the Issuer having performed all of its obligations under this Agreement to be performed on or before such date; and
(iii) there having been delivered to the Managers a certificate in the form attached as Schedule 2, dated as of such date, of a duly authorised officer of the Issuer to such effect;
6.1.6 Material adverse change: after the date hereof or, if earlier, the dates as of which information is given in the Offering Circular up to and at the Closing Date, there not having occurred any change (nor any development or event reasonably likely to involve a prospective change), in the condition (financial or other), prospects, results of operations or general affairs of the Issuer or of the Group, which, in the opinion of the Managers, is material and adverse in the context of the issue and Offering of the Further Bonds;
6.1.7 Other consents: on or prior to the Closing Date there shall have been delivered to the Managers copies of all resolutions, consents, authorities and approvals required in relation to the issue of the Further Bonds and the performance of its obligations under the Trust Deed, the Agency Agreement and the Bonds (including the consents and approvals required from all lenders);
6.1.8 Listing: the Hong Kong Stock Exchange having agreed to list the New Shares upon conversion of the Further Bonds and the Stock Exchange having agreed, subject to any conditions reasonably satisfactory to the Managers, to list the Further Bonds (or, in each case, the Managers being reasonably satisfied that such listing will be granted); and
6.1.9 Legal Opinions: on or before the Closing Date, there having been delivered to the Managers opinions, in form and substance reasonably satisfactory to the Managers, dated the Closing Date, of:
(i) Xxxxxxxxx and May, legal advisers to the Issuer as to English law;
(ii) Xxxxxxx Xxxx & Xxxxxxx (Cayman) Limited, legal advisers to the Issuer as to Cayman Islands law;
(iii) Linklaters, legal advisers to the Managers as to English law; and
(iv) Zhong Lun Law Firm, legal advisers to the Lead Manager as to PRC law.
6.2 Waiver: The Managers may, at their discretion and upon such terms as they think fit, waive compliance with the whole or any part of this Clause 6 (other than 6.1.2).
7 Closing
7.1 Issue of the Further Bonds: At 3:00 pm (Hong Kong time) (or such other time as may be agreed by the Managers and the Issuer) on the Closing Date, the Issuer will issue the Further Bonds and procure the entry in the register of Bondholders of the names of the persons designated by the Managers to be the holders of the Further Bonds and will deliver to the Managers or its order in such place as the Managers may require the Global Certificate duly executed and authenticated representing the aggregate principal amount of the Further Bonds. Delivery of the Global Certificate and completion of the register of Bondholders shall constitute the issue and delivery of the Further Bonds; and
7.2 Payment: Against such delivery the Managers will pay or cause to be paid to the Issuer the net subscription moneys for the Further Bonds (being the aggregate amount payable for the Further Bonds calculated at the Issue Price less the commission and concession referred to in Clause 8 and the amount payable to the Managers under Clause 9). Such payment shall be made by a depositary (the “Common Depositary”) common to Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme, on behalf of the Managers in U.S. dollars in same day settlement funds for value on the Closing Date to such US dollar account in New York City as shall be notified by the Issuer to the Managers not later than five days prior to the Closing Date, evidence of such payment taking the form of a confirmation by the Common Depositary that it has made such payment.
8 Commissions and Concession
The Issuer agrees to pay to the Managers a combined management and underwriting commission and selling concession of 1.90 per cent of the aggregate principal amount of the Further Bonds, which total amount will be retained as to 45 per cent. by DB and as to 55 per cent. by JPM (the “Underwriting Commission”). An additional incentive fee of up to 0.20 per cent. of the aggregate principal amount of the Further Bonds may be payable at the sole discretion of the Issuer to either or both Managers (the “Incentive Fee” and together with the Underwriting Commission, the “Commissions”). Such Commissions shall be deducted from the subscription moneys for the Further Bonds as provided in Clause 7.
9 Expenses
9.1 General Expenses: The Issuer agrees to pay:
(i) all reasonable costs and expenses in connection with (a) the preparation and production of the Offering Circular (in proof and definitive form and any supplement or amendment thereto) and the listing particulars (if any), the Contracts and all other documents relating to the issue of the Further Bonds, (b) the initial delivery and distribution of the Further Bonds, (c) the listing of the Further Bonds on the Stock Exchange and the listing of the New Shares and (d) all advertising in relation to the issue of the Further Bonds approved by the Issuer and the Managers; and
(ii) the documented fees and expenses of the Principal Paying Agent, the Trustee and the other agents appointed under the Agency Agreement in relation to the preparation and execution of the Contracts (including, without limitation, the fees and expenses of the Trustee’s legal advisers), the issue and authentication of the Further Bonds and the performance of their duties under the Contracts.
9.2 Managers’ Expenses: In addition, the Issuer will reimburse the costs and expenses of the Managers in connection with the issue of the Further Bonds, including the reasonable fees and expenses of their legal advisers and all travelling, telecommunications, postage and other out-of-pocket expenses, which the Issuer authorises the Managers to deduct from the subscription moneys for the Further Bonds as provided in Clause 7.2 on the basis that the Managers account to the Issuer for any amount by which such costs and expenses fall short of the sum deducted and the Issuer pays subsequently for any amount by which such costs and expenses exceed the sum deducted.
9.3 Payment: All payments due under this Agreement are to be made in U.S. dollars and are stated exclusive of any applicable tax whether income taxes, withholding taxes, value added taxes, goods and services taxes, business or services taxes or similar taxes other
than taxes imposed in respect of net income by a taxing jurisdiction wherein the recipient is incorporated or resident for tax purposes (“Taxes”). If any deduction or withholding for or on account of Taxes is required to be made from any payment to the Managers, then the Issuer shall pay an additional amount so that the Managers receive, free from any such withholding, deduction, assessment or levy, the full amount of the payments set out herein (other than any profits tax that may arise on the commission payable to the Managers under this Clause 9). The Issuer shall make appropriate payments and returns in respect of such Taxes and provide the Managers with an original or authenticated copy of the tax receipt.
10 Termination
10.1 Ability to Terminate: Notwithstanding anything contained in this Agreement, the Managers may, by written notice to the Issuer given at any time prior to payment of the net subscription monies for the Further Bonds to the Issuer, terminate this Agreement in any of the following circumstances:
10.1.1 if there shall have come to the notice of the Managers any breach of, or any event rendering untrue or incorrect in any respect, any of the warranties and representations contained in this Agreement or any failure to perform any of the Issuer’s undertakings or agreements in this Agreement;
10.1.2 if any of the conditions specified in Clause 6 have not been satisfied or waived by the Managers on or prior to the Closing Date;
10.1.3 if there shall have been, since the date of this Agreement, any change, or any development involving a prospective change, in national or international monetary, financial, political or economic conditions (including any disruption to trading generally, or trading in any securities of the Issuer on any stock exchange or in any over-the-counter market) or currency exchange rates or foreign exchange controls such as would in the opinion of the Managers, be likely to prejudice materially the success of the Offering and distribution of the Further Bonds or dealings in the Bonds in the secondary market;
10.1.4 if, in the opinion of the Managers, there shall have occurred any of the following events: (i) a suspension or a material limitation in trading in securities generally on the New York Stock Exchange, the London Stock Exchange plc, the Singapore Stock Exchange and/or the Hong Kong Stock Exchange and/or any other stock exchange on which the Issuer’s securities are traded; (ii) a suspension in trading in the Issuer’s securities on the Hong Kong Stock Exchange or the Issuer’s American Depositary Receipts on the New York Stock Exchange and/or any other stock exchange on which any of the Issuer’s securities are traded (other than any suspension in connection with the issue of the Further Bonds, or in respect of the transactions described in the Announcement (including any exercise by Datang and CHL of their pre-emptive rights)); (iii) a general moratorium on commercial banking activities in the United States, Singapore, Hong Kong and/or the United Kingdom declared by the relevant authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States, Hong Kong, Singapore or the United Kingdom; or (iv) a change or development involving a prospective change in taxation affecting the Issuer, the Bonds and the Shares to be issued upon conversion of the Bonds or the transfer thereof;
10.1.5 if there shall have occurred any event or series of events (including the occurrence of any local, national or international outbreak or escalation of disaster, hostility, insurrection, armed conflict, act of terrorism, act of God or epidemic) as would in the opinion of the Managers, be likely to prejudice materially the success of the Offering and distribution of the Further Bonds or dealings in the Bonds in the secondary market.
10.2 Consequences of Termination: Upon such written notice being given this Agreement shall terminate and be of no further effect and no party shall be under any liability to any other in respect of this Agreement, except for any antecedent breach and that the Issuer shall remain liable under Clause 4.3 and remain liable for the payment of all costs and expenses referred to in Clause 9 and already incurred or incurred in consequence of such termination, the Managers shall remain liable under Clause 2.2 and the respective obligations of the parties under Clause 11 which would have continued had the arrangements for the subscription and issue of the Further Bonds been completed, shall continue.
11 Survival of Representations and Obligations
The representations, warranties, agreements, undertakings and indemnities in this Agreement shall continue in full force and effect despite completion of the arrangements for the subscription and issue of the Further Bonds or any investigation made by or on behalf of the Managers.
12 Communications
Addresses: Any communication shall be given by letter, fax or telephone in the case of notices to the Issuer, to it at:
Xx. 00 Xxxxxxxxxx Xxxx
Xxxxxx Xxx Xxxx
Xxxxxxxx 000000
The People’s Republic of China
Fax no.: x00 00 0000 0000 (ext. 18017)
Attention: Xxxxx Xxxx
and in the case of notices from the Issuer, to each Manager at:
Deutsche Bank AG, Hong Kong Branch
Level 52, International Xxxxxxxx Xxxxxx
0 Xxxxxx Xxxx Xxxx
Xxxxxxx
Xxxx Xxxx
Fax No.: x000 0000 0000
Attention: Xxxxxx XxXxxxxxx, Equity-Linked Origination
X.X. Xxxxxx Securities plc
00 Xxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx
X00 0XX
Xxxxxx Xxxxxxx
Fax: x00 00 0000 0000
Attention: Head of Debt Syndicate and Head of EMEA Debt Capital Markets Group
with a copy to:
X.X. Xxxxxx Securities plc
c/- 00/X Xxxxxx Xxxxx
0 Xxxxxxxxx Xxxx
Xxxxxxx
Xxxx Xxxx
Fax: x000 0000 0000
Attention: Xxxxx Xxxxx, Head of Equity-linked Origination, Asia Pacific
12.1 Effectiveness: Any such communication shall take effect, in the case of a letter, at the time of delivery, in the case of fax, at the time of despatch or, in the case of telephone, when made.
12.2 Confirmations: Any communication not by letter shall be confirmed by letter but failure to send or receive the letter of confirmation shall not invalidate the original communication.
13 Currency Indemnity
13.1 Currency of Account and Payment: U.S. dollars (the “Contractual Currency”) is the sole currency of account and payment for all sums payable by a party under or in connection with this Agreement, including damages.
13.2 Extent of discharge: An amount received or recovered in a currency other than the Contractual Currency (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the insolvency, winding-up or dissolution of the Issuer or otherwise), by a party hereto in respect of any sum expressed to be due to it from another party will only discharge that party to the extent of the Contractual Currency amount which the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so).
13.3 Indemnity: If that Contractual Currency amount is less than the Contractual Currency amount expressed to be due to the recipient under this Agreement, the relevant party will indemnify the recipient against any loss sustained by it as a result. In any event, the relevant party will indemnify the recipient against the cost of making any such purchase.
13.4 Indemnity separate: The indemnities in this Clause 13 and in Clause 4.3 constitute separate and independent obligations from the other obligations in this Agreement, will give rise to a separate and independent cause of action, will apply irrespective of any indulgence granted by either party hereto and will continue in full force and effect despite any judgment, order, claim or proof for a liquidated amount in respect of any sum due under this Agreement or any other judgment or order.
14 Contracts (Rights of Third Parties) Xxx 0000
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Xxx 0000 to enforce any term of this Agreement.
15 Governing Law and Jurisdiction
15.1 Governing law: This Agreement, as to which time shall be of the essence, and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
15.2 Jurisdiction:
15.2.1 The courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and accordingly any legal action or proceedings arising out of or in connection with this Agreement (“Proceedings”) may be brought in such courts. The Issuer irrevocably submits to the jurisdiction of such courts and waives any objection to Proceedings in any such courts whether on the ground of venue or on the ground that the Proceedings have been brought in an inconvenient forum. These submissions are made for the benefit of the Managers and shall not limit the right of the Managers to take Proceedings in any other court of competent jurisdiction nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not).
15.2.2 The Issuer irrevocably appoints Trusec Limited, 2 Lambs Passage, Xxxxxx XX0X 0XX as its authorised agent for service of process in England. If for any reason such agent shall cease to be such agent for service of process, the Issuer shall forthwith, on request of the Managers, appoint a new agent for service of process in England and deliver to the Managers a copy of the new agent’s acceptance of that appointment within 30 days. Nothing in this Agreement shall affect the right to serve process in any other manner permitted by law.
16 Counterparts
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original.
This Agreement has been entered into on the date stated at the beginning.
SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION
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Signature Page — Subscription Agreement
DEUTSCHE BANK AG, HONG KONG BRANCH
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By: |
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By: |
Signature Page — Subscription Agreement
X.X. XXXXXX SECURITIES PLC
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By: |
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Signature Page — Subscription Agreement
SCHEDULE 1
SELLING RESTRICTIONS
No action has been taken or will be taken in any jurisdiction by the Managers that would, or is intended to, permit a public offering of the Bonds, or possession or distribution of the Offering Circular or any amendment or supplement thereto or any other offering or publicity material relating to the Bonds, in any country or jurisdiction where action for that purpose is required. Each Manager will comply with all applicable securities laws and regulations in each jurisdiction in which it acquires, purchases, offers or sells Bonds or has in its possession or distributes the Offering Circular or any amendment or supplement thereto or any other offering material, in all cases at its own expense. The Issuer will not have any responsibility for, and each of the Managers and the subscribers will obtain any covenant, approval or permission required by it for, the acquisition, offer, sale or delivery by it of the Bonds under the laws and regulations in force in any jurisdiction to which it is subject or in or from which it makes any acquisition, offer, sale or delivery. The Managers are not authorised to, and will not, make any representation or use any information in connection with the issue, subscription and sale of the Bonds other than as contained in the Offering Circular or any amendment or supplement thereto.
0 Xxxxxx Xxxxxx: The Bonds and the Shares to be issued upon conversion of the Bonds have not been and will not be registered under the U.S. Securities Act and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Each Manager represents and warrants that it has not offered or sold, and agrees that it will not offer or sell, any Bonds constituting part of its allotment within the United States in accordance with Rule 903 of Regulation S. Accordingly, neither it, its affiliates nor any persons acting on its or their behalf have engaged or will engage in any directed selling efforts with respect to the Bonds or the Shares to be issued upon conversion of the Shares. Terms used in this paragraph have the meaning given to them by Regulation S.
2 United Kingdom: Each Manager represents, warrants and agrees that:
2.1 it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Xxx 0000 (the “FSMA”) received by it in connection with the issue or sale of any Bonds in circumstances in which section 21(1) of the FSMA does not apply to the Issuer; and
2.2 it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Bonds in, from or otherwise involving the United Kingdom.
3 Hong Kong: Each Manager represents and agrees that:
(i) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any Bonds other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance; and
(ii) it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Bonds, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Bonds which are or are intended to be disposed of only to persons outside Hong Kong (who will not, in contravention of, inter alia, the CO, sell, offer or market the Bonds to persons who are public in Hong Kong, or who are not within the definition of “professional investors”) or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.
4 Singapore: Each Manager acknowledges that the Offering Circular will not be registered as a prospectus with the Monetary Authority of Singapore. Accordingly, each Manager represents, warrants and agrees that it has not offered or sold any Bonds or caused such Bonds to be made the subject of an invitation for subscription or purchase and will not offer or sell such Bonds or cause such Bonds to be made the subject of an invitation for subscription or purchase, and has not circulated or distributed, nor will it circulate or distribute, the Offering Circular or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of such Bonds, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor or other person specified in Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the XXX.
0 Xxxxx: Each Manager represents and agrees that the Bonds have not been and will not be registered under the Securities and Exchange Law of Japan (the “Securities and Exchange Law”) and that the Bonds which it subscribes will be subscribed by it as principal and that, in connection with the offering of the Bonds, it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell any Bonds in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law and other relevant laws and regulations of Japan.
6 Cayman Islands: No invitation whether directly or indirectly may be made to the public in the Cayman Islands to subscribe for the Bonds unless the Issuer is listed on The Cayman Islands Stock Exchange.
SCHEDULE 2
FORM OF CERTIFICATE CONFIRMING NO MATERIAL ADVERSE CHANGE
[ON THE LETTERHEAD OF THE ISSUER]
To:
Deutsche Bank AG, Hong Kong Branch
Xxxxx 00, Xxxxxxxxxxxxx Xxxxxxxx Xxxxxx
0 Xxxxxx Xxxx Xxxx, Xxxxxxx
Xxxx Xxxx
X.X. Xxxxxx Securities plc
00 Xxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx
X00 0XX
Xxxxxx Xxxxxxx
with a copy to:
X.X. Xxxxxx Securities plc
c/- 00/X Xxxxxx Xxxxx
0 Xxxxxxxxx Xxxx
Xxxxxxx
Xxxx Xxxx
(as the Managers)
[Date]
Dear Sirs
SUBSCRIPTION AGREEMENT RELATING TO SUBSCRIPTION OF US$95,000,000 ZERO COUPON CONVERTIBLE BONDS DUE 2018
Pursuant to the Subscription Agreement dated 4 June 2014 (the “Agreement”) made between inter alios, (1) Semiconductor Manufacturing International Corporation (the “Issuer”) and (2) yourselves as Managers, I hereby confirm, on behalf of the Issuer, that as at today’s date (i) the representations and warranties of the Issuer set forth in the Agreement are true, accurate and correct in all material respects at, and as if made on, today’s date; (ii) the Issuer has performed all of its obligations under the Agreement to be performed on or before today’s date and (iii) there has been no material adverse change nor any development or event involving a prospective material adverse change in the assets and liabilities, financial position and performance, profits and losses and prospects of the Issuer or the Group since the audited consolidated financial statements of the Group dated 31 December 2013.
Yours faithfully
For and on behalf of
SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION
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[Name] |
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Director/[Title of authorised officer] |
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SCHEDULE 3
UNDERWRITING COMMITMENTS FOR THE FURTHER BONDS
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Managers |
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Principal Amount of Bonds to be Subscribed |
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X.X. Xxxxxx Securities plc |
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US$ |
52,300,000 |
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Deutsche Bank AG, Hong Kong Branch |
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US$ |
42,700,000 |
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