EXHIBIT 4.17
Dated 22 April 2004
THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
and
NAM TAI ELECTRONICS, INC.
STOCK BORROWING AGREEMENT
relating to the Shares issued by Nam Tai Electronic & Electrical Products
Limited
LINKLATERS
00xx Xxxxx, Xxxxxxxxx Xxxxx
Xxxxxx Xxxx
Xxxx Xxxx
Telephone (000) 0000 0000
Facsimile (000) 0000 0000/2810 1695
TABLE OF CONTENTS Page
1 Interpretation............................................................ 1
2 Loans of Shares........................................................... 3
3 Delivery of Loaned Shares................................................. 4
4 Rights and Title.......................................................... 4
5 Dividends and Distributions............................................... 5
6 Re-delivery of Equivalent Shares.......................................... 5
7 Taxation.................................................................. 6
8 Representations and Warranties............................................ 6
9 Additional Representations and Warranties of the Borrower in relation to
Hong Kong Stock........................................................... 7
10 Borrower's Obligations.................................................... 7
11 Miscellaneous............................................................. 7
12 Remedies.................................................................. 8
13 Notices................................................................... 8
14 Severability.............................................................. 8
15 Time Of Essence........................................................... 9
16 Counterparts.............................................................. 9
17 Governing Law............................................................. 9
SCHEDULE Professional Investor Treatment Notice................................... 11
THIS AGREEMENT is made on 22 April 2004
BETWEEN:
(1) THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, a company
incorporated under the laws of Hong Kong whose registered office is at 0
Xxxxx'x Xxxx Xxxxxxx, Xxxx Xxxx (the "BORROWER"); and
(2) NAM TAI ELECTRONICS, INC., a company incorporated under the laws of
British Virgin Islands whose registered office is at McW. Xxxxxx & Co.,
XxXxxxxx Xxxxxxxx, PO Box 3342, Road Town, Tortola, British Virgin Islands
(the "LENDER").
RECITALS:
(A) The Lender (as defined below) proposes to offer for sale certain Shares
(as defined below) and the Company proposes to list the Shares on the main
board of the Stock Exchange by way of a global offering (the "OFFERING").
The Borrower has been appointed the global coordinator and bookrunner and
the sponsor and lead manager of the Offering.
The parties wish to enter into stock borrowing and lending arrangements in
respect of certain Shares (as defined below) subject to, and on the terms and
conditions of, this Agreement.
NOW IT IS HEREBY AGREED as follows:
1 INTERPRETATION
1.1 DEFINITIONS
In this Agreement (including the Recitals and the Schedules) the
following expressions shall, unless defined otherwise or the context
otherwise requires, have the following meanings:
"BORROWING REQUEST" means a request in writing made by the Borrower to the
Lender in respect of a proposed borrowing of Shares pursuant to Clause 2.1
specifying the description, title and amount of the Shares proposed to be
borrowed by the Borrower, the proposed Settlement Date and duration of
such borrowing and the date (being a Business Day), time, mode and place
of delivery which shall, where relevant, include the bank agent clearing
or settlement system and account to which delivery of the Shares is to be
made or details of the relevant CCASS participant name, CCASS participant
I.D. and CCASS stock account number if delivery of the Shares is to be
effected through CCASS;
"BUSINESS DAY" means any day (other than a Sunday) on which licensed banks
in Hong Kong are open for business generally;
"CCASS" means the Central Clearing and Settlement System established and
operated by Hong Kong Securities Clearing Company Limited;
"COLLECTOR" means the Collector of Stamp Revenue appointed under section 3
of the Ordinance;
"COMPANY" means Nam Tai Electronic & Electrical Products Limited, a
company incorporated under the laws of the Cayman Islands;
"EQUIVALENT SHARES" means shares of an identical class, nominal value,
description, rights attached thereto and amount as any Loaned Shares and
includes any certificates and other documents of or evidencing title
thereto and transfer thereof;
"HK$" means Hong Kong dollars, the lawful currency of Hong Kong;
"HONG KONG" means the Hong Kong Special Administrative Region of the
People's Republic of China;
"HONG KONG STOCK" has the meaning set out in section 2 of the Ordinance;
"LOAN" means a loan of Shares under this Agreement;
"LOANED SHARES" means the Shares delivered under a Loan hereunder and
includes the certificates and other documents of or evidencing title and
transfer thereof;
"OFFER PRICE" means the price per Share (exclusive of brokerage, SFC
transaction levy, SFC investor compensation levy and Stock Exchange
trading fee) at which the Shares are to be sold pursuant to the Offering,
to be determined as described under the section headed "Structure and
Conditions of the Global Offering - Pricing and Allocation" of the
Prospectus;
"ORDINANCE" means the Stamp Duty Ordinance (Chapter 117 of the Laws of
Hong Kong);
"OUTSTANDING LOANED SHARES" means, as at any particular point in time, the
aggregate of the number of Loaned Shares hereunder which have not been
redelivered in accordance with this Agreement;
"OVER-ALLOTMENT OPTION" has the same meaning ascribed thereto in the
Prospectus;
"PARTIES" means the parties to this Agreement, and the term "PARTY" shall
mean any party to this Agreement;
"PROSPECTUS" means the prospectus to be issued by the Company relating to
the offering of Shares in Hong Kong to be dated on or about 16 April 2004;
"RULES" means the rules for the time being of, or issued or promulgated by
the SFC, the Stock Exchange and/or other regulatory authority whose rules
and regulations shall from time to time affect the activities of the
Parties pursuant to this Agreement including but not limited to
regulations and guidance notes relating to stock lending for the time
being in force of any relevant tax authority and any associated procedures
required pursuant thereto;
"SETTLEMENT DATE" means the date (being a Business Day) upon which Loaned
Shares are or are to be transferred to the Borrower in accordance with
this Agreement which date shall be two (2) Business Days after the date of
the Borrowing Request;
"SFC" means The Securities and Futures Commission of Hong Kong;
"SHARES" means ordinary shares with a par value of HK$0.01 each in the
Company; and
"STOCK EXCHANGE" means The Stock Exchange of Hong Kong Limited.
1.2 MARKET TERMINOLOGY
Notwithstanding the use of expressions such as "borrow", "lend", or
"redeliver" or other cognate expressions which are used to reflect
terminology used in the market for transactions of the kind provided for
in this Agreement, title to Loaned Shares "borrowed" or "lent" provided in
accordance with this Agreement shall pass from one Party to another as
provided for in this Agreement, the Party obtaining such title being
obliged to redeliver Equivalent Shares.
1.3 OTHER INTERPRETATION
In this Agreement, unless otherwise specified:-
1.3.1 references to "RECITALS", "SECTIONS", "CLAUSES", "PARAGRAPHS" and
"SCHEDULES" are to recitals, sections, clauses, paragraphs of and
schedules to this Agreement;
1.3.2 a reference to any statute or statutory provision shall be construed
as a reference to the same as it may have been, or may from time to
time be, amended, modified or re-enacted;
1.3.3 references to a "COMPANY" shall be construed so as to include any
company, corporation or other body corporate, whenever and however
incorporated or established;
1.3.4 references to a "PERSON" shall be construed so as to include any
individual, firm, company, government, state or agency of a state or
any joint venture, association or partnership (whether or not having
separate legal personality);
1.3.5 references to writing shall include any modes of reproducing words
in a legible and non-transitory form;
1.3.6 references to times of the day are, unless otherwise specified, to
Hong Kong time;
1.3.7 headings to Clauses, sections and Schedules are for convenience only
and do not affect the interpretation of this Agreement;
1.3.8 the Schedules form part of this Agreement and shall have the same
force and effect as if expressly set out in the body of this
Agreement, and any reference to this Agreement shall include the
Schedules; and
1.3.9 words in the singular shall include the plural (and vice versa) and
words importing one gender shall include the other two genders.
2 LOANS OF SHARES
2.1 Subject to the Offering becoming unconditional and to the terms and
conditions of this Agreement, the Borrower may, at any time, orally or in
writing initiate a transaction whereby the Borrower may borrow Shares from
the Lender. The Lender shall, upon receipt of a Borrowing Request from the
Borrower no later than two Business Days prior to the Settlement Date
stated in such Borrowing Request, lend the number of Shares as set out in
the Borrowing Request to the Borrower, and the Borrower shall borrow such
number of Shares from the Lender.
2.2 The Borrower has the right to reduce the amount of Shares referred to in a
Borrowing Request provided that the Borrower has notified the Lender in
accordance with Clause 13 of such reduction no later than 12:00 noon on
the Business Day prior to the proposed Settlement Date set out in the
Borrowing Request unless otherwise agreed between the Parties.
2.3 Notwithstanding the provisions in this Agreement with respect to when a
Loan occurs, a Loan hereunder shall not occur until the relevant Shares
shall have been delivered to the Borrower in accordance with the delivery
instructions set out in the Borrowing Request or otherwise agreed between
the Parties.
2.4 The Parties agree that in respect of each Loan, the Borrower is not
required to pay the Lender any interest or consideration. The Parties
further agree that no collateral (cash or otherwise) shall be provided by
the Borrower to the Lender.
3 DELIVERY OF LOANED SHARES
The Lender shall deliver or procure the delivery of the Shares to the
Borrower in accordance with the relevant Borrowing Request by:
3.1 delivering certificates representing such Shares together with duly
executed stock transfer forms and such other instruments as may be
required to vest full right, title and interest thereto in the Borrower;
or
3.2 causing such Shares to remain or be credited to the Borrower's nominated
account and debited to the Lender's nominated account at any appropriate
clearing or settlement system or depository as may be agreed by the
Parties and such crediting and debiting shall result in notice of the
transaction being given to the Borrower; or
3.3 any other method of delivery as shall be agreed upon by the Parties,
and on the happening of any of such event in respect of Shares that are
the subject of a Borrowing Request, the Loaned Shares shall be deemed to
have been "delivered" to the Borrower in accordance with this Agreement
and the relevant Borrowing Request.
4 RIGHTS AND TITLE
4.1 The Parties shall execute and deliver all necessary documents and give all
necessary instructions to procure that all right, title and interest in:
4.1.2 (in the case of the Lender) any Shares borrowed pursuant to
Clause 2; and
4.1.2 (in the case of the Borrower) any Equivalent Shares redelivered
pursuant to Clause 6
shall, subject to the provisions of this Agreement, pass from one Party to
the other on delivery or redelivery of the same in accordance with this
Agreement, free from all liens, equities, charges, encumbrances claims and
third party rights. The Party acquiring such right, title and interest
shall have no obligation to return or redeliver any of the assets so
acquired but, in so far as any Loaned Shares delivered, the Borrower shall
be obliged, subject to the terms of this Agreement, to redeliver
Equivalent Shares.
4.2 In the case of Loaned Shares and Equivalent Shares title to which is
registered in a computer based system the transfer of title thereof shall
take place in accordance with the rules and procedures of such system as
are in force from time to time.
4.3 Each Party hereby undertakes to use all reasonable endeavours to procure
that all reasonable instructions received from the other Party in respect
of conversions, subdivisions, consolidations, redemptions, takeovers,
pre-emotions, options or other rights, are complied with in respect of
such Loaned Shares provided that each Party shall use all reasonable
endeavours to notify the other of its instructions in writing no later
than seven Business Days prior to the date upon which such actions are to
be taken.
4.4 In the event of any alteration to the nominal value of the Shares as a
result of any consolidation or sub-division of Shares taking place whilst
there are Outstanding Loaned Shares, the number of Shares to be
redelivered by the Borrower to the Lender pursuant to
Clause 6 shall from time to time be adjusted by multiplying the number of
the Outstanding Loaned Shares by the following fraction:
A
B
where: A is the nominal value of one Share immediately before such
alteration; and
B is the nominal value of one Share immediately after such
alteration.
Such adjustment shall become effective immediately after such
consolidation or sub-division takes effect.
5 DIVIDENDS AND DISTRIBUTIONS
5.1 The Lender shall be entitled to receive and retain such amounts as are
equal to the amounts of all dividends, entitlements or other distributions
or payments of any kind whatsoever accrued or made on or in respect of the
Loaned Shares as if the Loan had not occurred, the payment dates or record
dates (as the case may be) for which occur between the date of the
delivery of Loaned Shares by the Lender to the Borrower and the date of
the redelivery to the Lender of the entirety of the Equivalent Shares by
the Borrower.
5.2 Any cash dividends, distributions, payments or interest made on or in
respect of the Loaned Shares which the Lender is entitled to receive
pursuant to this Clause 5 shall be paid to the Lender by the Borrower as
soon as practicable after the date of receipt of the dividend or
distribution by the Company as if the Loan has not occurred or such other
date as the Lender and the Borrower may from time to time agree. Non-cash
distributions on the Loaned Shares shall be added to the Loaned Shares and
shall be considered as such for all purposes, except that, if the Loan is
terminated, the Borrower shall forthwith deliver the same to the Lender.
5.3 In the case of any dividend or distribution made on or in respect of
Loaned Shares comprising a payment, the amount payable by the Borrower to
the Lender hereunder shall be equal to the amount of the relevant dividend
or distribution.
6 RE-DELIVERY OF EQUIVALENT SHARES
6.1 The Borrower undertakes to redeliver or procure the redelivery of
Equivalent Shares together with all rights, title and interests attaching
thereto and therein free from all liens, charges, equities and
encumbrances in accordance with this Agreement and the terms of the
relevant Borrowing Request provided always that such redelivery shall be
made on or before five Business Days following the last date which The
Hongkong and Shanghai Banking Corporation Limited can exercise the
Over-allotment Option or (if earlier) the date on which the Over-allotment
Option is exercised in full (the "RETURN DATE"). The Borrower shall notify
the Lender by giving at least one Business Day's prior notice of each
redelivery. The Lender agrees that the Borrower shall have the right to
redeliver Equivalent Shares through CCASS or by such other means as the
Parties may agree. The Lender further agrees that the Borrower shall be
entitled to redeliver Equivalent Shares by instalments provided that all
Equivalent Shares must be redelivered on or before the Return Date. For
the avoidance of doubt, any reference herein or in any other agreement or
communication
between the Parties (howsoever expressed) to an obligation to redeliver or
account for or act in relation to Loaned Shares shall accordingly be
construed as a reference to an obligation to redeliver or account lor or
act in relation to Equivalent Shares.
6.2 The Borrower shall be entitled at any time to terminate a particular Loan
and to redeliver all and any Equivalent Shares due and outstanding to the
Lender in accordance with the Lender's instructions. The Lender shall
accept such redelivery so long as the mode of such redelivery is in
accordance with the terms of this Agreement.
7 TAXATION
The Borrower hereby undertakes promptly to pay and account for and
indemnify the Lender against any transfer or similar duties and/or taxes
and levies chargeable in Hong Kong in connection with any transfers or
transactions effected pursuant to or contemplated by this Agreement, and
any claim, liability, penalty, expenses or costs incurred by the Lender as
a result of the Borrower's failure to pay such duties and/or taxes and
levies.
8 REPRESENTATIONS AND WARRANTIES
8.1 Each of the Parties represents and warrants to and for the benefit of the
other that during the term of any Loan hereunder:
8.1.1 it is duly incorporated, established or constituted (as the case may
be) and validly existing under the laws of its country of
incorporation, establishment or constitution (as the case may be);
8.1.2 it has the power to execute and deliver this Agreement;
8.1.3 it has the power to enter into, and it is not restricted under the
terms of its constitution or in any other manner from entering into,
the transactions contemplated hereunder and to perform its
respective obligations hereunder;
8.1.4 it has taken all necessary action to authorise such execution,
delivery and performance hereof;
8.1.5 this Agreement constitutes its legal, valid and binding obligations,
enforceable in accordance with its terms;
8.1.6 (in the case of the Lender) as to all Loaned Shares, it is
absolutely entitled to pass full legal and beneficial ownership of
such Loaned Shares provided or delivered by it hereunder to the
Borrower free and clear of all liens, charges or encumbrances; and
8.1.7 (in the case of the Borrower) it is or will be absolutely entitled
to pass full legal and beneficial ownership of all Equivalent Shares
provided or delivered by it hereunder to the Lender or its nominee
free and clear of all liens, charges, encumbrances claims and third
party rights.
8.2 Each Party accepts liability as principal with respect to its obligations
hereunder.
8.3 Each Party represents and warrants that the execution, delivery and
performance by it of this Agreement and each transaction contemplated
hereunder will to its knowledge comply with all applicable laws, rules and
regulations including but not limited to those of Hong Kong.
8.4 The Lender agrees that it is a professional investor and agrees to being
so treated in the terms set out in the Schedule to this Agreement.
9 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE BORROWER IN RELATION TO
HONG KONG STOCK
The Borrower is borrowing or will borrow Hong Kong Stock under this
Agreement only for one or more of the specified purposes as permitted by
Section 19 of the Ordinance.
10 BORROWER'S OBLIGATIONS
10.1 The Borrower hereby undertakes to the Lender that the Borrower shall:
10.1.1 before the expiry of 30 days after the Loan is effected provide the
Collector with: (i) a duly executed copy or a certified true copy of
this Agreement (or in such other form thereof as may be acceptable
to the Collector), (ii) such fees and duties as may be specified
from time to time by the Financial Secretary for Hong Kong for the
purpose of the Ordinance in respect of borrowings of Hong Kong
Stock; and (iii) such other document, particulars and information in
the possession of the Borrower as the Collector may require; and
10.1.2 promptly comply with all filing and reporting obligations and do
all other acts and things as may be required to be performed by the
Borrower from time to time by the Collector and any applicable rules
and regulations for the time being in force.
10.2 In the event that the Borrower is in breach of its undertaking under
Clauses 10.1.1 or 10.1.2 above, the Lender may (but shall not be obliged
to) submit the Agreement, pay such fee and provide such other documents,
particulars and information to the Collector, and do all other acts and
things in relation thereto as the Lender may consider necessary or
desirable, at the cost and expense of and on behalf of the Borrower,
without prejudice to the provisions of Clause 7.
10.3 The Borrower shall, as appropriate, comply with the provisions of the
Ordinance in relation to borrowing of Loaned Shares, in particular as to
its obligation to make a stock return as defined in section 19 of the
Ordinance in accordance with the terms of this Agreement.
11 MISCELLANEOUS
11.1 Notwithstanding any provision of the Agreement, it is hereby acknowledged,
confirmed and agreed for all purposes that, until the Loaned Shares shall
have been delivered to the Borrower, no interest whatsoever in the Loaned
Shares shall pass to the Borrower and no Loan shall occur.
11.2 This Agreement shall not be assignable by either Party without the prior
written consent of the other Party and shall be binding upon and shall
enure to the benefit of the Parties and their respective successors and
assigns.
11.3 This Agreement sets out the entire agreement between the Parties in
relation to the subject matter hereof and shall not be amended or
supplemented except by instrument in writing signed by each of the
Parties.
11.4 Either Party shall have the right to terminate this Agreement if the
Underwriting Agreements (as defined in the Prospectus) fail to become
unconditional. Subject to the foregoing, this Agreement shall be effective
for the period commencing on the date of
hereof and, except for Clauses 7 and 10 of this Agreement which shall
survive termination or expiry of this Agreement, will expire upon
redelivery of all Equivalent Shares due and outstanding to the Lender in
accordance with Clause 6 of this Agreement.
12 REMEDIES
12.1 No delay or omission on any Party's part in exercising any right, power,
privilege or remedy hereunder shall impair such right, power, privilege or
remedy or be construed as a waiver thereof nor shall any single or partial
exercise of any such right, power, privilege or remedy preclude any
further exercise thereof or the exercise of any other right, power,
privilege or remedy.
12.2 The rights, powers, privileges and remedies herein provided are cumulative
and not exclusive of any rights, powers, privileges or remedies provided
by law. All remedies hereunder shall survive the termination of the
relevant Loan, redelivery of Equivalent Shares and termination of this
Agreement.
12.3 Without prejudice to any other rights it may have, each Party agrees that
in relation to legal proceedings, it will not seek specific performance of
the other Party's obligations to deliver or redeliver Shares or Equivalent
Shares in circumstances where the Shares of the Company are suspended from
trading on the Stock Exchange.
13 NOTICES
Any notice or other communication given or made under this Agreement shall
be in writing and may be delivered by hand or given by facsimile. If
delivered by hand, such notice or communication shall be deemed to have
been received on the date of despatch. If given by facsimile, such notice
or communication shall be deemed to have been received on receipt of
confirmation of successful transmission. Any such notice or communication
shall be sent to the party to whom it is addressed as follows:
To the Lender: Nam Tai Electronics, Inc.
00xx Xxxxx, Xxxxx Merchants Tower
Shun Tak Centre
Nos. 000-000 Xxxxxxxxx Xxxx Xxxxxxx
Xxxx Xxxx
Attention: Xx. Xxxxxx Xxx
FAX No. (000)0000 0000
To the Borrower: The Hongkong and Shanghai Banking Corporation
Limited
Xxxxx 00,0 Xxxxx'x Xxxx Xxxxxxx
Xxxx Xxxx
Attention: Xx. Xxxxxx Xxxx
Fax No. (000)0000 0000
14 SEVERABILITY
If any of the provisions of this Agreement is found by any court or other
competent authority to be void or unenforceable, such provision shall be
deemed to be deleted from
this Agreement and the remaining provisions of this Agreement shall
continue in full force and effect. Notwithstanding the foregoing the
Parties shall thereupon negotiate in good faith in order to agree the
terms of a mutually satisfactory provision to be substituted for the
provisions so found to be void or unenforceable. To the extent permitted
by applicable law, each Party hereby waives any provision of law which
would otherwise render any provision of this Agreement unenforceable or
invalid.
15 TIME OF ESSENCE
Time shall be of the essence of this Agreement.
16 COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
Parties hereto on separate counterparts, each of which when so executed
shall be an original but all of which shall together constitute one and
the same instrument.
17 GOVERNING LAW
17.1 This Agreement and all rights obligations and liabilities hereunder shall
be governed by and construed in accordance with the laws of Hong Kong and
the Parties hereby irrevocably submit to the non-exclusive jurisdiction of
the courts of Hong Kong.
17.2 The Lender irrevocably appoints Xx. Xxxxxx Xxx of x/x 00xx Xxxxx, Xxxxx
Merchants Tower, Shun Tak Centre, 000-000 Xxxxxxxxx Xxxx Xxxxxxx, Xxxx
Xxxx as its authorised agent for the service of process in Hong Kong in
connection with this Agreement. Service of process upon Xx. Xxxxxx Xxx at
the above address shall be deemed, for all purposes, to be due and
effective service, and shall be deemed completed whether or not forwarded
to or received by any such appointer. If for any reason such agent shall
cease to be the Lender's agent for the service of process, the Lender
shall forthwith appoint a new agent for the service of process in Hong
Kong acceptable to the Borrower and deliver to the Borrower a copy of the
new agent's acceptance of that appointment within 14 days, failing which
the Borrower shall be entitled to appoint such new agent for and on behalf
of the Lender and such appointment shall be effective upon the giving
notice of such appointment to the Lender. Nothing in this Agreement shall
affect the right to serve process in any other manner permitted by law.
IN WITNESS whereof this agreement has been entered into on the date first stated
above.
SIGNED by /s/ Xx Xxx Xxxx, Xxxxxx For and on behalf of
NAM TAI ELECTRONICS, INC.
for and on behalf of
NAM TAI ELECTRONICS, INC. /s/ X. Xxxxxxxx
in the presence of: -------------------------
Authorized Signature 24HA
SIGNED by:/s/ [ILLEGIBLE]
for and on behalf of
THE HONGKONG AND SHANGAI
BANKING CORPORATION LIMITED
in the presence of: /s/ Xxxxxxxx Orders
/s/ [ILLEGIBLE]
Woo Xxxx Xxxxxxx
Linklaters
Solicitor, Hong Kong SAR
SCHEDULE
PROFESSIONAL INVESTOR TREATMENT NOTICE
1 The Lender is a Professional Investor by reason of the Lender being within
a category of person described in the Securities and Futures (Professional
Investor) Rules as follows:
1.1 a trust corporation having been entrusted with total assets of not less
than HK$40 million (or equivalent) as stated in its latest audited
financial statements prepared within the last 16 months, or in the latest
audited financial statements prepared within the last 16 months of the
relevant trust or trusts of which it is trustee, or in custodian
statements issued to the trust corporation in respect of the trust(s)
within the last 12 months;
1.2 a high net worth individual having, alone or with associates on a joint
account, a portfolio of at least HK$8 million (or equivalent) in
securities and/or currency deposits, as stated in a certificate from an
auditor or professional accountant or in custodian statements issued to
the individual within the last 12 months;
1.3 a corporation the sole business of which is to hold investments and which
is wholly owned by an individual who, alone or with associates on a joint
account, falls within paragraph 1.2 above; and
1.4 a high net worth corporation or partnership having total assets of at
least HK$40 million (or equivalent) or a portfolio of at least HK$8
million (or equivalent) in securities and/or currency deposits, as stated
in its latest audited financial statements prepared within the last 16
months or in custodian statements issued to the corporation or partnership
within the last 12 months.
The Borrower has categorised the Lender as a Professional Investor based
on information the Lender has given to the Borrower. The Lender will
inform the Borrower promptly in the event any such information ceases to
be true and accurate. The Lender will be treated as a Professional
Investor in relation to all investment products and markets.
2 As a consequence of categorisation as a Professional Investor, the
Borrower is not required to fulfil certain requirements under the Code of
Conduct for Persons Licensed by or Registered with the Securities and
Futures Commission (the "Code") and other Hong Kong regulations. While the
Borrower may in fact do some or all of the following in providing services
to the Lender, the Borrower has no regulatory responsibility to do so:
2.1 Client agreement
The Borrower is not required to enter into a written agreement complying
with the Code relating to the services that are to be provided to the
Lender.
2.2 Risk disclosures
The Borrower is not required by the Code to provide the Lender with
written risk warnings in respect of the risks involved in any transactions
entered into with the Lender, or to bring those risks to your attention.
2.3 Information about the Borrower
The Borrower is not required to provide the Lender with information about
its business or the identity and status of employees and others acting on
its behalf with whom the Lender will have contact.
2.4 Prompt confirmation
The Borrower is not required by the Code to promptly confirm the essential
features of a transaction after effecting a transaction for the Lender.
2.5 Information about clients
The Borrower is not required to establish the Lender's financial
situation, investment experience or investment objectives, except where
the Borrower is providing advice on corporate finance work.
2.6 Nasdaq-Amex Pilot Program
If the Lender wishes to deal through the Stock Exchange in securities
admitted to trading on the Stock Exchange under the Nasdaq-Amex Pilot
Program, the Borrower is not required to provide the Lender with
documentation on that program.
2.7 Suitability
The Borrower is not required to ensure that a recommendation or
solicitation is suitable for the Lender in the light of the Lender's
financial situation, investment experience and investment objectives.
3 The Lender has the right to withdraw from being treated as a Professional
Investor at any time in respect of all or any investment products or
markets on giving written notice to the Compliance Department of the
Borrower.
4 By entering into this Agreement, the Lender represents and warrants to the
Borrower that it is knowledgeable and has sufficient expertise in the
products and markets that it is dealing in and is aware of the risks in
trading in the products and markets that it is dealing in.
5 By entering into this Agreement, the Lender hereby agrees and acknowledges
that it has read and understood and has had explained to it the
consequences of consenting to being treated as a Professional Investor and
the right to withdraw from being treated as such as set out herein and
that the Lender hereby consents to being treated as a Professional
Investor.
6 By entering into this Agreement, the Lender hereby agrees and acknowledges
that the Borrower will not provide the Lender with any contract notes,
statements of account or receipts under the Hong Kong Securities and
Futures (Contract Notes, Statements of Account and Receipts) Rules where
such would otherwise be required.
