EXHIBIT 4.11
Dated the 26th day of September 2002
TCL INTERNATIONAL HOLDINGS LIMITED
(the "Company")
and
Subscribers as set out in Schedule 1
------------------------------------
SUBSCRIPTION AGREEMENT
in respect of the issue of convertible notes by
TCL INTERNATIONAL HOLDINGS LIMITED
------------------------------------
XXXXXX, XXXX & XXXX
Solicitors & Notaries
Rooms 1621-33, Sun Hung Kai Centre
00 Xxxxxxx Xxxx
Tel: (000) 0000 0000 Fax: (000) 0000 0000
e-mail: xxxxxxx@xxxxxxxxxx.xxx.xx
T H I S A G R E E M E N T is made on the 26th day of September Two thousand
and Two.
1) TCL INTERNATIONAL HOLDINGS LIMITED a company incorporated in the Cayman
Islands and whose registered office is situate at Xxxxxx Xxxxx, Xxxxx
Xxxxxx Xxxxxx, P.O. Box 309, Xxxxxx Town, Grand Cayman, Cayman Islands,
British West Indies with principal place of business in Hong Kong at 13th
Floor, TCL Tower, 8 Xxx Xxxxx Road, Tsuen Wan, New Territories, Hong Kong
(the "Company"); and
2) Such persons more particularly set out in Schedule 1 hereto who have
executed this Subscription Agreement
(the "Subscribers" and each a "Subscriber").
WHEREAS:
A) The Company was incorporated in the Cayman Islands under the Company Law of
the Cayman Islands as an exempted company on 23 April 1999 and presently
has an authorised share capital of HK$500,000,000 divided into
5,000,000,000 Shares (as hereinafter defined) and issued share capital of
HK$259,447,460 divided into 2,594,474,602 Shares.
B) The Company is entitled to grant Options (as hereinafter defined) to its
employees. As at the date hereof, certain Options have been granted but
upon the grant and exercise of the subscription rights in full under the
Options (subject to any adjustment provided under the Share Option Scheme)
83,255,313 Shares will be allotted and issued on or before the 28 April
2005.
C) The Company has agreed to issue and the Subscribers have agreed to
subscribe for the Notes to the extent of the face value as more
particularly set out in column 5 against their respective name in Schedule
1 hereto and subject to the terms and conditions set out in this Agreement.
D) It is intended by the parties hereto that the proceeds from the issue of
the Notes will be applied towards the acquisition under the S&P Agreement.
NOW IT IS HEREBY AGREED AS FOLLOWS:-
PURPOSE AND DEFINITION
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1. The Schedules form an integral part of this Agreement and shall be
construed and have the same full force and effect as if expressly set
out in the main body of this Agreement.
2. The words and expressions set out below shall have the meanings
attributed to them below unless the context otherwise requires:-
"Accounts" the latest published audited consolidated accounts of
the Company and its subsidiaries comprising their
consolidated balance sheet as at 31 December 2001 and
their consolidated profit and loss account in respect
of the financial year ended 31 December 2001;
"Agreement" this Subscription Agreement;
"Business Day" a day (other than Saturday) on which banks in Hong Kong
are open to conduct business generally;
"Certificates" the certificates to be issued in respect of the Notes
substantially in the form set out in Schedule 2;
"Companies Companies Ordinance (Cap. 32) of the Laws of Hong Kong;
Ordinance"
"Completion" completion of the transaction contemplated herein
pursuant to Clause 15 and Schedule 3;
"Completion Date" the third Business Day following the date on which the
Condition Precedent is fulfilled or such other date as
the parties hereto may agree, provided that the date of
Completion shall not be earlier than the date of
completion of the S&P Agreement;
"Conditions" the terms and conditions to be attached to the
Certificate substantially in the form set out in
Schedule 2 (with such minor amendments thereto as the
parties may agree), and "Condition" refers to the
relative numbered paragraph of the Conditions;
"Condition the condition(s) precedent set out in Clause 12;
Precedent"
"Conversion Date" the date on which the Conversion Rights are exercised
in accordance with Conditions 24 to 25 of Schedule 2;
"Conversion Rights" the rights attached to the Notes to convert the same or
a part thereof into Conversion Shares;
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"Conversion Shares" the Shares to be issued by the Company upon exercise by
the Noteholder of the Conversion Rights;
"Equity Share the issued share capital of the Company excluding any
Capital" part thereof which does not either as respects
dividends or as respects capital carry any right to
participate beyond a specified amount or beyond an
amount calculated by reference to a specified rate in a
distribution;
"Hong Kong" the Hong Kong Special Administrative Region of the
People's Republic of China;
"Listing Rules" the Rules Governing the Listing of Securities on the
Stock Exchange;
"Notes" notes for the principal amounts aggregating up to
HK$350,000,000 to be issued by the Company under this
Agreement with the benefit of and subject to the
provisions of the Conditions and each a Note;
"Noteholder" the person who is for the time being the registered
holder of a Note;
"Options" options granted under the old share option scheme of
the Company adopted on 15 November 1999 and options
granted or to be granted to employees and executive
directors of the Company pursuant to the existing share
option scheme (the "Share Option Scheme") adopted by
the Company on 30 October 2001 under which scheme the
directors of the Company are entitled to grant options
to subscribe, subject to adjustments, up to 10% of the
aggregate nominal amount of the issued share capital of
the Company as at the date of approval of the Share
Option Scheme (as amended by the Listing Rules);
"S&P Agreement" the sale and purchase agreement dated 26 September 2002
entered into between Mate Fair Group Limited as the
vendor and TCL Holdings (BVI) Limited as the purchaser
and Xx. Xxxx Toe Xxxxx as the guarantor in relation to
the acquisition by TCL Holdings (BVI) Limited of a
13.8% equity interest in Huizhou TCL Mobile
Communication Co. Ltd., a Sino-foreign equity joint
venture established in March 1999 in the PRC;
"Shares" the shares of HK$0.10 each in the issued share capital
of the Company existing on the date of this Agreement
and
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all other (if any) stock or shares from time to time
and for the time being ranking pari passu therewith and
all other (if any) shares or stock in the Equity Share
Capital of the Company resulting from any sub-division,
consolidation or re-classification of Shares;
"Stock Exchange" The Stock Exchange of Hong Kong Limited;
"Warranties" the representations, warranties and undertakings under
Clause 17 and Schedule 4;
"HK$" Hong Kong dollars.
3. Except as otherwise expressly provided, expressions defined in the
Companies Ordinance have the same meaning in this Agreement.
4. A reference to a statute or statutory provision includes a reference:-
4.1 to that statute or provisions as from time to time modified or
re-enacted;
4.2 to any repealed statute or statutory provision which it re-enacts
(with or without modification); and
4.3 to any orders, regulations, instruments or other subordinate
legislation made under the relevant statute or statutory provision.
5. Unless the context otherwise requires:-
5.1 words in the singular include the plural, and vice versa;
5.2 words importing any gender include all genders; and
5.3 a reference to a person includes a reference to a body corporate and
to an unincorporated body of persons.
6. A reference to a Clause, Sub-Clause or Schedule is to a clause, sub-clause
or schedule (as the case may be) of or to this Agreement.
7. The headings are for convenience only and do not affect interpretation.
8. The definitions adopted in the recitals apply throughout this Agreement.
ISSUE AND SUBSCRIPTION OF THE NOTES
9. Subject to fulfilment of the Condition Precedent and on Completion, the
Subscribers shall subscribe for the Notes to the extent of the face value
as more particularly set out in column 5 against their respective name in
Schedule 1 hereto and shall pay or procure
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that there by paid to the Company the amount of the face value of the Notes
to be subscribed being the subscription moneys for the Notes.
10. Subject to fulfilment of the Condition Precedent and on Completion, the
Company shall upon receipt of the sum as specified in Clause 9 issue the
Notes at its full face value as subscribed to the Subscribers provided that
all (but not part only) of the Notes are subscribed, otherwise the Company
is under no obligation to issue any of the Notes.
11. It is expressly agreed and understood that the subscription of all (but not
part only) Notes shall be completed simultaneously.
CONDITION PRECEDENT
12. It shall be a condition precedent of Completion that prior thereto:-
12.1 the Stock Exchange shall have approved and not withdrawn approval for
the issue of the Notes (either unconditionally or subject only to
conditions to which neither the Company nor the Subscribers reasonably
object and the satisfaction of such conditions);
12.2 the Listing Committee of the Stock Exchange shall have granted (either
unconditionally or subject only to conditions to which neither the
Company nor the Subscribers reasonably object) listing of and
permission to deal in the Conversion Shares;
12.3 the shareholders of the Company shall have approved at an
extraordinary general meeting the issue of the Notes and the allotment
and issue of the Conversion Shares upon the exercise of the Conversion
Rights attaching thereto (at which the Subscribers and their
respective associates shall abstain from voting); and
12.4 all the conditions precedent as set out in Clauses 6.2 to 6.7 of the
S&P Agreement have been fulfilled.
13. The Company undertakes to the Subscribers to use its best endeavours to
ensure that the Condition Precedent is fulfilled as early as practicable
and in any event not later than 31 January 2003 or such later date as the
Subscribers and the Company may agree.
14. If the Condition Precedent has not been fulfilled on or before 31 January
2003 or such later date as may be agreed between the Subscribers and the
Company, this Agreement will lapse and become null and void and the parties
will be released from all obligations hereunder, save the liabilities for
any antecedent breaches hereof.
COMPLETION
15. Subject to fulfilment of the Condition Precedent and Clause 16, Completion
shall take place at the office of the solicitors for the Company, Messrs.
Xxxxxx, Xxxx & Xxxx at
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Rooms 1621-33, 16/F., Sun Hung Xxx Xxxxxx, 00 Xxxxxxx Xxxx, Xxxx Xxxx on
the Completion Date and each party shall perform its respective obligations
set out in Schedule 3.
16. In no event shall Completion take place earlier than the date and time at
which completion of the S&P Agreement takes place in accordance with the
terms and conditions thereof.
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
17. The Company hereby represents, warrants and undertakes to the Subscribers
in the terms set out in Clauses 17 to 19 and Schedule 4 as at the date
hereof and that each of the Warranties is now and will at Completion and
will at all times between the date of this Agreement and the Completion
Date, be true, complete and accurate in all respects and the Company hereby
agrees and acknowledges that the Subscribers are entering into this
Agreement in reliance on the Warranties.
18. The Company shall notify the Subscribers upon it becoming aware prior to
Completion of any event which could reasonably be expected to cause any of
the Warranties to be incorrect, misleading or breached in any material
respect or which may have any material adverse effect on the assets or
liabilities of the Company.
19. If any party fails to perform any of its obligations in any material
respect (including its obligation at Completion) under this Agreement or
breaches any of the terms or Warranties set out in this Agreement in any
material respect prior to Completion then without prejudice to all and any
other rights and remedies available at any time to a non-defaulting party
(including but not limited to the right to damages for any loss suffered by
that party) any non-defaulting party may, by notice either require the
defaulting party to perform such obligations or, insofar as the same is
practicable, remedy such breach, or to the extent it relates to the failure
of the defaulting party to perform any of its obligations on or prior to
Completion in any material respect treat the defaulting party as having
repudiated this Agreement and rescind the same. The rights conferred upon
the respective parties by the provision of this Clause 19 are additional to
and do not prejudice any other rights the respective parties may have.
Failure to exercise any of the rights herein conferred shall not constitute
a waiver of any such rights.
THE SUBSCRIBERS' UNDERTAKING
20. Each of the Subscribers hereby specifically undertakes in favour of the
Company that it will not exercise any of the conversion rights in and under
the Notes if immediately after such conversion there shall be less than the
prescribed minimum percentage of securities of the Company in the hands of
the public within the meaning of Rule 8.08 of the Listing Rules by reason
of such conversion. This undertaking shall survive Completion.
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21. Each of the Subscribers represents and warrants, and agrees, that it shall
not, for a period of six months from the date of issue of the Notes, offer
for sale, sell, transfer or otherwise dispose of any Notes or Shares to be
issued upon conversion of the Notes unless the prior written consent of the
Company to such offer for sale, sale, transfer or disposal is obtained.
ANNOUNCEMENT
22. Save as required by law or by the Stock Exchange or by any relevant
regulatory authority, neither of the parties hereto shall make any
announcement in relation to this Agreement without the consent of the other
party (such consent not to be unreasonably withheld).
NOTICES
23. Any notice required or permitted to be given by or under this Agreement
shall be in writing and shall be given by delivering it to the address of
the relevant party concerned
23.1. in the case of the Company to its principal place of business
address in Hong Kong shown on the first page of this Agreement
(marked for the attention of Xx Xxxx Sheng); or
23.2. in the case of the Subscribers to their respective correspondence
address in Hong Kong shown in column 4 against their respective
names in Schedule 1 and marked for attention of the person named
thereunder.
or to such other address in Hong Kong as the party concerned may have been
notified to the other party pursuant to this Clause 23 and may be given by
sending it by hand or in a prepaid envelope by post to such address or (in
either case) to such other address in Hong Kong as the party concerned may
have notified to the other party in accordance with this Clause 23 and such
notice shall be deemed to be served at the time of delivery or (as the case
may be) 48 hours after posting, or if sooner upon acknowledgement of
receipt by or on behalf of the party to which it is addressed.
COSTS AND EXPENSES
24. Each party shall bear its own legal, accountancy and other costs and
expenses incurred in connection with preparation, negotiation and
settlement of this Agreement. Capital fees or stamp duty (if any) relating
to the issue and delivery of the Notes shall be borne by the Company.
GENERAL PROVISIONS RELATING TO AGREEMENT
25. Any date or period of time shall be of the essence of this Agreement.
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26. Each party undertakes to the other to execute or procure to be executed all
such documents and to do or procure to be done all such other acts and
things as may be reasonable and necessary to give all parties the full
benefit of this Agreement.
27. This Agreement shall be binding on and enure for the benefit of the
successors of each of the parties and shall not be assignable.
28. The exercise of or failure to exercise any right or remedy in respect of
any breach of this Agreement shall not, save as provided herein, constitute
a waiver by such party of any other right or remedy it may have in respect
of that breach.
29. Any right or remedy conferred by this Agreement on any party for breach of
this Agreement (including without limitation the breach of any
representations and warranties) shall be in addition and without prejudice
to all other rights and remedies available to is in respect of that breach.
30. Any provision of this Agreement which is capable of being performed after
Completion but which has not been performed at or before Completion and all
representations and warranties and other undertakings contained in or
entered into pursuant to this Agreement shall remain in full force and
effect notwithstanding Completion.
31. This Agreement constitutes the entire agreement between the parties with
respect to its subject matter (neither party having relied on any
representation or warranty made by the other party which is not contained
in this Agreement) and no variation of this Agreement shall be effective
unless made in writing and signed by all of the parties.
32. This Agreement supersedes all and any previous agreements, arrangements or
understanding between the parties relating to the matters referred to in
this Agreement and all such previous agreements, understanding or
arrangements (if any) shall cease and determine with effect from the date
hereof.
33 If at any time any provision of this Agreement is or becomes illegal, void
or unenforceable in any respect, the remaining provisions hereof shall in
no way be affected or impaired thereby.
GOVERNING LAW AND JURISDICTION
34. This Agreement shall be governed by and construed in accordance with the
laws of Hong Kong and each party hereby submits to the non-exclusive
jurisdiction of the courts of Hong Kong as regards any claim or matter
arising under this Agreement and agrees that process may be served at the
address for service of notices pursuant to Clause 23.
COUNTERPARTS
35. This Agreement may be executed by the parties hereto in any number of
counterparts and on separate counterparts, each of which when so executed
shall be deemed an
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original but all of which shall constitute one and the same instrument and
is binding on all parties.
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SCHEDULE 1
(the "Subscribers")
Column 1 Column 2 Column 3 Column 4 Column 5
-------- -------- -------- -------- --------
Name Place of Registered Office Hong Kong Correspondence Address Face Value of Notes
Incorporation Subscribed For
---- -------------- ----------------- -------------------------------- -------------------
1 United Asset British Virgin Offshore Incorporations Address: Xxxx 000, Xxxxx 0, Xxxxx HK$210,000,000
Investments Islands Limited, X.X. Xxx 000, Xxxx Xxxx Xxxx, 00 Canton
Limited Offshore Incorporations Road, Tsimshatsui, Kowloon
Centre, Road Town, Tortola, Fax No.: 0000 0000
British Virgin Islands Attn.: Xxxx Toe Xxxxx
2 Go-Win British Virgin Sea Meadow House, Address: Xxxx 000, Xxxxx 0, Xxxxx HK$100,000,000
Limited Islands Xxxxxxxxxx Xxxxxxx, X.X. Xxxx Xxxx Xxxx, 00 Canton
Xxx 000, Xxxx Xxxx, Xxxx, Xxxxxxxxxx, Xxxxxxx
Tortola, British Virgin Fax No.: 0000 0000
Islands Attn.: Xxxx Toe Xxxxx
3 Xxx Xxx British Virgin X.X. Xxx 0000, Xxxx Xxxx, Xxxxxxx: 00xx Xxxxx, Xxxxx Merchants HK$40,000,000
Electronics, Islands Tortola, British Virgin Tower, Shun Tak Centre,
Inc. Islands 000-000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
Fax No.: 0000 0000
Attn.: Xx Xxx Xxxx, Xxxxxx
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SCHEDULE 2
TCL INTERNATIONAL HOLDINGS LIMITED
(TCL [CHINESE CHARACTERS])*
(Incorporated in the Cayman Islands with limited liability)
3% CONVERTIBLE NOTES AGGREGATING UP TO HK$350,000,000
Issued pursuant to the Memorandum of Association and Articles of Association
of TCL International Holdings Limited (the "Company") and a resolution of its
Board of Directors passed on the 26 day of September, 2002 and pursuant to an
ordinary resolution of the Company passed at an extraordinary general meeting
held on [*], 2002.
THIS IS TO CERTIFY
that [*] whose registered office is situate at [*] is, at the date hereof,
entered in the register of holders of 3% convertible notes due 2005 (the
"Notes") as the holder of the Note with a principal amount of [HK$*]). The
Notes are issued with the benefit of and subject to the terms and
conditions attached hereto which shall form an integral part of this
Certificate.
GIVEN under the Seal of the Company this [*] day of [*], 2002
---------------------------- Director
---------------------------- Secretary/Director
Notes:-
The Notes cannot be transferred to bearer on delivery and is only transferable
to the extent permitted by Condition 5 of the terms and conditions thereof.
This Certificate must be delivered to the secretary of TCL International
Holdings Limited for cancellation and reissue of an appropriate certificate in
the event of any such transfer.
* for identification purpose only
----------
(For endorsement in the event of partial conversion)
Date Amount Converted Amount Outstanding
---- ---------------- ------------------
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TERMS AND CONDITIONS OF THE NOTES
The Notes shall be held subject to and with the benefit of the terms and
conditions set out below and such terms and conditions shall be binding on TCL
INTERNATIONAL HOLDINGS LIMITED ("the Company"). Expressions defined in the
Subscription Agreement (the "Agreement") dated 26th September 2002 between the
subscribers as set out in Schedule 1 to the Agreement and TCL INTERNATIONAL
HOLDINGS LIMITED relating to the Notes shall bear the same meaning in this
Certificate:-
FORM AND TITLE
FORM
1. The Notes are in registered form and represented by note certificates
("Certificates") in which the principal amount is specified. Each
Certificate will have an identifying number which will be recorded on the
relevant Certificate and in the register of Noteholders (the "Register")
which the Company will keep in compliance with Condition 8.
TITLE
2. Title to the Note passes by transfer and registration in the Register of
Noteholders as described in the Conditions 5 to 7. The registered holder of
any Note will (except as otherwise required by applicable law or statutory
requirements) be treated as its absolute owner for all purposes (whether or
not it is overdue and regardless of any notice of ownership, trust or any
interest thereof or therein, any writing thereon, or any theft or loss
thereof) and no person shall be liable for so treating such holders. Any
Note held jointly shall be delivered to that one of the joint holders whose
name stands first in the Register in respect of the joint holding.
PERIOD
3. Subject as provided herein, the Company shall repay such principal moneys
outstanding under the Notes to the Noteholder together with all interest
accrued thereon up to and including the date of repayment on the third
anniversary of the date of issue of the Notes (the "Maturity Date").
STATUS AND TRANSFER
4. The obligations of the Company arising under each of the Notes constitute
general, unsecured obligations of the Company, and will rank equally among
themselves and pari passu with all other present and future unsecured and
unsubordinated obligations of the Company except for obligations accorded
preference by mandatory provisions of applicable law. No application will
be made for a listing of the Notes.
5. No assignment or transfer or part only of the Notes may be made. Any
assignment or transfer of the Notes (in whole) within 6 months from the
date of issue must be made with the prior consent of the board of directors
of the Company and (if required) the Stock Exchange of Hong Kong Limited
(the "Stock Exchange"). Thereafter, unless prior consent of Stock Exchange
is otherwise required, the Notes are freely transferable
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in whole.
6. The Notes may only be transferred by execution of a form of transfer
(the "Transfer Form") which shall be in a form previously agreed
between the Company and the Noteholder under the hand of the
transferor and the transferee (or their duly authorized
representatives) or, where either the transferor or transferee is a
corporation, under its common seal (if any) and under the hand of one
of its officers duly authorized in writing or otherwise executed by a
duly authorized officer thereof. In this Condition 6 "transferor"
shall, where the context permits or requires, include joint
transferors or can be construed accordingly.
7. The certificate of the Notes must be delivered for registration to
the Company accompanied by (i) a duly executed Transfer Form; (ii) in
the case of the execution of the Transfer Form on behalf of a
corporation by its officers, the authority of that person or those
persons to do so; and (iii) such other evidence (including legal
opinions) as the Company may reasonably require if the Transfer Form
is executed by some other person on behalf of the Noteholder. The
Company shall, within 7 Business Days of receipt of such documents
from the Noteholder, cancel the existing Certificate and issue a new
certificate under the seal of the Company, in favour of the transferee
or assignee as applicable.
8. The Company shall maintain and keep a full and complete register at
such location in the Cayman Islands as it shall from time to time
determine of the Notes and the Noteholders from time to time recording
its conversion and/or cancellation and the destruction of any
replacement Notes issued in substitution for any mutilated, defaced,
lost, stolen or destroyed Notes and of sufficient identification
details of all Noteholders from time to time holding the Notes. The
Company shall further procure that such register shall be made
available to any holder of the Notes at all reasonable times.
INTEREST
9. Subject to Condition 10, the Notes will bear interest from the date
of issue at the rate of 3 per cent per annum on the principal amount
of the Notes from time to time outstanding, which subject as provided
herein, will be calculated on the basis of 365-day year and in the
case of an incomplete month, the number of actual days elapsed and be
payable by the Company semi-annually in arrears on dates falling six
calendar months and one year after the date of issue of the Notes and
on the anniversaries of such dates for each year thereafter. The
first payment shall be made on the date falling six calendar months
after the date of issue of the Notes.
10. In the event that the Noteholder has converted part or whole of the
principal amount of the Notes, the Noteholder shall not be entitled
to interest in respect of such part or whole as the case may be of
the principal amount for the period from the immediately preceding
interest payment date to the Conversion Date concerned both dates
inclusive.
PAYMENTS
11. Payment of the principal in respect of the Notes will be made on the
due date by way of the Company's cheque drawn on a licensed bank in
Hong Kong to be delivered to the Noteholder at the address as set out
in Condition 31. Payments of interest in respect of the Notes will be
made semi-annually by way of the Company's cheque drawn on a
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licensed bank in Hong Kong to be delivered to the Noteholder at the
address as set out in Condition 31. All Payments by the Company shall
be made in Hong Kong Dollars.
12. If the due date for payment of any amount in respect of the Notes is
not a Business Day, the Noteholder will be entitled to payment on the
next following Business Day in the same manner and will not be
entitled to any further interest or other payment in respect of any
such delay.
CONVERSION
13. Subject as hereinafter provided (for the avoidance of doubt,
including Clause 26.1), each Noteholder will have the right to
convert the whole or part of the principal amount of the Note into
Shares at any time and from time to time, from the date of issue up
to the third anniversary of the date of issue of the Note in amounts
of not less than HK$10,000,000 on each conversion, save that if at
any time, the principal outstanding amount of the Note is less than
HK$10,000,000, the whole (but not part only) of the principal
outstanding amount of the Note may be converted. The price at which
each Share shall be issued upon conversion shall be HK$2.556 (being
120% of the average closing price of the Shares of the Company quoted
on the Stock Exchange for the last 10 trading days immediately before
the date of the
Subscription Agreement) subject to adjustment as
hereafter described (the "Conversion Price"). No fraction of a Share
will be issued on conversion but (except in cases where any such cash
payment would amount to less than HK$10) an equivalent cash payment
in Hong Kong dollars will be made to the Noteholder in respect of
such fraction. Shares issued upon conversion shall rank pari passu in
all respect with all other existing Shares outstanding on the date of
the conversion notice (the "Conversion Notice") (being a notice
received in accordance with Condition 24) and be entitled to all
dividends and other distribution the record date for which falls on a
date on or after the date of the Conversion Notice PROVIDED ALWAYS,
the Noteholder shall not be entitled to exercise the conversion right
hereunder if immediately after such conversion there shall be less
than the prescribed minimum percentage of securities of the Company
in the hands of the public within the meaning of Rule 8.08 of the
Rules Governing the Listing of Securities (the "Listing Rules") of
the Stock Exchange by reason of such conversion.
ADJUSTMENTS
14. Subject as hereinafter provided, the Conversion Price shall from time
to time be adjusted in accordance with the following relevant
provisions so that if the event giving rise to any such adjustment
shall be such as would be capable of falling within more than one of
Conditions 14.1 to 14.6 inclusive then it shall deemed to fall within
the first of the applicable paragraphs to the exclusion of the
remaining paragraphs:-
14.1. If and whenever the Shares by reason of any consolidation or
sub-division become of a different nominal amount, the
Conversion Price in force immediately prior thereto shall be
adjusted by multiplying it by the revised nominal amount and
dividing the result by the former nominal amount. Each such
adjustment shall be effective from the close of business in Hong
Kong on the day immediately preceding the date on which the
consolidation or sub-division becomes effective.
14.2. If and whenever the Company shall issue (other than in lieu of a
cash dividend)
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any Shares credited as fully paid by way of capitalisation of profits or
reserves (including any share premium account or capital redemption reserve
fund), the Conversion Price in force immediately prior to such issue shall
be adjusted by multiplying it by the aggregate nominal amount of the issued
Shares immediately before such issue and dividing the result by the sum of
such aggregate nominal amount and the aggregate nominal amount of the
Shares issued in such capitalisation. Each such adjustment shall be
effective (if appropriate retroactively) from the commencement of the day
next following the record date for such issue.
14.3 If and whenever the Company shall make any Capital Distribution (as defined
in Condition 15) to holders (in their capacity as such) of Shares (whether
on a reduction of capital or otherwise) or shall grant to such holders
rights to acquire for cash assets of the Company or any of its
subsidiaries, the Conversion Price in force immediately prior to such
distribution or grant shall be adjusted by multiplying it by the following
fraction:-
A-B
---
A
where:-
A = the market price (as defined in Condition 15) on the date on which the
Capital Distribution or, as the case may be, the grant is publicly
announced or (failing any such announcement) next preceding the date
of the Capital Distribution or, as the case may be, of the grant; and
B = the fair market value on the day of such announcement or (as the case
may require) the next preceding day, as determined in good faith by an
approved merchant bank, of the portion of the Capital Distribution or
of such rights which is attributable to one Share,
Provided that:-
(aa) if in the opinion of the relevant approved merchant bank, the use of
the fair market value as aforesaid produces a result which is
significantly inequitable, it may instead determine (and in such event
the above formula shall be construed as if B meant) the amount of the
said market price which should properly be attributed to the value of
the Capital Distribution or rights; and
(bb) the provisions of this Condition 14.3 shall not apply in relation to
the issue of Shares paid out of profits or reserves and issued in lieu
of a cash dividend.
Each such adjustment shall be effective (if appropriate retroactively) from
the commencement of the day next following the record date for the Capital
Distribution or grant.
14.4 If and whenever the Company shall offer to holders of Shares new Shares for
subscription by way of rights, or shall grant to holders of Shares any
options or
15
warrants to subscribe for new Shares, at a price which is less than
the market price at the date of the announcement of the terms of the
offer or grant, the Conversion Price shall be adjusted by multiplying
the Conversion Price in force immediately before the date of the
announcement of such offer or grant by a fraction of which the
numerator is the number of Shares in issue immediately before the date
of such announcement plus the number of Shares which the aggregate of
the amount (if any) payable for the rights, options or warrants and of
the amount payable for the total number of new Shares comprised
therein would purchase at such market price and the denominator is the
number of Shares in issue immediately before the date of such
announcement plus the aggregate number of Shares offered for
subscription or comprised in the options or warrants (such adjustment
to become effective (if appropriate retroactively) from the
commencement of the day next following the record date for the offer
or grant).
14.5 If and whenever the Company shall issue wholly for cash any securities
which by their terms are convertible into or exchangeable for or carry
rights of subscription for new Shares:-
(a) if the total Effective Consideration per Share (as defined below)
initially receivable for such securities is less than the market
price at the date of the announcement of the terms of issue of
such securities, the Conversion Price shall be adjusted by
multiplying the Conversion Price in force immediately prior to
the issue by a fraction of which the numerator is the number of
Shares in issue immediately before the date of the issue plus the
number of Shares which the total Effective Consideration
receivable for the securities issued would purchase at such
market price and the denominator is the number of Shares in issue
immediately before the date of the issue plus the number of
Shares to be issued upon conversion or exchange of, or the
exercise of the subscription rights conferred by, such securities
at the initial conversion or exchange rate or subscription price.
Such adjustment shall become effective (if appropriate
retrospectively) from the close of business in Hong Kong on the
Business Day next preceding whichever is the earlier of the date
on which the issue is announced and the date on which the issuer
determines the conversion or exchange rate or subscription price.
(b) if and whenever the rights of conversion or exchange or
subscription attached to any such securities as are mentioned in
Condition 14.5(a) are modified so that the total Effective
Consideration per Share initially receivable for such securities
shall be less than the market price at the date of announcement
of the proposal to modify such rights of conversion or exchange
or subscription, the Conversion Price shall be adjusted by
multiplying the Conversion Price in force immediately prior to
such modification by a fraction of which the numerator is the
number of Shares in issue immediately before the date of such
modification plus the number of Shares which the total Effective
Consideration receivable for the securities issued at the
modified conversion or exchange price would purchase at such
market price and of which the denominator is the number of Shares
in issue immediately before such date of modification plus the
number of Shares to be issued upon conversion or exchange of or
the exercise of the subscription rights conferred by such
securities at the modified conversion or exchange rate or
subscription price. Such adjustment shall become effective as at
the date upon which such
16
modification shall take effect. A right of conversion or exchange
or subscription shall not be treated as modified for the
foregoing purposes where it is adjusted to take account of rights
or capitalisation issues and other events normally giving rise to
adjustment of conversion or exchange terms.
(c) for the purposes of Condition 14.5, the "total Effective
Consideration" receivable for the securities issued shall be
deemed to be the consideration receivable by the Company for any
such securities plus the additional minimum consideration (if
any) to be received by the Company upon (and assuming) the
conversion or exchange thereof or the exercise of such
subscription rights, and the total Effective Consideration per
Share initially receivable for such securities shall be such
aggregate consideration divided by the number of Shares to be
issued upon (and assuming) such conversion or exchange at the
initial conversion or exchange rate or the exercise of such
subscription rights at the initial subscription price, in each
case without any deduction for any commissions, discounts or
expenses paid, allowed or incurred in connection with the issue.
14.6 If and whenever the Company shall issue wholly for cash any Shares at
a price per Share which is less than the market price at the date of
the announcement of the terms of such issue, the Conversion Price
shall be adjusted by multiplying the Conversion Price in force
immediately before the date of such announcement by a fraction of
which the numerator is the number of Shares in issue immediately
before the date of such announcement plus the number of Shares which
the aggregate amount payable for the issue would purchase at such
market price and the denominator is the number of Shares in issue
immediately before the date of such announcement plus the number of
Shares so issued. Such adjustment shall become effective on the date
of the issue.
15. For the purposes of the provisions under the heading "ADJUSTMENTS" (for the
avoidance of doubt, including Conditions 14 to 22):-
"announcement" shall include the release of an announcement to the
press or the delivery or transmission by telephone,
telex or otherwise of an announcement to the Stock
Exchange and "date of announcement" shall mean the date
on which the announcement is first so released,
delivered or transmitted;
"approved merchant means a merchant bank of repute in Hong Kong selected
bank" by the Company and agreed by the Noteholder for the
purpose of providing a specific opinion or calculation
or determination hereunder and in the absence of such
agreement shall be Cazenove Asia Limited;
17
"Capital shall (without prejudice to the generality of that
Distribution" phrase) include distributions in cash or specie. Any
dividend charged or provided for in the accounts for
any financial period shall (whenever paid and however
described) be deemed to be a Capital Distribution
Provided that any such dividend shall be automatically
deemed not a Capital distribution if it is paid out of
the aggregate of the net profits (less losses)
attributable to the holders of Shares for all financial
periods after 31 December 2001 as shown in the audited
consolidated profit and loss account of the Company and
its subsidiaries for each financial period ended 31
December;
"issue" shall include allot;
"market price" means the average of the closing prices of one Share on
the Stock Exchange for each of the last five Stock
Exchange dealing days on which dealings in the Shares
on the Stock Exchange took place ending on the last
such dealing day preceding the day on or as of which
the market price is to be ascertained;
"Shares" includes, for the purposes of Shares comprised in any
issue, distribution or grant pursuant to Conditions
14.3, 14.4, 14.5, or 14.6, any such ordinary shares of
the Company as, when fully paid, will be Shares;
"reserves" includes unappropriated profits;
"rights" includes rights in whatsoever form issued.
16. The provisions of Conditions 14.2, 14.3, 14.4, 14.5 and 14.6 shall not
apply to:-
16.1 an issue of fully paid Shares upon the exercise of any conversion
rights attached to securities convertible into Shares or upon exercise
of any rights (including any conversion of the Notes) to acquire
Shares provided that an adjustment has been made under the provisions
under the heading "ADJUSTMENTS" in respect of the issue of such
securities or granting of such rights (as the case may be);
16.2 an issue of fully paid Shares upon the exercise of the Option;
16.3 an issue of Shares or other securities of the Company or any
subsidiary of the Company wholly or partly convertible into, or rights
to acquire, Shares to officers or employees of the Company or any of
its subsidiaries pursuant to any employee or executive share scheme in
existence as at the date of the issue of Notes;
16.4 an issue by the Company of Shares or by the Company or any subsidiary
of the Company of securities wholly or partly convertible into or
rights to acquire Shares, in any such case in consideration or part
consideration for the acquisition of any other securities, assets or
business provided that an adjustment has been made (if appropriate)
under the provisions under the heading "ADJUSTMENTS" in respect of the
issue of such securities or granting of such rights (as the case
18
may be);
16.5. an issue of fully paid Shares by way of capitalisation of all or part
of any subscription right reserve, or any similar reserve which has
been or may be established pursuant to the terms of any securities
wholly or partly convertible into or rights to acquire Shares; or
16.6. an issue of Shares pursuant to a scrip dividend scheme where an
amount not less than the nominal amount of the Shares so issued is
capitalised and the market value of such Shares is not more than 110
per cent of the amount of dividend which holders of the Shares could
elect to or would otherwise receive in cash, for which purpose the
"market value" of a Share shall mean the average of the closing
prices for such Stock Exchange dealing days on which dealings in the
Shares took place (being not less than five such days) as are
selected by the directors of the Company in connection with
determining the basis of allotment in respect of the relevant scrip
dividend and which fall within the period of one month ending on the
last day on which holders of Shares may elect to receive or (as the
case may be) not to receive the relevant dividend in cash.
17. Any adjustment to the Conversion Price shall be made to the nearest one
cent so that any amount under half a cent shall be rounded down and any
amount of half a cent or more shall be rounded up and in no event shall any
adjustment (otherwise than upon the consolidation of Shares into Shares of
a larger nominal amount) involve an increase in the Conversion Price. In
addition to any determination which may be made by the directors of the
Company every adjustment to the Conversion Price shall be certified either
(at the option of the Company) by the auditors of the Company for the time
being or by an approved merchant bank.
18. Notwithstanding anything contained herein, no adjustment shall be made to
the Conversion Price in any case in which the amount by which the same
would be reduced in accordance with the foregoing provisions of this
Condition 18 would be less than one cent and any adjustment that would
otherwise be required then to be made shall not be carried forward.
19. If the Company or any subsidiary of the Company shall in any way modify the
rights attached to any share or loan capital so as wholly or partly to
convert or make convertible such share or loan capital into, or attach
thereto any rights to acquire, Shares, the Company shall appoint an
approved merchant bank to consider whether any adjustment to the Conversion
Price is appropriate (and if such approved merchant bank shall certify that
any such adjustment is appropriate the Conversion Price shall be adjusted
accordingly and the provisions of Conditions 17, 18 and 21 shall apply).
20. Notwithstanding the provisions of Condition 14, in any circumstances where
the Directors of the Company shall consider that an adjustment to the
Conversion Price provided for under the said provisions should not be made
or should be calculated on a different basis or that an adjustment to the
Conversion Price should be made notwithstanding that no such adjustment is
required under the said provisions or that an adjustment should take effect
on a different date or with a different time from that provided for under
the provisions, the Company may appoint an approved merchant bank to
consider whether for any reason whatever the adjustment to be made (or the
absence of adjustment) would or might not fairly and appropriately reflect
the relative interests of the persons affected thereby and, if such
approved merchant bank shall consider this to be the case, the adjustment
shall be modified or nullified or an
19
adjustment made instead of no adjustment in such manner including without
limitation, making an adjustment calculated on a different basis) and/or
the adjustment shall take effect from such other date and/or time as shall
be certified by such approved merchant bank to be in its opinion
appropriate.
21. Whenever the Conversion Price is adjusted as herein provided the Company
shall give notice to the holder of the Notes that the Conversion Price has
been adjusted (setting forth the event giving rise to the adjustment, the
adjustment Conversion Price in effect prior to such adjustment, the
adjusted Conversion Price and the effective date thereof) and shall at all
times thereafter so long as the Notes remains outstanding make available
for inspection at its principal place of business in Hong Kong a signed
copy of the said certificate of the auditors of the Company or (as the case
may be) of the relevant approved merchant bank and a certificate signed by
a director of the Company setting forth brief particulars of the event
giving rise to the adjustment, the Conversion Price in effect prior to
such adjustment, the adjusted Conversion Price and the effective date
thereof and shall, on request, send a copy thereof to the Noteholder.
22. If application of any of the provisions of the provisions under the heading
"ADJUSTMENTS" would but for this Condition 22 result in the Conversion
Price being reduced so that on conversion Shares shall fall to be issued at
a discount to their nominal value, then the Conversion Price shall be
adjusted to an amount equal to the nominal value of one Share.
PROTECTION OF THE NOTEHOLDER
23. So long as the Notes is outstanding, and subject to any approvals otherwise
given in writing by the Noteholder:-
23.1. the Company shall keep available for issue, free from pre-emptive
rights, out of its authorised but unissued capital sufficient Shares
to satisfy in full the Conversion Rights at the Conversion Price from
time to time and all other rights for the time being outstanding of
subscription for and conversion into Shares;
23.2. the Company shall not in any way modify the rights attached to the
Shares as a class or attach any special restrictions thereto;
23.3. the Company shall not issue or pay up any securities by way of
capitalisation of profits or reserves other than (i) by the issue of
fully paid Shares to holders of its Shares; or (ii) as mentioned in
Condition 16.4; or (iii) by the issue of Shares in lieu of a cash
dividend in the manner referred to in Condition 16.5;
23.4. the Company shall not create or permit to be in issue any Equity
Share Capital other than Shares, provided that nothing in this
Condition 23.4 shall prevent (i) any consolidation or sub-division of
the Shares; or (ii) the issue of Equity Share Capital which does not
participate in dividend before a certain date or in respect of a
certain financial period but is pari passu in all other respects with
the Shares; or (iii) the issue of Equity Share Capital to officers or
employees of the Company or any of its subsidiaries pursuant to an
employee or executive share scheme in existence as at the date of
issue of the Notes or pursuant to the Share Option Scheme;
23.5. the Company shall procure that (i) no securities issued by the
Company shall be
20
converted into Shares or exchanged for Shares except in accordance
with the terms of issue thereof, (ii) no securities issued by the
Company without rights to convert into Shares or to be exchanged for
Shares shall subsequently be granted such rights and (iii) at no
time shall there be in issue Shares of differing nominal values;
23.6. the Company shall not make any issue, grant or distribution or take
any other action if the effect thereof would be that on the exercise
of the Conversion Rights it would but for Condition 22 be required
to issue Shares at a discount to their nominal value;
23.7. if an offer is made to the holders of Shares (or such holders other
than the offeror and/or any company controlled by the offeror and/or
persons acting in concert with the offeror) to acquire all or a
proportion of the Shares, the Company shall forthwith give notice of
such offer to the Noteholder and use all its reasonable endeavours
to procure that a similar offer is extended in respect of the Notes
or in respect of any Shares issued on conversion of the Notes during
the period of the offer;
23.8. the Company shall not make any distribution in specie to holders of
Shares unless the Noteholder is entitled to the Specie Distribution
Right in accordance with Condition 28;
23.9. the Company shall not, subject as hereinafter provided, make any
reduction or redemption of share capital, share premium account or
capital redemption reserve involving the repayment of money to
shareholders (other than to shareholders having the right on a
winding-up to a return of capital in priority to the holders of
Shares) or reduce any uncalled liability in respect thereof unless,
in any such case, the same gives rise (or would, but for the
provisions of Conditions 18or 20 give rise) to an adjustment of the
Conversion Price in accordance with the provisions under the heading
"ADJUSTMENTS";
23.10. the Company shall use its best endeavours (a) to maintain a listing
for all the issued Shares on the Stock Exchange or on such other
equivalent internationally recognised stock exchange (a "recognised
stock exchange") as the Company may from time to time determine (b)
to obtain and maintain a listing on the Stock Exchange (or a
recognised stock exchange) for all the Shares issued on the exercise
of the Conversion Rights attaching to the Notes and (c) to obtain a
listing for all the Shares issued on the exercise of the Conversion
Rights attaching to the Notes on any other stock exchange on which
any of the Shares are for the time being listed and will forthwith
give notice to the holder of the Notes in accordance with Condition
31 of the listing or delisting of the Shares by any such stock
exchange;
23.11. as soon as possible and in any event not later than 14 Business Days
after the announcement of the terms of any issue referred to in the
provisions under the heading "ADJUSTMENTS" give notice to the
Noteholder advising it of the date on which the relevant adjustment
of the Conversion Price is likely to become effective and of the
effect of exercising their Conversion Rights pending such date;
23.12. the Company shall comply with and procure the compliance of all
conditions imposed by the Stock Exchange or by any other competent
authority (in Hong
21
Kong or elsewhere) for approval of the issue of the Notes or for the
listing of and permission to deal in the Shares issued or to be
issued on the exercise of the Conversion Rights and to ensure the
continued compliance thereof;
23.13. The Company shall ensure that all Shares issued upon conversion of
the Notes will be duly and validly issued fully paid and registered
in the name of the Noteholder or its nominee(s).
23.14. The Company shall not enter into any deed, agreement, assignment,
instrument or documents whatsoever which may result in any breach of
the terms of the Notes.
PROCEDURE FOR CONVERSION
24. The Conversion Rights may, subject as provided herein, be exercised on any
Business Day prior to maturity of the Notes by the Noteholder delivering to
the principal place of business address of the Company in Hong Kong a
written notice stating of the outstanding principal amount of the Note that
the Noteholder intends to convert together with the Certificate. The
Noteholder shall be responsible for payment of all taxes and stamp duty,
issue and registration duties (if any) and Stock Exchange levies and
charges (if any) arising on conversion.
25. The Shares arising on conversion shall be allotted and issued by the
Company to the Noteholder or as it may direct within 14 Business Days
after, and with effect from, the date the Conversion Notice is served by
the Noteholder and certificates for the Shares to which the Noteholder
shall become entitled in consequence of exercising his Conversion Rights
shall be issued in board lots and (if appropriate) together with an
endorsement on the Certificate by a director of the Company for any balance
of the Notes not converted.
26. The Company shall be entitled to redeem the outstanding Notes in accordance
with the following provisions:
26.1. Unless (and to the extent not) previously redeemed or converted and
in each case cancelled as herein provided and subject to Condition
26.2 below, the Company may at its option at any time after the
expiry of a period of 18 months from the date of issue of the Notes
by giving notice in writing (the "Early Redemption Notice") to the
Noteholders (which notice shall specify the date of such redemption
(the "Early Redemption Date") and shall be irrevocable) redeem all,
or some (being HK$10,000,000 in principal amount or an integral
multiple thereof), of the principal amount of the Notes outstanding
on the Early Redemption Date (which shall not be more than 10
Business Days after the date on which such notice is given) provided
that the closing price of the Shares on the Stock Exchange (as
derived from the Daily Quotations Sheet of the Stock Exchange) for
at least 20 dealing days in a period of 30 consecutive dealing days
ending on the day immediately preceding the date of the Early
Redemption Notice is at least 130 per cent. of the Conversion Price
in effect on such dealing day. Such notice shall oblige the Company
to redeem the principal amount of the Notes outstanding on such
Early Redemption Date (the "Principal Redemption Amount") at 100 per
cent. of its principal amount together with interest accrued on such
Principal Redemption Amount from the Interest Payment Date last
preceding the Early Redemption Date to but excluding the Early
Redemption Date. For the purpose of this Condition 26.1, the term
"dealing
22
day" means a day on which the Stock Exchange is open for business. If
there shall occur an event giving rise to a change in the Conversion
Price during any such 30 dealing day period, appropriate adjustments
for the relevant days shall be made for the purpose of calculating
the closing price for such days. If no price as aforesaid is reported
on the Stock Exchange for one or more consecutive dealing days, such
day or days will be disregarded in the relevant calculation and will
be deemed not to have existed when ascertaining such 30 dealing day
period.
26.2. In the event that a Noteholder serves a Conversion Notice at the same
time or prior to the service by the Company of an Early Redemption
Notice in accordance with Condition 26.1, the Conversion Notice shall
prevail and accordingly if the outstanding principal amount of the
Note held by such Noteholder is less than the aggregate of the
principal amount of the Note to be converted pursuant to such
Conversion Notice plus the Principal Redemption Amount, the
outstanding principal amount of the Note held by such Noteholder (or
relevant part thereof specified in such Conversion Notice) shall be
converted in accordance with such Conversion Notice pursuant to these
Conditions and the Early Redemption Notice shall be of effect only to
the extent of the outstanding principal amount of the Note held by
such Noteholder exceeds the principal amount of the Note to be
converted pursuant to such Conversion Notice, if any. In the event
that an Early Redemption Notice is served on a Noteholder prior to
the service of a Conversion Notice by such Noteholder, the Early
Redemption Notice shall prevail and accordingly if the outstanding
principal amount of the Note held by such Noteholder is less than the
aggregate principal amount of the Note to be converted pursuant to
such Conversion Notice plus the Principal Redemption Amount, the
outstanding principal amount of the Note held by such Noteholder (or
relevant part thereof specified in such Early Redemption Notice)
shall be redeemed in accordance with Condition 26.1 and the
Conversion Notice shall be of effect only to the extent of the
outstanding principal amount of the Note held by such Noteholder
exceeds the Principal Redemption Amount, if any.
26.3. Subject to Condition 26.1 above, and to the Noteholders' right to
have the Notes redeemed on the Maturity Date in accordance with
Condition 3, Noteholders shall not be entitled to redeem the Notes in
whole or in part at any other time.
26.4. Upon the redemption or conversion of the Notes, the Notes will
forthwith be cancelled and may not be re-issued or re-sold.
EVENTS OF DEFAULT
27. If any of the following events occurs, a Noteholder may give notice to the
Company that the Notes is, and it shall on the giving of such notice
immediately become, due and payable at its principal amount together with
any accrued interest calculated up to and including the date of repayment:-
27.1. the Company fails to pay the principal when due or the Company fails
to pay interest on the Notes when due unless non-payment of such
interest is due solely to administrative or technical error and
payment is made within seven Business Days of the due date thereof;
or
27.2. the Company defaults in performance or observance or compliance with
any of its other obligations set out herein which default is
incapable of remedy or, if
23
capable of remedy, is not in the reasonable opinion of the Noteholder
remedied within 14 Business Days after notice of such default shall
have been given to the Company by such Noteholder; or
27.3. any bank borrowings of the Company or its subsidiaries ("Major
Subsidiaries") with net asset value as shown in the respective latest
published accounts thereof amounts to 50% or more of that of the
Company are not paid when due, or as the case may be, within any
applicable grace period; or
27.4. the Company or its Major Subsidiaries fails to pay when due or
expressed to be due any amounts payable or expressed to be payable by
it under any present or future guarantee for any moneys borrowed from
or raised through a financial institution; or
27.5. an encumbrancer takes possession or a receiver, manager or other
similar officer is appointed on the whole or any substantial part of
the undertaking, property, assets or revenues of the Company or its
Major Subsidiaries; or
27.6. the Company or its Major Subsidiaries becomes insolvent or is unable
to pay its debts as they mature or applies for or consents to or
suffers the appointment of any administrator, liquidator or receiver
of the Company or its Major Subsidiaries on the whole or any part of
the undertaking, property, assets or revenues of the Company or its
Major Subsidiaries or takes any proceeding under any law for a
readjustment or deferment of its obligations or any part of them or
makes or enters into a general assignment or compromise with or for
the benefit of its creditors; or
27.7. an order is made or an effective resolution passed for winding-up of
the Company or any of its Major Subsidiaries except in the case of
winding-up for the purpose of the reorganisation of the Group
structure of the Company and its Major Subsidiaries; or
27.8. a moratorium is agreed or declared in respect of any indebtedness of
the Company or any of its Major Subsidiaries or any governmental
authority or agency condemns, seizes, compulsorily purchases or
expropriates all or a substantial part of the assets of the Company
or any of its Major Subsidiaries; or
27.9. the Shares (as a class) cease to be listed on the Stock Exchange or a
recognised stock exchange or are suspended from trading on the Stock
Exchange for a continuous period of 14 trading days due to the
default of the Company.
The Company will forthwith on becoming aware of any such event as is
mentioned in this Condition 27 give notice in writing thereof to the
Noteholder. At any time after the Notes has become payable the Noteholder
may without further notice institute such proceedings as it may think fit
to enforce payment of the monies due.
DISTRIBUTION IN SPECIE
28. If the Company declares a distribution in specie other than an issue of
Shares in lieu of a cash dividend (a "Specie Distribution") to shareholders
at any time during the period in which the Noteholder can exercise its
Conversion Rights, the Noteholder will, unless an adjustment to the
Conversion Price has been made under the provisions under the
24
heading "ADJUSTMENTS" in respect of the Specie Distribution in full, be
entitled to an amount (the "Specie Distribution Right") which shall be
determined as follows:-
28.1. the Company and the Noteholder will forthwith on the date of
announcement of the Specie Distribution instruct the approved
merchant bank as defined in Condition 15 to value the Specie
Distribution which would have been payable to the Noteholder on the
Shares failing to be issued if the Noteholder had exercised its
Conversion Rights immediately prior to the record date for the Specie
Distribution in respect of the whole of the principal amount of the
Notes then outstanding (the "Notional Specie Distribution"); and
28.2. upon the determination of the approved merchant bank's valuation of
the Notional Specie Distribution (which valuation shall be final and
binding on both the Company and the Noteholder) the Company will pay
a cash amount equal to the value of the Notional Specie Distribution
to the Noteholder.
VOTING
29. The Noteholder will not be entitled to attend or vote at any meetings of
the Company by reason only it being the Noteholder.
EXPERTS
30. In giving any certificate or making any adjustment hereunder, the auditors
of the Company or (as the case may be) the approved merchant bank shall be
deemed to be acting as experts and not as arbitrators and, in the absence
of manifest error, their decision shall be conclusive and binding on the
Company and the Noteholder and all persons claiming through or under them
respectively.
NOTICES
31. Any notice required or permitted to be given shall be given by delivering
it to the party:-
31.1. in the case of Noteholder(s) to their address in Hong Kong as
specified in the register of Noteholders
31.2. in the case of the Company to 13th Floor, TCL Tower, 8 Xxx Xxxxx
Road, Tsuen Wan, New Territories, Hong Kong
or to such other address as the party concerned may have notified to the
other party pursuant to this Condition 31 and may be given by sending it by
hand or in a prepaid envelope by registered mail to such address or (in
either case) to such other address as the party concerned may have notified
to the other parties in accordance with this Condition 31 and such notice
shall be deemed to be served at the time of delivery or (as the case may
be) 48 hours after posting, or if sooner upon acknowledgement of receipt by
or on behalf of the party to which it is addressed.
25
AMENDMENT
32. The terms and conditions of the Notes may be varied, expanded or amended
by agreement in writing between the Company and the Noteholder.
GOVERNING LAW AND JURISDICTION
33. The Notes and the terms of the Notes are governed by and shall be
construed in accordance with Hong Kong law and the parties agree to submit
to the non-executive jurisdiction of the courts of Hong Kong.
26
SCHEDULE 3
(Completion Requirements)
Obligations of the Company
1. At Completion, the Company shall deliver to each of the Subscribers (or to
such person at such place as the Subscribers may direct):-
1.1. a certified copy of the board resolution of the Company approving and
authorising the execution and completion of this Agreement and the
issue of the Notes and the Certificate(s) upon the terms and subject
to the Conditions contained therein;
1.2. evidence reasonably satisfactory to the Subscribers that the
Condition Precedent have been fulfilled; and
1.3. the Certificates duly issued in favour of the Subscribers in respect
of the Notes subscribed.
Obligations of the Subscribers
2. At Completion each of the Subscribers shall:-
2.1. deliver to the Company a certified copy of its board resolution
approving and authorising the execution of this Agreement; and
2.2. pay the subscription moneys for the full face value of the Note(s)
being subscribed in the manner as the Company may direct.
27
SCHEDULE 4
(Warranties)
1. The entire existing issued share capital of the Company is listed on the
Stock Exchange and the Company is not aware of any circumstance whereby
such listing will be suspended, cancelled or revoked before or after
Completion as a result of the transactions contemplated by this Agreement.
2. Save as mentioned in this Agreement, the Company has the authority to
enter into and perform this Agreement and that in entering into this
Agreement, the Company does not do so in breach of any existing obligation
or applicable legislation.
3. The Company has full power and authority to issue the Notes and perform
its obligations thereunder subject to the fulfilment of the Condition
Precedent.
4. Subject to the fulfilment of the Condition Precedent, all necessary
consents, authorisations and approvals of and all necessary registrations
and filings with any governmental or regulatory agency or body required in
Hong Kong, the Cayman Islands or elsewhere for or in connection with this
Agreement and the Notes and the performance of the terms thereof have been
obtained or made or will have been obtained or made by Completion.
5. Subject as otherwise provided herein, the issue of the Notes and the
Certificates will not infringe and will not be contrary to any laws or
regulations of any government or regulatory body of Hong Kong, the Cayman
Islands or elsewhere, as the case may be, and will not result in any
breach of the terms of the Memorandum of Associated and Articles of
Association of the Company or constitute a default under any deed,
agreement, mortgage or other instrument to which the Company is a party.
6. Upon the issue of the Notes and the execution of the Certificates by and
delivery of the same, the Notes and the Certificates will constitute the
legal, valid and binding obligations of the Company enforceable against
the Company in accordance with its terms.
7. The Company and its subsidiaries are not involved in any litigation,
arbitration or administrative proceedings relating to claims or amounts
which are material in the context of the issue of the Notes.
8. No event exists or has occurred and no condition is in existence which
would be (after the issue of the Notes) an event of default under
Condition 27 of the Conditions and no event or act has occurred which,
with the giving of notice, or the lapse of time, or both, would (after the
issue of the Notes), constitute such an event of default.
9. A copy of the Memorandum of Association and Articles of Association of the
Company which have been supplied to the Subscribers and for the purposes
of identification, signed by a director of the Company is complete and
accurate in all
28
material respects.
10. Save for the Options and as contemplated under the
Subscription Agreement,
there are no options, rights to acquire, or any other form of security or
encumbrance on, over or affecting any part of the unissued share capital
of the Company and there is no agreement or commitment to give or create
any of the foregoing and no claim has been made by any person to be
entitled to any of the foregoing.
11. The particulars relating to the share capital of the Company as set out in
Recital (A) of this Agreement are correct and accurate and, subject to the
fulfilment of the Condition Precedent, the Company will on Completion
have sufficient authorised share capital to satisfy the Company's
obligation under the Notes.
12. From the date hereof until the issue of the Notes no act will be done and
no circumstances will arise which will (or but for Condition 18 of the
Conditions would) give rise to an adjustment of the Conversion Price (as
defined in the Conditions) under the provisions under the heading
"ADJUSTMENTS" (for the avoidance of doubt including Conditions 14 to 22)
of the Notes if the act were done or the circumstances arose after the
issue of the Notes.
13. The Accounts:-
13.1. have been prepared on a basis consistent with those of the previous
financial year in accordance with generally accepted accounting
principles and practices including all applicable statements of
standard accounting practice generally accepted in Hong Kong. The
Accounts make proper provisions for all of the actual and contingent
liabilities of the Company or any of its subsidiaries and comply
with the disclosure requirements of the Companies Ordinance as if
the Company were a company incorporated under the Companies
Ordinance; and
13.2. show a true and fair view of the state of affairs and financial
position of the Company as at 31 December 2001 and of its results
for the financial period ended on that date.
14. Since 31 December 2001, to the date of this Agreement:-
14.1. there has been no material adverse change in the financial condition
or prospects of the Company;
14.2. no dividend or any other distribution has been or will be declared,
made or paid by the Company other than a final dividend of HK$0.03
per Share for the year ended 31 December 2001; and
14.3. The Company has not incurred any material additional liabilities
whether actual or contingent, otherwise than in the ordinary course
of business and except as already announced by the Company to the
public and/or its shareholders in accordance with the Listing Rules
of the Stock Exchange before the date hereof.
15. The Company is deemed to have repeated all the Warranties on the basis
that such
29
Warranties will at all times from the date of this Agreement up to and
including the date of Completion be true complete and accurate in all respects
and such Warranties shall have effect as if given at Completion as well as the
date of this Agreement.
30
EXECUTION PAGE
AS WITNESS whereof this Agreement has been duly executed on the date
first above written.
SIGNED by Xx Xxxx Sheng )
duly authorised for and on behalf )
of TCL INTERNATIONAL ) For and on behalf of
HOLDINGS LIMITED ) TCL INTERNATIONAL HOLDINGS LIMITED
whose signature )
is verified by: /s/ Xx Xxxx Sheng
--------------------------------------
[Illegible] Authorized Signature(s)
SIGNED by Xxxx Toe Xxxxx )
duly authorised for and on behalf )
of United Asset Investments Limited ) For and on behalf of
whose signature ) UNITED ASSET INVESTMENTS LIMITED
is verified by:
/s/ Xxxx Toe Xxxxx
--------------------------------------
[Illegible] Authorized Signature(s)
SIGNED by Xxxx Toe Xxxxx )
duly authorised for and on behalf )
of Go-Win Limited ) For and on behalf of
whose signature ) GO-WIN LIMITED
is verified by:
/s/ Xxxx Toe Xxxxx
--------------------------------------
[Illegible] Authorized Signature(s)
SIGNED by Xx Xxx Xxxx, Xxxxxx )
duly authorised for and on behalf )
of Nam Tai Electronics, Inc. ) For and on behalf of
in the presence of: ) NAM TAI ELECTRONICS, INC.
/s/ Xx Xxx Xxxx, Xxxxxx
----------------------------------------
[Illegible] Authorized Signature
31
