EXHIBIT 4 (cc)
CONFORMED COPY
PCCW-HKT CAPITAL NO.2 LIMITED
US$500,000,000 6% GUARANTEED NOTES DUE 2013
Guaranteed by
PCCW-HKT TELEPHONE LIMITED
PURCHASE AGREEMENT
July 10, 2003
July 10, 2003
The Hongkong and Shanghai Banking Corporation Limited
Xxxxx 00
0 Xxxxx'x Xxxx, Xxxxxxx
Xxxx Xxxx
Ladies and Gentlemen:
PCCW-HKT Capital No.2 Limited, a company with limited liability organized
under the laws of the British Virgin Islands (the "Issuer"), proposes to issue
and sell to The Hongkong and Shanghai Banking Corporation Limited (the
"Manager") US$500,000,000 principal amount of its 6% Guaranteed Notes due 2013
(the "Notes"). The Notes will be unconditionally guaranteed as to payment of
principal, premium (if any), interest and additional amounts by PCCW-HKT
Telephone Limited, a company with limited liability organized under the laws of
Hong Kong (the "Guarantor"). The Guarantor's guarantee included in the
Indenture (defined below) and noted on the Notes is hereafter referred to as
the "Guarantee". The Notes, including the Guarantee, are hereinafter referred
to as the "Securities". The Securities will be issued pursuant to the
provisions of an Indenture to be dated as of July 17, 2003 (the "Indenture")
among the Issuer, the Guarantor and HSBC Bank USA, as Trustee (the "Trustee"),
in the form attached as Exhibit F, as modified to reflect the timing of the
transaction and pricing information.
The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), to qualified
institutional buyers (each a "QIB") in compliance with the exemption from
registration provided by Rule 144A under the Securities Act and in offshore
transactions to non-U.S. persons in reliance on Regulation S under the
Securities Act ("Regulation S").
In connection with the sale of the Securities, the Issuer and the
Guarantor have prepared a preliminary offering circular dated July 9, 2003 (the
"Preliminary Circular"), and have prepared a final offering circular dated the
date hereof (the "Final Circular" and, with the Preliminary Circular, each a
"Circular") for delivery to the prospective purchasers of the Securities.
1. Representations and Warranties. Each of the Issuer and the Guarantor
represents and warrants to, and agrees with, you that:
(a) None of the Preliminary Circular or the Final Circular in the
form used by the Manager to confirm sales, in each case as of its
respective date and, in the case of the Final Circular, on the Closing
Date
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(as defined in Section 4), contained or will contain any untrue statement
of a material fact or omitted or will omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in any Circular based upon information relating to
the Manager furnished to either of the Issuer or the Guarantor in writing
by the Manager expressly for use therein.
(b) The Guarantor has been duly incorporated and is validly existing
as a corporation under the laws of Hong Kong, has the corporate power and
authority to own its property and to conduct such business as described in
each Circular and is duly qualified to transact such business and is in
good standing in each jurisdiction (to the extent such concept is
applicable in such jurisdiction) in which the conduct of its business or
its ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or (if applicable) be in
good standing would not have a material adverse effect on the Guarantor
and the Issuer, taken as a whole.
(c) The Issuer has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the British Virgin Islands,
has the corporate power and authority to own its property and to conduct
such business as described in each Circular and is duly qualified to
transact such business and is in good standing in each jurisdiction (to
the extent such concept is applicable in such jurisdiction) in which the
conduct of its business or its ownership or leasing of property requires
such qualification; for so long as the Notes are outstanding, the Issuer
will conduct no business, except relating to the offering, sale or
issuance of indebtedness and the lending of the proceeds thereof to the
Guarantor and any other activities in connection therewith.
(d) All of the issued shares in the capital of the Issuer have been
duly authorized and validly issued and are fully paid and non-assessable,
are owned directly by the Guarantor, free and clear of all liens,
encumbrances, equities or claims except for any liens, encumbrances,
equities or claims that would not have a material adverse effect on the
Guarantor and the Issuer as a whole, and none of such shares was issued in
violation of any pre-emptive rights; and the Issuer has the share
capitalization as set forth in the Final Circular.
(e) There are no subsidiaries of the Guarantor other than the Issuer,
PCCW-HKT Capital Limited, PCCW-HKT Capital No.3 Limited, PCCW-HKT Capital
No.4 Limited, Cascade Limited, Cascade Holding No.1 Limited, Cascade
Holding No.2 Limited and PCCW IMS Limited.
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(f) This Agreement has been duly authorized, executed and delivered
by the Issuer and the Guarantor.
(g) The Notes have been duly authorized by the Issuer and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Manager in accordance with
the terms of this Agreement, will be valid and binding obligations of the
Issuer, enforceable in accordance with their terms, subject to the effects
of applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and general principles of equity, and the holders thereof
will be entitled to the benefits conferred thereunder and under the
Indenture.
(h) The Guarantee noted on the Securities pursuant to the Indenture
has been duly authorized by the Guarantor and, when the Guarantee is
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Manager in accordance with
the terms of this Agreement, the Guarantee will be a valid and binding
obligation of the Guarantor, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and general principles of equity.
(i) The Indenture has been duly authorized and, when executed and
delivered by each of the Issuer and the Guarantor, will be a valid and
binding agreement of each of the Issuer and the Guarantor, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general principles
of equity; and the Securities and the Indenture will conform in all
material respects to the descriptions thereof in each Circular.
(j) The execution and delivery by the Issuer of, and the performance
by the Issuer of its obligations under, this Agreement, the Indenture and
the Notes will not contravene or result in a breach of any of the terms or
provisions of, or constitute a default under, (i) any provision of
applicable law or the Memorandum and Articles of Association of the Issuer
or (ii) any indenture, mortgage, deed of trust, loan agreement or any
agreement or other instrument binding upon the Issuer or to which any of
its property or assets is subject or (iii) any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the
Issuer, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Issuer of its obligations under this Agreement, the
Indenture or the Notes, except such as may be required by the securities
or Blue Sky laws of the various states in connection with the offer and
sale of the Notes.
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(k) The execution and delivery by the Guarantor of, and the
performance by the Guarantor of its obligations under, this Agreement, the
Indenture and the Guarantee will not contravene or result in a breach of
any of the terms or provisions of, or constitute a default under, (i) any
provision of applicable law or the certificate of incorporation or by-laws
of the Guarantor or (ii) any indenture, mortgage, deed of trust, loan
agreement or any agreement or other instrument binding upon the Guarantor
or the Issuer, or to which any of its property or assets is subject or
(iii) any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Guarantor or any subsidiary, except, in
the case of clauses (ii) and (iii), where such contravention, breach or
default would neither have a material adverse effect on the Guarantor and
the Issuer, taken as a whole, nor have a material adverse effect on the
power or ability of the Guarantor or the Issuer to perform its respective
obligations under this Agreement, the Indenture, the Guarantee or the
Notes or to consummate the transactions contemplated by the Final
Circular; and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency having jurisdiction
over the Guarantor is required for the performance by the Guarantor of its
obligations under this Agreement, the Indenture or the Guarantee, except
such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Securities.
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Guarantor and the Issuer, taken as a whole, or of the
Issuer from that set forth in the Final Circular.
(m) There are no legal or governmental proceedings pending or to the
knowledge of the Guarantor threatened to which the Guarantor or the Issuer
is a party or to which any of the properties of the Guarantor or the
Issuer is subject other than proceedings accurately described in all
material respects in each Circular and proceedings that would not have a
material adverse effect on the Guarantor and the Issuer, taken as a whole,
or on the power or ability of the Guarantor or the Issuer to perform its
respective obligations under this Agreement, the Indenture, the Guarantee
or the Notes or to consummate the transactions contemplated by the Final
Circular.
(n) The Guarantor and the Issuer (i) are in compliance with any and
all applicable laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them under
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applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except (x) for such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or approvals as are accurately described in all material respects in the
Final Circular or (y) where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or approvals would not, singly or in the aggregate, have material adverse
effect on the Guarantor and the Issuer, taken as a whole.
(o) Except as accurately described in all material respects in the
Final Circular, there are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties) which would, singly or in the aggregate, have a material
adverse effect on the Guarantor and the Issuer, taken as a whole.
(p) Neither the Issuer nor the Guarantor is and, after giving effect
to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Circular, neither will be
required to register as an "investment company" under the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(q) None of the Issuer, the Guarantor, any affiliate (as defined in
Rule 501(b) of Regulation D, an "Affiliate") of the Issuer or the
Guarantor or any person acting on its or their behalf (other than the
Manager) has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be integrated
with the sale of the Securities in a manner that would require the
registration under the Securities Act of the Securities or (ii) offered,
solicited offers to buy or sold the Securities by any form of general
solicitation or general advertising (as those terms are used in Regulation
D under the Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act.
(r) None of the Issuer, the Guarantor, any of its or their Affiliates
or any person acting on its or their behalf (other than the Manager) has
engaged or will engage in any directed selling efforts (within the meaning
of Regulation S) with respect to the Securities, and the Issuer, the
Guarantor, any of its or their Affiliates or any person acting
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on its or their behalf (other than the Manager) have complied and will
comply with the offering restrictions (within the meaning of Regulation S)
in connection with the offering of the Securities contemplated by this
Agreement and the Final Circular.
(s) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Manager in the manner contemplated by
this Agreement to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended.
(t) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
(u) The choice of New York law as the governing law of each of this
Agreement, the Indenture, the Notes and the Guarantee is a valid choice of
law and will be recognized and given effect to by each of the courts of
Hong Kong and the courts of the British Virgin Islands; and the submission
by each of the Issuer and the Guarantor to the non-exclusive jurisdiction
of the New York courts contained in this Agreement and the Indenture and
the appointment by each of the Issuer and the Guarantor of CT Corporation
System as its agent for service of process in connection therewith are, in
each case, valid and binding on it under the laws of its jurisdiction of
incorporation.
(v) No consents, authorizations, approvals, orders, certificates or
permits (each, a "consent") of and from, and no declarations or filings
with, any local or other governmental authorities in Hong Kong or any
courts and other tribunals in Hong Kong are required for the Guarantor to
own, lease, licence and use its Hong Kong properties and assets and to
conduct its business in the manner described in each Circular, except (i)
for the Fixed Telecommunications Network Services Licence issued on June
29, 1995 (and subsequently amended on March 31, 1998 and January 31, 2001)
by the Telecommunications Authority pursuant to the Hong Kong
Telecommunications Ordinance and certain other licences that the Guarantor
has obtained (each of which licence is currently in full force and effect
and filings required to be made pursuant to the terms of such licence, all
of which have been filed by the Guarantor), and (ii) to the extent that
the failure to have or obtain any such consent or make any such
declaration or filing would not singly or in the aggregate have a material
adverse effect on the Guarantor and the Issuer, taken as a whole.
(w) Each of the Issuer and the Guarantor has full power, authority
and legal right under the laws of its jurisdiction of incorporation to
enter into and perform its obligations of indemnification and contribution
set forth in Section 8 of this Agreement; none of the
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contribution provisions nor the indemnification provisions set forth in
such Section 8 contravene the public policy or laws of its jurisdiction of
incorporation.
(x) The Guarantor and its obligations under this Agreement, the
Indenture and the Guarantee are subject to commercial law and to suit in
Hong Kong and neither the Guarantor nor any of its properties, assets or
revenues has any right of immunity, on the grounds of sovereignty or
otherwise, from any legal action, suit or proceeding, from the giving of
any relief in any court, from set-off or counterclaim, from the
jurisdiction of any court, from service of process, attachment upon or
prior to judgment, or attachment in aid of execution of judgment, or from
execution of a judgment, or other legal process or proceeding for the
giving of any relief or for the enforcement of judgment, in Hong Kong,
with respect to its obligations, liabilities or any other matter under or
arising out of or in connection with this Agreement, the Indenture or the
Guarantee.
(y) The Issuer and its obligations under this Agreement, the
Indenture and the Notes are subject to commercial law and to suit in the
British Virgin Islands and neither the Issuer nor any of its properties,
assets or revenues has any right of immunity, on the grounds of
sovereignty or otherwise, from any legal action, suit or proceeding, from
the giving of any relief in any court, from set-off or counterclaim, from
the jurisdiction of any court, from service of process, attachment upon or
prior to judgment, or attachment in aid of execution of judgment, or from
execution of a judgment, or other legal process or proceeding for the
giving of any relief or for the enforcement of judgment, in the British
Virgin Islands, with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Agreement, the
Indenture or the Notes.
(z) Each of this Agreement, the Indenture, and the Notes and the
Guarantee is in proper legal form under the laws of the British Virgin
Islands and Hong Kong, as the case may be, and to ensure the legality,
validity and admissibility into evidence in the British Virgin Islands and
Hong Kong, as the case may be, of each of this Agreement, the Indenture,
the Notes and the Guarantee, it is not necessary that this Agreement, the
Indenture, the Notes or the Guarantee or any other document or instrument
be filed or recorded with any court or other authority in the British
Virgin Islands and Hong Kong, as the case may be.
(aa) Although there is no statutory enforcement in the British Virgin
Islands of a judgment obtained in any competent court of the State of New
York or in a federal court of the United States of America in New
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York (any such court, a "Competent Court"), the courts of the British
Virgin Islands will recognize and enforce a judgment of a Competent Court
obtained against the Issuer arising out of or relating to this Agreement,
the Indenture or the Notes, based on the principle that a judgment of a
competent foreign court imposes upon the judgment debtor an obligation to
pay the sum for which judgment has been given provided such judgment is
final, for a liquidated sum, not in respect of taxes or a fine or penalty,
and was not obtained in a manner and is not of a kind the enforcement of
which is contrary to the public policy of the British Virgin Islands. A
British Virgin Islands court may stay proceedings if concurrent
proceedings are being brought elsewhere.
(bb) A final and conclusive judgment on the merits properly obtained
against the Guarantor in a Competent Court for a fixed sum of money in
respect of any legal suit or proceeding arising out of or relating to this
Agreement, the Indenture or the Guarantee and which could be enforced by
execution against the Guarantor in the jurisdiction of such Competent
Court and has not been stayed or satisfied in whole may be sued on in Hong
Kong as a debt due from the Guarantor if: (i) the Guarantor was, at the
time such proceeding was instituted, resident in the jurisdiction in which
such proceeding has been commenced or had submitted to the jurisdiction of
such Competent Court; (ii) that judgment was not obtained by fraud; (iii)
the enforcement of that judgment would not be contrary to public policy of
Hong Kong; (iv) that judgment had not been obtained in contravention of
the principles of natural justice; (v) the judgment of the relevant court
does not include the payment of any tax, fine or penalty; and (vi) the
Guarantor either was duly served with the process of the Competent Court
or appeared before the Competent Court.
(cc) Except as disclosed in each of the Preliminary Circular and the
Final Circular under the caption "Certain Tax Considerations - Hong Kong
Taxation" and " - British Virgin Islands Taxation," no taxes, imposts or
duties of any nature (including, without limitation, stamp or other
issuance or transfer taxes or duties and capital gains, income,
withholding or other taxes) are payable by or on behalf of the Guarantor
or the Issuer, and no stamp or withholding taxes, imposts or duties are
payable on behalf of the Manager, to Hong Kong or to the British Virgin
Islands or any political subdivision or taxing authority thereof or
therein in connection with (a) the execution of this Agreement, the
Indenture, the Guarantee, the Notes, or the Intercompany Loan dated July
10, 2003 (the "Intercompany Loan"); or (b) the issuance or sale of the
Notes to the Manager in the manner contemplated in this Agreement.
(dd) To the knowledge of the Issuer and the Guarantor, based on
consultation with their counsel, (i) there currently are not any proposed
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laws (or regulations or rulings) of the British Virgin Islands or Hong
Kong that would result in the imposition of withholding tax on any
payments on the Notes or the Intercompany Loan and (ii) although the
People's Republic of China currently imposes a withholding tax on
interest, the People's Republic of China's tax laws are not applicable in
Hong Kong.
(ee) Each of the balance sheets and profit and loss accounts and cash
flow statements of the Guarantor included in each Circular present fairly
the financial position of the Guarantor as of the dates indicated therein
and the results of operations and cash flows for the periods specified
therein, and (i) such financial statements have been prepared in
accordance with accounting principles generally accepted in Hong Kong and
(ii) KPMG, which certified each of the audited financial statements
included in each Circular, are independent public accountants with respect
to the Guarantor pursuant to the rules promulgated by the Hong Kong
Society of Accountants.
(ff) Each of the Issuer and the Guarantor is a "foreign issuer" as
such term is defined by Regulation S.
2. Agreements to Sell and Purchase. (a) Each of the Issuer and the
Guarantor hereby agrees to sell to the Manager, and the Manager, upon the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase from the Issuer and the
Guarantor the Securities at a purchase price of 99.058% of the principal amount
thereof (the "Purchase Price") plus accrued interest, if any, to the Closing
Date.
(b) Each of the Issuer and the Guarantor hereby agrees that it will
not, during the period beginning on the date hereof and continuing to and
including the Closing Date, offer, sell, contract to sell or otherwise
dispose of any debt of the Issuer or the Guarantor or warrants to purchase
debt of the Issuer or the Guarantor substantially similar to the
Securities (other than the sale of the Securities under this Agreement).
(c) None of the Issuer, the Guarantor or any of its or their
Affiliates will sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act)
which could be integrated with the sale of the Securities in a manner
which would require the registration of the Securities under the
Securities Act.
3. Terms of Offering. You have advised the Issuer and the Guarantor that
the Manager will make an offering of the Securities purchased by it hereunder
on the terms to be set forth in the Final Circular, as soon as practicable
after this Agreement is entered into as in your judgment is advisable.
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4. Payment and Delivery. Payment for the Securities shall be made to the
Issuer in Federal or other funds immediately available in New York City against
delivery of such Securities for the account of the Manager at 9:00 a.m., New
York City time, on July 17, 2003, or at such other time on the same or such
other date as shall be mutually agreed. The time and date of such payment are
hereinafter referred to as the "Closing Date."
Payment for the Securities shall be made against delivery, (i) with
respect to Securities to be resold by the Manager, of one or more global
securities (the "Rule 144A Global Securities") to the Trustee as custodian for
Cede & Co., as nominee of The Depository Trust Company ("DTC"), for the account
of the Manager and (ii) with respect to Securities to be resold outside the
United States to foreign purchasers of one or more global securities (the
"Regulation S Securities" and, together with the Rule 144A Global Securities,
the "Global Securities") to the Trustee as custodian for DTC, on behalf of
Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear") and
Clearstream Banking SA ("Clearstream") for the account of the Manager. The
Securities shall be delivered with any transfer taxes payable in connection
with the transfer of the Securities to the Manager duly paid.
5. Conditions to the Manager's Obligations. The obligations of the Manager
to purchase and pay for the Securities on the Closing Date are subject to the
performance by the Issuer and the Guarantor of each of their respective
obligations hereunder and to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) the Notes shall have been rated BBB by Standard & Poor's
Ratings Service and Baa2 by Xxxxx'x Investors Service (each, a
"Rating Agency");
(ii) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded the Issuer
or the Guarantor or any of the Notes or any securities of either the
Issuer or the Guarantor or in the rating outlook for either of the
Issuer or the Guarantor by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(iii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
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the Guarantor and the Issuer, taken as a whole, from that set forth
in the Final Circular that, in your judgment, is material and adverse
and that makes it, in your judgment, impracticable to market the
Securities on the terms and in the manner contemplated in the Final
Circular.
(b) The Manager shall have received from each of the Issuer and the
Guarantor on the Closing Date a certificate, dated the Closing Date and
signed by an executive officer thereof, to the effect set forth in Section
5(a)(i) and to the effect that its representations and warranties in this
Agreement are true and correct as of the Closing Date and that it has
complied in all material respects with all of the agreements and satisfied
all of the conditions on its part to be performed or satisfied hereunder
on or before the Closing Date.
The officers signing and delivering such certificates may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Manager shall have received on the Closing Date an opinion of
Xxxxxx Westwood & Riegels LLP, British Virgin Islands counsel for the
Issuer, dated the Closing Date, to the effect set forth in Exhibit A. Such
opinion shall be rendered to the Manager at the request of the Issuer and
shall so state therein.
(d) The Manager shall have received on the Closing Date an opinion of
Xxxxx Xxxx & Xxxxxxxx, U.S. counsel for the Issuer and the Guarantor,
dated the Closing Date, to the effect set forth in Exhibit B. Such opinion
shall be rendered to the Manager at the request of the Guarantor and shall
so state therein.
(e) The Manager shall have received on the Closing Date an opinion of
Xxxxxxx & Xxxxxxx, Hong Kong counsel for the Issuer and the Guarantor,
dated the Closing Date, to the effect set forth in Exhibit C. Such opinion
shall be rendered to the Manager at the request of the Guarantor and shall
so state therein.
(f) The Manager shall have received on the Closing Date an opinion of
Xxxxx & Xxxxx, U.S. counsel for the Manager, dated the Closing Date, to
the effect set forth in Exhibit D.
(g) The Manager shall have received on each of the date hereof and
the Closing Date a letter, dated the date hereof or the Closing Date, as
the case may be, from KPMG, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
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and certain financial information contained in each Circular substantially
in the form attached hereto as Exhibit E; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date hereof.
(h) DTC shall have approved the form of the Securities and each of
DTC, the Issuer and the Guarantor shall have executed a letter of
representations with respect to the Securities and such letter shall be in
full force and effect.
(i) The Indenture shall have been duly executed and delivered and
shall be in full force and effect, and true and complete copies thereof
shall have been delivered to the Manager.
(j) The Securities shall have been duly executed and delivered and
shall be in full force and effect, and true and complete copies thereof
shall have been delivered to the Manager.
(k) On or prior to the Closing Date, the Guarantor and the Issuer
shall have furnished to each of you such further certificates and
documents as you may reasonably request.
6. Covenants of the Issuer and the Guarantor. In further consideration of
the agreements of the Manager contained in this Agreement, the Issuer and the
Guarantor, jointly and severally, covenant with the Manager as follows:
(a) To furnish to you in New York City, without charge, promptly
after the date hereof and during the period mentioned in Section 6(c), as
many copies of the Final Circular and any supplements and amendments
thereto as you may reasonably request.
(b) Before amending or supplementing any Circular, to furnish to you
a copy of each such proposed amendment or supplement and not to use any
such proposed amendment or supplement to which you reasonably object.
(c) If, during such period after the date hereof and prior to the
date on which all of the Securities shall have been sold by the Manager,
any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Final Circular in order to make the
statements therein, in the light of the circumstances when the Final
Circular is delivered to a purchaser, not misleading, or if, in the
reasonable opinion of counsel for the Manager, it is necessary to amend or
supplement the Final Circular to comply with applicable law, forthwith to
prepare and furnish, at its own expense, to the Manager, either amendments
or supplements to
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the Final Circular so that the statements in the Final Circular as so
amended or supplemented will not, in the light of the circumstances when
the Final Circular is delivered to a purchaser, be misleading or so that
the Final Circular, as amended or supplemented, will comply with
applicable law.
(d) To endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) all costs and expenses related to the
establishment of the Issuer (including without limitation the fees of the
initial directors and administrator); (ii) the fees, disbursements and
expenses of the Issuer's and the Guarantor's counsel and the Issuer's and
the Guarantor's accountants in connection with the issuance and sale of
the Securities and all other fees or expenses in connection with the
preparation of each Circular and all amendments and supplements thereto,
including all printing costs associated therewith, and the delivering of
copies thereof to the Manager, in the quantities herein above specified;
(iii) all costs and expenses related to the transfer and delivery of the
Securities to the Manager, including any transfer or other similar taxes
payable thereon; (iv) the cost of printing or producing any Blue Sky or
legal investment circular in connection with the offer and sale of the
Securities under state securities laws and all expenses in connection with
the qualification of the Securities for offer and sale under state
securities laws as provided in Section 6(d) hereof, including filing fees
but excluding the fees and disbursements of counsel for the Manager in
connection with such qualification and in connection with the Blue Sky or
legal investment circular; (v) any fees charged by rating agencies for the
rating of the Securities; (vi) the fees and expenses, if any, incurred in
the listing of the Securities on the Luxembourg Stock Exchange, including
any fees or expenses of any listing agents; (vii) the costs and charges of
the Trustee (including the fees, disbursements and expenses of the
Trustee's counsel) and any transfer agent, registrar or depositary; (viii)
the cost of the preparation, issuance and delivery of the Securities; (ix)
any stamp or value added taxes payable in connection with the transaction
contemplated hereby; and (x) all other cost and expenses incident to the
performance of the obligations of the Issuer and the Guarantor hereunder
for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 8,
and the last paragraph of Section 10, the Manager will pay all of its
costs and expenses, transfer
14
taxes payable on resale of any of the Securities by them and any
advertising expenses connected with any offers it may make.
(f) None of the Issuer, the Guarantor or any Affiliate will sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in the Securities Act) which could be
integrated with the sale of the Securities in a manner which would require
the registration under the Securities Act of the Securities.
(g) Not to solicit any offer to buy or offer or sell the Securities
by means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act.
(h) None of the Issuer, the Guarantor, any of its or their Affiliates
or any person acting on its or their behalf (other than the Manager) will
engage in any directed selling efforts (as that term is defined in
Regulation S) with respect to the Securities, and the Issuer, the
Guarantor, any of its or their Affiliates and each person acting on its or
their behalf (other than the Manager) will comply with the offering
restrictions (within the meaning of Regulation S) in connection with the
offering of the Securities contemplated by this Agreement and the Final
Circular.
(i) During the period of two years after the Closing Date, each of
the Issuer and the Guarantor will not, and will not permit any of its
Affiliates (as defined in Rule 144 under the Securities Act) to resell any
of the Securities which constitute "restricted securities" under Rule 144
that have been reacquired by any of them.
(j) To use its best efforts to have the Securities (i) accepted for
settlement through each of DTC, Euroclear and Clearstream, and each of the
Issuer and the Guarantor confirms that it has authorized the Manager to
take steps necessary for that purpose, and (ii) accepted for listing on
the Luxembourg Stock Exchange.
(k) To notify you promptly of any change affecting any of its
representations or warranties, or its respective agreements and
indemnities herein at any time prior to payment being made to or for the
account of the Guarantor or the Issuer on the Closing Date.
(l) Neither the Issuer nor the Guarantor will become an open-end
investment company, unit investment trust or face-amount certificate
15
company that is or is required to be registered under Section 8 of the
Investment Company Act.
7. Offering of Securities; Restrictions on Transfer. (a) The Manager
represents and warrants to the Issuer and the Guarantor that such Manager is a
QIB. The Manager agrees with, and undertakes to, the Issuer and the Guarantor
that (i) it will not solicit offers for, or offer or sell, Securities by any
form of general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act; and (ii) as
part of the Manager's distribution, it will solicit offers for Securities only
from, and will offer Securities only to, persons that it reasonably believes to
be (A) in the case of offers inside the United States, QIBs and (B) in the case
of offers outside the United States, to persons other than U.S. persons, as
that term is defined in Regulation S ("foreign purchasers," which term shall
include dealers or other professional fiduciaries in the United States acting
on a discretionary basis for foreign beneficial owners (other than an estate or
trust)) in reliance upon Regulation S under the Securities Act that, in each
case, in purchasing such Securities are deemed to have represented and agreed
as provided in the Final Circular under the caption "Transfer Restrictions".
(b) The Manager agrees with, and represents, warrants and undertakes
to, the Issuer and the Guarantor with respect to offers and sales outside
the United States that:
(i) such Manager understands and acknowledges that no action has
been or will be taken in any jurisdiction by the Issuer or the
Guarantor that would permit a public offering of the Securities, or
possession or distribution of any Circular or any other offering or
publicity material relating to the Securities, in any country or
jurisdiction where action for that purpose is required;
(ii) such Manager will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers, sells
or delivers Securities or has in its possession or distributes any
Circular or any such other material, in all cases at its own expense;
(iii) the Securities have not been registered under the
Securities Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except
in accordance with Rule 144A or Regulation S under the Securities Act
or pursuant to another exemption from the registration requirements
of the Securities Act;
16
(iv) such Manager has offered the Securities and will offer and
sell the Securities (A) as part of their distribution at any time and
(B) otherwise until 40 days after the later of the commencement of
the offering and the Closing Date only in accordance with Rule 903 of
Regulation S or as otherwise permitted in Section 7(a); accordingly,
neither such Manager, its Affiliates nor any persons acting on its or
their behalf have engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the
Securities;
(v) such Manager has not entered and will not enter into any
contractual arrangement with respect to the distribution or delivery
of the Securities, except with our affiliates or with the prior
written consent of the Guarantor;
(vi) such Manager has (A) not offered or sold and, prior to the
date falling six months after the Closing Date, will not offer or
sell any Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995 (as amended); such Manager has only communicated or
caused to be communicated, and will only communicate or cause to be
communicated, any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial Services
and Markets Xxx 0000, or the FSMA) received by it in connection with
the issue or sale of the Securities in circumstances in which Section
21(1) of the FSMA does not apply to the Manager. The Manager has
complied with all applicable provisions of the FSMA with respect to
anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom;
(vii) The Circular has not been registered as a prospectus with
the Monetary Authority of Singapore and the Securities will be
offered in Singapore pursuant to an exemption invoked under Section
274 and Section 275 of the Securities and Futures Xxx 0000 (SFA),
Chapter 289, of the Singapore; accordingly, the Manager has
represented and agreed that the Securities may not be offered or sold
or be made subject of an invitation for subscription or purchase, or
may the Circular or any other offering document or material relating
to the Securities be
17
circulated or distributed, directly or indirectly, to the public or
any member of the public in Singapore other than (i) to an
institutional investor or other person specified in Section 274 of
the SFA, (ii) to a sophisticated investor, and in accordance with the
conditions, specified in Section 275 of the SFA or (iii) otherwise
pursuant to, and in accordance with the conditions of, any other
applicable provisions of the SFA;
(viii) such Manager (A) has not offered or sold and will not
offer or sell in Hong Kong by means of any document, any Securities
other than to persons whose ordinary business it is to buy or sell
shares or debentures (whether as principal or agent) or in
circumstances which do not constitute an offer to the public within
the meaning of the Companies Ordinance (Chapter 32 of the Laws of
Hong Kong) and (B) has not issued or had in its possession for the
purpose of issue and will not issue or have in its possession for the
purpose of issue any document, invitation or advertisement relating
to the Securities whether in Hong Kong or elsewhere which is directed
at, or the contents of which are likely to be accessed or read by,
the public in Hong Kong other than any document, invitation or
advertisement in respect of the Securities which are or are intended
to be disposed of only to persons outside Hong Kong or only to
"professional investors" within the meaning of the Securities and
Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and any
rules made thereunder;
(ix) such Manager has not made and will not make any invitation
on behalf of the Issuer or the Guarantor to the public in the British
Virgin Islands to purchase the Securities, and the Securities offered
through any Circular may not be offered or sold, directly or
indirectly, in the British Virgin Islands or to any resident of the
British Virgin Islands, except as permitted by British Virgin Islands
law;
(x) such Manager has represented and agreed that it has not and
will not offer, sell or publicly promote or advertise the Securities
in the Federal Republic of Germany other than in compliance with the
German Securities Selling Prospectus Act
(Wertpapierverkaufsprospektgesetz) of December 31, 1990, as amended,
or any other laws applicable in the Federal Republic of Germany
governing the issue, offering and sale of securities;
(xi) such Manager has represented and agreed that it has not
offered or sold, directly or indirectly, to the public in France.
Neither the Circular nor any other offering material has
18
been nor will it be submitted to the clearance procedure of the
"Commission des operations de bourse," and it may not be released or
distributed to the public in France. The investors in France may only
purchase the Securities for their own account and in accordance with
article L.411-2 of the French Monetary and Financial Code and decree
no. 98-880 dated October 1, 1998, provided they are "qualified
investors" within the meaning of such decree. Any resale, directly or
indirectly, to the public of the Securities offered may be effected
only in compliance with article L.411-1 of the French Monetary and
Financial Code;
(xii) such Manager understands that the Securities have not been
and will not be registered under the Securities and Exchange Law of
Japan, and represents that it has not offered or sold, and agrees not
to offer or sell, directly or indirectly, any Securities in Japan or
for the account of any resident thereof except pursuant to any
exemption from the registration requirements of the Securities and
Exchange Law of Japan and otherwise in compliance with applicable
provisions of Japanese law. As used in this paragraph, "resident of
Japan" means any person residing in Japan, including any corporation
or other entity organized under the laws of Japan; and
(xiii) such Manager agrees that, at or prior to confirmation of
sales of the Securities, it will have sent to each distributor,
dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities from it during the restricted
period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 and may not be offered and sold within
the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the
offering and the final closing date, except in either case in
accordance with Regulation S (or Rule 144A if available) under the
Securities Act. Terms used above have the meaning given to them by
Regulation S."
Terms used in Sections 7(b)(iv) and 7(b) (xiii) have the meanings given to
them by Regulation S.
8. Indemnity and Contribution. (a) Each of the Issuer and the
Guarantor, jointly and severally, agrees to indemnify and hold harmless the
19
Manager and each person, if any, who controls the Manager within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained
in any Circular (as amended or supplemented if either the Issuer or the
Guarantor shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to the Manager furnished to the Issuer or the Guarantor in writing by
the Manager through you expressly for use therein.
(b) The Manager agrees to indemnify and hold harmless each of the
Issuer and the Guarantor, its directors, its officers and each person, if
any, who controls the Issuer or the Guarantor within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Issuer and the Guarantor
to the Manager, but only with reference to information relating to the
Manager furnished to the Issuer or the Guarantor in writing by the Manager
through you expressly for use in any Circular or any amendments or
supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to Section 8(a) or 8(b), such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may
be sought (the "indemnifying party") in writing and the indemnifying
party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the reasonable fees
and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel, (ii) the
indemnifying party has failed within a reasonable time to retain counsel
reasonably satisfactory to the indemnified party or (iii) the named
parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. It is understood that the
20
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings
in the same jurisdiction, be liable for the fees and expenses of more than
one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be
reimbursed promptly after they are incurred. Such firm shall be designated
in writing by the Manager, in the case of parties indemnified pursuant to
Section 8(a), and by the Guarantor, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees (jointly and severally in the
case where the Issuer or the Guarantor is the indemnifying party) to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees
and expenses of counsel as contemplated by the second and third sentences
of this paragraph, the indemnifying party agrees (jointly and severally in
the case where the Issuer or the Guarantor is the indemnifying party) that
it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 90
days after receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement. If during any period of time, the indemnifying party is
disputing in good faith the reasonableness of such fees and expenses of
counsel, such period of time shall not be counted in calculating such
90-day period. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or
8(b) is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Issuer and the Guarantor on the one
hand
21
and the Manager on the other hand from the offering of the Securities or
(ii) if the allocation provided by clause 8(d)(i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 8(d)(i) above but also
the relative fault of the Issuer and the Guarantor on the one hand and of
the Manager on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Issuer and the Guarantor on the one hand and the Manager
on the other hand in connection with the offering of the Securities shall
be deemed to be in the same respective proportions as the net proceeds
from the offering of the Securities (before deducting expenses) received
by the Issuer and the total discounts and commissions received by the
Manager, in each case as set forth in this Agreement, bear to the
aggregate offering price of the Securities. The relative fault of the
Issuer and the Guarantor on the one hand and of the Manager on the other
hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied
by the Guarantor or by the Manager and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) Each of the Issuer, the Guarantor and the Manager agrees that it
would not be just or equitable if contribution pursuant to this Section 8
were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations
referred to in Section 8(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred
to in Section 8(d) shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, the
Manager shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities resold by it in
the initial placement of such Securities were offered to investors exceeds
the amount of any damages that the Manager has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise
be available to any indemnified party at law or in equity.
22
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Issuer and the Guarantor contained in this Agreement shall remain
operative and in full force and effect in accordance with the terms of
this Agreement regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of the Manager or any person
controlling the Manager or by or on behalf of the Issuer and the
Guarantor, its officers or directors or any person controlling the Issuer
and the Guarantor and (iii) acceptance of and payment for any of the
Securities.
9. Termination. This Agreement shall be subject to termination by notice
given by you to the Guarantor, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the National Association of Securities Dealers, Inc. or
The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), (ii)
trading of any securities of the Issuer, the Guarantor or PCCW Limited shall
have been suspended on the New York Stock Exchange or the Hong Kong Stock
Exchange, (iii) a general moratorium on commercial banking activities in New
York shall have been declared by either Federal or New York State authorities
or in Hong Kong shall have been declared by the Hong Kong Monetary Authority,
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in your judgment,
is material and adverse or (v) there shall have occurred a change or
development involving a prospective change in the existing financial,
political, economic or regulatory conditions in Hong Kong or the British Virgin
Islands (including, without limitation, a change in exchange controls, currency
exchange rates or taxation) and (b) in the case of any of the events specified
in clauses 9(a)(i) through 9(a)(v), such event, singly or together with any
other such event, makes it, in your judgment, impracticable to market the
Securities on the terms and in the manner contemplated in the Final Circular.
10. Effectiveness; Other Termination. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If this Agreement shall be terminated by the Manager because of any
failure or refusal on the part of either the Issuer or the Guarantor to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason either the Issuer or the Guarantor shall be unable to perform its
obligations under this Agreement, each of the Issuer and the Guarantor agrees,
jointly and severally, that it will reimburse the Manager for all out-of-pocket
expenses (including the fees and disbursements of their counsel) reasonably
incurred by the Manager in connection with this Agreement or the offering
contemplated hereunder.
23
11. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
12. Judgment Currency. If for the purposes of obtaining judgment in any
court it is necessary to convert a sum due hereunder into any currency other
than United States dollars, the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be the
rate at which, in accordance with normal banking procedures, the Manager could
purchase United States dollars with such other currency in New York City on the
business day preceding that on which final judgment is given. To the fullest
extent permitted by law, the obligation of either of the Issuer or the
Guarantor in respect to any sum due from it to the Manager shall,
notwithstanding any judgment in a currency other than United States dollars,
not be discharged until the first business day, following receipt by the
Manager of any sum adjudged to be so due in such other currency, on which (and
only to the extent that) the Manager may in accordance with normal banking
procedures purchase United States dollars with such other currency; if the
United States dollars so purchased are less than the sum originally due to the
Manager hereunder, the Guarantor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Manager against such loss.
If the United States dollars so purchased are greater than the sum originally
due to such Manager hereunder, the Manager agrees to pay to the Guarantor an
amount equal to the excess of the dollars so purchased over the sum originally
due to the Manager hereunder.
13. Applicable Law; Submission to Jurisdiction; Waiver of Immunity;
Appointment of Process Agent. (a) This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
(b) Each of the Issuer and the Guarantor hereby irrevocably (i)
agrees that any suit, action or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby may be instituted
in any New York State Court or United States District Court in either case
in the Borough of Manhattan, The City of New York, (ii) waives, to the
fullest extent permitted by law, any objection which it may have based on
improper venue or forum non conveniens to the conduct of any such suit,
action or proceeding in any such court and (iii) submits to the
non-exclusive jurisdiction of any such court in any such suit, action or
proceeding. To the extent that either of the Issuer or the Guarantor has
or hereafter may acquire any immunity (sovereign or otherwise) from any
legal action, suit or proceeding, jurisdiction of any court, set-off or
from any legal process (whether service or notice, attachment prior to
judgment, attachment in aid of execution of judgment or otherwise) with
respect to itself or its property, it irrevocably waives and agrees not to
plead or claim such immunity in respect of its obligations hereunder. Each
of the Issuer
24
and the Guarantor agrees that final, non-appealable judgment in any such
suit, action or proceeding brought in such court shall be conclusive and
binding upon the Issuer and the Guarantor, as the case may be, and may be
enforced in any court the jurisdiction of which the Issuer or the
Guarantor, as the case may be, is subject by a suit upon such judgment.
(c) Each of the Issuer and the Guarantor hereby irrevocably
designates and appoints CT Corporation System, whose offices are currently
located at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized
agent for service of process (such agent, together with its successors,
being hereinafter referred to as the "Authorized Agent") on whom process
may be served in any suit, action or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby; provided that
if for any reason the Authorized Agent ceases to act as Authorized Agent
hereunder, each of the Issuer and the Guarantor will appoint another
person acceptable to the Manager in the Borough of Manhattan, The City and
State of New York. Each of the Issuer and the Guarantor irrevocably agrees
that the service of process on the Authorized Agent at its address set
forth above, or at such other address in the Borough of Manhattan, The
City and State of New York, as shall be provided by notice to the Manager
at the time given by the Authorized Agent, shall be deemed in every
respect effective service of process on the Issuer or the Guarantor, as
the case may be. Each of the Issuer and the Guarantor further agrees to
take any and all actions as may be necessary to maintain the designation
and appointment of the Authorized Agent as its agent for service of
process in full force and effect for as long as the Securities are
outstanding.
14. Communications. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunications as follows:
If to the Manager:
Address: Xxxxx 00
0 Xxxxx'x Xxxx, Xxxxxxx
Xxxx Xxxx
Xxxxxxxxx: Transaction Management
Facsimile (000) 0000-0000 or (000) 0000-0000
25
If to the Issuer and/or the Guarantor:
Address: 00xx Xxxxx, XXXX Xxxxx, XxxXxx
Xxxxx, 000 Xxxx'x Xxxx, Xxxxxx Xxx,
Xxxx Xxxx
Attention: The Company Secretary
Facsimile: 000-0000-0000
15. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
26
Very truly yours,
PCCW-HKT Capital No.2 Limited
By: /s/ Xxxxx Xxxxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxxxx Xxxxx
Title: Director
PCCW-HKT Telephone Limited
By: /s/ Alexander Xxxxxxx Xxxxx
-------------------------------
Name: Alexander Xxxxxxx Xxxxx
Title: Director
Accepted as of the date hereof
The Hongkong and Shanghai Banking
Corporation Limited
By: /s/ Xxxxxxx Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxx Xxxxxxx
Title: Head of Financing Group,
Asia Pacific
27
EXHIBIT A
OPINION OF XXXXXX WESTWOOD & RIEGELS LLP
BRITISH VIRGIN ISLANDS COUNSEL TO THE ISSUER
The Hongkong and Shanghai Banking Corporation Limited
Xxxxx 00
0 Xxxxx'x Xxxx, Xxxxxxx
Xxxx Xxxx
Dear Sirs
PCCW-HKT Capital No.2 Limited IBC No. 471384 (the "Issuer")
US$500,000,000 of [o]% Guaranteed Notes due 2013 unconditionally and
irrevocably guaranteed by PCCW-HKT Telephone Limited (the "Guarantor")
(together, the "Notes")
1. We are lawyers qualified to practice in the British Virgin Islands and
have acted as British Virgin Islands counsel to the Issuer and the
Guarantor in connection with the issue by the Issuer of the Notes. This
opinion is limited to British Virgin Islands law as at the date of this
opinion and as applied by the courts of the British Virgin Islands. We
express no opinion on the laws of any other jurisdiction.
2. In giving this opinion, we have examined copies of the documents (together
the "Documents") listed in the First Schedule to this opinion and
conducted searches of the public records listed in the Second Schedule to
this opinion.
Terms defined in the Offering Circular and not otherwise defined in this
opinion bear the same meaning in this opinion as in the Offering Circular.
3. References in this opinion to:-
(a) the "Specified Transactions" are to:-
(i) the creation, offering, issue and delivery of the Notes by the
Issuer and the performance of its obligations under the Notes;
(ii) the execution and delivery by the Issuer of the Principal
Agreements and the performance by the Issuer of its obligations
under them;
(iii) the taking of all other actions and the doing of all other
things provided for in or contemplated by the Principal
Agreements and the Notes or otherwise necessary or desirable in
connection with the issue of the Notes; and
(iv) [the enforcement by the Issuer of any of its rights under the
Facility Letter.]
(b) the "Principal Agreements" are to:-
(i) the Indenture; and
1
(ii) the Purchase Agreement.
4. For the purposes of this opinion we have assumed without further enquiry:
(a) the authenticity of all documents submitted to us as originals, the
conformity with the originals hereof of all documents submitted to us
as copies or drafts and the authenticity of such originals;
(b) the genuineness of all signatures and seals;
(c) the accuracy and completeness of all corporate minutes, resolutions
and records which we have seen;
(d) the accuracy of any and all representations of fact expressed in or
implied by the documents we have examined;
(e) that the Principal Agreements and the Facility Letter constitute (or
will constitute when executed and delivered) valid, legally binding
and enforceable obligations of the Issuer under the laws of the State
of New York (or in the case of the Facility Letter, under the laws of
the Hong Kong Special Administrative Region of the People's Republic
of China ("Hong Kong")) by which law they are respectively expressed
to be governed;
(f) that all the obligations under each Principal Agreement of each party
to it other than the Issuer are legal, valid, binding and enforceable
in accordance with their terms on that party; and
(g) that the Directors' Resolutions and Shareholders' Resolutions remain
in full force and effect.
5. On the basis of and subject to the foregoing and the qualifications that
follow, we are of the opinion that:
(a) The Issuer is a company with limited liability duly incorporated and
in good standing under the laws of the British Virgin Islands capable
of suing and being sued with power and authority to own its assets
and conduct its business as described in the Offering Circular.
(b) The Issuer has the power to enter into and execute the Principal
Agreements, authorise, create, offer and issue the Notes and carry
out the Specified Transactions, and has taken all necessary action to
authorise its entry into and delivery of the Principal Agreements and
the entry into and issue, creation and offer of the Notes and the
exercise of its rights and the performance of its obligations under
both the Principal Agreements and the Notes and to carry out the
Specified Transactions.
(c) The Guarantor is the registered holder of and has full legal title to
one issued ordinary shares of US$1.00 par value in the capital of the
Issuer. The ownership by the Guarantor of such shares in the Issuer
does not contravene any law or regulation of the British Virgin
Islands or the Memorandum and Articles of Association of the Issuer.
On the basis of our searches of the British Virgin Islands Companies
Registry and the British Virgin Islands High Court Registry there is
no
2
record of any pledge, lien, charge or other security interest over
the issued shares in the Issuer (other than the first and paramount
lien conferred on the Issuer itself under its constitutional
documents), but it should be noted that there is no requirement that
notice of a security interest over shares in the a company may be
registered with the Registrar of Companies or any other public body
in the British Virgin Islands and there are very few mechanisms
whereby this could be done. Ownership by the Guarantor of such shares
is valid and lawful under all applicable laws, rules, regulations and
guidelines or any court or public, governmental or regulatory agency
or body of or in the British Virgin Islands.
(d) The Notes have been duly authorised and executed by the Issuer and,
when they have been duly authenticated in accordance with the terms
of the Indenture and delivered to and paid for by the Managers in
accordance with the terms of the Purchase Agreement, will be duly and
validly issued, fully-paid and non-assessable and will constitute
valid and binding obligations of the Issuer and holders thereof will
be entitled to the rights and benefits conferred thereunder and under
the Indenture.
(e) the Principal Agreements [and the Facility Letter] have been duly
authorised, executed and delivered by the Issuer and constitute valid
and binding instruments of the Issuer.
(f) All action, conditions and things required by the laws of or by any
regulatory authority in the British Virgin Islands to be taken,
fulfilled and done (including the obtaining of any necessary
approval, authorisation, exemption, licence or permission and the
making of any necessary filing, recording or registration) in order:-
(i) to enable the Issuer to carry out the Specified Transactions;
(ii) to ensure that the obligations of the Issuer under the Principal
Agreements and the Notes are legally binding and enforceable;
and
(iii) to make the Principal Agreements and the Notes admissible in
evidence in the courts of the British Virgin Islands have been
taken, fulfilled and done.
(g) It is not necessary in order to ensure the legality, validity,
enforceability or admissibility in evidence of the Principal
Agreements in the British Virgin Islands:-
(i) that they be filed, registered, recorded or enrolled with any
court or governmental authority in the British Virgin Islands;
or
(ii) that any registration fees, stamp or similar duty (other than
the payment of court fees in the event of litigation before the
Courts of the British Virgin Islands) be paid on or in relation
to the Principal Agreements; or
(iii) that any consents, authorisations or approvals of any court or
governmental authority in the British Virgin Islands be
obtained in relation to the Principal Agreements.
(h) In relation to the Issuer, none of the Specified Transactions do or
will violate any law or regulation to which it is subject or any of
the documents constituting it.
3
(i) The obligations of the Issuer under the Principal Agreements and the
Notes will be treated by the courts of the British Virgin Islands as
valid, enforceable and legally binding and the Principal Agreements
and the Notes are in proper legal form for enforcement against the
Issuer in the British Virgin Islands and contain no provision which
is contrary to law or public policy in the British Virgin Islands or
which would not for any reason be upheld by the courts of the British
Virgin Islands.
(j) The payment obligations of the Issuer under the Principal Agreements
and the Notes rank at least equally with all its other unsecured and
unsubordinated indebtedness.
(k) The Notes constitute the direct obligations of the Issuer. If a court
order is made or an effective resolution is passed for the winding-up
of the Issuer, payment of principal and interest (including interest
in arrears and additional interest thereon) and any additional
amounts on the Notes would rank at least pari passu in priority with
all other unsecured and unsubordinated obligations of the Issuer
(other than obligations preferred by applicable law) and senior in
priority of payment and in all other respects to all other
indebtedness of the Issuer which by its terms rank subordinate or
junior in right of payment to the Notes.
(l) All statements in the Offering Circular regarding British Virgin
Islands legal matters, including without limitation, the statements
on page [o] of the Offering Circular under the heading "Tax
Considerations - British Virgin Islands Taxation" and on page [o] of
the Offering Circular under the heading "Enforcement of Civil
Liabilities" in relation to the British Virgin Islands are correct
and are not in our view misleading.
(m) It is not necessary (a) in order to enable the Manager to exercise or
enforce any of its rights under the Purchase Agreement in the British
Virgin Islands, (b) to enable the Trustee to exercise or enforce any
of its rights under the Indenture in the British Virgin Islands or
(c) by reason of entry into and/or the performance of the Purchase
Agreement or the Indenture that the Manager or the Trustee or either
of them should be licensed, qualified or entitled to do business in
the British Virgin Islands.
(n) Neither the Manager nor the Trustee is or will be deemed to be
resident, domiciled, carrying on business or subject to taxation in
the British Virgin Islands by reason only of the entry into,
performance and/or enforcement of the Purchase Agreement or the
Indenture.
(o) The performance by the Managers or the Trustee in the British Virgin
Islands of any of their rights, duties, obligations and
responsibilities under the Purchase Agreement or the Indenture will
not violate any law applicable in the British Virgin Islands.
(p) No stamp, registration, documentary or similar taxes are payable
under the laws of the British Virgin Islands by reason of any of the
Specified Transactions or in relation to any enforcement proceedings
in respect of the Notes or the Principal Agreements brought in the
courts of the British Virgin Islands and the holders of the Notes
will not incur or become liable for any tax on income or capital
gain, stamp duty, registration, transfer or other like taxes under
the laws of the British Virgin Islands by reason only of the
acquisition, ownership or disposal of the Notes.
4
(q) All payments by the Issuer of principal, premium (if any) and
interest on the Notes may be made without withholding or deduction
for or on account of any other taxes, duties, assessments or
governmental charges in the British Virgin Islands.
(r) Holders of Notes who are not resident in the British Virgin Islands,
and who do not engage in trade or business through a permanent
establishment in the British Virgin Islands, will not be subject to
the British Virgin Islands taxes or duties on gains realised on the
sale or redemption of Notes. There is no estate duty or inheritance
tax or similar tax in the British Virgin Islands. No holder of a Note
will be deemed to be resident or domiciled in the British Virgin
Islands simply by virtue of holding a Note.
(s) The courts of the British Virgin Islands will observe and give effect
to the choice of New York law as the governing law of the Principal
Agreements and the Notes and the choice of Hong Kong law as the
governing law of the Facility Letter.
(t) Any monetary judgment in a court of the British Virgin Islands in
respect of a claim brought in connection with the Principal Agreement
and the issue of the Notes is likely to be expressed in the currency
in which such claim is made, since such courts have power to grant a
monetary judgment expressed otherwise than in the currency of the
British Virgin Islands, but they may not necessarily do so.
(u) Any final and conclusive monetary judgment for a definite sum
obtained against the Issuer in the courts of the state of New York or
the U.S. Federal courts sitting in New York state (each a "Court") in
respect of the Notes or the Principal Agreements would be treated by
the courts of the British Virgin Islands as a cause of action in
itself so that no retrial of the issues would be necessary provided
that:
(i) the Court had jurisdiction in the matter and the Issuer either
submitted to such jurisdiction or was resident or carrying on
business within such jurisdiction and was duly served with
process;
(ii) the judgment given by the Court was not in respect of
penalties, taxes, fines or similar fiscal or revenue
obligations;
(iii) in obtaining judgment there was no fraud on the part of the
person in whose favour judgment was given or on the part of the
Court;
(iv) recognition or enforcement of the judgment in the British
Virgin Islands would not be contrary to public policy; and
(v) the proceedings pursuant to which judgment was obtained were
not contrary to natural justice.
(v) The Issuer has power to submit and the submission by the Issuer to
the jurisdiction of the courts of the state of New York and
nomination, in Section 13 of the Purchase Agreement and Section 11.08
of the Indenture, by the Issuer of an agent in New York state to
accept service of process in respect of proceedings before such
courts is valid.
(w) The Issuer is not entitled to immunity from suit or enforcement of a
judgment on the ground of sovereignty or otherwise in the courts of
the British Virgin Islands in
5
respect of proceedings against it in relation to the Principal
Agreements and the execution or performance of the Principal
Agreements and the issue of the Notes by the Issuer constitute
private and commercial acts.
(x) No court proceedings pending against the Issuer are indicated by our
searches of the British Virgin Islands High Court Registry.
(y) On the basis of our searches of the British Virgin Islands Companies
Registry and the British Virgin Islands High Court Registry, no
currently valid order or resolution for winding up of the Issuer and
no current notice of appointment of a receiver over the Issuer or any
of its assets appears on the records maintained in respect of the
Issuer at the Companies Registry, but it should be noted that it is
not a requirement that notice of appointment of a receiver be
registered with the Registrar of Companies or any other public body
in the British Virgin Islands.
(z) Service of process in the British Virgin Islands on the Issuer may be
effected by leaving at the registered office of the Issuer the
relevant document to be served. On the basis of our search of the
British Virgin Islands Companies Registry the registered office of
the Issuer is Offshore Incorporations Centre, P.O. Box 957, Road
Town, Tortola, British Virgin Islands.
6. The opinion is subject to the qualifications:-
(a) Rights and obligations may be limited by bankruptcy, insolvency,
liquidation, arrangement and other similar laws of the British Virgin
Islands of general application affecting the rights of creditors.
(b) Claims under the Principal Agreements and the Notes may become barred
under the laws relating to limitation of actions in the British
Virgin Islands or may be or become subject to defences of set-off or
counterclaim.
(c) Equitable remedies such as injunctions and orders for specific
performance are discretionary and will not normally be available
where damages are considered an adequate remedy.
(d) Where obligations are to be performed in a jurisdiction outside the
British Virgin Islands they may not be enforceable under the laws of
the British Virgin Islands to the extent that such performance would
be contrary to public policy under the laws of the British Virgin
Islands.
(e) The courts in the British Virgin Islands will determine in their
discretion whether or not an illegal or unenforceable provision may
be severed.
(f) The courts of the British Virgin Islands may refuse to give effect to
a provision in respect of the cost of unsuccessful litigation brought
before those courts or where the courts themselves have made an order
for costs.
(g) The term enforceable means that a document is of a type and form
enforced by the British Virgin Islands courts. It does not mean that
each obligation will be enforced in accordance with its terms.
Certain rights and obligations may be qualified by non-conclusivity
of certificates, doctrines of good faith and fair conduct, the
availability of
6
equitable remedies and other matters but in our view this
qualification would not defeat your legitimate expectations in any
material respect.
7. This opinion is rendered for your benefit and the benefit of your legal
counsel in connection with the issue by the Issuer of the Notes only. It
may not be disclosed to or relied on by any other party for any other
purpose.
7
FIRST SCHEDULE
1. A copy of the Memorandum and Articles of Association and Certificate of
Incorporation of the Issuer obtained from the British Virgin Islands
Companies Registry on [o].
2. A facsimile copy of the minutes of a meeting of the directors of the
Issuer containing resolutions of the directors of the Issuer dated [o]
2003 approving the Issuer's entry into, and authorising the execution by
the Issuer of the Principal Agreements and the issue of the Notes (the
"Directors' Resolutions").
3. A facsimile copy of the unanimous written resolutions of the sole member
of the Issuer dated [o] 2003 approving the Issuer's entry into, and
execution of, the Principal Agreements and the issue of the Notes (the
"Shareholders' Resolutions").
4. An original registered agents' certificate dated [o] 2003 identifying the
directors, officers and shareholders of the Issuer, issued by Offshore
Incorporations Limited, the Issuer's registered agent (the "Registered
Agent's Certificate").
5. The Offering Circular dated July [o] 2003 (the "Offering Circular")
relating to the issue of the Notes.
6. A facsimile copy of the executed purchase agreement dated July [o] 2003
(the "Purchase Agreement") entered into between The Hongkong and Shanghai
Banking Corporation Limited (the "Manager"), the Issuer and the Guarantor
relating to the subscription and offering of the Notes.
7. A facsimile copy of the executed indenture dated July [o] 2003 (the
"Indenture") entered into between HSBC Bank USA (the "Trustee"), the
Issuer and the Guarantor constituting the Notes.
8. The form of the Notes as set forth in Exhibits A, B, D and E to the
Indenture.
9. [The inter-company facility dated [o] (the "Facility Letter") entered into
between the Guarantor and the Issuer relating to the on-lending
arrangement whereby the Issuer on-lends the net proceeds of the issuance
of the Note to the Guarantor.]
8
SECOND SCHEDULE
1. The public records of the Issuer on file and available for inspection at
the Companies Registry, Road Town, Tortola, British Virgin Islands on [o]
2003.
2. The records of proceedings on file with, and available for inspection on
[o] 2003 at the High Court of Justice, British Virgin Islands.
9
EXHIBIT B
FORM OF OPINION OF XXXXX XXXX & XXXXXXXX
U.S. COUNSEL TO THE ISSUER AND THE GUARANTOR
July [o], 2001
The Hongkong and Shanghai Banking Corporation Limited
Xxxxx 00
0 Xxxxx'x Xxxx, Xxxxxxx
Xxxx Xxxx
Ladies and Gentlemen:
We have acted as special U.S. counsel to PCCW-HKTC Capital No.2 Limited, a
company with limited liability organized under the laws of the British Virgin
Islands (the "Issuer"), and PCCW-HKT Telephone Limited, a company with limited
liability organized under the laws of Hong Kong (the "Guarantor"), in
connection with the offer and sale by the Issuer of the US$500,000,000
aggregate principal amount of [o]% Guaranteed Notes due 2013 (the "Notes"),
pursuant to the Purchase Agreement (the "Purchase Agreement"), dated July [o],
2003, among The Hongkong and Shanghai Banking Corporation Limited (the
"Manager"), the Issuer and the Guarantor. The Notes will be unconditionally and
irrevocably guaranteed by the Guarantor (the "Guarantee," and together with the
Notes, the "Securities") and the Securities will be issued pursuant to the
provisions of an Indenture (the "Indenture") dated as of July [o], 2003 among
the Issuer, the Guarantor and HSBC Bank USA, as Trustee (the "Trustee"). This
opinion is delivered to you pursuant to Section 5(d) of the Purchase Agreement.
We have examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary for the purposes of
rendering this opinion.
We have participated in the preparation of the Offering Circular (the "Offering
Circular") dated July [o], 2003 relating to the offering of the Securities.
Based upon the foregoing, we are of the opinion that:
(a) Assuming that they have been duly authorized, executed, issued and
delivered by the Issuer insofar as the laws of its jurisdiction of
incorporation are concerned, when duly authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by the
Manager in accordance with the terms of the Purchase Agreement, the Notes
will be valid and binding obligations of the Issuer, enforceable in
accordance with their terms, except as (a) the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, and (b) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(b) Assuming that the Guarantee has been duly authorized, executed, issued and
delivered by the Guarantor insofar as the laws of its jurisdiction of
incorporation are concerned, when the Notes are duly authenticated in
accordance with the provisions of the Indenture and
10
delivered to and paid for by the Manager in accordance with the terms of
the Purchase Agreement, the Guarantee will be a valid and binding
obligation of the Guarantor, enforceable in accordance with its terms,
except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and (b) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles
of general applicability.
(c) Assuming that the Indenture has been duly authorized, executed and
delivered by each of the parties thereto insofar as the laws of its
jurisdiction of incorporation are concerned, the Indenture will be a valid
and binding obligation of each of the Issuer and the Guarantor,
enforceable in accordance with its terms, except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, and (b)
rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(d) It is not necessary in connection with the offer, sale and delivery of the
Securities to the Manager under the Purchase Agreement or in connection
with the initial resale of such Securities by the Manager in the manner
contemplated by the Purchase Agreement and the Offering Circular (it being
understood that no opinion is expressed as to any other sale of any
Security) to register the Securities under the Securities Act of 1933, as
amended, or to qualify the Indenture under the Trust Indenture Act of
1939, as amended.
(e) No consent, approval, authorization, order, registration or qualification
of or with any governmental body or agency under United States federal or
New York State law that in our experience is normally applicable to
general business corporations in relation to transactions of the type
contemplated by the Purchase Agreement is required for the performance by
the Company of its obligations under the Purchase Agreement, except such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection with
the offer and sale of the Securities.
(f) Under the laws of the State of New York relating to personal jurisdiction,
each of the Issuer and the Guarantor has, pursuant to Section 13 of the
Purchase Agreement, validly and effectively submitted to the personal
jurisdiction of the federal and state courts in the Borough of Manhattan
in the City of New York in any suit or proceeding arising out of or
relating to the Purchase Agreement or the transactions contemplated
thereby, and each of the Issuer and the Guarantor has validly and
effectively appointed CT Corporation as its authorized agent for the
purposes described in Section 13 thereof.
(g) Under the laws of the State of New York relating to personal jurisdiction,
each of the Issuer and the Guarantor has, pursuant to Section 11.08 of the
Indenture, validly and effectively submitted to the personal jurisdiction
of the federal and state courts in the Borough of Manhattan in the City of
New York in any suit or proceeding arising out of or relating to the
Indenture, and each of the Issuer and the Guarantor has validly and
effectively appointed CT Corporation as its authorized agent for the
purposes described in Section 11.08 thereof.
We have considered the statements relating to legal matters or documents
included in the Offering Circular under the captions "Description of the Notes
and Guarantee," "Tax Considerations -United States Federal Income Taxation" and
"Transfer Restrictions," and in the [tenth, eleventh, twelfth, thirteenth and
fourteenth paragraphs] under the caption "Plan of Distribution." In our
opinion, such statements fairly summarize in all material respects such matters
or documents.
11
We have not ourselves checked the accuracy, completeness or fairness of, or
otherwise verified, the information furnished with respect to other matters in
the Offering Circular. We have generally reviewed and discussed with your
representatives, and with certain officers and employees of, and counsel and
independent public accountants for, the Issuer and the Guarantor, the
information furnished, whether or not subject to our check and verification. On
the basis of such consideration, review and discussion, but without independent
check or verification except as stated above, nothing has come to our attention
that causes us to believe that the Offering Circular (except for the financial
statements and financial schedules and other financial and statistical data
included therein, as to which we express no belief) as of its date and as of
the date hereof contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Our opinion set forth in paragraph (d) above assumes (a) that the offering is
made as contemplated in the Offering Circular and (b) the accuracy of and
compliance with the representations, warranties and covenants of the Issuer,
the Guarantor and you in the Purchase Agreement relating to the offering of the
Securities.
We are members of the Bar of the State of New York and our opinion is limited
to the laws of the State of New York and the federal laws of the United States.
To the extent that the laws of the British Virgin Islands or Hong Kong are
relevant to our opinion set forth above, we have, without making any
independent investigation with respect thereto, assumed the correctness of and
relied upon, and our opinion is subject to the qualifications, assumptions and
exceptions set forth in, the opinions of Xxxxxx Westwood & Riegels, British
Virgin Islands counsel to the Issuer, and Xxxxxxx & Xxxxxxx, Hong Kong counsel
to the Issuer and the Guarantor, dated the date hereof and delivered to you
pursuant to Sections 5(c) and 5(e), respectively, of the Purchase Agreement.
This opinion is rendered to you solely in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by or furnished to any other person without our prior written consent.
Very truly yours,
00
XXXXXXX X
XXXXXXX XX XXXXXXX & XXXXXXX
XXXX XXXX COUNSEL TO THE GUARANTOR
To: The Hongkong and Shanghai Banking Corporation Limited
Xxxxx 00
0 Xxxxx'x Xxxx Xxxxxxx
Xxxx Xxxx
(the "Manager")
Dear Sirs
US$500,000,000 [o]% Guaranteed Notes due 2013 (the "Notes") to be issued by
PCCW-HKT Capital No.2 Limited (the "Issuer") and unconditionally and
irrevocably guaranteed by PCCW-HKT Telephone Limited (the "Guarantor")
We have been requested by the Guarantor to provide to you as Manager in respect
of the Notes a legal opinion as to the laws of the Hong Kong Special
Administrative Region of the People's Republic of China ("Hong Kong") for the
purposes of section 5(e) of the Purchase Agreement (as defined in the Schedule
to this opinion). We have acted as legal advisers to the Guarantor as to the
laws of Hong Kong and have taken instructions solely from the Guarantor.
This opinion is limited to the laws of Hong Kong as applied by the Hong Kong
courts on the date of this opinion and is given on the basis that it will be
governed by and construed in accordance with the laws of Hong Kong on such
date. We have assumed that there is nothing in the laws of any other
jurisdiction which affects this opinion. For the avoidance of doubt (and
without limitation), we have made no investigation of, and express no opinion
in relation to, the laws of any other jurisdiction including the laws of the
British Virgin Islands or the laws of the State of New York for the purposes of
this opinion.
1. Documents
For the purposes of this opinion, we have only examined the documents listed
and (where appropriate) defined in the Schedule to this opinion (the
"Documents"). Terms defined in the Documents shall, unless the context
otherwise requires, have the same meaning when used in this opinion. We express
no opinion as to any searches, agreement, instrument or document other than as
specified in this opinion.
2. Searches
In giving this opinion, we have relied on:
2.1 searches of the publicly available records of the Companies Registry of
Hong Kong in relation to the Guarantor conducted by us on [o] July 2003;
13
2.2 searches of the publicly available records of the Official Receiver's
Office in Hong Kong in relation to the Guarantor conducted by TARGET
On-Line Financial Limited on [o] July 2003; and
2.3 searches of the publicly available records at the Court of First Instance
of the High Court of Hong Kong in relation to the Guarantor conducted by
TARGET On-Line Financial Limited on [o] July 2003,
together, the "Searches").
We have not made any searches, enquiries or investigations of any factual
matters, statements or circumstances relating to or referred to in this opinion
except for the Searches.
3. Assumptions
We have assumed, for all purposes of this opinion, that:
3.1 all the Principal Documents (as defined in the Schedule hereto) have been
validly authorised by each party thereto (other than the Guarantor), that
the Principal Documents have been and the Notes, upon issue, will be
validly executed, and (in the case of the Global Notes (as defined in the
Schedule hereto) and any definitive Notes) authenticated and issued in
accordance with the Principal Documents, and delivered by the relevant
party or parties thereto and that the performance of each party (other
than the Guarantor) of its obligations under each of the Principal
Documents is within the capacity and powers, corporate or otherwise, of
each such party;
3.2 all original Documents and the signatures and (where applicable) seals on
them are genuine and (other than in the case of the Guarantor) were
affixed by persons duly authorised on behalf of the relevant party in
accordance with the constitutional documents of, and valid resolutions
passed by, such party and that all copies or engrossments of Documents
conform to the original and that there have been no amendments, novations,
supplements, modifications or variations to any of the Documents;
3.3 each company which is a party to any of the Principal Documents (other
than the Guarantor) is duly incorporated in and validly existing (and, if
applicable, in good standing) under the laws of the relevant jurisdiction
of its incorporation, has all powers and authorities to own its property
and assets and to conduct its business as it is now conducted or purported
to be conducted and to enter into, exercise its rights under and perform
the obligations expressed to be assured by it in each of the Principal
Documents to which it is a party;
3.4 the obligations of each party to the Principal Documents are, and the
Global Notes are, and will remain, its valid and legal obligations,
binding on and enforceable against it (and are not subject to avoidance by
any person) under all applicable laws (other than the laws of Hong Kong)
and in all applicable jurisdictions (other than Hong Kong);
3.5 each of the Principal Documents and the Notes take and will take effect
and is valid and binding under the lands of the State of New York in
accordance with its terms; as each of the Principal Documents and the
Notes is expressed to be governed by the laws of the State of New York, we
must, for the expressed of this opinion, assume that the terms of the
Principal Documents and the Notes have the same meaning under the laws of
the State of New York as they would if they were expressed to be governed
by the laws of Hong Kong;
14
3.6 the Searches were and remain at the date of this opinion accurate,
complete and up to date and disclose all information which is necessary or
material for the purposes of this opinion and had the Searches been made
on the date of this opinion, they would have revealed no other information
which is not revealed in the Searches and there has been no alteration in
the status, position or condition of the Guarantor (howsoever described)
from that revealed in the Searches;
3.7 the choice of the laws of the State of New York to govern the Principal
Documents was freely made in good faith by the respective parties to such
documents and was not made with the intention or effect of avoiding the
laws of the jurisdiction with which the Guarantor or any other party to
such documents has its most substantial connection and there is no reason
for avoiding such choice on the grounds of public policy;
3.8 the courts of the State of New York and the courts of the jurisdiction
(other than Hong Kong) in which each party to the Principal Documents is
incorporated, resides or is a national of would give effect to the choice
of law specified in each of the Principal Documents as the governing law
of that Principal Document and to the provisions of that Principal
Document;
3.9 the Memorandum and Articles of Association (as defined in the Schedule to
this opinion) are true, complete and up to date and are in full force and
effect at the date of this opinion;
3.10 the Directors' Meeting (as defined in the Schedule to this opinion) was
duly and properly convened and conducted and a quorum was present
throughout, that the Directors' Minutes (as defined in the Schedule
hereto) are true and complete records of the proceedings at such meetings,
that due disclosure had been made by each director of any interests he or
she might have in the matters considered at such meetings, and that no
action has been taken which limits or modifies, rescinds or nullifies the
resolutions passed at such meetings or the authority of the Guarantor
granted by such meetings, which remains, and will remain, in full force
and effect in accordance with the terms thereof;
3.11 each of the Principal Documents and the Global Notes was (or, as the case
may be, wiil be) entered into in good faith on arm's length commercial
terms and that such documents and the transactions contemplated by them
were (or, as the case may be, wiil be) entered into for the legitimate
purposes of, and in the commercial interests and for the benefit of, each
of the parties thereto and that each such party was solvent immediately
before and immediately after the execution of the Principal Documents and
the Global Notes;
3.12 the giving of the Guarantee by the Guarantor is not or may not be deemed
to be a "fraudulent preference" for the purposes of section 266 of the
Companies Ordinance (Chapter 32 of the Laws of Hong Kong) or is not a
disposition to defraud creditors for the purposes of section 60 of the
Conveyancing and Property Ordinance (Chapter 219 of the Laws of Hong
Kong);
3.13 nothing in the Principal Documents and the Notes conflicts with, is
incompatible with, is prohibited under or is in breach of the terms of any
agreement, document, obligation, undertaking or commitment whatsoever
assumed, entered into, given by or binding on any party to them and there
are no provisions, contractual or other restrictions, in any agreement or
arrangement (not being a document specifically provided to and examined by
us for the purpose of giving this opinion) which would affect any of the
conclusions in this opinion;
15
3.14 all authorisations, approvals, consents, licences, notices, filings,
publications, orders and exemptions required under any applicable law
(other than the laws of Hong Kong) for the entry into and execution of the
Principal Documents and the exercise of all rights and performance of all
obligations under them by each party to them have been duly obtained and
fulfilled and are and will remain in full force and effect and all
conditions (if any) to which they are subject have been and will remain
satisfied;
3.15 the execution and delivery of the Principal Documents and the performance
by the parties them of their respective obligations under them has not
violated and does not or, as the case may be, will not violate (1) the
laws (including public policy requirements) of any relevant jurisdiction
outside Hong Kong; or (2) the memorandum and articles of association or
by-laws or any other constitutional documents of any such party (other
than the Guarantor), and none of the opinions expressed below are or will
be affected by the laws (including the public policy requirements) of any
such jurisdiction;
3.16 none of the parties to the Principal Documents is or will be seeking to
achieve any purpose not apparent from the Principal Documents which might
render the same, and no facts, circumstances or events have arisen or
existed or will arise or exist which might give rise to a right for any
person to treat the Principal Documents, illegal or void or voidable, or
as frustrated or subject to a right of repudiation or rescission;
3.17 all statements of fact and/or representations (other than as to matters of
law on which we specifically express an opinion in this letter) and
undertakings made in the Documents and the Notes are, as at the date of
this opinion, or (as the case may be) will be, as at the date on which
such statements, representations and undertakings are made, correct,
accurate and up to date, have been or (as the case may be) will be
complied with and have been or (as the case may be) will be made bona fide
and not for any collateral purpose;
3.18 the Principal Documents have been executed or signed on behalf of the
Guarantor by the persons who are named as the persons authorised to sign
such documents in the Director's Minutes and that the Principal Documents
have been executed or signed and delivered by such persons at the time and
in the manner set out in the Directors' Minutes;
3.19 the restrictions on transfer in respect of the Notes set out in paragraph
7 of the Purchase Agreement have been and are complied with;
3.20 the Manager and any other person dealing in the Notes in Hong Kong is
licensed, or deemed licensed, under transitional arrangements for type 1
dealing in securities regulated activity under the Securities and Futures
Ordinance (Chapter 571 of the Laws of Hong Kong); and
3.21 any Notes bought and sold in Hong Kong shall be bought and sold privately.
4. Opinion
On the basis of, and subject to, the foregoing assumptions and the reservations
set out below, and subject to any matters not disclosed to us, we are of the
opinion that as a matter of the laws of Hong Kong:
4.1 the Guarantor is a company duly incorporated in Hong Kong with limited
liability under the Companies Ordinance (Chapter 32 of the Laws of Hong
Kong) and is validly existing under the laws of Hong Kong;
16
4.2 based solely on the Searches, no order or resolution for the winding up,
administration or similar insolvency proceeding in respect of the
Guarantor and no notice of appointment of a receiver or similar insolvency
representative over any of the assets of the Guarantor has been filed at
the Companies Registry of Hong Kong, or with the Official Receiver's
Office of Hong Kong or the Court of First Instance of the High Court of
Hong Kong, in each case as at [o];
4.3 the Guarantor has the corporate power to enter into and perform its
obligations under the Principal Documents and has taken all necessary
corporate action to authorise the execution and delivery by it of the
Principal Documents and the performance of its obligations under them;
4.4 there is no reason, so far as the laws of Hong Kong are concerned, why the
Indenture will not constitute the valid and binding obligations of the
Guarantor;
4.5 all necessary action under the laws of Hong Kong has been duly taken by or
on behalf of the Guarantor, and there are no consents, approvals,
authorisations or orders required by the Guarantor from any governmental
or other regulatory agencies in Hong Kong, for the entry into or execution
by the Guarantor of the Principal Documents or the performance of its
obligations under them;
4.6 no registration, filing or similar formalities are required of the
Guarantor with the government of, or any regulatory authority in, Hong
Kong in connection with the execution of the Principal Documents or the
performance by the Guarantor of its obligations under them;
4.7 the Principal Documents have been duly executed by, or on behalf of, the
Guarantor;
4.8 the execution and delivery by the Guarantor of the Principal Documents and
the performance by the Guarantor of its obligations under them does not:
(1) violate the laws of Hong Kong applicable to companies generally at
the date of this opinion; or
(2) violate the Memorandum and Articles of Association of the Guarantor;
4.9 a final and conclusive judgment on the merits properly obtained against
the Guarantor in any court of the State of New York or in a federal court
of the United States of America in New York which is competent to hear the
dispute (any such court, a "Competent Court") for a fixed sum of money in
respect of any legal suit or proceeding arising out of or relating to the
Purchase Agreement, the Indenture or the Guarantee and which could be
enforced by execution against the Guarantor in the jurisdiction of such
Competent Court and has not been stayed or satisfied in whole may be sued
on in Hong Kong as a debt due from the Guarantor if: (1) the Guarantor
was, at the time such proceeding was instituted, resident in the
jurisdiction in which such proceeding has been commenced or had submitted
to the jurisdiction of the relevant Competent Court; (2) that judgment was
not obtained by fraud; (3) the enforcement of that judgment would not be
contrary to public policy of Hong Kong; (4) that judgment had not been
obtained in contravention of the principles of natural justice; (5) that
judgment does not include the payment of any tax, fine or penalty and (6)
the Guarantor either was duly served with the process of the relevant
Competent Court or appeared before the relevant Competent Court;
17
4.10 except as disclosed in the Offering Circular under the heading "Certain
Tax Considerations - Hong Kong Taxation," (1) payments by the Guarantor
pursuant to the Guarantee may this opinion be made on the date of this
opinion without withholding or deduction for any taxes, duties or other
charges of whatever nature of Hong Kong or any political subdivision or
authority of or in it having power to tax; and (2) no stamp, registration
or other similar duty is payable in Hong Kong in connection with the
execution and delivery by the Guarantor of the Purchase Agreement or the
Indenture;
4.11 the choice of the laws of the State of New York as the governing law of
the Purchase Agreement, the Indenture and the Guarantee is a valid choice
of law and will be recognised and given effect to by the courts of Hong
Kong; and the submission by the Guarantor to the non-exclusive
jurisdiction of the New York courts contained in the Purchase Agreement
and the Indenture and the appointment by the Guarantor of [o] as its agent
for service of process in connection with such documents are, in each
case, valid and binding on it under the laws of Hong Kong;
4.12 each of the Purchase Agreement, the Indenture and the Guarantee is in
proper legal form under the laws of Hong Kong for its enforcement in the
courts of Hong Kong, subject to proof of the relevant provisions of the
law of any jurisdiction (other than Hong Kong) which may be relevant and
except that a court in Hong Kong would apply its own procedural rules in
any proceedings;
4.13 the statements set forth in the Offering Circular under the headings
"Enforceability of Civil Liabilities" on page v, "Business - Regulation"
on pages [o] and "Certain Tax Considerations - Hong Kong Taxation" on page
[o], insofar as they purport to summarise certain provisions of the laws
and regulations of Hong Kong referred to therein, fairly summarise such
provisions in all material respects; and
4.14 the Offering Circular will not constitute a prospectus which is required
to be registered under the Companies Ordinance (Chapter 32 of the Laws of
Hong Kong).
5. General reservations
This opinion is subject to the following reservations:
5.1 the validity, performance and enforcement of the obligations of the
Guarantor under the Purchase Agreement, the Indenture and the Guarantee
may be limited by laws relating to bankruptcy, insolvency, liquidation,
reorganisation, court schemes, moratoria, administration and other laws of
general application relating to or affecting the rights of creditors;
5.2 the opinion we express that the Guarantor is duly incorporated and validly
existing under the laws of Hong Kong is based solely on our examination of
the Documents and the Searches; it should be noted however that its
Searches are not capable of revealing definitively whether or not a
winding-up petition has been presented or an administration or similar
insolvency proceeding commenced; notice of a winding-up petition, a
winding-up order or resolution, or a notice of appointment of a receiver
(or similar insolvency representative) may not be filed at the Companies
Registry of Hong Kong or with the Official Receiver's Office of Hong Kong
immediately and there may be a delay in the relevant notice appearing on
the file of the company concerned;
18
5.3 the opinion we express that the Indenture may constitute the valid and
binding obligations of the Guarantor does not mean that such obligations
will necessarily be enforceable in all circumstances in accordance with
their terms; in particular:-
(A) enforcement may be limited by general principles of equity - for
example, equitable remedies (such as an injunction or specific
performance) are only available at the discretion of the court and
may not be available where damages are considered to be an adequate
remedy;
(B) claims may be barred under the Limitation Ordinance (Chapter 347 of
the Laws of Hong Kong) and equitable remedies may not be available
when there has been a delay in making a claim for them which the
court considers unreasonable and any claim may be or become subject
to defences of set-off or counterclaim;
(C) where obligations are to be performed in a jurisdiction outside Hong
Kong, they may not be enforceable in Hong Kong to the extent that the
performance or enforcement of such obligations would be illegal under
the laws of that jurisdiction or contrary to mandatory laws or public
policy of that jurisdiction;
(D) enforcement may be prevented by reason of fraud, misrepresentation,
public policy or mistake or limited by the doctrine of frustration of
contracts;
(E) where a party to an agreement is party to that agreement in more than
one capacity, that party will not be able to enforce obligations owed
by it to itself; and
(F) enforcement of a foreign judgment by the courts of Hong Kong may be
refused if the foreign judgment is incompatible with a judgment of
the courts of Hong Kong between the same parties relating to the same
issues or, in some circumstances, with an earlier foreign judgment
which satisfies the same criteria and is enforceable in Hong Kong;
5.4 any term of an agreement may be amended orally by the parties thereto
despite any provision to be contrary in such agreement;
5.5 no opinion is expressed as to the correctness of any representation,
warranty or statement of fact given or made (expressly or impliedly) in,
under or by virtue of any of the Principal Documents;
5.6 other than as mentioned in paragraphs 4.10 and 4.13 above, we do not
express any opinion as to any taxation (including taxation payable under
the laws of Hong Kong) consequences which will or may arise as a result of
any transaction effected in connection with the Principal Documents;
5.7 to the extent that any of our opinions are dependent upon the HWR Legal
Opinion (as defined in the Schedule hereto), such opinions are subject to
the same assumptions, qualifications and reservations as set out therein,
and we have relied upon the HWR Legal Opinion as being an accurate
statement as to British Virgin Islands law;
5.8 any transfer of, or payment in respect of, a bond or note involving the
government of any country which is currently the subject of United Nations
sanctions, any person or body resident in, incorporated in, or
constituted, under the laws of such country or exercising public functions
in any such country or any person or body controlled by any of the
19
foregoing or by any person acting on behalf of any of the foregoing or any
other person otherwise the subject of such sanctions, may be subject to
restrictions pursuant to such sanctions as implemented in Hong Kong;
5.9 failure to exercise a right may operate as a waiver of that right
notwithstanding a provision to the contrary;
5.10 a provision that a notice or appointment is irrevocable may not be
enforceable;
5.11 any provision of any of the Principal Documents allowing an invalid,
illegal or unenforceable provision to be severed from other provisions may
be disregarded by the Hong Kong courts;
5.12 provisions for default interest in the Principal Documents may bot be
enforceable if such interest amounts to a penalty under the laws of Hong
Kong;
5.13 any action brought in the courts of Hong Kong would be subject to the
rules and procedures of such courts including the power of any such court,
at its discretion, to order a party in an action, who is ordinarily
resident out of the jurisdiction to provide security for costs, or to stay
proceedings which it is hearing if concurrent proceedings are being
brought elsewhere;
5.14 a Hong Kong court may refuse to give effect to any provision of the
Principal Document (1) for the payment of expenses in respect of the costs
of enforcement (actual or contemplated) or of unsuccessful litigation
brought before a Hong Kong court or where the court has itself made an
order for costs or (2) which would involve the enforcement of foreign
revenue or penal laws or (3) which would be inconsistent with Hong Kong
public policy;
5.15 we do not express any opinion as to the enforceability in Hong Kong of any
judgment obtained in any jurisdiction other than in Hong Kong;
5.16 the choice of Hong Kong law to govern the Principal Documents would not be
recognised or upheld by the Hong Kong courts if such choice of law (1) was
not bona fide and freely made or (2) would be contrary to mandatory rules
of the laws of Hong Kong or public policy in Hong Kong, and a Hong Kong
court will not apply the laws of Hong Kong if it is not pleaded or proved;
the choice of Hong Kong law would not be upheld, for example, if it was
made with the intention of evading the law of the jurisdiction with which
the relevant Principal Document had its most substantial connection and
which, in the absence of Hong Kong law, would have invalidated such
Principal Document or been inconsistent with it;
5.17 we express no opinion on any provision in the Principal Documents
requiring written amendments and waivers thereof insofar as it suggests
that oral or other modifications, amendments or waivers could not be
effectively agreed upon or granted by or between the parties thereto;
5.18 there is some possibility that a court of Hong Kong would hold that a
judgment on a particular agreement, whether given in Hong Kong or
elsewhere, would supersede such agreement to all intents and purposes, so
that any obligation thereunder which by its terms would survive such
judgment might not be held to do so;
5.19 we express no opinion as to whether a judgment would be entered into in a
court of Hong Kong for an amount other than one expressed in the currency
of Hong Kong or as to the
20
date upon which a conversion from a foreign currency would be made for the
purpose of enforcement of any judgment; a court of Hong Kong has a
discretion as to whether to give judgment in a foreign currency and will
exercise such discretion in favour of a plaintiff if it considers the
circumstances appropriate;
5.20 a certificate, determination, notification or opinion as to any matter
provided for in the Principal Documents might be held by the courts of
Hong Kong not to be conclusive if it could be shown to have an
unreasonable or arbitrary basis or in the event of manifest error;
5.21 a court of Hong Kong will not apply the laws of the State of New York if
(1) it is not pleaded or proved or (2) to do so would be contrary to the
mandatory rules of the laws of Hong Kong or manifestly incompatible with
the public policy of Hong Kong; and
5.22 we have not been responsible for ensuring that the Offering Circular
complies with the listing requirements of the Luxembourg Stock Exchange
and we express no opinion as to compliance with any rules, regulations or
requirements of the Luxembourg Stock Exchange in connection with the
Notes; we have not been responsible for the investigation or verification
of statements of fact (including statements as to foreign law) in the
Offering Circular or any other Document or the reasonableness of any
statements of opinion contained in the Offering Circular or any of the
Documents, nor have we been responsible for ensuring that the Offering
Circular contains all material facts.
6. Matters relating to the changes to the Hong Kong legal system following
Resumption of Chinese Sovereignty over Hong Kong on 1 July 1997
On 4 April 1990, the President of the People's Republic of China adopted the
Basic Law. Article 8 of the Basic Law states that the laws previously in force
in the territory of Hong Kong, that is, the common law, rules of equity,
ordinances, subordinate legislation and customary law shall be maintained,
except for any that contravene the Basic Law, and subject to any amendment by
the legislature of Hong Kong. Under Article 160 of the Basic Law, the laws
previously in force in the territory of Hong Kong shall be adopted as laws of
Hong Kong except for those which the Standing Committee of the National
People's Congress of the People's Republic of China (the "Standing Committee")
declares to be in contravention of the Basic Law and, if any laws are later
discovered to be in contravention of the Basic Law, they shall be amended or
cease to have force in accordance with the procedure as prescribed by the Basic
Law.
By a decision made on 23 February 1997 (the "Decision") the Standing Committee
declared that fourteen Hong Kong ordinances and their subsidiary legislation,
and provisions in ten other Hong Kong ordinances, contravened the Basic Law and
would not be adopted as part of the laws of Hong Kong after 30 June 1997. One
of these ordinances is the Application of English Law Ordinance, Chapter 88 of
the Laws of Hong Kong (the "English Law Ordinance") which applied the common
law and rules of equity of England to the territory of Hong Kong.
For the purposes of giving this opinion, we have assumed that the effect of the
Decision, insofar as it relates to the English Law Ordinance, is to repeal the
English Law Ordinance as from 1 July 1997 and that the common law and rules of
equity which applied in the territory of Hong Kong on 30 June 1997 continue to
apply to Hong Kong subject to their independent development and to the extent
that they do not contravene the Basic Law.
On 1 July 1997, the Provisional Legislative Council of Hong Kong passed the
Hong Kong Reunification Ordinance (the "Reunification Ordinance"). Section 5 of
the Reunification
21
Ordinance, which amends the Interpretation and General Clauses Ordinance,
Chapter 1 of the Laws of Hong Kong, states at 2A(2)(e) that:-
"provisions applying any English law may continue to be applicable by
reference thereto as a transitional arrangement pending their amendment by
the Hong Kong Special Administrative Region through the Legislature
thereof, provided that they are not prejudicial to the sovereignty of the
People's Republic of China and do not contravene the provisions of the
Basic Law."
For the purposes of the opinion above as to the laws of Hong Kong we have
assumed that:-
(A) the courts of Hong Kong will continue to apply and have regard to
common law precedent and rules of equity;
(B) the Basic Law does not include any provision which would be
contravened by any law of Hong Kong; and
(C) save for the Decision, the Standing Committee has not and does not
declare any provision of Hong Kong law to contravene or be
inconsistent with the Basic Law.
It is our understanding that the status of the Provisional Legislative Council
of Hong Kong and the application of the Basic Law has been contested before the
courts of Hong Kong. These challenges were rejected by the Court of Appeal in
July 1997. There may be a further appeal to the Court of Final Appeal. Until
all such challenges have been resolved in the courts or the legislation which
has been passed by the Provisional Legislative Council ratified by a
Legislative Council elected in accordance with the requirements of the Basic
Law, the status of the laws of Hong Kong to some extent remain uncertain and no
conclusive view can be expressed as to the validity of the legislation passed
by the Provisional Legislative Council.
7. Confidentiality
This opinion is addressed to you solely for your benefit (in your capacity as
the Manager) in connection with the issue of the Notes pursuant to the Purchase
Agreement. It is not to be transmitted to anyone else nor is it to be relied
upon by anyone else or for any other purpose or quoted or referred to in any
public document or filed with anyone without our express prior written consent.
Yours faithfully
Xxxxxxx & Xxxxxxx
22
SCHEDULE
Documents
1. Original executed copy of the Purchase Agreement in relation to the Notes
dated [o] 2003 entered into between the Issuer, the Guarantor and the
Manager (the "Purchase Agreement").
2. Original executed copy of an indenture which incorporates the form of
guarantee to be given by the Guarantor (the "Guarantee") in relation to
the Notes dated [o] 2003 entered into between, inter alia, the Guarantor,
the Issuer and the Trustee (the "Indenture").
3. Unsigned copies of the Certificated Note, the Restricted Global Note and
the Regulation S Global Note (together, the "Global Notes"), each in the
form scheduled to the Indenture.
4. The Offering Circular dated [o] 2003 in relation to the Notes (the
"Offering Circular").
5. A copy of the memorandum and articles of association of the Guarantor
certified by [o] as a true copy of the same on [o] 2003 (the "Memorandum
and Articles of Association").
6. Copies of the Certificate of Incorporation and each of the Certificates of
Incorporation on Change of Name of the Guarantor certified by [o] as true
copies of the same on [o] 2003.
7. A copy of the minutes of the meeting of the directors of the Guarantor
held on [o] 2003 (the "Directors' Meeting") certified by [o] as a true
copy of the same on [o] 2003 (the "Directors' Minutes").
8. A copy of a certificate dated [o] 2003 signed by the company secretary of
the Guarantor continuing, inter alia, the names and signatures of the
persons authorised by the Directors' Minutes to execute documents on
behalf of the Guarantor.
9. A copy of a legal opinion given by Xxxxxx Westwood & Riegels ("HWR") on
[o] 2003 in respect of the issue of the Notes (the "HWR Legal Opinion").
The documents referred to in paragraphs 1 to 3 are collectively referred to as
the "Principal Documents". The documents referred to in paragraphs 1 to 8 above
are collectively referred to as the "Documents".
23
EXHIBIT D
OPINION OF XXXXX & XXXXX,
U.S. COUNSEL TO THE
MANAGER
The opinion of Xxxxx & Overy to be delivered pursuant to Section 5(f) of the
Purchase Agreement shall be to the effect that:
(a) Assuming the Notes have been duly authorized, executed, issued and
delivered by each of the Issuer and the Guarantor insofar as the laws of
its jurisdiction of incorporation are concerned, the Notes have been duly
executed, authenticated, issued and delivered and constitute valid and
binding obligations of each of the Issuer and the Guarantor, enforceable
in accordance with their terms, except as (a) the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and (b) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(b) Assuming that the Guarantee has been duly authorized, executed, issued and
delivered by the Guarantor insofar as the laws of its jurisdiction of
incorporation are concerned, when the Notes are duly authenticated in
accordance with the provisions of the Indenture and delivered to and paid
for by the Manager in accordance with the terms of the Purchase Agreement,
the Guarantee will be a valid and binding obligation of the Guarantor,
enforceable in accordance with its terms, except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, and (b)
rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(c) Assuming the Indenture has been duly authorized, executed, issued and
delivered by each of the Issuer and the Guarantor insofar as the laws of
its jurisdiction of incorporation are concerned, the Indenture has been
duly executed, authenticated, issued and delivered and constitutes a valid
and binding obligation of each of the Issuer and the Guarantor,
enforceable in accordance with its terms, except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and (b)
rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(d) It is not necessary in connection with the offer, sale and delivery of the
Securities to the Managers under the Purchase Agreement or in connection
with the initial resale of such Securities by the Managers in the manner
contemplated by the Purchase Agreement and the Final Circular (it being
understood that no opinion is expressed as to any other sale of any
Security) to register the Securities under the Securities Act of 1933, as
amended, or to qualify the Indenture under the Trust Indenture Act of
1939, as amended.
Our opinion set forth in paragraph (d) above assumes that the offering is made
as contemplated in the Final Circular and the accuracy of and compliance with
the representations, warranties and covenants of the Issuer, the Guarantor and
the Manager in the Purchase Agreement relating to the offering of the
Securities.
We have considered the statements relating to legal matters or documents
included in the Final Circular under the captions "Description of the Notes and
Guarantee" and "Transfer Restrictions.
24
In our opinion, such statements fairly summarize in all material respects such
matters or documents.
We have not ourselves checked the accuracy, completeness or fairness of, or
otherwise verified, the information furnished with respect to other matters in
the Final Circular. We have generally reviewed and discussed with your
representatives and certain officers and employees of, and counsel and
independent public accountants for, the Issuer and the Guarantor the
information furnished, whether or not subject to our check and verification. On
the basis of such consideration, review and discussion, but without independent
check or verification except as stated above, nothing has come to our attention
that causes us to believe that the Final Circular (except for the financial
statements and other financial and statistical data included therein, as to
which we are not called upon to express a belief) as of its date and as of the
date hereof contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
25
