EXHIBIT 4.2
Citibank, N.A. -- Draft October 12, 2004
DEPOSIT AGREEMENT
by and among
CHINA NETCOM GROUP CORPORATION (HONG KONG) LIMITED
AND
CITIBANK, N.A.,
as Depositary,
AND
THE HOLDERS AND BENEFICIAL OWNERS FROM TIME TO TIME
OF AMERICAN DEPOSITARY SHARES ISSUED HEREUNDER
Dated as of November __, 2004
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of ___________, 2004, by and among (i) CHINA
NETCOM GROUP CORPORATION (HONG KONG) LIMITED, a company organized under the laws
of Hong Kong, and its successors (the "Company"), (ii) CITIBANK, N.A., a
national banking association organized under the laws of the United States of
America acting in its capacity as depositary, and any successor depositary
hereunder (the "Depositary"), and (iii) all Holders and Beneficial Owners from
time to time of American Depositary Shares issued hereunder (all such
capitalized terms as hereinafter defined).
WITNESSETH THAT:
WHEREAS, the Company desires to establish with the Depositary an ADR
facility to provide inter alia for the deposit of the Shares (as hereinafter
defined) and the creation of American Depositary Shares representing the Shares
so deposited and, if applicable, for the execution and delivery of American
Depositary Receipts evidencing American Depositary Shares; and
WHEREAS, the Depositary is willing to act as the Depositary for such ADR
facility upon the terms set forth in this Deposit Agreement; and
WHEREAS, any American Depositary Receipts issued pursuant to the terms of
this Deposit Agreement are to be substantially in the form of Exhibit A attached
hereto, with appropriate insertions, modifications and omissions, as hereinafter
provided in this Deposit Agreement; and
WHEREAS, the Shares are to be listed on the Hong Kong Stock Exchange and
American Depositary Shares to be issued pursuant to the terms of this Deposit
Agreement are to be listed for trading on the New York Stock Exchange, Inc.
under the symbol "CN"; and
WHEREAS, the Board of Directors of the Company (or an authorized committee
thereof) has duly approved the establishment of an ADR facility upon the terms
set forth in this Deposit Agreement (as hereinafter defined), the execution and
delivery of this Deposit Agreement on behalf of the Company, and the actions of
the Company and the transactions contemplated herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
All capitalized terms used, but not otherwise defined, herein shall have
the meanings set forth below, unless otherwise clearly indicated:
SECTION 1.1 "AFFILIATE" shall have the meaning assigned to such term by
the Commission (as hereinafter defined) under Regulation C promulgated under the
Securities Act (as hereinafter defined), or under any successor regulation
thereto.
SECTION 1.2 "ADS RECORD DATE" shall have the meaning given to such term in
Section 4.9.
SECTION 1.3 "AMERICAN DEPOSITARY RECEIPT(s)", "ADR(s)" and "RECEIPT(s)"
shall mean the certificate(s) issued by the Depositary to evidence the American
Depositary Shares issued under the terms of this Deposit Agreement in the form
of Certificated ADS(s) (as hereinafter defined), as such ADRs may be amended
from time to time in accordance with the provisions of this Deposit Agreement.
An ADR may evidence any number of ADSs and may, in the case of ADSs held through
a central depository such as DTC, be in the form of a "Balance Certificate."
Except as specifically provided in this Deposit Agreement, in any applicable
agreement among the Depositary, the Company and the applicable Holders and
Beneficial Owners supplementing this Deposit Agreement, or in the applicable
ADR(s), the term ADR(s) shall include (i) Restricted ADR(s) issued pursuant to
Section 2.13 of this Deposit Agreement and (ii) Partial Entitlement ADR(s)
issued pursuant to Section 2.11 of this Deposit Agreement.
SECTION 1.4 "AMERICAN DEPOSITARY SHARE(s)" and "ADS(s)" shall mean the
rights and interests in the Deposited Securities granted to the Holders and
Beneficial Owners pursuant to the terms and conditions of this Deposit Agreement
and, if issued as Certificated ADS(s), (as hereinafter defined) the ADR(s)
issued to evidence such ADSs. ADS(s) may be issued under the terms of the
Deposit Agreement in the form of (a) Certificated ADS(s) (as hereinafter
defined), in which case the ADS(s) are evidenced by ADR(s), or (b)
Uncertificated ADS(s) (as hereinafter defined), in which case the ADS(s) are not
evidenced by ADR(s) but are reflected on the direct registration system
maintained by the Depositary for such purposes under the terms of Section 2.12.
Unless otherwise specified in this Deposit Agreement or in any ADR, or unless
the context otherwise requires, any reference in the Deposit Agreement or any
ADR to ADS(s) shall include Certificated ADS(s) and Uncertificated ADS(s),
individually or collectively, as the context may require. Except as specifically
provided in this Deposit Agreement, in any applicable agreement among the
Depositary, the Company and the applicable Holders and Beneficial Owners
supplementing this Deposit Agreement, or in the applicable ADR(s), the term
ADS(s) shall include (i) Restricted ADS(s) issued pursuant to Section 2.13 of
this Deposit Agreement and (ii) Partial Entitlement ADS(s) issued pursuant to
Section 2.11 of this Deposit Agreement. Each ADS shall represent [NUMBER OF
SHARES] Share(s) until there shall occur a distribution upon Deposited
Securities referred to in Section 4.2 or a change in Deposited Securities
referred to in Section 4.11 with respect to which additional ADSs are not
issued, and thereafter each ADS shall represent the Deposited Securities
determined in accordance with the terms of such Sections. The Company and the
Depositary may at any time hereafter, subject to applicable law and the terms of
this Deposit Agreement, amend the ADS-to-Share ratio, without, however,
adversely affecting the rights of Holders under this Deposit Agreement to
receive the Deposited Securities represented by the Holders' ADSs before the
effective date of the amendment of the ADS-to-Share ratio.
SECTION 1.5 "APPLICANT" shall have the meaning given to such term in
Section 5.10.
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SECTION 1.6 "BENEFICIAL OWNER" shall mean, as to any ADS, any person or
entity having a beneficial interest deriving from the ownership of such ADS. A
Beneficial Owner of ADSs may or may not be the Holder of the ADSs or, if
applicable, the ADRs evidencing ADSs. A Beneficial Owner shall be able to
exercise any right or receive any benefit hereunder solely through the person
who is the Holder of the ADSs or, if applicable, the ADRs evidencing ADSs owned
by such Beneficial Owner. Unless otherwise identified to the Depositary, a
Holder shall be deemed to be the Beneficial Owner of all the ADSs registered in
his/her/its name.
SECTION 1.7 "CERTIFICATED ADS(s)" shall have the meaning set forth in
Section 2.12.
SECTION 1.8 "COMMISSION" shall mean the Securities and Exchange Commission
of the United States or any successor governmental agency thereto in the United
States.
SECTION 1.9 "COMPANY" shall mean China Netcom Group Corporation (Hong
Kong) Limited, a company incorporated and existing under the laws of Hong Kong,
and its successors.
SECTION 1.10 "CUSTODIAN" shall mean, as of the date hereof, Citibank, N.A.
- Hong Kong branch, having its principal office at 10/F., Harbour Front (II),
22, Xxx Xxxx Street, Xxxx Xxx, Kowloon, Hong Kong, as the custodian for the
purposes of this Deposit Agreement, and any other entity that may be appointed
by the Depositary in consultation with the Company pursuant to the terms of
Section 5.5 as successor, substitute or additional custodian hereunder. The term
"Custodian" shall mean any Custodian individually or all Custodians
collectively, as the context requires.
SECTION 1.11 "DELIVER" and "DELIVERY" shall mean, when used in respect of
ADSs, Deposited Securities and Shares, either (i) the physical delivery of the
certificate(s) representing such securities, or (ii) the electronic delivery of
such securities by means of book-entry transfer, if available.
SECTION 1.12 "DEPOSIT AGREEMENT" shall mean this Deposit Agreement and all
exhibits hereto, as the same may from time to time be amended and supplemented
from time to time in accordance with the terms hereof.
SECTION 1.13 "DEPOSITARY" shall mean Citibank, N.A., a national banking
association organized under the laws of the United States, in its capacity as
depositary under the terms of this Deposit Agreement, and any successor
depositary hereunder.
SECTION 1.14 "DEPOSITED SECURITIES" shall mean Shares at any time
deposited under this Deposit Agreement and any and all other securities,
property and cash held by the Depositary or the Custodian in respect thereof,
subject, in the case of cash, to the provisions of Section 4.8. The collateral
delivered in connection with Pre-Release Transactions described in Section 5.10
hereof shall not constitute Deposited Securities. Except as specifically
provided in this Deposit Agreement, in any applicable agreement among the
Depositary, the Company and the applicable Holders and Beneficial Owners
supplementing this Deposit Agreement, or in the applicable ADR(s), the term
Deposited Securities shall include (i) Restricted Share(s) on deposit pursuant
to
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Section 2.13 of this Deposit Agreement and (ii) Partial Entitlement Shares on
deposit pursuant to Section 2.11 of this Deposit Agreement.
SECTION 1.15 "DOLLARS" and "$" shall refer to the lawful currency of the
United States.
SECTION 1.16 "DTC" shall mean The Depository Trust Company, a national
clearinghouse and the central book-entry settlement system for securities traded
in the United States and, as such, the custodian for the securities of DTC
Participants (as hereinafter defined) maintained in DTC, and any successor
thereto.
SECTION 1.17 "DTC PARTICIPANT" shall mean any financial institution (or
any nominee of such institution) having one or more participant accounts with
DTC for receiving, holding and delivering the securities and cash held in DTC.
SECTION 1.18 "EXCHANGE ACT" shall mean the United States Securities
Exchange Act of 1934, as amended from time to time.
SECTION 1.19 "FOREIGN CURRENCY" shall mean any currency other than
Dollars.
SECTION 1.20 "FULL ENTITLEMENT ADR(s)", "FULL ENTITLEMENT ADS(s)" AND
"FULL ENTITLEMENT SHARE(s)" shall have the respective meanings set forth in
Section 2.11.
SECTION 1.21 "HOLDER(s)" shall mean the person(s) in whose name the ADSs
are registered on the books of the Depositary (or the Registrar, if any)
maintained for such purpose. A Holder may or may not be a Beneficial Owner. If a
Holder is not the Beneficial Owner of the ADS(s) registered in its name, such
person shall be deemed, for all purposes hereunder, to have all requisite
authority to act on behalf of the Beneficial Owners of the ADSs registered in
its name.
SECTION 1.22 "HONG KONG" shall refer to the Hong Kong Special
Administrative Region of the People's Republic of China.
SECTION 1.23 "PARTIAL ENTITLEMENT ADR(s)", "PARTIAL ENTITLEMENT ADS(s)"
AND "PARTIAL ENTITLEMENT SHARE(s)" shall have the respective meanings set forth
in Section 2.11.
SECTION 1.24 "PRE-RELEASE TRANSACTION" shall have the meaning set forth in
Section 5.10.
SECTION 1.25 "PRINCIPAL OFFICE" shall mean, when used with respect to the
Depositary, the principal office of the Depositary at which at any particular
time its depositary receipts business shall be administered, which, at the date
of this Deposit Agreement, is located at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, X.X.X.
SECTION 1.26 "REGISTRAR" shall mean the Depositary or any bank or trust
company having an office in the Borough of Manhattan, The City of New York,
which shall be appointed by the Depositary in consultation with the Company to
register issuances, transfers and cancellations of ADSs as herein provided, and
shall include any co-registrar appointed by the
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Depositary in consultation with the Company for such purposes. Registrars (other
than the Depositary) may be removed and substitutes appointed by the Depositary.
Each Registrar (other than the Depositary) appointed pursuant to this Deposit
Agreement shall be required to give notice in writing to the Depositary and to
the Company accepting such appointment and agreeing to be bound by the
applicable terms of this Deposit Agreement.
SECTION 1.27 "RESTRICTED SECURITIES" shall mean Shares, Deposited
Securities or ADSs which (i) have been acquired directly or indirectly from the
Company or any of its Affiliates in a transaction or chain of transactions not
involving any public offering and are subject to resale limitations under the
Securities Act or the rules issued thereunder, or (ii) are held by an officer or
director (or persons performing similar functions) or other Affiliate of the
Company, or (iii) are subject to other restrictions on sale or deposit under the
laws of the United States, Hong Kong or any other country, or under a
shareholder agreement or the Articles of Association of the Company or under the
regulations of an applicable securities exchange unless, in each case, such
Shares, Deposited Securities or ADSs are being transferred or sold to persons
other than an Affiliate of the Company in a transaction (a) covered by an
effective resale registration statement, or (b) exempt from the registration
requirements of the Securities Act (as hereinafter defined), and the Shares,
Deposited Securities or ADSs are not, when held by such person(s), Restricted
Securities.
SECTION 1.28 "RESTRICTED ADR(s)", "RESTRICTED ADS(s)" AND "RESTRICTED
SHARES" shall have the respective meanings set forth in Section 2.13.
SECTION 1.29 "SECURITIES ACT" shall mean the United States Securities Act
of 1933, as amended from time to time.
SECTION 1.30 "SHARE REGISTRAR" shall mean Computershare Hong Kong Investor
Services Limited or any institution organized under the laws of Hong Kong
appointed by the Company to carry out the duties of registrar for the Shares,
and any successor thereto appointed by the Company.
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SECTION 1.31 "SHARES" shall mean the Company's ordinary shares, par value
U.S.$0.04 per share, validly issued and outstanding and fully paid and may, if
the Depositary so agrees after consultation with the Company, include evidence
of the right to receive Shares; provided that in no event shall Shares include
evidence of the right to receive Shares with respect to which the full purchase
price has not been paid or Shares as to which preemptive rights have theretofore
not been validly waived or exercised; provided further, however, that, if there
shall occur any change in par value, split-up, consolidation, reclassification,
exchange, conversion or any other event described in Section 4.11 in respect of
the Shares of the Company, the term "Shares" shall thereafter, to the maximum
extent permitted by law, represent the successor securities resulting from such
event. Except as specifically provided in this Deposit Agreement, in any
applicable agreement among the Depositary, this Company and the applicable
Holders and Beneficial Owners, supplementing this Deposit Agreement, or in the
applicable ADR(s), the term Share(s) shall include (i) Restricted Share(s) on
deposit pursuant to Section 2.13 of this Deposit Agreement, and (ii) Partial
Entitlement Shares on deposit pursuant to Section 2.11 of this Deposit
Agreement.
SECTION 1.32 "UNCERTIFICATED ADS(s)" shall have the meaning set forth in
Section 2.12.
SECTION 1.33 "UNITED STATES" and "U.S." shall have the meaning assigned to
it in Regulation S as promulgated by the Commission under the Securities Act.
ARTICLE II
APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS;
DEPOSIT OF SHARES; EXECUTION AND
DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS
SECTION 2.1 APPOINTMENT OF DEPOSITARY. The Company hereby appoints the
Depositary as depositary for the Deposited Securities and hereby authorizes and
directs the Depositary to act in accordance with the terms and conditions set
forth in this Deposit Agreement and the applicable ADRs. Each Holder and each
Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued
in accordance with the terms and conditions of this Deposit Agreement shall be
deemed for all purposes to (a) be a party to and bound by the terms of this
Deposit Agreement and the applicable ADR(s), and (b) appoint the Depositary its
attorney-in-fact, with full power to delegate, to act on its behalf and to take
any and all actions contemplated in this Deposit Agreement and the applicable
ADR(s), to adopt any and all procedures necessary to comply with applicable law
and to take such action as the Depositary in its sole discretion may deem
necessary or appropriate to carry out the purposes of this Deposit Agreement and
the applicable ADR(s), the taking of such actions to be the conclusive
determinant of the necessity and appropriateness thereof.
SECTION 2.2 FORM AND TRANSFERABILITY OF ADSs.
(a) FORM. Certificated ADSs shall be evidenced by definitive ADRs which
shall be engraved, printed, lithographed or produced in such other manner as may
be agreed upon by the Company and the Depositary. ADRs may be issued under this
Deposit Agreement in
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denominations of any whole number of ADSs. The ADRs shall be substantially in
the form set forth in Exhibit A to the Deposit Agreement, with any appropriate
insertions, modifications and omissions, in each case as otherwise contemplated
in the Deposit Agreement or required by law. ADRs shall be (i) dated, (ii)
signed by the manual or facsimile signature of a duly authorized signatory of
the Depositary, (iii) countersigned by the manual or facsimile signature of a
duly authorized signatory of the Registrar, and (iv) registered in the books
maintained by the Registrar for the registration of issuances and transfers of
ADSs. No ADR and no Certificated ADS evidenced thereby shall be entitled to any
benefits under the Deposit Agreement or be valid or enforceable for any purpose
against the Depositary or the Company, unless such ADR shall have been so dated,
signed, countersigned and registered. ADRs bearing the facsimile signature of a
duly-authorized signatory of the Depositary or the Registrar, who at the time of
signature was a duly-authorized signatory of the Depositary or the Registrar, as
the case may be, shall bind the Depositary, notwithstanding the fact that such
signatory has ceased to be so authorized prior to the delivery of such ADR by
the Depositary. The ADRs shall bear a CUSIP number that is different from any
CUSIP number that was, is or may be assigned to any depositary receipts
previously or subsequently issued pursuant to any other arrangement between the
Depositary (or any other depositary) and the Company and which are not ADRs
issued hereunder.
(b) LEGENDS. The ADRs may, with the prior consent of the Company (such
consent not to be unreasonably withheld), be endorsed with, or have incorporated
in the text thereof, such legends or recitals not inconsistent with the
provisions of the Deposit Agreement as (i) may be necessary to enable the
Depositary and the Company to perform their respective obligations hereunder,
(ii) may be required to comply with any applicable laws or regulations, or with
the rules and regulations of any securities exchange or market upon which ADSs
may be traded, listed or quoted, or to conform with any usage with respect
thereto, (iii) may be necessary to indicate any special limitations or
restrictions to which any particular ADRs or ADSs are subject by reason of the
date or manner of issuance of the Deposited Securities or otherwise (including,
without limitation, as contemplated in Section 2.13 of this Deposit Agreement),
or (iv) may be required by any book-entry system in which the ADSs are held.
Holders and Beneficial Owners shall be deemed, for all purposes, to have notice
of, and to be bound by, the terms and conditions of the legends set forth, in
the case of Holders, on the ADR registered in the name of the applicable Holders
or, in the case of Beneficial Owners, on the ADR representing the ADSs owned by
such Beneficial Owners.
(c) TITLE. Subject to the limitations contained herein and in the ADR,
title to an ADR (and to each Certificated ADS evidenced thereby) shall be
transferable by delivery upon the same terms as a certificated security under
the laws of the State of New York, provided that, in the case of Certificated
ADSs, such ADR has been properly endorsed or is accompanied by proper
instruments of transfer. Notwithstanding any notice to the contrary, the
Depositary and the Company may deem and treat the Holder of an ADS (that is, the
person in whose name an ADS is registered on the books of the Depositary) as the
absolute owner thereof for all purposes. Neither the Depositary nor the Company
shall have any obligation nor be subject to any liability under this Deposit
Agreement or any ADR to any Holder or any Beneficial Owner unless such holder is
the Holder registered on the books of the Depositary or, in the case of a
Beneficial Owner, such Beneficial Owner, or the Beneficial Owner's
representative, is the Holder registered on the books of the Depositary.
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(d) BOOK-ENTRY SYSTEMS. The Depositary shall make arrangements for the
acceptance of the ADSs into DTC. A single ADR in the form of a "Balance
Certificate" will evidence all ADSs held through DTC and will be registered in
the name of the nominee for DTC (currently "Cede & Co.") and will provide that
it represents the aggregate number of ADSs from time to time indicated in the
records of the Depositary as being issued hereunder and that the aggregate
number of ADSs represented thereby may from time to time be increased or
decreased by making adjustments on such records of the Depositary and of DTC or
its nominee as hereinafter provided. As such, the nominee for DTC will be the
only "Holder" of the ADR evidencing all ADSs held through DTC. Citibank, N.A.
(or such other entity as is appointed by DTC or its nominee) may hold the
"Balance Certificate" as custodian for DTC. Each Beneficial Owner of ADSs held
through DTC must rely upon the procedures of DTC and the DTC Participants to
exercise or be entitled to any rights attributable to such ADSs. The DTC
Participants shall for all purposes be deemed to have all requisite power and
authority to act on behalf of the Beneficial Owners of the ADSs held in the DTC
Participants' respective accounts in DTC and the Depositary shall for all
purposes be authorized to rely upon any instructions and information given to it
by DTC Participants on behalf of Beneficial Owners of ADSs. So long as ADSs are
held through DTC or unless otherwise required by law, ownership of beneficial
interests in the ADR registered in the name of the nominee for DTC will be shown
on, and transfers of such ownership will be effected only through, records
maintained by (i) DTC or its nominee (with respect to the interests of DTC
Participants), or (ii) DTC Participants or their nominees (with respect to the
interests of clients of DTC Participants).
SECTION 2.3 DEPOSIT WITH CUSTODIAN. Subject to the terms and conditions of
this Deposit Agreement and applicable law, Shares or evidence of rights to
receive Shares (other than Restricted Securities) may be deposited by any person
(including the Depositary in its individual capacity but subject, however, in
the case of the Company or any Affiliate of the Company, to Section 5.7 hereof)
at any time, whether or not the transfer books of the Company or the Share
Registrar, if any, are closed, by Delivery of the Shares to the Custodian;
provided, that Restricted Shares may be deposited only upon the terms
contemplated in Section 2.13 of this Deposit Agreement. Every deposit of Shares
shall be accompanied by the following: (A) (i) in the case of Shares represented
by certificates issued in registered form, appropriate instruments of transfer
or endorsement, in a form satisfactory to the Custodian, (ii) in the case of
Shares represented by certificates in bearer form. the requisite coupons and
talons pertaining thereto, and (iii) in the case of Shares delivered by
book-entry transfer, confirmation of such book-entry transfer to the Custodian
or that irrevocable instructions have been given to cause such Shares to be so
transferred, (B) such certifications and payments (including, without
limitation, the Depositary's fees and related charges) and evidence of such
payments (including, without limitation, stamping or otherwise marking such
Shares by way of receipt) as may be required by the Depositary or the Custodian
in accordance with the provisions of this Deposit Agreement and applicable law,
(C) if the Depositary so reasonably requires, a written order directing the
Depositary to execute and deliver to, or upon the written order of, the
person(s) stated in such order the number of ADSs representing the Shares so
deposited, (D) evidence satisfactory to the Depositary (which may be an opinion
of counsel) that all necessary approvals have been granted by, or there has been
compliance with the rules and regulations of, any applicable governmental agency
in Hong Kong, and (E) if the Depositary so requires, (i) an agreement,
assignment or
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instrument satisfactory to the Depositary or the Custodian which provides for
the prompt transfer by any person in whose name the Shares are or have been
recorded to the Custodian of any distribution, or right to subscribe for
additional Shares or to receive other property in respect of any such deposited
Shares or, in lieu thereof, such indemnity or other agreement as shall be
satisfactory to the Depositary or the Custodian and (ii) if the Shares are
registered in the name of the person on whose behalf they are presented for
deposit, a proxy or proxies entitling the Custodian to exercise voting rights in
respect of the Shares for any and all purposes until the Shares so deposited are
registered in the name of the Depositary, the Custodian or any nominee.
Without limiting any other provision of this Deposit Agreement, the
Depositary shall instruct the Custodian not to, and the Depositary shall not
knowingly, accept for deposit (a) any Restricted Securities (except as
contemplated in Section 2.13 of this Deposit Agreement) nor (b) any fractional
Shares or fractional Deposited Securities nor (c) a number of Shares or
Deposited Securities which upon application of the ADS to Shares ratio would
give rise to fractional ADSs. No Share shall be accepted for deposit unless
accompanied by evidence, if any is required by the Depositary, that is
reasonably satisfactory to the Depositary or the Custodian that all conditions
to such deposit have been satisfied by the person depositing such Shares under
applicable laws and regulations of Hong Kong and any necessary approval has been
granted by any applicable governmental body in Hong Kong, if any. The Depositary
may issue ADSs against evidence of rights to receive Shares from the Company,
any agent of the Company or any custodian, registrar, transfer agent, clearing
agency or other entity authorized by the Company to maintain ownership or
transaction records in respect of the Shares. Such evidence of rights shall
consist of written blanket or specific guarantees of ownership of Shares
furnished by the Company or any such custodian, registrar, transfer agent,
clearing agency or other entity authorized by the Company to maintain ownership
or transaction records in respect of the Shares.
Without limitation of the foregoing, the Depositary shall not knowingly
accept for deposit under this Deposit Agreement any Shares or other Deposited
Securities required to be registered under the provisions of the Securities Act,
unless a registration statement is in effect as to such Shares or other
Deposited Securities, or any Shares or other Deposited Securities the deposit of
which would violate any provisions of the Articles of Association of the
Company. For purposes of the foregoing sentence, the Depositary shall be
entitled to rely upon representations and warranties made or deemed made
pursuant to this Deposit Agreement and shall not be required to make any further
investigation. The Depositary will comply with written instructions of the
Company (received by the Depositary reasonably in advance) not to accept for
deposit hereunder any Shares identified in such instructions at such times and
under such circumstances as may reasonably be specified in such instructions in
order to facilitate the Company's compliance with the securities laws of the
United States.
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SECTION 2.4 REGISTRATION AND SAFEKEEPING OF DEPOSITED SECURITIES. The
Depositary shall instruct the Custodian upon each Delivery of certificates
representing registered Shares being deposited hereunder with the Custodian (or
other Deposited Securities pursuant to Article IV hereof), together with the
other documents above specified, to present such certificate(s), together with
the appropriate instrument(s) of transfer or endorsement, duly stamped, to the
Share Registrar for transfer and registration of the Shares (as soon as transfer
and registration can be accomplished and at the expense of the person for whom
the deposit is made) in the name of the Depositary, the Custodian or a nominee
of either. Deposited Securities shall be held by the Depositary or by a
Custodian for the account and to the order of the Depositary or a nominee in
each case on behalf of the Holders and Beneficial Owners, at such place or
places as the Depositary or the Custodian shall determine.
SECTION 2.5 ISSUANCE OF ADSs. The Depositary has made arrangements with
the Custodian to confirm to the Depositary (i) that a deposit of Shares has been
made pursuant to Section 2.3 hereof, (ii) that such Deposited Securities have
been recorded in the name of the Depositary, the Custodian or a nominee of
either on the shareholders' register maintained by or on behalf of the Company
by the Share Registrar if registered Shares have been deposited or, if deposit
is made by book-entry transfer, confirmation of such transfer in the books of
the applicable book-entry settlement entity, (iii) that all required documents
have been received, and (iv) the person(s) to whom or upon whose order ADSs are
deliverable in respect thereof and the number of ADSs to be so delivered. Such
notification may be made by letter, cable, telex, SWIFT message or, at the risk
and expense of the person making the deposit, by facsimile or other means of
electronic transmission. Upon receiving such notice from the Custodian, the
Depositary, subject to the terms and conditions of this Deposit Agreement and
applicable law, shall issue the ADSs representing the Shares so deposited to or
upon the order of the person(s) named in the notice delivered to the Depositary
and, if applicable, shall execute and deliver at its Principal Office Receipt(s)
registered in the name(s) requested by such person(s) and evidencing the
aggregate number of ADSs to which such person(s) are entitled, but, in each
case, only upon payment to the Depositary of the charges of the Depositary for
accepting a deposit, issuing ADSs (as set forth in Section 5.9 and Exhibit B
hereto) and all taxes and governmental charges and fees payable in connection
with such deposit and the transfer of the Shares and the issuance of the ADS(s).
The Depositary shall only issue ADSs in whole numbers and deliver, if
applicable, ADR(s) evidencing whole numbers of ADSs. Nothing herein shall
prohibit any Pre-Release Transaction upon the terms set forth in this Deposit
Agreement.
10
SECTION 2.6 TRANSFER, COMBINATION AND SPLIT-UP OF ADRs.
(a) TRANSFER. The Registrar shall as soon as reasonably practicable
register the transfer of ADRs (and of the ADSs represented thereby) on the books
maintained for such purpose and the Depositary shall as soon as reasonably
practicable (x) cancel such ADRs and execute new ADRs evidencing the same
aggregate number of ADSs as those evidenced by the ADRs canceled by the
Depositary, (y) cause the Registrar to countersign such new ADRs and (z) Deliver
such new ADRs to or upon the order of the person entitled thereto, if each of
the following conditions has been satisfied: (i) the ADRs have been duly
Delivered by the Holder (or by a duly authorized attorney of the Holder) to the
Depositary at its Principal Office for the purpose of effecting a transfer
thereof, (ii) the surrendered ADRs have been properly endorsed or are
accompanied by proper instruments of transfer (including signature guarantees in
accordance with standard securities industry practice), (iii) the surrendered
ADRs have been duly stamped (if required by the laws of the State of New York or
of the United States), and (iv) all applicable fees and charges of, and expenses
incurred by, the Depositary and all applicable taxes and governmental charges
(as are set forth in Section 5.9 and Exhibit B hereto) have been paid, subject,
however, in each case, to the terms and conditions of the applicable ADRs, of
the Deposit Agreement and of applicable law, in each case as in effect at the
time thereof.
(b) COMBINATION & SPLIT UP. The Registrar shall as soon as reasonably
practicable register the split-up or combination of ADRs (and of the ADSs
represented thereby) on the books maintained for such purpose and the Depositary
shall (x) cancel such ADRs and execute new ADRs for the number of ADSs
requested, but in the aggregate not exceeding the number of ADSs evidenced by
the ADRs cancelled by the Depositary, (y) cause the Registrar to countersign
such new ADRs and (z) Deliver such new ADRs to or upon the order of the Holder
thereof, if each of the following conditions has been satisfied: (i) the ADRs
have been duly Delivered by the Holder (or by a duly authorized attorney of the
Holder) to the Depositary at its Principal Office for the purpose of effecting a
split-up or combination thereof, and (ii) all applicable fees and charges of,
and expenses incurred by, the Depositary and all applicable taxes and
governmental charges (as are set forth in Section 5.9 and Exhibit B hereto) have
been paid, subject, however, in each case, to the terms and conditions of the
applicable ADRs, of the Deposit Agreement and of applicable law, in each case as
in effect at the time thereof.
(c) CO-TRANSFER AGENTS. The Depositary may appoint one or more co-transfer
agents for the purpose of effecting transfers, combinations and split-ups of
ADRs at designated transfer offices on behalf of the Depositary. In carrying out
its functions, a co-transfer agent may require evidence of authority and
compliance with applicable laws and other requirements by Holders or persons
entitled to such ADRs and will be entitled to protection and indemnity to the
same extent as the Depositary. Such co-transfer agents may be removed and
substitutes appointed by the Depositary in consultation with the Company. Each
co-transfer agent appointed under this Section 2.6 (other than the Depositary)
shall give notice in writing to the Depositary and to the Company accepting such
appointment and agreeing to be bound by the applicable terms of this Deposit
Agreement.
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SECTION 2.7 SURRENDER OF ADSs AND WITHDRAWAL OF DEPOSITED SECURITIES. The
Holder of ADSs shall be entitled to Delivery (at the Custodian's designated
office) of the Deposited Securities at the time represented by the ADSs upon
satisfaction of each of the following conditions: (i) the Holder (or a
duly-authorized attorney of the Holder) has duly Delivered ADSs to the
Depositary at its Principal Office (and if applicable, the ADRs evidencing such
ADSs) for the purpose of withdrawal of the Deposited Securities represented
thereby, (ii) if applicable and so required by the Depositary, the ADRs
Delivered to the Depositary for such purpose have been properly endorsed in
blank or are accompanied by proper instruments of transfer in blank (including
signature guarantees in accordance with standard securities industry practice),
(iii) if so required by the Depositary, the Holder of the ADSs has executed and
delivered to the Depositary a written order directing the Depositary to cause
the Deposited Securities being withdrawn to be Delivered to or upon the written
order of the person(s) designated in such order, and (iv) all applicable fees
and charges of, and expenses incurred by, the Depositary and all applicable
taxes and governmental charges (as are set forth in Section 5.9 and Exhibit B
hereof) have been paid, subject, however, in each case, to the terms and
conditions of the ADRs evidencing the surrendered ADSs, of the Deposit
Agreement, of the Company's Articles of Association and of any applicable laws
and the rules of the applicable book-entry settlement entity, and to any
provisions of or governing the Deposited Securities, in each case as in effect
at the time thereof.
Upon satisfaction of each of the conditions specified above, the
Depositary (i) shall cancel the ADSs Delivered to it (and, if applicable, the
ADRs evidencing the ADSs so Delivered), (ii) shall direct the Registrar to
record the cancellation of the ADSs so Delivered on the books maintained for
such purpose, and (iii) shall direct the Custodian to Deliver (without
unreasonable delay) at the Custodian's designated office the Deposited
Securities represented by the ADSs so canceled together with any certificate or
other document of title for the Deposited Securities, or evidence of the
electronic transfer thereof (if available), as the case may be, to or upon the
written order of the person(s) designated in the order delivered to the
Depositary for such purpose, subject however, in each case, to the terms and
conditions of the Deposit Agreement, of the ADRs evidencing the ADSs so
cancelled, of the Articles of Association of the Company, of any applicable laws
and of the rules of the applicable book-entry settlement entity, and to the
terms and conditions of or governing the Deposited Securities, in each case as
in effect at the time thereof.
The Depositary shall not accept for surrender ADSs representing less than
one Share. In the case of the Delivery to it of ADSs representing a number other
than a whole number of Shares, the Depositary shall cause ownership of the
appropriate whole number of Shares to be Delivered in accordance with the terms
hereof, and shall, at the discretion of the Depositary, either (i) return to the
person surrendering such ADSs the number of ADSs representing any remaining
fractional Share, or (ii) sell or cause to be sold the fractional Share
represented by the ADSs so surrendered and remit the proceeds of such sale (net
of (a) applicable fees and charges of, and expenses incurred by, the Depositary
and (b) taxes withheld) to the person surrendering the ADSs.
Notwithstanding anything else contained in any ADR or the Deposit
Agreement, the Depositary may make delivery at the Principal Office of the
Depositary of (i) any cash dividends
12
or cash distributions, or (ii) any proceeds from the sale of any distributions
of shares or rights, which are at the time held by the Depositary in respect of
the Deposited Securities represented by the ADSs surrendered for cancellation
and withdrawal. At the request, risk and expense of any Holder so surrendering
ADSs, and for the account of such Holder, the Depositary shall direct the
Custodian to forward (to the extent permitted by law) any cash or other property
(other than securities) held by the Custodian in respect of the Deposited
Securities represented by such ADSs to the Depositary for delivery at the
Principal Office of the Depositary. Such direction shall be given by letter or,
at the request, risk and expense of such Holder, by cable, telex or facsimile
transmission.
SECTION 2.8 LIMITATIONS ON EXECUTION AND DELIVERY, TRANSFER, ETC. OF ADSs;
SUSPENSION OF DELIVERY, TRANSFER, ETC.
(a) ADDITIONAL REQUIREMENTS. As a condition precedent to the execution and
delivery, registration of issuance, transfer, split-up, combination or
surrender, of any ADS, the delivery of any distribution thereon, or the
withdrawal of any Deposited Securities, the Depositary or the Custodian may
require (i) payment from the depositor of Shares or presenter of ADSs or of an
ADR of a sum sufficient to reimburse it for any tax or other governmental charge
and any stock transfer or registration fee with respect thereto (including any
such tax or charge and fee with respect to Shares being deposited or withdrawn)
and payment of any applicable fees and charges of the Depositary as provided in
Section 5.9 and Exhibit B hereof, (ii) the production of proof satisfactory to
it as to the identity and genuineness of any signature or any other matter
contemplated by Section 3.1 hereof, and (iii) compliance with (A) any laws or
governmental regulations relating to the execution and delivery of ADRs or ADSs
or to the withdrawal of Deposited Securities and (B) such reasonable regulations
as the Depositary or the Company may establish consistent with the provisions of
the representative ADR, if applicable, this Deposit Agreement and applicable
law.
(b) ADDITIONAL LIMITATIONS. The issuance of ADSs against deposits of
Shares generally or against deposits of particular Shares may be suspended, or
the deposit of particular Shares may be refused, or the registration of transfer
of ADSs in particular instances may be refused, or the registration of transfers
of ADSs generally may be suspended, during any period when the transfer books of
the Company, the Depositary, a Registrar or the Share Registrar are closed or if
any such action is deemed necessary or advisable by the Depositary or the
Company, in good faith, at any time or from time to time because of any
requirement of law, any government or governmental body or commission or any
securities exchange on which the ADSs or Shares are listed, or under any
provision of this Deposit Agreement or the representative ADR(s), if applicable,
or under any provision of, or governing, the Deposited Securities, or because of
a meeting of shareholders of the Company or for any other reason, subject, in
all cases, to Section 7.8 hereof.
(c) REGULATORY RESTRICTIONS. Notwithstanding any provision of this Deposit
Agreement or any ADR(s) to the contrary, Holders are entitled to surrender
outstanding ADSs to withdraw the Deposited Securities at any time subject only
to (i) temporary delays caused by closing the transfer books of the Depositary
or the Company or the deposit of Shares in connection with voting at a
shareholders' meeting or the payment of dividends, (ii) the payment
13
of fees, taxes and similar charges, (iii) compliance with any U.S. or foreign
laws or governmental regulations relating to the ADRs or to the withdrawal of
the Deposited Securities, and (iv) other circumstances specifically contemplated
by Instruction I.A.(l) of the General Instructions to Form F-6 (as such General
Instructions may be amended from time to time).
SECTION 2.9 LOST ADRs, ETC. In case any ADR shall be mutilated, destroyed,
lost, or stolen, the Depositary shall execute, register and deliver a new ADR of
like tenor at the expense of the Holder (a) in the case of a mutilated ADR, in
exchange of and substitution for such mutilated ADR upon cancellation thereof,
or (b) in the case of a destroyed, lost or stolen ADR, in lieu of and in
substitution for such destroyed, lost, or stolen ADR, after the Holder thereof
(i) has submitted to the Depositary a written request for such exchange and
substitution before the Depositary has notice that the ADR has been acquired by
a bona fide purchaser, (ii) has provided such security or indemnity (including
an indemnity bond) as may be required by the Depositary to save it and any of
its agents harmless, and (iii) has satisfied any other reasonable requirements
imposed by the Depositary, including, without limitation, evidence reasonably
satisfactory to the Depositary of such destruction, loss or theft of such ADR,
the authenticity thereof and the Holder's ownership thereof.
SECTION 2.10 CANCELLATION AND DESTRUCTION OF SURRENDERED ADRs; MAINTENANCE
OF RECORDS. All ADRs surrendered to the Depositary shall be canceled by the
Depositary. Canceled ADRs shall not be entitled to any benefits under this
Deposit Agreement or be valid or enforceable against the Depositary for any
purpose. The Depositary is authorized to destroy ADRs so canceled, provided the
Depositary maintains a record of all destroyed ADRs. Any ADSs held in book-entry
form (i.e., through accounts at DTC) shall be deemed canceled when the
Depositary causes the number of ADSs evidenced by the Balance Certificate to be
reduced by the number of ADSs surrendered (without the need to physically
destroy the Balance Certificate). The Depositary agrees to maintain records of
all ADRs surrendered and the Shares withdrawn, substitute ADRs delivered and
canceled or destroyed ADRs as required by the regulations governing the stock
transfer industry. Upon the reasonable request of the Company, the Depositary
shall provide a copy of such records to the Company.
SECTION 2.11 PARTIAL ENTITLEMENT ADSs. In the event any Shares are
deposited which (i) entitle the holders thereof to receive a per-share
distribution or other entitlement in an amount different from the Shares then on
deposit or (ii) are not fully fungible (including, without limitation, as to
settlement or trading) with the Shares then on deposit (the Shares then on
deposit collectively, "Full Entitlement Shares" and the Shares with different
entitlement, "Partial Entitlement Shares"), the Depositary shall (i) cause the
Custodian to hold Partial Entitlement Shares separate and distinct from Full
Entitlement Shares, and (ii) subject to the terms of this Deposit Agreement,
issue ADSs and, if applicable, deliver ADRs representing Partial Entitlement
Shares which are separate and distinct from the ADSs and ADRs representing Full
Entitlement Shares, by means of separate CUSIP numbering and legending (if
necessary) and, if applicable, by issuing ADRs evidencing such ADSs with
applicable notations thereon ("Partial Entitlement ADSs/ADRs" and "Full
Entitlement ADSs/ADRs", respectively). If and when Partial Entitlement Shares
become Full Entitlement Shares, the Depositary shall (a) give notice thereof to
Holders of Partial Entitlement ADSs and give Holders of Partial Entitlement ADRs
the opportunity to exchange such Partial Entitlement ADRs for Full Entitlement
ADRs, (b) cause the
14
Custodian to transfer the Partial Entitlement Shares into the account of the
Full Entitlement Shares, and (c) take such actions as are necessary to remove
the distinctions between (i) the Partial Entitlement ADRs and ADSs, on the one
hand, and (ii) the Full Entitlement ADRs and ADSs on the other. Holders and
Beneficial Owners of Partial Entitlement ADSs shall only be entitled to the
entitlements of Partial Entitlement Shares. Holders and Beneficial Owners of
Full Entitlement ADSs shall be entitled only to the entitlements of Full
Entitlement Shares. All provisions and conditions of this Deposit Agreement
shall apply to Partial Entitlement ADRs and ADSs to the same extent as Full
Entitlement ADRs and ADSs, except as contemplated by this Section 2.11. The
Depositary is authorized to take any and all other actions as may be necessary
(including, without limitation, making the necessary notations on ADRs) to give
effect to the terms of this Section 2.11. The Company agrees to give timely
written notice to the Depositary if any Shares issued or to be issued are
Partial Entitlement Shares and shall assist the Depositary with the
establishment of procedures enabling the identification of Partial Entitlement
Shares upon Delivery to the Custodian.
SECTION 2.12 CERTIFICATED/UNCERTIFICATED ADSs. Notwithstanding any other
provision of the Deposit Agreement, the Depositary may, at any time and from
time to time, issue ADSs that are not evidenced by ADRs (such ADSs, the
"Uncertificated ADS(s)" and the ADS(s) evidenced by ADR(s), the "Certificated
ADS(s)"). When issuing and maintaining Uncertificated ADS(s) under the Deposit
Agreement, the Depositary shall at all times be subject to (i) the standards
applicable to registrars and transfer agents maintaining direct registration
systems for equity securities in New York and issuing uncertificated securities
under New York law, and (ii) the terms of New York law applicable to
uncertificated equity securities. Uncertificated ADSs shall not be represented
by any instruments but shall be evidenced by registration in the books and
records of the Depositary maintained for such purpose. Holders of Uncertificated
ADSs, that are not subject to any registered pledges, liens, restrictions or
adverse claims of which the Depositary has notice at such time, shall at all
times have the right to exchange the Uncertificated ADS(s) for Certificated
ADS(s) of the same type and class, subject in each case to applicable laws and
any rules and regulations the Depositary may have established in respect of the
Uncertificated ADSs. Holders of Certificated ADSs shall, if the Depositary
maintains a direct registration system for the ADSs, have the right to exchange
the Certificated ADSs for Uncertificated ADSs upon (i) the due surrender of the
Certificated ADS(s) to the Depositary for such purpose and (ii) the presentation
of a written request to that effect to the Depositary, subject in each case to
(a) all liens and restrictions noted on the ADR evidencing the Certificated
ADS(s) and all adverse claims of which the Depositary then has notice, (b) the
terms of the Deposit Agreement and the rules and regulations that the Depositary
may establish for such purposes hereunder, (c) applicable law, and (d) payment
of the Depositary fees and expenses applicable to such exchange of Certificated
ADS(s) for Uncertificated ADS(s). Uncertificated ADSs shall in all respects be
identical to Certificated ADS(s) of the same type and class, except that (i) no
ADR(s) shall be, or shall need to be, issued to evidence Uncertificated ADS(s),
(ii) Uncertificated ADS(s) shall, subject to the terms of the Deposit Agreement,
be transferable upon the same terms and conditions as uncertificated securities
under New York law, (iii) the ownership of Uncertificated ADS(s) shall be
recorded on the books of the Depositary maintained for such purpose and evidence
of such ownership shall be reflected in periodic statements provided by the
Depositary to the Holder(s) in accordance with applicable New York law,
15
(iv) the Depositary may from time to time, upon notice to the Holders of
Uncertificated ADSs affected thereby, establish rules and regulations, and amend
or supplement existing rules and regulations, as may be deemed reasonably
necessary to maintain Uncertificated ADS(s) on behalf of Holders, provided that
(a) such rules and regulations do not conflict with the terms of the Deposit
Agreement and applicable law, and (b) the terms of such rules and regulations
are readily available to Holders upon request, (v) the Uncertificated ADS(s)
shall not be entitled to any benefits under this Deposit Agreement or be valid
or enforceable for any purpose against the Depositary or the Company unless such
Uncertificated ADS(s) is/are registered on the books of the Depositary
maintained for such purpose, (vi) the Depositary may, in connection with any
deposit of Shares resulting in the issuance of Uncertificated ADSs and with any
transfer, pledge, release and cancellation of Uncertificated ADSs, require the
prior receipt of such documentation as the Depositary may deem reasonably
appropriate, and (vii) upon termination of the Deposit Agreement, the Depositary
shall not require Holders of Uncertificated ADSs to affirmatively instruct the
Depositary before remitting proceeds from the sale of the Deposited Securities
represented by such Holders' Uncertificated ADSs under the terms of Section 6.2
of the Deposit Agreement. When issuing ADSs under the terms of the Deposit
Agreement, including, without limitation, issuances pursuant to Sections 2.5,
4.2, 4.3, 4.4, 4.5 and 4.11, the Depositary may in its discretion determine to
issue Uncertificated ADSs rather than Certificated ADSs, unless otherwise
specifically instructed by the applicable Holder to issue Certificated ADSs. All
provisions and conditions of the Deposit Agreement shall apply to Uncertificated
ADSs to the same extent as to Certificated ADSs, except as contemplated by this
Section 2.12. The Depositary is authorized and directed to take any and all
actions and establish any and all procedures deemed reasonably necessary to give
effect to the terms of this Section 2.12. Any references in the Deposit
Agreement or any ADR(s) to the terms "American Depositary Share(s)" or "ADS(s)"
shall, unless the context otherwise requires, include Certificated ADS(s) and
Uncertificated ADS(s). Except as set forth in this Section 2.12 and except as
required by applicable law, the Uncertificated ADSs shall be treated as ADSs
issued and outstanding under the terms of the Deposit Agreement. In the event
that, in determining the rights and obligations of parties hereto with respect
to any Uncertificated ADSs, any conflict arises between (a) the terms of the
Deposit Agreement (other than this Section 2.12) and (b) the terms of this
Section 2.12, the terms and conditions set forth in this Section 2.12 shall be
controlling and shall govern the rights and obligations of the parties to the
Deposit Agreement pertaining to the Uncertificated ADSs.
SECTION 2.13 RESTRICTED ADSs. The Depositary shall, at the request and
expense of the Company, establish procedures enabling the deposit hereunder of
Shares that are Restricted Securities in order to enable the holder of such
Shares to hold its ownership interests in such Restricted Shares in the form of
ADSs issued under the terms hereof (such Shares, "Restricted Shares").
Restricted ADSs shall only be issued in physical form, registered in the name of
the Holder of Restricted ADSs. Upon receipt of a written request from the
Company to accept Restricted Shares for deposit hereunder, the Depositary agrees
to establish procedures permitting the deposit of such Restricted Shares and the
issuance of ADSs representing such deposited Restricted Shares (such ADSs, the
"Restricted ADSs," and the ADRs evidencing such Restricted ADSs, the "Restricted
ADRs"). The Company shall assist the Depositary in the establishment of such
procedures and agrees that it shall take all steps necessary and reasonably
satisfactory to the
16
Depositary to insure that the establishment of such procedures does not violate
the provisions of the Securities Act or any other applicable laws. The
depositors of such Restricted Shares and the holders of the Restricted ADSs may
be required prior to the deposit of such Restricted Shares, the transfer of the
Restricted ADRs and the Restricted ADSs evidenced thereby or the withdrawal of
the Restricted Shares represented by Restricted ADSs to provide such written
certifications or agreements as the Depositary or the Company may require. The
Company shall provide to the Depositary in writing the legend(s) to be affixed
to the Restricted ADRs, which legends shall (i) be in a form reasonably
satisfactory to the Depositary and (ii) contain the specific circumstances under
which the Restricted ADRs and the Restricted ADSs represented thereby may be
transferred or the Restricted Shares withdrawn. The Restricted ADSs issued upon
the deposit of Restricted Shares shall be separately identified on the books of
the Depositary and the Restricted Shares so deposited shall be held separate and
distinct from the other Deposited Securities held hereunder. The Restricted
Shares and the Restricted ADSs shall not be eligible for Pre-Release
Transactions. The Restricted ADSs shall not be eligible for inclusion in any
book-entry settlement system, including, without limitation, DTC, and shall not
in any way be fungible with the ADSs issued under the terms hereof that are not
Restricted ADSs. The Restricted ADRs and the Restricted ADSs evidenced thereby
shall be transferable only by the Holder thereof upon delivery to the Depositary
of (i) all documentation otherwise contemplated by this Deposit Agreement and
(ii) an opinion of counsel reasonably satisfactory to the Depositary setting
forth, inter alia, the conditions upon which the Restricted ADR presented is,
and the Restricted ADSs evidenced thereby are, transferable by the Holder
thereof under applicable securities laws and the transfer restrictions contained
in the legend set forth on the Restricted ADR presented for transfer. Except as
set forth in this Section 2.13 and except as required by applicable law, the
Restricted ADRs and the Restricted ADSs evidenced thereby shall be treated as
ADRs and ADSs issued and outstanding under the terms of the Deposit Agreement.
In the event that, in determining the rights and obligations of parties hereto
with respect to any Restricted ADSs, any conflict arises between (a) the terms
of this Deposit Agreement (other than this Section 2.13) and (b) the terms of
(i) this Section 2.13 or (ii) the applicable Restricted ADR, the terms and
conditions set forth in this Section 2.13 and of the Restricted ADR shall be
controlling and shall govern the rights and obligations of the parties to this
Deposit Agreement pertaining to the deposited Restricted Shares, the Restricted
ADSs and Restricted ADRs. In the event that the Company makes any distributions
upon Deposited Securities described in Article IV of this Deposit Agreement, the
Depositary shall (i) make the determinations contemplated in Article IV with
respect to the Restricted ADSs independently from the determination for ADSs
that are not Restricted ADSs and (ii) shall make distributions under Article IV
to Holders of Restricted ADSs only on the basis of the distributions received
from the Company in respect of the Restricted Shares corresponding to the
Restricted ADSs held by such Holders.
If the Restricted ADRs, the Restricted ADSs and the Restricted Shares are no
longer Restricted Securities, the Depositary, upon receipt of (x) an opinion of
counsel reasonably satisfactory to the Depositary setting forth, inter alia,
that the Restricted ADRs, the Restricted ADSs and the Restricted Shares are not
as of such time Restricted Securities, and (y) instructions from the Company to
remove the restrictions applicable to the Restricted ADRs, the Restricted ADSs
and the Restricted Shares, shall (i) eliminate the distinctions and separations
between the applicable
17
Restricted Shares held on deposit under this Section 2.13 and the other Shares
held on deposit under the terms of the Deposit Agreement that are not Restricted
Shares, (ii) treat the newly unrestricted ADRs and ADSs on the same terms as,
and fully fungible with, the other ADRs and ADSs issued and outstanding under
the terms of the Deposit Agreement that are not Restricted ADRs or Restricted
ADSs, (iii) take all actions necessary to remove any distinctions, limitations
and restrictions previously existing under this Section 2.13 between the
applicable Restricted ADRs and Restricted ADSs, respectively, on the one hand,
and the other ADRs and ADSs that are not Restricted ADRs or Restricted ADSs,
respectively, on the other hand, including, without limitation, by making the
newly-unrestricted ADSs eligible for Pre-Release Transactions and for inclusion
in the applicable book-entry settlement systems.
18
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
AND BENEFICIAL OWNERS OF ADSs
SECTION 3.1 PROOFS, CERTIFICATES AND OTHER INFORMATION. Any person
presenting Shares for deposit, any Holder and any Beneficial Owner may be
required, and every Holder and Beneficial Owner agrees, from time to time to
provide to the Company, the Depositary and the Custodian such proof of
citizenship or residence, taxpayer status, payment of all applicable taxes or
other governmental charges, exchange control approval, legal or beneficial
ownership of ADSs and Deposited Securities, compliance with applicable laws, the
terms of this Deposit Agreement or the ADR(s) evidencing the ADSs and the
provisions of, or governing, the Deposited Securities, to execute such
certifications and to make such representations and warranties, and to provide
such other information and documentation (or, in the case of Shares in
registered form presented for deposit, such information relating to the
registration on the books of the Company or of the Share Registrar) as the
Depositary or the Custodian may reasonably deem necessary or proper or as the
Company may reasonably require by written request to the Depositary consistent
with its obligations under this Deposit Agreement and the applicable ADR(s). The
Depositary and the Registrar, as applicable, may withhold the execution or
delivery or registration of transfer of any ADR or ADS or the distribution or
sale of any dividend or distribution of rights or of the proceeds thereof or, to
the extent not limited by the terms of Section 7.8 hereof, the Delivery of any
Deposited Securities until such proof or other information is filed or such
certifications are executed, or such representations and warranties are made, or
such other documentation or information provided, in each case to the
Depositary's, the Registrar's and the Company's satisfaction. The Depositary
shall provide the Company, in a timely manner, with copies or originals if
necessary and appropriate of (i) any such proofs of citizenship or residence,
taxpayer status, or exchange control approval or copies of written
representations and warranties which it receives from Holders and Beneficial
Owners, and (ii) any other information or documents which the Company may
reasonably request and which the Depositary shall request and receive from any
Holder or Beneficial Owner or any person presenting Shares for deposit or ADSs
for cancellation, transfer or withdrawal. Except to the extent that information
is readily accessible from the records of the Depositary, the Depositary shall
not be required to (i) obtain any information for the Company if not provided by
the Holders or Beneficial Owners, or (ii) verify or vouch for the accuracy of
the information so provided by the Holders or Beneficial Owners.
SECTION 3.2 LIABILITY FOR TAXES AND OTHER CHARGES. Any tax or other
governmental charge payable by the Custodian or by the Depositary with respect
to any ADR or any Deposited Securities or ADSs shall be payable by the Holders
and Beneficial Owners to the Depositary. The Company, the Custodian and/or the
Depositary may withhold or deduct from any distributions made in respect of
Deposited Securities and may sell for the account of a Holder and/or Beneficial
Owner any or all of the Deposited Securities and apply such distributions and
sale proceeds in payment of such taxes (including applicable interest and
penalties) or charges, the Holder and the Beneficial Owner remaining liable for
any deficiency. The Custodian may refuse the deposit of Shares and the
Depositary may refuse to issue ADSs, to deliver ADRs, register the transfer of
ADSs, register the split-up or combination of ADRs and
19
(subject to Section 7.8) the withdrawal of Deposited Securities until payment in
full of such tax, charge, penalty or interest is received. Every Holder and
Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian,
and any of their agents, officers, employees and Affiliates for, and to hold
each of them harmless from, any claims with respect to taxes (including
applicable interest and penalties thereon) arising from any tax benefit obtained
for such Holder and/or Beneficial Owner.
SECTION 3.3 REPRESENTATIONS AND WARRANTIES ON DEPOSIT OF SHARES. Each
person depositing Shares under the Deposit Agreement shall be deemed thereby to
represent and warrant that (i) such Shares and the certificates therefor are
duly authorized, validly issued, fully paid, non-assessable and legally obtained
by such person, (ii) all preemptive (and similar) rights, if any, with respect
to such Shares have been validly waived or exercised, (iii) the person making
such deposit is duly authorized so to do, (iv) the Shares presented for deposit
are free and clear of any lien, encumbrance, security interest, charge, mortgage
or adverse claim, and (v) the Shares presented for deposit are not, and the ADSs
issuable upon such deposit will not be, Restricted Securities (except as
contemplated in Section 2.13), and (vi) the Shares presented for deposit have
not been stripped of any rights or entitlements. Such representations and
warranties shall survive the deposit and withdrawal of Shares, the issuance and
cancellation of ADSs in respect thereof and the transfer of such ADSs. If any
such representations or warranties are false in any way, the Company and the
Depositary shall be authorized, at the cost and expense of the person depositing
Shares, to take any and all actions necessary to correct the consequences
thereof.
SECTION 3.4 COMPLIANCE WITH INFORMATION REQUESTS. Notwithstanding any
other provision of this Deposit Agreement or any ADR(s), each Holder and
Beneficial Owner agrees to comply with requests from the Company pursuant to
applicable law, the rules and requirements of the Hong Kong Stock Exchange, the
New York Stock Exchange, and any other stock exchange on which the Shares or
ADSs are, or will be, registered, traded or listed or the Articles of
Association of the Company, which are made to provide information, inter alia,
as to the capacity in which such Holder or Beneficial Owner owns ADSs (and
Shares as the case may be) and regarding the identity of any other person(s)
interested in such ADSs and the nature of such interest and various other
matters, whether or not they are Holders and/or Beneficial Owners at the time of
such request. The Depositary agrees to use its reasonable efforts to forward,
upon the request of the Company and at the Company's expense, any such request
from the Company to the Holders and to forward to the Company any such responses
to such requests received by the Depositary.
SECTION 3.5 OWNERSHIP RESTRICTIONS. Notwithstanding any other provision in
this Deposit Agreement or any ADR, the Company may restrict transfers of the
Shares where such transfer (i) might result in ownership of Shares exceeding
limits imposed by applicable law or the Articles of Association of the Company,
or (ii) is otherwise in violation of applicable laws, rules and regulations. The
Company may also restrict, in such manner as it deems appropriate, transfers of
the ADSs where such transfer (i) may result in the total number of Shares
represented by the ADSs owned by a single Holder or Beneficial Owner to exceed
any such limits, or (ii) is in violation of applicable laws, rules and
regulations. The Company may, in its sole discretion but subject to applicable
law, instruct the Depositary to take action with respect to
20
the ownership interest of any Holder or Beneficial Owner in excess of the limits
set forth in the preceding sentence, including, but not limited to, the
imposition of restrictions on the transfer of ADSs, the removal or limitation of
voting rights or mandatory sale or disposition on behalf of a Holder or
Beneficial Owner of the Shares represented by the ADSs held by such Holder or
Beneficial Owner in excess of such limitations, if and to the extent such
disposition is permitted by applicable law and the Articles of Association of
the Company.
ARTICLE IV
THE DEPOSITED SECURITIES
SECTION 4.1 CASH DISTRIBUTIONS. Whenever the Depositary receives
confirmation from the Custodian of the receipt of any cash dividend or other
cash distribution on any Deposited Securities, or receives proceeds from the
sale of any Deposited Securities or any other entitlements held in respect of
Deposited Securities under the terms hereof, the Depositary will (i) if at the
time of receipt thereof any amounts received in a Foreign Currency can in the
judgment of the Depositary (pursuant to Section 4.8) be converted on a
practicable basis into Dollars transferable to the United States, promptly
convert or cause to be converted such cash dividend, distribution or proceeds
into Dollars (on the terms described in Section 4.8), (ii) if applicable,
establish the ADS Record Date upon the terms described in Section 4.9, and (iii)
distribute promptly the amount thus received (net of (a) the applicable fees and
charges of, and expenses incurred by, the Depositary and (b) taxes withheld) to
the Holders entitled thereto as of the ADS Record Date in proportion to the
number of ADSs held as of the ADS Record Date. The Depositary shall distribute
only such amount, however, as can be distributed without attributing to any
Holder a fraction of one cent, and any balance not so distributed shall be held
by the Depositary (without liability for interest thereon) and shall be added to
and become part of the next sum received by the Depositary for distribution to
Holders of ADSs outstanding at the time of the next distribution. If the
Company, the Custodian or the Depositary is required to withhold and does
withhold from any cash dividend or other cash distribution in respect of any
Deposited Securities an amount on account of taxes, duties or other governmental
charges, the amount distributed to Holders on the ADSs representing such
Deposited Securities shall be reduced accordingly. Such withheld amounts shall
be forwarded and made available by the Company, the Custodian or the Depositary
to the relevant governmental authority. Evidence of payment thereof by the
Company, the Custodian or the Depositary, as applicable, shall be forwarded by
the Company, the Custodian or the Depositary, as applicable, upon request. To
the extent not subject to any confidentiality undertaking with respect to such
information and not prohibited by law from releasing such information, the
Company, the Depositary or the Custodian, as the case may be, will forward to
the Depositary, the Company or their respective agents, as the case may be, such
information from its records as the Depositary or the Company, as the case may
be, may reasonably request in writing in order to enable the Depositary, the
Company or their respective agents, as the case may be, to file necessary
reports with governmental agencies, and the Depositary, the Company or their
respective agents may file or cause the filing of any such reports necessary to
obtain the benefits under the applicable tax treaties for Holders of ADSs.
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SECTION 4.2 DISTRIBUTION IN SHARES. If any distribution upon any Deposited
Securities consists of a dividend in, or free distribution of, Shares, the
Company shall cause such Shares to be deposited with the Custodian and
registered, as the case may be, in the name of the Depositary, the Custodian or
their respective nominees. Upon receipt of confirmation of such deposit from the
Custodian, the Depositary shall establish the ADS Record Date upon the terms
described in Section 4.9 and either (i) the Depositary shall, subject to Section
5.9 hereof, distribute to the Holders as of the ADS Record Date in proportion to
the number of ADSs held as of the ADS Record Date, additional ADSs, which
represent in the aggregate the number of Shares received as such dividend, or
free distribution, subject to the other terms of this Deposit Agreement
(including, without limitation, (a) the applicable fees and charges of, and
expenses incurred by, the Depositary and (b) taxes), or (ii) if additional ADSs
are not so distributed, each ADS issued and outstanding after the ADS Record
Date shall, to the extent permissible by law, thenceforth also represent rights
and interests in the additional integral number of Shares distributed upon the
Deposited Securities represented thereby (net of (a) the applicable fees and
charges of, and expenses incurred by, the Depositary (as provided in Section 5.9
of this Deposit Agreement), and (b) taxes). In lieu of delivering fractional
ADSs, the Depositary shall sell the number of Shares or ADSs, as the case may
be, represented by the aggregate of such fractions and distribute the net
proceeds upon the terms described in Section 4.1. In the event that the
Depositary determines that any distribution in property (including Shares) is
subject to any tax or other governmental charges which the Depositary is
obligated to withhold, or, if the Company in the fulfillment of its obligation
under Section 5.7 hereof, has furnished an opinion of U.S. counsel determining
that Shares must be registered under the Securities Act or other laws in order
to be distributed to Holders (and no such registration statement has been
declared effective), the Depositary may dispose of all or a portion of such
property (including Shares and rights to subscribe therefor) in such amounts and
in such manner, including by public or private sale, as the Depositary deems
necessary and practicable, and the Depositary shall distribute the net proceeds
of any such sale (after deduction of (a) taxes and (b) fees and charges of, and
expenses incurred by, the Depositary) to Holders entitled thereto upon the terms
described in Section 4.1. The Depositary shall hold and/or distribute any unsold
balance of such property in accordance with the provisions of this Deposit
Agreement.
SECTION 4.3 ELECTIVE DISTRIBUTIONS IN CASH OR SHARES. Whenever the Company
intends to make a distribution payable at the election of the holders of Shares
in cash or in additional Shares, the Company shall give timely notice
(determined in accordance with U.S. market practices) thereof to the Depositary
stating whether or not it wishes such elective distribution to be made available
to Holders of ADSs. Upon timely receipt of notice indicating that the Company
wishes such elective distribution to be made available to Holders of ADSs, the
Depositary shall consult with the Company to determine, and the Company shall
assist the Depositary in its determination, whether it is lawful and reasonably
practicable to make such elective distribution available to the Holders of ADSs.
The Depositary shall make such elective distribution available to Holders only
if (i) the Company shall have timely requested that the elective distribution be
made available to Holders, (ii) the Depositary shall have determined in
consultation with the Company that such distribution is reasonably practicable
and (iii) the Depositary shall have received satisfactory documentation within
the terms of Section 5.7. If the above conditions are not satisfied, the
Depositary shall, to the extent permitted by law, distribute
22
to the Holders, on the basis of the same determination as is made in Hong Kong
in respect of the Shares for which no election is made, either (X) cash upon the
terms described in Section 4.1 or (Y) additional ADSs representing such
additional Shares upon the terms described in Section 4.2. If the above
conditions are satisfied, the Depositary shall establish an ADS Record Date (on
the terms described in Section 4.9) and establish procedures to enable Holders
to elect the receipt of the proposed distribution in cash or in additional ADSs.
The Company shall assist the Depositary in establishing such procedures to the
extent necessary. If a Holder elects to receive the proposed distribution (X) in
cash, the distribution shall be made upon the terms described in Section 4.1, or
(Y) in ADSs, the distribution shall be made upon the terms described in Section
4.2. Nothing herein shall obligate the Depositary to make available to Holders a
method to receive the elective distribution in Shares (rather than ADSs). There
can be no assurance that Holders generally, or any Holder in particular, will be
given the opportunity to receive elective distributions on the same terms and
conditions as the holders of Shares.
SECTION 4.4 DISTRIBUTION OF RIGHTS TO PURCHASE ADDITIONAL ADSs.
(a) DISTRIBUTION TO ADS HOLDERS. Whenever the Company intends to
distribute to the holders of the Deposited Securities rights to subscribe for
additional Shares, the Company shall give timely notice (determined in
accordance with U.S. market practices) thereof to the Depositary stating whether
or not it wishes such rights to be made available to Holders of ADSs. Upon
timely receipt of a notice indicating that the Company wishes such rights to be
made available to Holders of ADSs, the Depositary shall consult with the Company
to determine, and the Company shall assist the Depositary in its determination,
whether it is lawful and reasonably practicable to make such rights available to
the Holders. The Depositary shall make such rights available to Holders only if
(i) the Company shall have timely requested that such rights be made available
to Holders, (ii) the Depositary shall have received satisfactory documentation
within the terms of Section 5.7, and (iii) the Depositary shall have determined
that such distribution of rights is reasonably practicable. In the event any of
the conditions set forth above are not satisfied or if the Company requests that
the rights not be made available to Holders of ADSs, the Depositary shall
proceed with the sale of the rights as contemplated in Section 4.4(b) below. In
the event all conditions set forth above are satisfied, the Depositary shall
establish an ADS Record Date (upon the terms described in Section 4.9) and
establish procedures to (x) distribute rights to purchase additional ADSs (by
means of warrants or otherwise), (y) enable the Holders to exercise such rights
(upon payment of the subscription price and of the applicable (a) fees and
charges of, and expenses incurred by, the Depositary (as provided in Section 5.9
of this Deposit Agreement), and (b) taxes), and (z) deliver ADSs upon the valid
exercise of such rights. The Company shall assist the Depositary to the extent
necessary in establishing such procedures. Nothing herein shall obligate the
Depositary to make available to the Holders a method to exercise rights to
subscribe for Shares (rather than ADSs).
(b) SALE OF RIGHTS. If (i) the Company does not timely request the
Depositary to make the rights available to Holders or requests that the rights
not be made available to Holders, (ii) the Depositary fails to receive
satisfactory documentation within the terms of Section 5.7 or determines in
consultation with the Company that it is not reasonably practicable to make the
rights available to Holders, or (iii) any rights made available are not
exercised and appear to be about to lapse, the Depositary shall determine in
consultation with the Company whether it is
23
lawful and reasonably practicable to sell such rights, in a riskless principal
capacity, at such place and upon such terms (including public or private sale)
as it may deem practicable. The Company shall assist the Depositary to the
extent necessary to determine such legality and practicability. The Depositary
shall, upon such sale, convert and distribute proceeds of such sale (net of
applicable (a) fees and charges of, and expenses incurred by, the Depositary (as
provided in Section 5.9 of this Deposit Agreement), and (b) taxes) upon the
terms set forth in Section 4.1.
(c) LAPSE OF RIGHTS. If the Depositary is unable to make any rights
available to Holders upon the terms described in Section 4.4(a) or to arrange
for the sale of the rights upon the terms described in Section 4.4(b), the
Depositary shall allow such rights to lapse.
Neither the Depositary nor the Company shall be responsible for (i) any
failure to determine that it may be lawful or practicable to make such rights
available to Holders in general or any Holders in particular, nor (ii) any
foreign exchange exposure or loss incurred in connection with such sale, or
exercise. The Depositary shall not be responsible for the content of any
materials forwarded to the Holders on behalf of the Company in connection with
the rights distribution.
Notwithstanding anything to the contrary in this Section 4.4, if
registration (under the Securities Act or any other applicable law) of the
rights or the securities to which any rights relate may be required in order for
the Company to offer such rights or such securities to Holders and to sell the
securities represented by such rights, the Depositary will not distribute such
rights to the Holders (i) unless and until a registration statement under the
Securities Act (or other applicable law) covering such offering is in effect or
(ii) unless the Company furnishes the Depositary with opinion(s) of counsel for
the Company in the United States and counsel to the Company in any other
applicable country in which rights would be distributed, in each case reasonably
satisfactory to the Depositary, to the effect that the offering and sale of such
securities to Holders and Beneficial Owners are exempt from, or do not require
registration under, the provisions of the Securities Act or any other applicable
laws.
In the event that the Company, the Depositary or the Custodian shall be
required to withhold and does withhold from any distribution of property
(including rights) an amount on account of taxes or other governmental charges,
the amount distributed to the Holders of ADSs representing such Deposited
Securities shall be reduced accordingly. In the event that the Depositary
determines that any distribution in property (including Shares and rights to
subscribe therefor) is subject to any tax or other governmental charges which
the Depositary is obligated to withhold, the Depositary may dispose of all or a
portion of such property (including Shares and rights to subscribe therefor) in
such amounts and in such manner, including by public or private sale, as the
Depositary deems necessary and practicable to pay any such taxes or charges.
There can be no assurance that Holders generally, or any Holder in
particular, will be given the opportunity to receive or exercise rights on the
same terms and conditions as the holders of Shares or be able to exercise such
rights. Nothing herein shall obligate the Company to file any registration
statement in respect of any rights or Shares or other securities to be acquired
upon the exercise of such rights.
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SECTION 4.5 DISTRIBUTIONS OTHER THAN CASH, SHARES OR RIGHTS TO PURCHASE
SHARES.
(a) Whenever the Company intends to distribute to the holders of Deposited
Securities property other than cash, Shares or rights to purchase additional
Shares, the Company shall give timely notice thereof to the Depositary and shall
indicate whether or not it wishes such distribution to be made to Holders of
ADSs. Upon receipt of a notice indicating that the Company wishes such
distribution be made to Holders of ADSs, the Depositary shall consult with the
Company, and the Company shall assist the Depositary, to determine whether such
distribution to Holders is lawful and reasonably practicable. The Depositary
shall not make such distribution unless (i) the Company shall have requested the
Depositary to make such distribution to Holders, (ii) the Depositary shall have
received satisfactory documentation within the terms of Section 5.7, and (iii)
the Depositary shall have determined in consultation with the Company that such
distribution is reasonably practicable.
(b) Upon receipt of satisfactory documentation and the request of the
Company to distribute property to Holders of ADSs and after making the requisite
determinations set forth in (a) above, the Depositary shall distribute the
property so received to the Holders of record, as of the ADS Record Date, in
proportion to the number of ADSs held by them respectively and in such manner as
the Depositary may deem practicable for accomplishing such distribution (i) upon
receipt of payment or net of the applicable fees and charges of, and expenses
incurred by, the Depositary (as provided in Section 5.9 of this Deposit
Agreement), and (ii) net of any taxes withheld. The Depositary may dispose of
all or a portion of the property so distributed and deposited, in such amounts
and in such manner (including public or private sale) as the Depositary may deem
practicable or necessary to satisfy any taxes (including applicable interest and
penalties) or other governmental charges applicable to the distribution.
(c) If (i) the Company does not request the Depositary to make such
distribution to Holders or requests not to make such distribution to Holders,
(ii) the Depositary does not receive satisfactory documentation within the terms
of Section 5.7, or (iii) the Depositary determines that all or a portion of such
distribution is not reasonably practicable, the Depositary shall sell or cause
such property to be sold in a public or private sale, at such place or places
and upon such terms as it may deem practicable and shall (i) cause the proceeds
of such sale, if any, to be converted into Dollars and (ii) distribute the
proceeds of such conversion received by the Depositary (net of applicable (a)
fees and charges of, and expenses incurred by, the Depositary (as provided in
Section 5.9 of this Deposit Agreement), and (b) taxes) to the Holders as of the
ADS Record Date upon the terms of Section 4.1. If the Depositary is unable to
sell such property, the Depositary may dispose of such property for the account
of the Holders in any way it deems reasonably practicable under the
circumstances.
(d) Neither the Depositary nor the Company shall be responsible for (i)
any failure to determine whether it is lawful or practicable to make the
property described in this Section 4.5 available to Holders in general or any
Holders in particular, nor (ii) any foreign exchange exposure or loss incurred
in connection with the sale or disposal of such property. The Depositary shall
not be responsible for the content of any materials forwarded to the Holders on
behalf of the Company in connection with the distribution or sale of such
property.
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SECTION 4.6 DISTRIBUTIONS WITH RESPECT TO DEPOSITED SECURITIES IN BEARER
FORM. Subject to the terms of this Article IV, distributions in respect of
Deposited Securities that are held by the Depositary in bearer form shall be
made to the Depositary for the account of the respective Holders of ADS(s) with
respect to which any such distribution is made upon due presentation by the
Depositary or the Custodian to the Company of any relevant coupons, talons, or
certificates. The Company shall promptly notify the Depositary of such
distributions. The Depositary or the Custodian shall promptly present such
coupons, talons or certificates, as the case may be, in connection with any such
distribution.
SECTION 4.7 REDEMPTION. If the Company intends to exercise any right of
redemption in respect of any of the Deposited Securities, the Company shall give
timely notice (determined in accordance with U.S. market practices) thereof to
the Depositary which notice shall set forth the particulars of the proposed
redemption. Upon timely receipt of (i) such notice and (ii) satisfactory
documentation given by the Company to the Depositary within the terms of Section
5.7, and only if the Depositary shall have determined that such proposed
redemption is practicable, the Depositary shall provide to each Holder a notice
setting forth the intended exercise by the Company of the redemption rights and
any other particulars set forth in the Company's notice to the Depositary. The
Depositary shall instruct the Custodian to present to the Company the Deposited
Securities in respect of which redemption rights are being exercised against
payment of the applicable redemption price. Upon receipt of confirmation from
the Custodian that the redemption has taken place and that funds representing
the redemption price have been received, the Depositary shall convert, transfer,
and distribute the proceeds (net of applicable (a) fees and charges of, and the
expenses incurred by, the Depositary, and (b) taxes), retire ADSs and cancel
ADRs, if applicable, upon delivery of such ADSs by Holders thereof and the terms
set forth in Sections 4.1 and 6.2 hereof. If less than all outstanding Deposited
Securities are redeemed, the ADSs to be retired will be selected by lot or on a
pro rata basis, as may be determined by the Depositary. The redemption price per
ADS shall be the dollar equivalent of the per share amount received by the
Depositary (adjusted to reflect the ADS(s)-to-Share(s) ratio) upon the
redemption of the Deposited Securities represented by ADSs (subject to the terms
of Section 4.8 hereof and the applicable fees and charges of, and expenses
incurred by, the Depositary (as provided in Section 5.9 of this Deposit
Agreement), and taxes) multiplied by the number of Deposited Securities
represented by each ADS redeemed.
SECTION 4.8 CONVERSION OF FOREIGN CURRENCY. Whenever the Depositary or the
Custodian shall receive Foreign Currency, by way of dividends or other
distributions or the net proceeds from the sale of securities, property or
rights, which in the reasonable judgment of the Depositary can at such time be
converted on a practicable basis, by sale or in any other manner that it may
determine in accordance with applicable law, into Dollars transferable to the
United States and distributable to the Holders entitled thereto, the Depositary
shall, as soon as reasonably practicable, convert or cause to be converted, by
sale or in any other manner that it may determine, such Foreign Currency into
Dollars, and shall distribute as soon as reasonably practicable such Dollars
(net of any applicable fees (as provided in Section 5.9 of this Deposit
Agreement), any reasonable and customary expenses incurred in such conversion
and any expenses incurred on behalf of the Holders in complying with currency
exchange control or other governmental requirements) in accordance with the
terms of the applicable sections of this Deposit Agreement. If the Depositary
shall have distributed warrants or other instruments that
26
entitle the holders thereof to such Dollars, the Depositary shall distribute
such Dollars to the holders of such warrants and/or instruments upon surrender
thereof for cancellation, in either case without liability for interest thereon.
Such distribution may be made upon an averaged or other practicable basis
without regard to any distinctions among Holders on account of any application
of exchange restrictions or otherwise.
If such conversion or distribution generally or with regard to a
particular Holder can be effected only with the approval or license of any
government or agency thereof, the Depositary shall have authority to file such
application for approval or license, if any, as it may deem desirable acting in
good faith. In no event, however, shall the Depositary be obligated to make such
a filing.
If at any time the Depositary shall determine that in its judgment the
conversion of any Foreign Currency and the transfer and distribution of proceeds
of such conversion received by the Depositary is not reasonably practicable or
lawful, or if any approval or license of any governmental authority or agency
thereof that is required for such conversion, transfer and distribution is
denied or, in the opinion of the Depositary, not obtainable at a reasonable cost
or within a reasonable period, the Depositary may, in its discretion, (i) make
such conversion and distribution in Dollars to the Holders for whom such
conversion, transfer and distribution is lawful and practicable, (ii) distribute
the Foreign Currency (or an appropriate document evidencing the right to receive
such Foreign Currency) to Holders for whom this is lawful and practicable or
(iii) hold (or cause the Custodian to hold) such Foreign Currency (without
liability for interest thereon) for the respective accounts of the Holders
entitled to receive the same.
SECTION 4.9 FIXING OF ADS RECORD DATE. Whenever the Depositary shall
receive notice of the fixing of a record date by the Company for the
determination of holders of Deposited Securities entitled to receive any
distribution (whether in cash, Shares, rights, or other distribution), or
whenever for any reason the Depositary causes a change in the number of Shares
that are represented by each ADS, or whenever the Depositary shall receive
notice of any meeting of, or solicitation of consents or proxies of, holders of
Shares or other Deposited Securities, or whenever the Depositary shall find it
necessary or convenient in connection with the giving of any notice,
solicitation of any consent or any other matter, the Depositary shall fix a
record date (the "ADS Record Date") for the determination of the Holders of
ADS(s) who shall be entitled to receive such distribution, to give instructions
for the exercise of voting rights at any such meeting, to give or withhold such
consent, to receive such notice or solicitation or to otherwise take action, or
to exercise the rights of Holders with respect to such changed number of Shares
represented by each ADS. The Depositary shall make reasonable efforts to
establish the ADS Record Date as closely as possible to the applicable record
date for the Deposited Securities (if any) set by the Company in Hong Kong.
Subject to applicable law and the provisions of Section 4.1 through 4.8 and to
the other terms and conditions of this Deposit Agreement, only the Holders of
ADSs at the close of business in New York on such ADS Record Date shall be
entitled to receive such distribution, to give such voting instructions, to
receive such notice or solicitation, or otherwise take action.
SECTION 4.10 VOTING OF DEPOSITED SECURITIES.
27
(a) ADS VOTING INSTRUCTIONS. As soon as practicable after receipt of
notice of any meeting at which the holders of Deposited Securities are entitled
to vote, or of solicitation of consents or proxies from holders of Deposited
Securities, the Depositary shall fix the ADS Record Date in respect of such
meeting or solicitation of consent or proxy in accordance with Section 4.9. The
Depositary shall, if requested by the Company in writing in a timely manner
(which request must be received by the Depositary at least thirty (30) days
prior to the date of such vote or meeting) and as soon as reasonably practicable
after receipt thereof, at the Company's expense and provided no U.S. legal
prohibitions exist, distribute to Holders as of the ADS Record Date: (a) such
notice of meeting or solicitation of consent or proxy, (b) a statement that the
Holders at the close of business on the ADS Record Date will be entitled,
subject to any applicable law, the provisions of this Deposit Agreement, the
Articles of Association of the Company and the provisions of or governing the
Deposited Securities (which provisions, if any, shall be summarized in pertinent
part by the Company), to instruct the Depositary as to the exercise of the
voting rights, if any, pertaining to the Deposited Securities represented by
such Holder's ADSs, and (c) a brief statement as to the manner in which such
voting instructions may be given (including an indication that instructions will
be deemed to have been given in accordance with Section 4.10(b) below (if no
instructions are received by the Depositary prior to the deadline set for such
purposes) to the Depositary to give a discretionary proxy to a person designated
by the Company). Voting instructions may be given only in respect of a number of
ADSs representing an integral number of Deposited Securities. In the event the
notice of meeting or vote and request of the Company is not received by the
Depositary at least thirty (30) days prior to such meeting or vote, the
Depositary shall not have any obligation to notify the Holders and shall not
under any circumstances vote the Deposited Securities, cause the Deposited
Securities to be voted or grant any discretionary proxy to the Company. Upon the
timely receipt from a Holder of ADSs as of the ADS Record Date of voting
instructions in the manner specified by the Depositary, the Depositary shall
endeavor, insofar as practicable and permitted under applicable law, the
provisions of this Deposit Agreement, Articles of Association of the Company and
the provisions of the Deposited Securities, to vote, or cause the Custodian to
vote, the Deposited Securities (in person or by proxy) represented by such
Holder's ADSs in accordance with such voting instructions, either on a show of
hands, in which case, the Depositary shall vote or shall instruct the Custodian
to vote in accordance with instructions received from a majority of Holders
giving instructions, or on a poll, in which case the Depositary shall vote or
cause the Custodian to vote in accordance with the instructions as received from
the Holders giving instructions.
Under the Articles of Association of the Company (as in effect as of the
date hereof), a poll may be demanded at any meeting by (i) the chairman of the
meeting, (ii) at least three shareholders present in person or by proxy and
entitled to vote at the meeting, (iii) a shareholder or shareholders present in
person or by proxy (1) who represent in the aggregate not less than 10% of the
total voting rights of all shareholders having the right to attend and vote at
the meeting, or (2) who hold Shares conferring the right to attend and vote at
the meeting on which there have been paid sums in the aggregate equal to not
less than 10% of the total sum paid up on all Shares conferring that right. The
Depositary will not join in demanding a poll, whether or not requested to do so
by Holders of ADSs.
28
(b) DISCRETIONARY PROXY TO MANAGEMENT. Neither the Depositary nor the
Custodian shall under any circumstances exercise any discretion as to voting and
neither the Depositary nor the Custodian shall vote, attempt to exercise the
right to vote, or in any way make use of for purposes of establishing a quorum
or otherwise, the Deposited Securities represented by ADSs, except pursuant to
and in accordance with the voting instructions timely received from Holders or
as otherwise contemplated herein.
If the Depositary timely receives voting instructions from a Holder which
fail to specify the manner in which the Depositary is to vote the Deposited
Securities represented by such Holder's ADSs, the Depositary will deem such
Holder (unless otherwise specified in the notice distributed to Holders) to have
instructed the Depositary to vote in favor of the items set forth in such voting
instructions.
If the Depositary does not receive instructions from a Holder as of the
ADS Record Date on or before the date established by the Depositary for such
purpose, such Holder shall be deemed, and the Depositary shall deem such Holder,
to have instructed the Depositary to give a discretionary proxy to a person
designated by the Company to vote the Deposited Securities; provided, however,
that no such discretionary proxy shall be given by the Depositary with respect
to any matter to be voted upon as to which the Company informs the Depositary
that (i) the Company does not wish such proxy to be given, (ii) substantial
opposition exists, or (iii) the rights of holders of Deposited Securities may be
adversely affected; further, provided, that no such discretionary proxy will be
given by the Depositary with respect to a particular item for which no
instructions have been received in the event that the vote is on a show of
hands.
Notwithstanding anything else contained herein, the Depositary shall, if
so requested in writing by the Company, represent all Deposited Securities
(whether or not voting instructions have been received in respect of such
Deposited Securities from Holders as of the ADS Record Date) for the sole
purpose of establishing quorum at a meeting of shareholders.
(c) LEGAL PROHIBITIONS. Notwithstanding anything else contained in this
Deposit Agreement or any ADR, the Depositary shall not have any obligation to
take any action with respect to any meeting, or solicitation of consents or
proxies, of holders of Deposited Securities if the taking of such action would
violate U.S. laws. The Company agrees to take any and all actions reasonably
necessary to enable Holders and Beneficial Owners to exercise the voting rights
accruing to the Deposited Securities and to deliver to the Depositary an opinion
of U.S. counsel addressing any actions requested to be taken if so reasonably
requested by the Depositary.
There can be no assurance that Holders or Beneficial Owners generally or
any Holder or Beneficial Owner in particular will receive the notice described
above with sufficient time to enable the Holder to return voting instructions to
the Depositary in a timely manner.
SECTION 4.11 CHANGES AFFECTING DEPOSITED SECURITIES. Upon any change in
nominal or par value, split-up, cancellation, consolidation or any other
reclassification of Deposited Securities, or upon any recapitalization,
reorganization, merger or consolidation or sale of assets affecting the Company
or to which it is a party, any securities which shall be received by the
29
Depositary or the Custodian in exchange for, or in conversion of or replacement
of or otherwise in respect of, such Deposited Securities shall, to the extent
permitted by law, be treated as new Deposited Securities under this Deposit
Agreement, and the ADRs shall, subject to the provisions of this Deposit
Agreement and applicable law, evidence ADSs representing the right to receive
such additional securities. The Depositary may, with the Company's approval, and
shall, if the Company shall so request, subject to the terms of the Deposit
Agreement and receipt of an opinion of counsel to the Company reasonably
satisfactory to the Depositary that such distributions are not in violation of
any applicable laws or regulations, execute and deliver additional ADRs as in
the case of a stock dividend on the Shares, or call for the surrender of
outstanding ADRs to be exchanged for new ADRs, in either case, as well as in the
event of newly deposited Shares, with necessary modifications to the form of ADR
contained in Exhibit A hereto, specifically describing such new Deposited
Securities or corporate change. The Company agrees to, jointly with the
Depositary, amend the Registration Statement on Form F-6 as filed with the
Commission to permit the issuance of such new form of ADRs. Notwithstanding the
foregoing, in the event that any security so received may not be lawfully
distributed to some or all Holders in the reasonable judgment of the Depositary
in consultation with the Company, the Depositary may, with the Company's
approval, and shall, if the Company requests, subject to receipt of an opinion
of Company's counsel reasonably satisfactory to the Depositary that such action
is not in violation of any applicable laws or regulations, sell such securities
at public or private sale, at such place or places and upon such terms as it may
deem proper and may allocate the net proceeds of such sales (net of (a) fees and
charges of, and expenses incurred by, the Depositary (as provided in Section 5.9
of this Deposit Agreement), and (b) taxes) for the account of the Holders
otherwise entitled to such securities upon an averaged or other practicable
basis without regard to any distinctions among such Holders and distribute the
net proceeds so allocated to the extent practicable as in the case of a
distribution received in cash pursuant to Section 4.1. Neither the Depositary
nor the Company shall be responsible for (i) any failure to determine that it
may be lawful or feasible to make such securities available to Holders in
general or to any Holder in particular, (ii) any foreign exchange exposure or
loss incurred in connection with such sale, or (iii) any liability to the
purchaser of such securities. The Depositary shall not be responsible for the
content of any materials forwarded to the Holders on behalf of the Company in
connection with the distribution or sale of such securities.
SECTION 4.12 AVAILABLE INFORMATION. The Company is subject to the periodic
reporting requirements of the Exchange Act and accordingly files certain
information with the Commission. These reports and documents can be inspected
and copied at the public reference facilities maintained by the Commission
located at Judiciary Plaza, 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx X.X. 00000.
SECTION 4.13 REPORTS. The Depositary shall make available for inspection
by Holders at its Principal Office any reports and communications, including any
proxy soliciting materials, received from the Company which are both (a)
received by the Depositary, the Custodian, or the nominee of either of them as
the holder of the Deposited Securities and (b) made generally available to the
holders of such Deposited Securities by the Company. The Depositary shall also
provide to Holders copies of such reports when furnished by the Company pursuant
to Section 5.6.
30
SECTION 4.14 LIST OF HOLDERS. Promptly upon written request by the
Company, the Depositary shall furnish to it a list, as of a recent date, of the
names, addresses and holdings of ADSs of all Holders.
SECTION 4.15 TAXATION. The Depositary will, and will instruct the
Custodian to, forward to the Company or its agents such information from its
records as the Company may reasonably request to enable the Company or its
agents to file the necessary tax reports with governmental authorities or
agencies. The Depositary, the Custodian or the Company and its agents may file
such reports as are necessary to reduce or eliminate applicable taxes on
dividends and on other distributions in respect of Deposited Securities under
applicable tax treaties or laws for the Holders and Beneficial Owners. In
accordance with instructions from the Company and to the extent practicable, the
Depositary or the Custodian will take reasonable administrative actions to
obtain tax refunds, reduced withholding of tax at source on dividends and other
benefits under applicable tax treaties or laws with respect to dividends and
other distributions on the Deposited Securities. As a condition to receiving
such benefits, Holders and Beneficial Owners of ADSs may be required from time
to time, and in a timely manner, to file such proof of taxpayer status,
residence and beneficial ownership (as applicable), to execute such certificates
and to make such representations and warranties, or to provide any other
information or documents, as the Depositary or the Custodian may deem necessary
or proper to fulfill the Depositary's or the Custodian's obligations under
applicable law. Neither the Depositary, the Custodian nor the Company shall have
any obligation or liability to any person if any Holder or Beneficial Owner
fails to provide such information or if such information does not reach the
relevant tax authorities in time for any Holder or Beneficial Owner to obtain
the benefit of any tax treaty. The Holders and Beneficial Owners shall indemnify
the Depositary, the Company, the Custodian and any of their respective
directors, employees, agents and Affiliates against, and hold each of them
harmless from, any claims by any governmental authority with respect to taxes,
additions to tax, penalties or interest arising out of any refund of taxes,
reduced rate of withholding at source or other tax benefit obtained.
If the Company (or any of its agents) withholds from any distribution any
amount on account of taxes or governmental charges, or pays any other tax in
respect of such distribution (i.e., stamp duty tax, capital gains or other
similar tax), the Company shall (and shall cause such agent to) remit promptly
to the Depositary information about such taxes or governmental charges withheld
or paid, and, if so requested, the tax receipt (or other proof of payment to the
applicable governmental authority) therefor, in each case, in a form reasonably
satisfactory to the Depositary. The Depositary shall, to the extent required by
U.S. law, report to Holders any taxes withheld by it or the Custodian, and, if
such information is provided to it by the Company, any taxes withheld by the
Company. The Depositary and the Custodian shall not be required to provide the
Holders with any evidence of the remittance by the Company (or its agents) of
any taxes withheld, or of the payment of taxes by the Company, except to the
extent the evidence is provided by the Company to the Depositary or the
Custodian, as applicable. Neither the Depositary nor the Custodian shall be
liable for the failure by any Holder or Beneficial Owner to obtain the benefits
of credits on the basis of non-U.S. tax paid against such Holder's or Beneficial
Owner's income tax liability.
31
Notwithstanding any other provision of this Deposit Agreement, before
making any distribution or other payment on any Deposited Securities, the
Company or its agent shall make such deductions (if any) which, by the laws of
Hong Kong, the Company or its agent is required to make in respect of any
income, capital gains or other taxes and the Company or its agent may also
deduct the amount of any tax or governmental charges payable by the Company or
its agent or for which the Company or its agent might be made liable in respect
of such distribution or other payment or any document signed in connection
therewith. In making such deductions, the Company and its agent shall have no
obligation to any Holder or Beneficial Owner to apply a rate under any treaty or
other arrangement between Hong Kong and the country within which such Holder or
Beneficial Owner is resident unless such Holder or Beneficial Owner has timely
provided to the Company or its agent evidence of the residency of such Holder or
Beneficial Owner that is accepted by the relevant tax authorities of Hong Kong.
The Depositary is under no obligation to provide the Holders and Beneficial
Owners with any information about the tax status of the Company. The Depositary
shall not incur any liability for any tax consequences that may be incurred by
Holders and Beneficial Owners on account of their ownership of the ADSs,
including without limitation, tax consequences resulting from the Company (or
any of its subsidiaries) being treated as a "Foreign Personal Holding Company,"
or as a "Passive Foreign Investment Company" (in each case as defined in the
U.S. Internal Revenue Code and the regulations issued thereunder) or otherwise.
ARTICLE V
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY
SECTION 5.1 MAINTENANCE OF OFFICE AND TRANSFER BOOKS BY THE REGISTRAR.
Until termination of this Deposit Agreement in accordance with its terms, the
Registrar shall maintain in the Borough of Manhattan, the City of New York, an
office and facilities for the issuance and delivery of ADSs, the acceptance for
surrender of ADS(s) for the purpose of withdrawal of Deposited Securities, the
registration of issuances, cancellations, transfers, combinations and split-ups
of ADS(s) and, if applicable, to countersign ADRs evidencing the ADSs so issued,
transferred, combined or split-up, in each case in accordance with the
provisions of this Deposit Agreement.
The Registrar shall keep books for the registration of ADSs which at all
reasonable times shall be open for inspection by the Company and by the Holders
of such ADSs, provided that such inspection shall not be, to the Registrar's
knowledge, for the purpose of communicating with Holders of such ADSs in the
interest of a business or object other than the business of the Company or other
than a matter related to this Deposit Agreement or the ADSs.
The Registrar may close the transfer books with respect to the ADSs, at
any time or from time to time, when deemed necessary or advisable by it in good
faith in connection with the performance of its duties hereunder, or at the
reasonable written request of the Company subject, in all cases, to Section 7.8
hereof.
If any ADSs are listed on one or more stock exchanges or automated
quotation systems in the United States, the Depositary shall act as Registrar or
appoint a Registrar or one or more
32
co-registrars in consultation with the Company for registration of issuances,
cancellations, transfers, combinations and split-ups of ADSs and, if applicable,
to countersign ADRs evidencing the ADSs so issued, transferred, combined or
split-up, in accordance with any requirements of such exchanges or systems. Such
Registrar or co-registrars may be removed and a substitute or substitutes
appointed by the Depositary in consultation with the Company.
SECTION 5.2 EXONERATION. The Depositary and the Company undertake to
perform such duties and only such duties as are specifically set forth in this
Deposit Agreement, and no implied covenants or obligations shall be read into
this Deposit Agreement against the Depositary or the Company. Neither the
Depositary nor the Company shall be obligated to do or perform any act which is
inconsistent with the provisions of this Deposit Agreement or incur any
liability (i) if the Depositary or the Company shall be prevented or forbidden
from, or subjected to any civil or criminal penalty or restraint on account of,
or delayed in, doing or performing any act or thing required by the terms of
this Deposit Agreement, by reason of any provision of any present or future law
or regulation of the United States, Hong Kong or any other country, or of any
other governmental authority or regulatory authority or stock exchange, or on
account of the possible criminal or civil penalties or restraint, or by reason
of any provision, present or future, of the Articles of Association of the
Company or any provision of or governing any Deposited Securities, or by reason
of any act of God or war or other circumstances beyond its control (including,
without limitation, nationalization, expropriation, currency restrictions, work
stoppage, strikes, civil unrest, acts of terrorism, revolutions, rebellions,
explosions and computer failure), (ii) by reason of any exercise of, or failure
to exercise, any discretion provided for in this Deposit Agreement or in the
Articles of Association of the Company or provisions of or governing Deposited
Securities, (iii) for any action or inaction in reliance upon the advice of or
information from legal counsel, accountants, any person presenting Shares for
deposit, any Holder, any Beneficial Owner or authorized representative thereof,
or any other person believed by it in good faith to be competent to give such
advice or information, (iv) for the inability by a Holder or Beneficial Owner to
benefit from any distribution, offering, right or other benefit which is made
available to holders of Deposited Securities but is not, under the terms of this
Deposit Agreement, made available to Holders of ADSs, or (v) for any
consequential or punitive damages for any breach of the terms of this Deposit
Agreement.
The Depositary and any Custodian, and each of their respective directors,
officers, employees, agents and Affiliates, and the Company, its controlling
persons and its agents may rely and shall be protected in acting upon any
written notice, request or other document believed by it to be genuine and to
have been signed or presented by the proper party or parties.
No disclaimer of liability under the Securities Act is intended by any
provision of this Deposit Agreement.
SECTION 5.3 STANDARD OF CARE. The Company, the Depositary and their
respective agents assume no obligation and shall not be subject to any liability
under this Deposit Agreement or any ADRs to any Holder(s) or Beneficial
Owner(s), except that the Company, the Depositary and their respective agents
agree to perform their respective obligations specifically set forth in this
Deposit Agreement or the applicable ADRs without negligence or bad faith.
33
Without limitation of the foregoing, neither the Depositary, nor the
Company, nor any of their respective directors, officers, employees, agents or
Affiliates shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of any Deposited Securities or in
respect of the ADSs, which in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense (including
fees and disbursements of counsel) and liability be furnished as often as may be
required (and no Custodian shall be under any obligation whatsoever with respect
to such proceedings, the responsibility of the Custodian being solely to the
Depositary).
Neither the Depositary and its agents nor the Company shall be liable for
any failure to carry out any instructions to vote any of the Deposited
Securities, or for the manner in which any vote is cast or the effect of any
vote, or for any failure to determine that any distribution or action may be
lawful or reasonably practicable, provided that any such action, omission or
determination is in good faith and in accordance with the terms of this Deposit
Agreement. Neither the Depositary nor the Company shall incur any liability for
any investment risk associated with acquiring an interest in the Deposited
Securities, for the validity or worth of the Deposited Securities, for any tax
consequences that may result from the ownership of ADSs, Shares or Deposited
Securities or for the credit-worthiness of any third party. The Depositary shall
not incur any liability for the content of any information submitted to it by
the Company for distribution to the Holders or for any inaccuracy of any
translation thereof, for allowing any rights to lapse upon the terms of this
Deposit Agreement or for the failure or timeliness of any notice from the
Company. No waiver of any rights of any Holder or Beneficial Owner under the
U.S. securities laws is intended by any provision of this paragraph. In
addition, notwithstanding anything in this paragraph to the contrary, no
provision in this paragraph shall prevent either party from pursuing its rights
to indemnification pursuant to Section 5.8 of this Deposit Agreement.
SECTION 5.4 RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF
SUCCESSOR DEPOSITARY. The Depositary may at any time resign as Depositary
hereunder by written notice of resignation delivered to the Company, such
resignation to be effective on the earlier of (i) the 90th day after delivery
thereof to the Company (whereupon the Depositary shall be entitled to take the
actions contemplated in Section 6.2 hereof), or (ii) the appointment by the
Company of a successor depositary and its acceptance of such appointment as
hereinafter provided.
The Depositary may at any time be removed by the Company by written notice
of such removal, which removal shall be effective on the later of (i) the 90th
day after delivery thereof to the Depositary (whereupon the Depositary shall be
entitled to take the actions contemplated in Section 6.2 hereof), or (ii) upon
the appointment by the Company of a successor depositary and its acceptance of
such appointment as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall use its best efforts to appoint a successor
depositary, which shall be a bank or trust company having an office in the
Borough of Manhattan, the City of New York. Every successor depositary shall be
required by the Company to execute and deliver to its predecessor and to the
Company an instrument in writing accepting its appointment hereunder, and
thereupon
34
such successor depositary, without any further act or deed (except as
required by applicable law), shall become fully vested with all the rights,
powers, duties and obligations of its predecessor (other than as contemplated in
Sections 5.8 and 5.9). The predecessor depositary, upon payment of all sums due
it and on the written request of the Company shall, (i) execute and deliver an
instrument transferring to such successor all rights and powers of such
predecessor hereunder (other than as contemplated in Sections 5.8 and 5.9), (ii)
duly assign, transfer and deliver all right, title and interest to the Deposited
Securities to such successor, and (iii) deliver to such successor a list of the
Holders of all outstanding ADSs and such other information relating to ADSs and
Holders thereof as the successor may reasonably request. Any such successor
depositary shall promptly provide notice of its appointment to such Holders.
Any corporation into or with which the Depositary may be merged or
consolidated shall be the successor of the Depositary without the execution or
filing of any document or any further act.
SECTION 5.5 THE CUSTODIAN. The Depositary has initially appointed
Citibank, N.A. - Hong Kong branch as Custodian for the purpose of this Deposit
Agreement. The Custodian or its successors in acting hereunder shall be subject
at all times and in all respects to the direction of the Depositary for the
Shares for which the Custodian acts as custodian and shall be responsible solely
to it. If any Custodian resigns or is discharged from its duties hereunder with
respect to any Deposited Securities and no other Custodian has previously been
appointed hereunder, the Depositary shall, in consultation with the Company,
promptly appoint a substitute custodian that is organized under the laws of Hong
Kong. Such resignation of the Custodian shall take effect upon the appointment
of a successor custodian and its acceptance of such appointment. The Depositary
shall require such resigning or discharged Custodian to deliver the Deposited
Securities held by it, together with all such records maintained by it as
Custodian with respect to such Deposited Securities as the Depositary may
request, to the Custodian designated by the Depositary. Whenever the Depositary
determines, in its discretion, that it is appropriate to do so, it may appoint
an additional custodian with respect to any Deposited Securities, or discharge
the Custodian with respect to any Deposited Securities and appoint a substitute
custodian, which shall thereafter be Custodian hereunder with respect to the
Deposited Securities. Immediately upon any such change, the Depositary shall
give notice thereof in writing to all Holders of ADSs, each other Custodian and
the Company.
Upon the appointment of any successor depositary, any Custodian then
acting hereunder shall, unless otherwise instructed by the Depositary, continue
to be the Custodian of the Deposited Securities without any further act or
writing, and shall be subject to the direction of the successor depositary. The
successor depositary so appointed shall, nevertheless, on the written request of
any Custodian, execute and deliver to such Custodian all such instruments as may
be proper to give to such Custodian full and complete power and authority to act
on the direction of such successor depositary.
SECTION 5.6 NOTICES AND REPORTS. On or before the first date on which the
Company gives notice, by publication or otherwise, of any meeting of holders of
Shares or other Deposited Securities, or of any adjourned meeting of such
holders, or of the taking of any action by such holders other than at a meeting,
or of the taking of any action in respect of any cash or other
35
distributions or the offering of any rights in respect of Deposited Securities,
the Company shall transmit to the Depositary and the Custodian a copy of the
notice thereof in the English language but otherwise in the form given or to be
given to holders of Shares or other Deposited Securities. The Company shall also
furnish to the Custodian and the Depositary a summary, in English, of any
applicable provisions or proposed provisions of the Articles of Association of
the Company that may be relevant or pertain to such notice of meeting or be the
subject of a vote thereat.
The Company will also transmit to the Depositary (a) an English language
version of the other notices, reports and communications which are made
generally available by the Company to holders of its Shares or other Deposited
Securities and (b) the English-language versions of the Company's annual and
semi-annual reports prepared in accordance with the applicable requirements of
the Commission. The Depositary shall arrange, at the request of the Company and
at the Company's expense, to provide copies thereof to all Holders or make such
notices, reports and other communications available to all Holders on a basis
similar to that for holders of Shares or other Deposited Securities or on such
other basis as the Company may advise the Depositary or as may be required by
any applicable law, regulation or stock exchange requirement.
The Depositary will, at the expense of the Company, make available a copy
of any such notices, reports or communications issued by the Company and
delivered to the Depositary for inspection by the Holders of the ADSs at the
Depositary's Principal Office, at the office of the Custodian and at any other
designated transfer office.
SECTION 5.7 ISSUANCE OF ADDITIONAL SHARES, ADSs ETC. The Company agrees
that in the event it or any of its Affiliates proposes (i) an issuance, sale or
distribution of additional Shares, (ii) an offering of rights to subscribe for
Shares or other Deposited Securities, (iii) an issuance of securities
convertible into or exchangeable for Shares, (iv) an issuance of rights to
subscribe for securities convertible into or exchangeable for Shares, (v) an
elective dividend of cash or Shares, (vi) a redemption of Deposited Securities,
(vii) a meeting of holders of Deposited Securities, or solicitation of consents
or proxies, relating to any reclassification of securities, merger or
consolidation or transfer of assets, or (viii) any reclassification,
recapitalization, reorganization, merger, consolidation or sale of assets which
affects the Deposited Securities, except, in the case of clauses (i) through
(iv) above, where any such issuance, sale, offering or distribution is to be
made solely in connection with compensation of the Company's directors,
executives, officers or employees, or with any Company employee benefit program
or share option plan, so long as (x) such issuance, sale, offering or
distribution is made outside the United States, (y) the Company's directors,
executives, officers, employees, employee benefit program or share option plan
is not a U.S. person (within the meaning of paragraph (k) of Rule 902 of
Regulation S under the Securities Act), and (z) such issuance, sale, offering or
distribution does not violate applicable law or the rules and regulations of any
securities exchange or market upon which the Deposited Securities may be traded,
listed or quoted, the Company will obtain U.S. legal advice and take all steps
necessary to ensure that the proposed transaction does not violate the
registration provisions of the Securities Act, or any other applicable laws
(including, without limitation, the Investment Company Act of 1940, as amended,
the Exchange Act and the securities laws of the states of the U.S.). In support
of the foregoing, the Company will furnish to the Depositary (a) a written
opinion of U.S. counsel (reasonably satisfactory to the Depositary)
36
stating whether such transaction (1) requires a registration statement under the
Securities Act to be in effect or (2) is exempt from the registration
requirements of the Securities Act and (b) an opinion of Hong Kong counsel
stating that (1) making the transaction available to Holders and Beneficial
Owners does not violate the laws or regulations of Hong Kong and (2) all
requisite regulatory consents and approvals have been obtained in Hong Kong;
provided, however, that no such opinion shall be required in the event of an
issuance of Shares as a bonus or share split. If the filing of a registration
statement is required, the Depositary shall not have any obligation to proceed
with the transaction unless it shall have received evidence reasonably
satisfactory to it that such registration statement has been declared effective.
If, being advised by counsel, the Company determines that a transaction is
required to be registered under the Securities Act, the Company will either (i)
register such transaction to the extent necessary, (ii) alter the terms of the
transaction to avoid the registration requirements of the Securities Act or
(iii) direct the Depositary to take specific measures, in each case as
contemplated in this Deposit Agreement, to prevent such transaction from
violating the registration requirements of the Securities Act. The Company
agrees with the Depositary that neither the Company nor any of its Affiliates
will at any time (i) deposit any Shares or other Deposited Securities, either
upon original issuance or upon a sale of Shares or other Deposited Securities
previously issued and reacquired by the Company or by any such Affiliate, or
(ii) issue additional Shares, rights to subscribe for such Shares, securities
convertible into or exchangeable for Shares or rights to subscribe for such
securities, unless such transaction and the securities issuable in such
transaction are exempt from registration under the Securities Act and, if
applicable, the Exchange Act or have been registered under the Securities Act
and, if applicable, the Exchange Act (and such registration statement has been
declared effective).
Notwithstanding anything else contained in this Deposit Agreement, nothing
in this Deposit Agreement shall be deemed to obligate the Company to file any
registration statement in respect of any proposed transaction.
SECTION 5.8 INDEMNIFICATION. The Depositary agrees to indemnify the
Company and its directors, officers, employees, agents and Affiliates against,
and hold each of them harmless from, any direct loss, liability, tax, charge or
expense of any kind whatsoever (including, but not limited to, the reasonable
fees and expenses of counsel) which may arise out of acts performed or omitted
by the Depositary or Citibank, N.A. - Hong Kong branch, as Custodian hereunder,
or any of their respective directors, officers or employees under the terms
hereof due to the negligence or bad faith of the Depositary or Citibank, N.A. -
Hong Kong branch, as Custodian hereunder, or any of their respective directors,
officers or employees under the terms hereunder.
The Company agrees to indemnify the Depositary, the Custodian and any of
their respective directors, officers, employees, agents and Affiliates against,
and hold each of them harmless from, any direct loss, liability, tax, charge or
expense of any kind whatsoever (including, but not limited to, the reasonable
fees and expenses of counsel) that may arise (a) out of or in connection with
any offer, issuance, sale, resale, transfer, deposit or withdrawal of ADRs,
ADSs, the Shares, or other Deposited Securities, as the case may be, (b) out of
or as a result of any offering documents in respect thereof or (c) out of acts
performed or omitted, including, but not limited to, any delivery by the
Depositary on behalf of the Company of information regarding the Company in
connection with this Deposit Agreement, the ADRs, the
37
ADSs, the Shares, or any Deposited Securities, in any such case (i) by the
Depositary, the Custodian or any of their respective directors, officers,
employees, agents and Affiliates, except to the extent such loss, liability,
tax, charge or expense is due to the negligence or bad faith of any of them, or
(ii) by the Company or any of its directors, officers, employees, agents and
Affiliates, except to the extent any such loss, liability, tax, charge or
expense arises out of information relating to the Depositary or any Custodian,
as applicable, furnished to the Company by the Depositary in writing and not
materially changed or altered by the Company.
The obligations set forth in this Section shall survive the termination of
this Deposit Agreement and the succession or substitution of any party hereto.
Any person seeking indemnification hereunder (an "indemnified person")
shall notify the person from whom it is seeking indemnification (the
"indemnifying person") of the commencement of any indemnifiable action or claim
promptly after such indemnified person becomes aware of such commencement
(provided that the failure to make such notification shall not affect such
indemnified person's rights to seek indemnification except to the extent the
indemnifying person is materially prejudiced by such failure) and shall consult
in good faith with the indemnifying person as to the conduct of the defense of
such action or claim that may give rise to an indemnity hereunder, which defense
shall be reasonable in the circumstances. No indemnified person shall compromise
or settle any action or claim that may give rise to an indemnity hereunder
without the consent of the indemnifying person, which consent shall not be
unreasonably withheld.
SECTION 5.9 FEES AND CHARGES OF DEPOSITARY. The Company, the Holders, the
Beneficial Owners, and persons depositing Shares or surrendering ADSs for
cancellation and withdrawal of Deposited Securities shall be required to pay to
the Depositary the Depositary's fees and related charges identified as payable
by them respectively in the Fee Schedule attached hereto as Exhibit B. All fees
and charges so payable may, at any time and from time to time, be changed by
agreement between the Depositary and the Company, but, in the case of fees and
charges payable by Holders and Beneficial Owners, only in the manner
contemplated in Section 6.1. The Depositary shall provide, without charge, a
copy of its latest fee schedule to anyone upon request.
The Company agrees to promptly pay to the Depositary such fees and
charges, except for such fees and related charges identified as payable by
Holders and Beneficial Owners as set out in the Fee Schedule attached hereto as
Exhibit B, and to reimburse the Depositary for such out-of-pocket expenses as
the Depositary and the Company may agree to in writing from time to time.
Responsibility for payment of such charges may at any time and from time to time
be changed by agreement between the Company and the Depositary. Unless otherwise
agreed, the Depositary shall present its statement for such expenses and fees or
charges to the Company once every three months. The charges and expenses of the
Custodian are for the sole account of the Depositary.
The right of the Depositary to receive payment of fees, charges and
expenses as provided above shall survive the termination of this Deposit
Agreement. As to any Depositary, upon the resignation or removal of such
Depositary as described in Section 5.4 hereof, such right shall
38
extend for those fees, charges and expenses incurred prior to the effectiveness
of such resignation or removal.
SECTION 5.10 PRE-RELEASE TRANSACTIONS. Subject to the further terms and
provisions of this Section 5.10, the Depositary, its Affiliates and their
agents, on their own behalf, may own and deal in any class of securities of the
Company and its Affiliates and in ADSs. In its capacity as Depositary, the
Depositary shall not lend Shares or ADSs; provided, however, that the Depositary
may, except in the case of Restricted ADSs, (i) issue ADSs prior to the receipt
of Shares pursuant to Section 2.3 and (ii) deliver Shares prior to the receipt
of ADSs for withdrawal of Deposited Securities pursuant to Section 2.7,
including ADSs which were issued under (i) above but for which Shares may not
have been received (each such transaction a "Pre-Release Transaction"). The
Depositary may receive ADSs in lieu of Shares under (i) above and receive Shares
in lieu of ADSs under (ii) above. Each such Pre-Release Transaction will be (a)
subject to a written agreement whereby the person or entity (the "Applicant") to
whom ADSs or Shares are to be delivered (w) represents that at the time of the
Pre-Release Transaction the Applicant or its customer owns the Shares or ADSs
that are to be delivered by the Applicant under such Pre-Release Transaction,
(x) agrees to indicate the Depositary as owner of such Shares or ADSs in its
records and to hold such Shares or ADSs in trust for the Depositary until such
Shares or ADSs are delivered to the Depositary or the Custodian, (y)
unconditionally guarantees to deliver to the Depositary or the Custodian, as
applicable, such Shares or ADSs, and (z) agrees to any additional restrictions
or requirements that the Depositary deems appropriate, (b) at all times fully
collateralized with cash, U.S. government securities or such other collateral as
the Depositary deems appropriate, (c) terminable by the Depositary on not more
than five (5) business days' notice and (d) subject to such further indemnities
and credit regulations as the Depositary deems appropriate. The Depositary will
normally limit the number of ADSs and Shares involved in such Pre-Release
Transactions at any one time to thirty percent (30%) of the ADSs outstanding
(without giving effect to ADSs outstanding under (i) above), provided, however,
that the Depositary reserves the right to change or disregard such limit from
time to time as it deems appropriate.
The Depositary may also set limits with respect to the number of ADSs and
Shares involved in Pre-Release Transactions with any one person on a
case-by-case basis as it deems appropriate. The Depositary may retain for its
own account any compensation received by it in conjunction with the foregoing.
Collateral provided pursuant to (b) above, but not the earnings thereon, shall
be held for the benefit of the Holders (other than the Applicant).
SECTION 5.11 RESTRICTED SECURITIES OWNERS. The Company agrees to advise in
writing each of the persons or entities who, to the knowledge of the Company,
holds Restricted Securities that such Restricted Securities are ineligible for
deposit hereunder (except under the circumstances contemplated in Section 2.13)
and, to the extent practicable, shall require each of such persons to represent
in writing that such person will not deposit Restricted Securities hereunder
(except under the circumstances contemplated in Section 2.13).
39
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.1 AMENDMENT/SUPPLEMENT. Subject to the terms and conditions of
this Section 6.1 and applicable law, the ADRs outstanding at any time, the
provisions of this Deposit Agreement and the form of ADR attached hereto and to
be issued under the terms hereof may at any time and from time to time be
amended or supplemented by written agreement between the Company and the
Depositary in any respect which they may deem necessary or desirable without the
prior written consent of the Holders or Beneficial Owners. Any amendment or
supplement which shall impose or increase any fees or charges (other than
charges in connection with foreign exchange control regulations, and taxes and
other governmental charges, delivery and other such expenses), or which shall
otherwise materially prejudice any substantial existing right of Holders or
Beneficial Owners, shall not, however, become effective as to outstanding ADSs
until the expiration of thirty (30) days after notice of such amendment or
supplement shall have been given to the Holders of outstanding ADSs. The parties
hereto agree that any amendments or supplements which (i) are reasonably
necessary (as agreed by the Company and the Depositary) in order for (a) the
ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs to be
settled solely in electronic book-entry form and (ii) do not in either such case
impose or increase any fees or charges to be borne by Holders, shall be deemed
not to materially prejudice any substantial rights of Holders or Beneficial
Owners. Every Holder and Beneficial Owner at the time any amendment or
supplement so becomes effective shall be deemed, by continuing to hold such
ADSs, to consent and agree to such amendment or supplement and to be bound by
this Deposit Agreement and the ADR, if applicable, as amended or supplemented
thereby. In no event shall any amendment or supplement impair the right of the
Holder to surrender such ADS and receive therefor the Deposited Securities
represented thereby, except in order to comply with mandatory provisions of
applicable law. Notwithstanding the foregoing, if any governmental body should
adopt new laws, rules or regulations which would require an amendment of, or
supplement to, this Deposit Agreement to ensure compliance therewith, the
Company and the Depositary may amend or supplement the Deposit Agreement and any
ADRs at any time in accordance with such changed laws, rules or regulations.
Such amendment or supplement to the Deposit Agreement and any ADRs in such
circumstances may become effective before a notice of such amendment or
supplement is given to Holders or within any other period of time as required
for compliance with such laws, rules or regulations.
SECTION 6.2 TERMINATION. The Depositary shall, at any time at the written
direction of the Company, terminate this Deposit Agreement by providing notice
of such termination to the Holders of all ADSs then outstanding at least thirty
(30) days prior to the date fixed in such notice for such termination. If ninety
(90) days shall have expired after (i) the Depositary shall have delivered to
the Company a written notice of its election to resign, or (ii) the Company
shall have delivered to the Depositary a written notice of the removal of the
Depositary, and in either case a successor depositary shall not have been
appointed and accepted its appointment as provided in Section 5.4, the
Depositary may terminate this Deposit Agreement by providing notice of such
termination to the Holders of all ADSs then outstanding at least thirty (30)
days prior to the date fixed for such termination. On and after the date of
termination of this Deposit Agreement, the Holder of ADS(s) will, upon surrender
of such ADS(s) at the Principal Office of
40
the Depositary, upon the payment of the charges of the Depositary for the
surrender of ADSs referred to in Section 2.7 and subject to the conditions and
restrictions therein set forth, and upon payment of any applicable taxes or
governmental charges, be entitled to Delivery, to him or upon his order, of the
amount of Deposited Securities represented by such ADS(s). If any ADSs shall
remain outstanding after the date of termination of this Deposit Agreement, the
Registrar thereafter shall discontinue the registration of transfers of ADSs,
and the Depositary shall suspend the distribution of dividends to the Holders
thereof, and shall not give any further notices or perform any further acts
under this Deposit Agreement, except that the Depositary shall continue to
collect dividends and other distributions pertaining to Deposited Securities,
shall sell rights as provided in this Deposit Agreement, and shall continue to
deliver Deposited Securities, subject to the conditions and restrictions set
forth in Section 2.7, together with any dividends or other distributions
received with respect thereto and the net proceeds of the sale of any rights or
other property, in exchange for ADSs surrendered to the Depositary (after
deducting, or charging, as the case may be, in each case, the charges of the
Depositary for the surrender of an ADS, any expenses for the account of the
Holder in accordance with the terms and conditions of this Deposit Agreement and
any applicable taxes or governmental charges or assessments). At any time after
the expiration of six months from the date of termination of this Deposit
Agreement, the Depositary may sell the Deposited Securities then held hereunder
and may thereafter hold uninvested the net proceeds of any such sale, together
with any other cash then held by it hereunder, in an unsegregated account,
without liability for interest for the pro rata benefit of the Holders whose
ADSs have not theretofore been surrendered. After making such sale, the
Depositary shall be discharged from all obligations under this Deposit Agreement
with respect to the ADSs, the ADRs, if any, and the Deposited Securities, except
to account for such net proceeds and other cash (after deducting, or charging,
as the case may be, in each case, the charges of the Depositary for the
surrender of ADSs, any expenses for the account of the Holder in accordance with
the terms and conditions of this Deposit Agreement and any applicable taxes or
governmental charges or assessments). Upon the termination of this Deposit
Agreement, the Company shall be discharged from all obligations under this
Deposit Agreement except for its obligations to the Depositary under Sections
5.8, 5.9 and 7.6 hereof.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 COUNTERPARTS. This Deposit Agreement may be executed in any
number of counterparts, each of which shall be deemed an original and all of
such counterparts together shall constitute one and the same agreement. Copies
of this Deposit Agreement shall be maintained with the Depositary and shall be
open to inspection by any Holder during business hours.
SECTION 7.2 NO THIRD-PARTY BENEFICIARIES. This Deposit Agreement is for
the exclusive benefit of the parties hereto (and their successors) and shall not
be deemed to give any legal or equitable right, remedy or claim whatsoever to
any other person, except to the extent specifically set forth in this Deposit
Agreement. Nothing in this Deposit Agreement shall be deemed to give rise to a
partnership or joint venture among the parties nor establish a fiduciary or
similar relationship among the parties. The parties hereto acknowledge and agree
that (i) the
41
Depositary and its Affiliates may at any time have multiple banking
relationships with the Company and its Affiliates, (ii) the Depositary and its
Affiliates may be engaged at any time in transactions in which parties adverse
to the Company or the Holders or Beneficial Owners may have interests and (iii)
nothing contained in this Deposit Agreement shall (a) preclude the Depositary or
any of its Affiliates from engaging in such transactions or establishing or
maintaining such relationships, and (b) obligate the Depositary or any of its
Affiliates to disclose such transactions or relationships or to account for any
profit made or payment received in such transactions or relationships.
SECTION 7.3 SEVERABILITY. In case any one or more of the provisions
contained in this Deposit Agreement or in the ADRs should be or become invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall in
no way be affected, prejudiced or disturbed thereby.
SECTION 7.4 HOLDERS AND BENEFICIAL OWNERS AS PARTIES; BINDING EFFECT. The
Holders and Beneficial Owners from time to time of ADSs shall be parties to this
Deposit Agreement and shall be bound by all of the terms and conditions hereof
and of any ADR by acceptance thereof or any beneficial interest therein.
SECTION 7.5 NOTICES. Any and all notices to be given to the Company shall
be deemed to have been duly given if personally delivered or sent by mail, air
courier or cable, telex or facsimile transmission, confirmed by letter
personally delivered or sent by mail or air courier, addressed to Xxxxxxxx X,
Xx. 000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx 10031, People's Republic
of China, Attention: Xx. Xxxxx Xiaotie, Joint Company Secretary, or to any other
address which the Company may specify in writing to the Depositary.
Any and all notices to be given to the Depositary shall be deemed to have
been duly given if personally delivered or sent by registered postal mail, air
courier or major express courier or cable, telex or facsimile transmission,
confirmed by letter personally delivered or sent by mail, air courier or major
express courier, addressed to Citibank, N.A., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, U.S.A., Attention: Depositary Receipts Department, or to any
other address which the Depositary may specify in writing to the Company.
Any and all notices to be given to any Holder shall be deemed to have been
duly given if (a) personally delivered or sent by mail or cable, telex or
facsimile transmission, confirmed by letter, addressed to such Holder at the
address of such Holder as it appears on the books of the Depositary or, if such
Holder shall have filed with the Depositary a request that notices intended for
such Holder be mailed to some other address, at the address specified in such
request, or (b) if a Holder shall have designated such means of notification as
an acceptable means of notification under the terms of this Deposit Agreement,
by means of electronic messaging addressed for delivery to the e-mail address
designated by the Holder for such purpose. Notice to Holders shall be deemed to
be notice to Beneficial Owners for all purposes of this Deposit Agreement.
Failure to notify a Holder or any defect in the notification to a Holder shall
not affect the sufficiency of notification to other Holders or to the Beneficial
Owners of ADSs held by such other Holders.
42
Delivery of a notice sent by mail, air courier or cable, telex or
facsimile transmission shall be deemed to be effective at the time when a duly
addressed letter containing the same (or a confirmation thereof in the case of a
cable, telex or facsimile transmission) is deposited, postage prepaid, in a
post-office letter box or delivered to an air courier service, without regard
for the actual receipt or time of actual receipt thereof by a Holder. The
Depositary or the Company may, however, act upon any cable, telex or facsimile
transmission received by it from any Holder, the Custodian, the Depositary, or
the Company, notwithstanding that such cable, telex or facsimile transmission
shall not be subsequently confirmed by letter.
Delivery of a notice by means of electronic messaging shall be deemed to
be effective at the time of the initiation of the transmission by the sender (as
shown on the sender's records), notwithstanding that the intended recipient
retrieves the message at a later date, fails to retrieve such message, or fails
to receive such notice on account of its failure to maintain the designated
e-mail address, its failure to designate a substitute e-mail address or for any
other reason.
SECTION 7.6 GOVERNING LAW AND JURISDICTION. This Deposit Agreement and the
ADRs shall be interpreted in accordance with, and all rights hereunder and
thereunder and provisions hereof and thereof shall be governed by, the laws of
the State of New York without reference to the principles of choice of law
thereof. Notwithstanding anything contained in this Deposit Agreement, any ADR
or any present or future provisions of the laws of the State of New York, the
rights of holders of Shares and of any other Deposited Securities and the
obligations and duties of the Company in respect of the holders of Shares and
other Deposited Securities, as such, shall be governed by the laws of Hong Kong
(or, if applicable, such other laws as may govern the Deposited Securities).
Except as set forth in the following paragraph of this Section 7.6, the
Company and the Depositary agree that the federal or state courts in the City of
New York shall have jurisdiction to hear and determine any suit, action or
proceeding and to settle any dispute between them that may arise out of or in
connection with this Deposit Agreement and, for such purposes, each irrevocably
submits to the non-exclusive jurisdiction of such courts. The Company hereby
irrevocably designates, appoints and empowers CT Corporation System (the
"Agent") now at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its
authorized agent to receive and accept for and on its behalf, and on behalf of
its properties, assets and revenues, service by mail of any and all legal
process, summons, notices and documents that may be served in any suit, action
or proceeding brought against the Company in any federal or state court as
described in the preceding sentence or in the next paragraph of this Section
7.6. If for any reason the Agent shall cease to be available to act as such, the
Company agrees to designate a new agent in New York on the terms and for the
purposes of this Section 7.6 reasonably satisfactory to the Depositary. The
Company further hereby irrevocably consents and agrees to the service of any and
all legal process, summons, notices and documents in any suit, action or
proceeding against the Company, by service by mail of a copy thereof upon the
Agent (whether or not the appointment of such Agent shall for any reason prove
to be ineffective or such Agent shall fail to accept or acknowledge such
service), with a copy mailed to the Company by registered or certified air mail,
postage prepaid, to its address provided in Section 7.5 hereof. The Company
agrees that the failure of the Agent to give any notice of such service to it
shall not impair or
43
affect in any way the validity of such service or any judgment rendered in any
action or proceeding based thereon.
Notwithstanding the foregoing, the Depositary and the Company
unconditionally agree that in the event that a Holder or Beneficial Owner brings
a suit, action or proceeding against (a) the Company, (b) the Depositary in its
capacity as Depositary under this Deposit Agreement or (c) against both the
Company and the Depositary, in any such case, in any state or federal court of
the United States, and the Depositary or the Company have any claim, for
indemnification or otherwise, against each other arising out of the subject
matter of such suit, action or proceeding, then the Company and the Depositary
may pursue such claim against each other in the state or federal court in the
United States in which such suit, action, or proceeding is pending and, for such
purposes, the Company and the Depositary irrevocably submit to the non-exclusive
jurisdiction of such courts. The Company agrees that service of process upon the
Agent in the manner set forth in the preceding paragraph shall be effective
service upon it for any suit, action or proceeding brought against it as
described in this paragraph.
The Company irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of venue of any actions, suits or proceedings brought in any court as provided
in this Section 7.6, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
The Company irrevocably and unconditionally waives, to the fullest extent
permitted by law, and agrees not to plead or claim, any right of immunity from
legal action, suit or proceeding, from setoff or counterclaim, from the
jurisdiction of any court, from service of process, from attachment upon or
prior to judgment, from attachment in aid of execution or judgment, from
execution of judgment, or from any other legal process or proceeding for the
giving of any relief or for the enforcement of any judgment, and consents to
such relief and enforcement against it, its assets and its revenues in any
jurisdiction, in each case with respect to any matter arising out of, or in
connection with, the Deposit Agreement, any ADR or the Deposited Securities.
No disclaimer of liability under the Securities Act is intended by any
provision of the Deposit Agreement. The provisions of this Section 7.6 shall
survive any termination of this Deposit Agreement, in whole or in part.
SECTION 7.7 ASSIGNMENT. Subject to the provisions of Section 5.4 hereof,
this Deposit Agreement may not be assigned by either the Company or the
Depositary.
SECTION 7.8 COMPLIANCE WITH U.S. SECURITIES LAWS. Notwithstanding anything
in this Deposit Agreement to the contrary, the withdrawal or delivery of
Deposited Securities will not be suspended by the Company or the Depositary
except as would be permitted by Instruction I.A.(1) of the General Instructions
to Form F-6 Registration Statement, as amended from time to time, under the
Securities Act.
44
SECTION 7.9 HONG KONG LAW REFERENCES. Any summary of Hong Kong laws and
regulations and of the terms of the Company's Articles of Association set forth
in this Deposit Agreement have been provided by the Company solely for the
convenience of Holders, Beneficial Owners and the Depositary. While such
summaries are believed by the Company to be accurate as of the date of this
Deposit Agreement, (i) they are summaries and as such may not include all
aspects of the materials summarized applicable to a Holder or Beneficial Owner,
and (ii) these laws and regulations and the Company's Articles of Association
may change after the date of this Deposit Agreement. Neither the Depositary nor
the Company has any obligation under the terms of this Deposit Agreement to
update any such summaries.
SECTION 7.10 TITLES AND REFERENCES. All references in this Deposit
Agreement to exhibits, articles, sections, subsections, and other subdivisions
refer to the exhibits, articles, sections, subsections and other subdivisions of
this Deposit Agreement unless expressly provided otherwise. The words "this
Deposit Agreement", "herein", "hereof", "hereby", "hereunder", and words of
similar import refer to the Deposit Agreement as a whole as in effect between
the Company, the Depositary and the Holders and Beneficial Owners of ADSs and
not to any particular subdivision unless expressly so limited. Pronouns in
masculine, feminine and neuter gender shall be construed to include any other
gender, and words in the singular form shall be construed to include the plural
and vice versa unless the context otherwise requires. Titles to sections of this
Deposit Agreement are included for convenience only and shall be disregarded in
construing the language contained in this Deposit Agreement. References to
"applicable laws and regulations" shall refer to laws and regulations applicable
to ADRs, ADSs or Deposited Securities as in effect at the relevant time of
determination, unless otherwise required by law or regulation.
45
IN WITNESS WHEREOF, CHINA NETCOM GROUP CORPORATION (HONG KONG) LIMITED and
CITIBANK, N.A. have duly executed this Deposit Agreement as of the day and year
first above set forth and all Holders and Beneficial Owners shall become parties
hereto upon acceptance by them of ADSs issued in accordance with the terms
hereof, or upon acquisition of any beneficial interest therein.
CHINA NETCOM GROUP CORPORATION
(HONG KONG) LIMITED
By:_______________________________
Name:
Title:
CITIBANK, N.A.
By:_______________________________
Name:
Title:
46
EXHIBIT A
[FORM OF ADR]
Number CUSIP NUMBER: _______
_____________
American Depositary Shares (each American
Depositary Share representing [NUMBER OF
SHARES] ordinary Fully Paid ordinary
shares, each with a par value of U.S.$0.04
per share)
AMERICAN DEPOSITARY RECEIPT
FOR
AMERICAN DEPOSITARY SHARES
representing
DEPOSITED ORDINARY SHARES
of
CHINA NETCOM GROUP CORPORATION (HONG KONG) LIMITED
(Incorporated under the laws of Hong Kong)
CITIBANK, N.A., a national banking association organized and existing
under the laws of the United States of America, as depositary (the
"Depositary"), hereby certifies that _____________ is the owner of
______________ American Depositary Shares (hereinafter "ADS"), representing
deposited ordinary shares, each of Par Value of U.S.$0.04, including evidence of
rights to receive such ordinary shares (the "Shares"), of China Netcom Group
Corporation (Hong Kong) Limited, a corporation incorporated under the laws of
Hong Kong (the "Company"). As of the date of the Deposit Agreement (as
hereinafter defined), each ADS represents [NUMBER OF SHARES] Shares deposited
under the Deposit Agreement with the Custodian, which at the date of execution
of the Deposit Agreement is Citibank, N.A. - Hong Kong branch (the "Custodian").
The ADS(s)-to-Share(s) ratio is subject to amendment as provided in Articles IV
and VI of the Deposit Agreement. The Depositary's Principal Office is located at
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X.
A-1
(1) THE DEPOSIT AGREEMENT. This American Depositary Receipt is one of an
issue of American Depositary Receipts ("ADRs"), all issued and to be issued upon
the terms and conditions set forth in the Deposit Agreement, dated as of
November __, 2004 (as amended and supplemented from time to time, the "Deposit
Agreement"), by and among the Company, the Depositary, and all Holders and
Beneficial Owners from time to time of ADSs. The Deposit Agreement sets forth
the rights and obligations of Holders and Beneficial Owners of ADSs and the
rights and duties of the Depositary in respect of the Shares deposited
thereunder and any and all other securities, property and cash from time to time
received in respect of such Shares and held thereunder (such Shares, securities,
property and cash are herein called "Deposited Securities"). Copies of the
Deposit Agreement are on file at the Principal Office of the Depositary and with
the Custodian. Each Holder and each Beneficial Owner, upon acceptance of any
ADSs (or any interest therein) issued in accordance with the terms and
conditions of the Deposit Agreement, shall be deemed for all purposes to (a) be
a party to and bound by the terms of the Deposit Agreement and applicable
ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to
delegate, to act on its behalf and to take any and all actions contemplated in
the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures
necessary to comply with applicable law and to take such action as the
Depositary in its sole discretion may deem necessary or appropriate to carry out
the purposes of the Deposit Agreement and the applicable ADR(s), the taking of
such actions to be the conclusive determinant of the necessity and
appropriateness thereof.
The statements made on the face and reverse of this ADR are summaries of
certain provisions of the Deposit Agreement and the Articles of Association of
the Company (as in effect on the date of the signing of the Deposit Agreement)
and are qualified by and subject to the detailed provisions of the Deposit
Agreement and the Articles of Association of the Company, to which reference is
hereby made. All capitalized terms used herein which are not otherwise defined
herein shall have the meanings ascribed thereto in the Deposit Agreement. The
Depositary makes no representation or warranty as to the validity or worth of
the Deposited Securities. The Depositary has made arrangements for the
acceptance of the ADSs into DTC. Each Beneficial Owner of ADSs held through DTC
must rely on the procedures of DTC and the DTC Participants to exercise and be
entitled to any rights attributable to such ADSs.
(2) WITHDRAWAL OF DEPOSITED SECURITIES. The Holder of this ADR (and of the
ADSs evidenced hereby) shall be entitled to Delivery (at the Custodian's
designated office) of the Deposited Securities at the time represented by the
ADSs evidenced hereby upon satisfaction of each of the following conditions: (i)
the Holder (or a duly authorized attorney of the Holder) has duly Delivered to
the Depositary at its Principal Office the ADSs evidenced hereby (and, if
applicable, this ADR) for the purpose of withdrawal of the Deposited Securities
represented thereby, (ii) if applicable and so required by the Depositary, this
ADR has been properly endorsed in blank or is accompanied by proper instruments
of transfer in blank (including signature guarantees in accordance with standard
securities industry practice), (iii) if so required by the Depositary, the
Holder of the ADSs has executed and delivered to the Depositary a written order
directing the Depositary to cause the Deposited Securities being withdrawn to be
Delivered to or upon the written order of the person(s) designated in such
order, and (iv) all applicable fees and charges of, and expenses incurred by,
the Depositary and all applicable taxes
A-2
and governmental charges (as are set forth in Section 5.9 of, and Exhibit B to,
the Deposit Agreement) have been paid, subject, however, in each case, to the
terms and conditions of this ADR, of the Deposit Agreement, of the Company's
Articles of Association, of any applicable laws and the rules of the applicable
book-entry settlement system, and to any provisions of or governing the
Deposited Securities, in each case as in effect at the time thereof.
Upon satisfaction of each of the conditions specified above, the
Depositary (i) shall cancel the ADSs Delivered to it (and, if applicable, the
ADR(s) evidencing the ADSs so Delivered), (ii) shall direct the Registrar to
record the cancellation of the ADSs so Delivered on the books maintained for
such purpose, and (iii) shall direct the Custodian to Deliver (without
unreasonable delay) at the Custodian's designated office the Deposited
Securities represented by the ADSs so canceled together with any certificate or
other document of title for the Deposited Securities, or evidence of the
electronic transfer thereof (if available), as the case may be, to or upon the
written order of the person(s) designated in the order delivered to the
Depositary for such purpose, subject however, in each case, to the terms and
conditions of the Deposit Agreement, of this ADR, of the Articles of Association
of the Company, of any applicable laws and of the rules of the applicable
book-entry settlement system, and to the terms and conditions of or governing
the Deposited Securities, in each case as in effect at the time thereof.
The Depositary shall not accept for surrender ADSs representing less than
one Share. In the case of Delivery to it of ADSs representing a number other
than a whole number of Shares, the Depositary shall cause ownership of the
appropriate whole number of Shares to be Delivered in accordance with the terms
hereof, and shall, at the discretion of the Depositary, either (i) return to the
person surrendering such ADSs the number of ADSs representing any remaining
fractional Share, or (ii) sell or cause to be sold the fractional Share
represented by the ADSs so surrendered and remit the proceeds of such sale (net
of (a) applicable fees and charges of, and expenses incurred by, the Depositary
and (b) taxes withheld) to the person surrendering the ADSs. Notwithstanding
anything else contained in this ADR or the Deposit Agreement, the Depositary may
make delivery at the Principal Office of the Depositary of (i) any cash
dividends or cash distributions, or (ii) any proceeds from the sale of any
distributions of shares or rights, which are at the time held by the Depositary
in respect of the Deposited Securities represented by the ADSs surrendered for
cancellation and withdrawal. At the request, risk and expense of any Holder so
surrendering ADSs represented by this ADR, and for the account of such Holder,
the Depositary shall direct the Custodian to forward (to the extent permitted by
law) any cash or other property (other than securities) held by the Custodian in
respect of the Deposited Securities represented by such ADSs to the Depositary
for delivery at the Principal Office of the Depositary. Such direction shall be
given by letter or, at the request, risk and expense of such Holder, by cable,
telex or facsimile transmission.
(3) TRANSFER, COMBINATION AND SPLIT-UP OF ADRs. The Registrar shall as
soon as reasonably practicable register the transfer of this ADR (and of the
ADSs represented hereby) on the books maintained for such purpose and the
Depositary shall as soon as reasonably practicable (x) cancel this ADR and
execute new ADRs evidencing the same aggregate number of ADSs as those evidenced
by this ADR when canceled, (y) cause the Registrar to countersign such new ADRs,
and (z) Deliver such new ADRs to or upon the order of the person entitled
thereto, if each
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of the following conditions has been satisfied: (i) this ADR has been duly
Delivered by the Holder (or by a duly authorized attorney of the Holder) to the
Depositary at its Principal Office for the purpose of effecting a transfer
thereof, (ii) this ADR has been properly endorsed or is accompanied by proper
instruments of transfer (including signature guarantees in accordance with
standard securities industry practice), (iii) this ADR has been duly stamped (if
required by the laws of the State of New York or of the United States), and (iv)
all applicable fees and charges of, and expenses incurred by, the Depositary and
all applicable taxes and governmental charges (as are set forth in Section 5.9
of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however,
in each case, to the terms and conditions of this ADR, of the Deposit Agreement
and of applicable law, in each case as in effect at the time thereof.
The Registrar shall as soon as reasonably practicable register the
split-up or combination of this ADR (and of the ADSs represented hereby) on the
books maintained for such purpose and the Depositary shall (x) cancel this ADR
and execute new ADRs for the number of ADSs requested, but in the aggregate not
exceeding the number of ADSs evidenced by this ADR (when canceled), (y) cause
the Registrar to countersign such new ADRs, and (z) Deliver such new ADRs to or
upon the order of the Holder thereof, if each of the following conditions has
been satisfied: (i) this ADR has been duly Delivered by the Holder (or by a duly
authorized attorney of the Holder) to the Depositary at its Principal Office for
the purpose of effecting a split-up or combination hereof, and (ii) all
applicable fees and charges of, and expenses incurred by, the Depositary and all
applicable taxes and government charges (as are set forth in Section 5.9 of, and
Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each
case, to the terms and conditions of this ADR, of the Deposit Agreement and of
applicable law, in each case as in effect at the time thereof.
(4) PRE-CONDITIONS TO REGISTRATION, TRANSFER, ETC. As a condition
precedent to the execution and delivery, the registration of issuance, transfer,
split-up, combination or surrender, of any ADS, the delivery of any distribution
thereon, or the withdrawal of any Deposited Securities, the Depositary or the
Custodian may require (i) payment from the depositor of Shares or presenter of
ADSs or of an ADR of a sum sufficient to reimburse it for any tax or other
governmental charge and any stock transfer or registration fee with respect
thereto (including any such tax or charge and fee with respect to Shares being
deposited or withdrawn) and payment of any applicable fees and charges of the
Depositary as provided in the Deposit Agreement and in this ADR, (ii) the
production of proof satisfactory to it as to the identity and genuineness of any
signature or any other matters contemplated in the Deposit Agreement, and (iii)
compliance with (A) any laws or governmental regulations relating to the
execution and delivery of ADRs or ADSs or to the withdrawal of Deposited
Securities and (B) such reasonable regulations as the Depositary or the Company
may establish consistent with the provisions of this ADR and the Deposit
Agreement and applicable law.
The issuance of ADSs against deposits of Shares generally or against
deposits of particular Shares may be suspended, or the deposit of particular
Shares may be refused, or the registration of transfer of ADSs in particular
instances may be refused, or the registration of transfer of ADSs generally may
be suspended, during any period when the transfer books of the Company, the
Depositary, a Registrar or the Share Registrar are closed or if any such action
is
A-4
deemed necessary or advisable by the Depositary or the Company, in good faith,
at any time or from time to time because of any requirement of law, any
government or governmental body or commission or any securities exchange upon
which the Shares or ADSs are listed, or under any provision of the Deposit
Agreement or this ADR, or under any provision of, or governing, the Deposited
Securities, or because of a meeting of shareholders of the Company or for any
other reason, subject in all cases to paragraph (24) hereof. Notwithstanding any
provision of the Deposit Agreement or this ADR to the contrary, Holders are
entitled to surrender outstanding ADSs to withdraw the Deposited Securities at
any time subject only to (i) temporary delays caused by closing the transfer
books of the Depositary or the Company or the deposit of Shares in connection
with voting at a shareholders' meeting or the payment of dividends, (ii) the
payment of fees, taxes and similar charges, (iii) compliance with any U.S. or
foreign laws or governmental regulations relating to the ADRs or ADSs to the
withdrawal of the Deposited Securities, and (iv) other circumstances
specifically contemplated by Instruction I.A.(l) of the General Instructions to
Form F-6 (as such General Instructions may be amended from time to time).
(5) COMPLIANCE WITH INFORMATION REQUESTS. Notwithstanding any other
provision of the Deposit Agreement or this ADR, each Holder and Beneficial Owner
of the ADSs represented hereby agrees to comply with requests from the Company
pursuant to applicable law, the rules and requirements of the Hong Kong Stock
Exchange, the New York Stock Exchange, and of any other stock exchange on which
Shares or ADSs are, or will be, registered, traded or listed, or the Articles of
Association of the Company, which are made to provide information, inter alia,
as to the capacity in which such Holder or Beneficial Owner owns ADSs (and
Shares, as the case may be) and regarding the identity of any other person(s)
interested in such ADSs and the nature of such interest and various other
matters, whether or not they are Holders and/or Beneficial Owners at the time of
such request.
(6) OWNERSHIP RESTRICTIONS. Notwithstanding any provision of this ADR or
of the Deposit Agreement, the Company may restrict transfers of the Shares where
such transfer (i) might result in ownership of Shares exceeding limits imposed
by applicable law or the Articles of Association of the Company, or (ii) is
otherwise in violation of applicable laws, rules and regulations. The Company
may also restrict, in such manner as it deems appropriate, transfers of ADSs
where such transfer (i) may result in the total number of Shares represented by
the ADSs owned by a single Holder or Beneficial Owner to exceed any such limits,
or (ii) is in violation of applicable laws, rules and regulations.. The Company
may, in its sole discretion but subject to applicable law, instruct the
Depositary to take action with respect to the ownership interest of any Holder
or Beneficial Owner in excess of the limits set forth in the preceding sentence,
including but not limited to, the imposition of restrictions on the transfer of
ADSs, the removal or limitation of voting rights or a mandatory sale or
disposition on behalf of a Holder or Beneficial Owner of the Shares represented
by the ADSs held by such Holder or Beneficial Owner in excess of such
limitations, if and to the extent such disposition is permitted by applicable
law and the Articles of Association of the Company.
(7) LIABILITY OF HOLDER FOR TAXES AND OTHER CHARGES. Any tax or other
governmental charge payable with respect to any ADR or any Deposited Securities
or ADSs
A-5
shall be payable by the Holders and Beneficial Owners to the Depositary.
The Company, the Custodian and/or Depositary may withhold or deduct from any
distributions made in respect of Deposited Securities and may sell for the
account of a Holder and/or Beneficial Owner any or all of the Deposited
Securities and apply such distributions and sale proceeds in payment of such
taxes (including applicable interest and penalties) or charges, the Holder and
the Beneficial Owner hereof remaining liable for any deficiency. The Custodian
may refuse the deposit of Shares and the Depositary may refuse to issue ADSs, to
deliver ADRs, register the transfer, split-up or combination of ADRs and
(subject to paragraph (24) hereof) the withdrawal of Deposited Securities until
payment in full of such tax, charge, penalty or interest is received. Every
Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the
Custodian, and any of their agents, officers, employees and Affiliates for, and
hold each of them harmless from, any claims with respect to taxes (including
applicable interest and penalties thereon) arising from any tax benefit obtained
for such Holder and/or Beneficial Owner.
(8) REPRESENTATIONS AND WARRANTIES OF DEPOSITORS. Each person depositing
Shares under the Deposit Agreement shall be deemed thereby to represent and
warrant that (i) such Shares and the certificates therefor are duly authorized,
validly issued, fully paid, non-assessable and legally obtained by such person,
(ii) all preemptive (and similar) rights, if any, with respect to such Shares
have been validly waived or exercised, (iii) the person making such deposit is
duly authorized so to do, (iv) the Shares presented for deposit are free and
clear of any lien, encumbrance, security interest, charge, mortgage or adverse
claim, (v) the Shares presented for deposit are not, and the ADSs issuable upon
such deposit will not be, Restricted Securities (except as contemplated in
Section 2.13 of the Deposit Agreement), and (vi) the Shares presented for
deposit have not been stripped of any rights or entitlements. Such
representations and warranties shall survive the deposit and withdrawal of
Shares, the issuance and cancellation of ADSs in respect thereof and the
transfer of such ADSs. If any such representations or warranties are false in
any way, the Company and the Depositary shall be authorized, at the cost and
expense of the person depositing Shares, to take any and all actions necessary
to correct the consequences thereof.
(9) FILING PROOFS, CERTIFICATES AND OTHER INFORMATION. Any person
presenting Shares for deposit, and any Holder and any Beneficial Owner may be
required, and every Holder and Beneficial Owner agrees, from time to time to
provide to the Company, the Depositary and the Custodian such proof of
citizenship or residence, taxpayer status, payment of all applicable taxes or
other governmental charges, exchange control approval, legal or beneficial
ownership of ADSs and Deposited Securities, compliance with applicable laws and
the terms of the Deposit Agreement or this ADR and the provisions of, or
governing, the Deposited Securities, to execute such certifications and to make
such representations and warranties, and to provide such other information and
documentation (or, in the case of Shares in registered form presented for
deposit, such information relating to the registration of Shares on the books of
the Shares Registrar) as the Depositary or the Custodian may reasonably deem
necessary or proper or as the Company may reasonably require by written request
to the Depositary consistent with its obligations under the Deposit Agreement
and this ADR. The Depositary and the Registrar, as applicable, may withhold the
execution or delivery or registration of transfer of any ADR or ADS or the
distribution or sale of any dividend or other distribution of rights or of the
proceeds
A-6
thereof or, to the extent not limited by paragraph (24) hereof, the
Delivery of any Deposited Securities until such proof or other information is
filed or such certifications are executed, or such representations and
warranties are made, or such information and documentation are provided, in each
case to the Depositary's, the Registrar's and the Company's satisfaction.
(10) CHARGES OF DEPOSITARY. The Depositary shall charge the following
fees:
(i) Issuance Fee: to any person depositing Shares or to whom ADSs
are issued upon the deposit of Shares, a fee not in excess of
U.S. $5.00 per 100 ADSs (or portion thereof) so issued under
the terms of the Deposit Agreement (excluding issuances
pursuant to paragraphs (iii) and (v) below);
(ii) Cancellation Fee: to any person surrendering ADSs for
cancellation and withdrawal of Deposited Securities, a fee not
in excess of U.S. $5.00 per 100 ADSs (or portion thereof) so
surrendered;
(iii) Dividend Fee: No Fee shall be payable upon distribution of (a)
cash dividends or (b) ADSs pursuant to stock dividends (or
other free distributions of stock) so long as the charging of
such fee is prohibited by the exchange upon which the ADSs are
listed. If charging of such fees is not prohibited, the fees
specified in (i) above shall be payable in respect of ADS
distributions pursuant to stock dividends (or other free
distributions of stock) and the fees specified in (iv) below
shall be payable in respect of distributions of cash;
(iv) Cash Distribution Fee: to any Holder of ADS(s), a fee not in
excess of U.S. $2.00 per 100 ADSs (or portion thereof) held
for the distribution of cash proceeds (i.e., upon the sale of
rights and other entitlements);
(v) Rights Exercise Fee: to any Holder of ADS(s), a fee not in the
excess of U.S. $5.00 per 100 ADSs (or portion thereof) issued
upon the exercise of rights to purchase additional ADSs;
(vi) Other Distribution Fee: to any Holder of ADS(s) receiving a
distribution of securities other than ADSs or rights to
purchase additional ADSs, a fee not in excess of U.S. $5.00
per unit of 100 securities (or fraction thereof) distributed;
(vii) Annual Depositary Services Fee: to the extent permitted by the
exchange on which the ADSs are listed, to any Holder of
ADS(s), a fee not in excess of U.S. $2.00 per 100 ADSs (or
fraction thereof) held on the last day of each calendar year,
except to the extent of any cash dividend fee(s) charged under
paragraph (iii) above during that calendar year.
A-7
In addition, Holders, Beneficial Owners, persons depositing Shares and
persons surrendering ADSs for cancellation and withdrawal of Deposited
Securities will be required to pay the following charges:
(i) taxes (including applicable interest and penalties) and other
governmental charges;
(ii) such registration fees as may from time to time be in effect
for the registration of Shares or other Deposited Securities
on the share register and applicable to transfers of Shares or
other Deposited Securities to or from the name of the
Custodian, the Depositary or any nominees upon the making of
deposits and withdrawals, respectively;
(iii) such cable, telex and facsimile transmission and delivery
expenses as are expressly provided in the Deposit Agreement to
be at the expense of the person depositing or withdrawing
Shares or Holders and Beneficial Owners of ADSs;
(iv) the expenses and charges incurred by the Depositary in the
conversion of foreign currency;
(v) such fees and expenses as are incurred by the Depositary in
connection with compliance with exchange control regulations
and other regulatory requirements applicable to Shares,
Deposited Securities, ADSs and ADRs; and
(vi) the fees and expenses incurred by the Depositary, the
Custodian, or any nominee in connection with the delivery or
servicing of Deposited Securities.
Any other charges and expenses of the Depositary under the Deposit
Agreement will be paid by the Company upon agreement between the Depositary and
the Company. All fees and charges may, at any time and from time to time, be
changed by agreement between the Depositary and Company but, in the case of fees
and charges payable by Holders or Beneficial Owners, only in the manner
contemplated by paragraph (22) of this ADR and as contemplated in the Deposit
Agreement. The Depositary will provide, without charge, a copy of its latest fee
schedule to anyone upon request. The charges and expenses of the Custodian are
for the sole account of the Depositary.
(11) TITLE TO ADRs. It is a condition of this ADR, and every successive
Holder of this ADR by accepting or holding the same consents and agrees, that
title to this ADR (and to each Certificated ADS evidenced hereby) shall be
transferable by delivery upon the same terms as a certificated security under
the laws of the State of New York, provided that, in the case of Certificated
ADSs, this ADR has been properly endorsed or is accompanied by proper
instruments of transfer. Notwithstanding any notice to the contrary, the
Depositary and the
A-8
Company may deem and treat the Holder of this ADR (that is, the person in whose
name this ADR is registered on the books of the Depositary) as the absolute
owner thereof for all purposes. Neither the Depositary nor the Company shall
have any obligation nor be subject to any liability under the Deposit Agreement
or this ADR to any holder of this ADR or any Beneficial Owner unless such holder
is the Holder of this ADR registered on the books of the Depositary or, in the
case of a Beneficial Owner, such Beneficial Owner or the Beneficial Owner's
representative is the Holder registered on the books of the Depositary.
(12) VALIDITY OF ADR. The Holder(s) of this ADR (and the ADSs represented
hereby) shall not be entitled to any benefits under the Deposit Agreement or be
valid or enforceable for any purpose against the Depositary or the Company
unless this ADR has been (i) dated, (ii) signed by the manual or facsimile
signature of a duly-authorized signatory of the Depositary, (iii) countersigned
by the manual or facsimile signature of a duly-authorized signatory of the
Registrar, and (iv) registered in the books maintained by the Registrar for the
registration of issuances and transfers of ADRs. An ADR bearing the facsimile
signature of a duly-authorized signatory of the Depositary or the Registrar, who
at the time of signature was a duly authorized signatory of the Depositary or
the Registrar, as the case may be, shall bind the Depositary, notwithstanding
the fact that such signatory has ceased to be so authorized prior to the
delivery of such ADR by the Depositary.
(13) AVAILABLE INFORMATION; REPORTS; INSPECTION OF TRANSFER BOOKS. The
Company is subject to the periodic reporting requirements of the Exchange Act
and accordingly files certain information with the Commission. These reports and
documents can be inspected and copied at the public reference facilities
maintained by the Commission located at Judiciary Plaza, 000 Xxxxx Xxxxxx, X.X.,
Xxxxxxxxxx X.X. 00000. The Depositary shall make available for inspection by
Holders at its Principal Office any reports and communications, including any
proxy soliciting materials, received from the Company which are both (a)
received by the Depositary, the Custodian, or the nominee of either of them as
the holder of the Deposited Securities and (b) made generally available to the
holders of such Deposited Securities by the Company.
The Registrar shall keep books for the registration of ADSs which at all
reasonable times shall be open for inspection by the Company and by the Holders
of such ADSs, provided that such inspection shall not be, to the Registrar's
knowledge, for the purpose of communicating with Holders of such ADSs in the
interest of a business or object other than the business of the Company or other
than a matter related to the Deposit Agreement or the ADSs.
The Registrar may close the transfer books with respect to the ADSs, at
any time or from time to time, when deemed necessary or advisable by it in good
faith in connection with the performance of its duties hereunder, or at the
reasonable written request of the Company subject, in all cases, to paragraph
(24) hereof.
Dated:
CITIBANK, N.A. CITIBANK, N.A.
A-9
Transfer Agent and Registrar as Depositary
By: _______________________________ By: _________________________________
Authorized Signatory Authorized Signatory
The address of the Principal Office of the Depositary is 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X.
A-10
[FORM OF REVERSE OF ADR]
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT
(14) DIVIDENDS AND DISTRIBUTIONS IN CASH, SHARES, ETC. Whenever the
Depositary receives confirmation from the Custodian of receipt of any cash
dividend or other cash distribution on any Deposited Securities, or receives
proceeds from the sale of any Deposited Securities or of any entitlements held
in respect of Deposited Securities under the terms of the Deposit Agreement, the
Depositary will (i) if at the time of receipt thereof any amounts received in a
Foreign Currency can, in the judgment of the Depositary (upon the terms of the
Deposit Agreement), be converted on a practicable basis into Dollars
transferable to the United States, promptly convert or cause to be converted
such cash dividend, distribution or proceeds into Dollars (upon the terms of the
Deposit Agreement), (ii) if applicable, establish the ADS Record Date upon the
terms described in Section 4.9 of the Deposit Agreement, and (iii) distribute
promptly the amount thus received (net of (a) applicable fees and charges of,
and expenses incurred by, the Depositary and (b) taxes withheld) to the Holders
entitled thereto as of the ADS Record Date in proportion to the number of ADSs
held as of the ADS Record Date. The Depositary shall distribute only such
amount, however, as can be distributed without attributing to any Holder a
fraction of one cent, and any balance not so distributed shall be held by the
Depositary (without liability for interest thereon) and shall be added to and
become part of the next sum received by the Depositary for distribution to
Holders of ADSs then outstanding at the time of the next distribution. If the
Company, the Custodian or the Depositary is required to withhold and does
withhold from any cash dividend or other cash distribution in respect of any
Deposited Securities an amount on account of taxes, duties or other governmental
charges, the amount distributed to Holders on the ADSs representing such
Deposited Securities shall be reduced accordingly. Such withheld amounts shall
be forwarded and made available by the Company, the Custodian or the Depositary
to the relevant governmental authority. Evidence of payment thereof by the
Company, the Custodian or the Depositary, as applicable, shall be forwarded by
the Company, the Custodian or the Depositary, as applicable, upon request. To
the extent not subject to any confidentiality undertaking with respect to such
information and not prohibited by law from releasing such information, the
Company, the Depositary or the Custodian, as the case may be, will forward to
the Depositary, the Company or their respective agents, as the case may be, such
information from its records as the Depositary or the Company, as the case may
be, may reasonably request in writing in order to enable the Depositary, the
Company or their respective agents, as the case may be, to file necessary
reports with governmental agencies, and the Depositary, the Company or their
respective agents may file or cause the filing of any such reports necessary to
obtain the benefits under the applicable tax treaties for Holders of ADSs.
If any distribution upon any Deposited Securities consists of a dividend
in, or free distribution of, Shares, the Company shall cause such Shares to be
deposited with the Custodian and registered, as the case may be, in the name of
the Depositary, the Custodian or their
A-11
respective nominees. Upon receipt of confirmation of the deposit from the
Custodian, the Depositary shall, subject to and in accordance with the Deposit
Agreement, establish the ADS Record Date and either (i) the Depositary shall
distribute to the Holders as of the ADS Record Date in proportion to the number
of ADSs held as of the ADS Record Date, additional ADSs, which represent in
aggregate the number of Shares received as such dividend, or free distribution,
subject to the terms of the Deposit Agreement (including, without limitation,
(a) the applicable fees and charges of, and expenses incurred by, the Depositary
and (b) taxes), or (ii) if additional ADSs are not so distributed, each ADS
issued and outstanding after the ADS Record Date shall, to the extent
permissible by law, thenceforth also represent rights and interests in the
additional integral number of Shares distributed upon the Deposited Securities
represented thereby (net of (a) the applicable fees and charges of, and expenses
incurred by, the Depositary (as provided herein and in the Deposit Agreement),
and (b) taxes). In lieu of delivering fractional ADSs, the Depositary shall sell
the number of Shares or ADSs, as the case may be, represented by the aggregate
of such fractions and distribute the net proceeds upon the terms set forth in
the Deposit Agreement.
In the event that the Depositary determines that any distribution in
property (including Shares) is subject to any tax or other governmental charges
which the Depositary is obligated to withhold, or, if the Company in the
fulfillment of its obligations under the Deposit Agreement, has furnished an
opinion of U.S. counsel determining that Shares must be registered under the
Securities Act or other laws in order to be distributed to Holders (and no such
registration statement has been declared effective), the Depositary may dispose
of all or a portion of such property (including Shares and rights to subscribe
therefor) in such amounts and in such manner, including by public or private
sale, as the Depositary deems necessary and practicable and the Depositary shall
distribute the net proceeds of any such sale (after deduction of (a) taxes and
(b) fees and charges of, and the expenses incurred by, the Depositary) to
Holders entitled thereto upon the terms of the Deposit Agreement. The Depositary
shall hold and/or distribute any unsold balance of such property in accordance
with the provisions of the Deposit Agreement.
Upon timely receipt of a notice indicating that the Company wishes an
elective distribution to be made available to Holders of ADSs upon the terms
described in the Deposit Agreement, the Company and the Depositary shall
determine whether such distribution is lawful and reasonably practicable. If so,
the Depositary shall, subject to the terms and conditions of the Deposit
Agreement, establish an ADS Record Date according to paragraph (16) and
establish procedures to enable the Holder hereof to elect to receive the
proposed distribution in cash or in additional ADSs. If a Holder elects to
receive the distribution in cash, the distribution shall be made as in the case
of a distribution in cash. If the Holder hereof elects to receive the
distribution in additional ADSs, the distribution shall be made as in the case
of a distribution in Shares upon the terms described in the Deposit Agreement.
If such elective distribution is not reasonably practicable or if the Depositary
did not receive satisfactory documentation set forth in the Deposit Agreement,
the Depositary shall, to the extent permitted by law, distribute to Holders, on
the basis of the same determination as is made in Hong Kong in respect of the
Shares for which no election is made, either (x) cash or (y) additional ADSs
representing such additional Shares, in each case, upon the terms described in
the Deposit Agreement. Nothing herein or in the Deposit Agreement shall obligate
the Depositary to make available to the Holder
A-12
hereof a method to receive the elective distribution in Shares (rather than
ADSs). There can be no assurance that the Holder hereof will be given the
opportunity to receive elective distributions on the same terms and conditions
as the holders of Shares.
Upon timely receipt by the Depositary of a notice indicating that the
Company wishes rights to subscribe for additional Shares to be made available to
Holders of ADSs, the Depositary upon consultation with the Company, shall
determine, whether it is lawful and reasonably practicable to make such rights
available to the Holders. The Depositary shall make such rights available to any
Holders only if (i) the Company shall have timely requested that such rights be
made available to Holders, (ii) the Depositary shall have received the
documentation contemplated in the Deposit Agreement, and (iii) the Depositary
shall have determined that such distribution of rights is reasonably
practicable. If such conditions are not satisfied, the Depositary shall sell the
rights as described below. In the event all conditions set forth above are
satisfied, the Depositary shall establish an ADS Record Date (upon the terms
described in the Deposit Agreement) and establish procedures to (x) distribute
rights to purchase additional ADSs (by means of warrants or otherwise), (y)
enable the Holders to exercise the rights (upon payment of the subscription
price and of the applicable (a) fees and charges of, and expenses incurred by,
the Depositary (as provided herein and in the Deposit Agreement), and (b)
taxes), and (z) deliver ADSs upon the valid exercise of such rights. Nothing
herein or in the Deposit Agreement shall obligate the Depositary to make
available to the Holders a method to exercise rights to subscribe for Shares
(rather than ADSs). If (i) the Company does not timely request the Depositary to
make the rights available to Holders or if the Company requests that the rights
not be made available to Holders, (ii) the Depositary fails to receive
satisfactory documentation required by the Deposit Agreement or determines in
consultation with the Company that it is not reasonably practicable to make the
rights available to Holders, or (iii) any rights made available are not
exercised and appear to be about to lapse, the Depositary shall determine in
consultation with the Company whether it is lawful and reasonably practicable to
sell such rights, in a riskless principal capacity, at such place and upon such
terms (including public and private sale) as it may deem practicable. The
Depositary shall, upon such sale, convert and distribute proceeds of such sale
(net of applicable (a) fees and charges of, and expenses incurred by, the
Depositary (as provided herein and in the Deposit Agreement), and (b) taxes)
upon the terms hereof and of the Deposit Agreement. If the Depositary is unable
to make any rights available to Holders or to arrange for the sale of the rights
upon the terms described above, the Depositary shall allow such rights to lapse.
Neither the Depositary nor the Company shall be responsible for (i) any failure
to determine that it may be lawful or practicable to make such rights available
to Holders in general or any Holders in particular, nor (ii) any foreign
exchange exposure or loss incurred in connection with such sale or exercise. The
Depositary shall not be responsible for the content of any materials forwarded
to the Holders on behalf of the Company in connection with the rights
distribution.
Notwithstanding anything herein or in the Deposit Agreement to the
contrary, if registration (under the Securities Act or any other applicable law)
of the rights or the securities to which any rights relate may be required in
order for the Company to offer such rights or such securities to Holders and to
sell the securities represented by such rights, the Depositary will not
distribute such rights to the Holders (i) unless and until a registration
statement under the
A-13
Securities Act (or other applicable law) covering such offering is in effect or
(ii) unless the Company furnishes the Depositary with opinion(s) of counsel for
the Company in the United States and counsel to the Company in any other
applicable country in which rights would be distributed, in each case reasonably
satisfactory to the Depositary, to the effect that the offering and sale of such
securities to Holders and Beneficial Owners are exempt from, or do not require
registration under, the provisions of the Securities Act or any other applicable
laws. In the event that the Company, the Depositary or the Custodian shall be
required to withhold and does withhold from any distribution of property
(including rights) an amount on account of taxes or other governmental charges,
the amount distributed to the Holders of ADSs representing such Deposited
Securities shall be reduced accordingly. In the event that the Depositary
determines that any distribution in property (including Shares and rights to
subscribe therefor) is subject to any tax or other governmental charges which
the Depositary is obligated to withhold, the Depositary may dispose of all or a
portion of such property (including Shares and rights to subscribe therefor) in
such amounts and in such manner, including by public or private sale, as the
Depositary deems necessary and practicable to pay any such taxes or charges.
There can be no assurance that Holders generally, or any Holder in
particular, will be given the opportunity to receive or exercise rights on the
same terms and conditions as the holders of Shares or to exercise such rights.
Nothing herein or in the Deposit Agreement shall obligate the Company to file
any registration statement in respect of any rights or Shares or other
securities to be acquired upon the exercise of such rights.
Upon timely receipt of a notice indicating that the Company wishes
property other than cash, Shares or rights to purchase additional Shares, to be
made to Holders of ADSs, the Depositary shall consult with the Company, and the
Company shall assist the Depositary, to determine whether such distribution to
Holders is lawful and reasonably practicable. The Depositary shall not make such
distribution unless (i) the Company shall have requested the Depositary to make
such distribution to Holders, (ii) the Depositary shall have received
satisfactory documentation contemplated in the Deposit Agreement, and (iii) the
Depositary shall have determined in consultation with the Company that such
distribution is reasonably practicable. Upon satisfaction of such conditions,
the Depositary shall distribute the property so received to the Holders of
record, as of the ADS Record Date, in proportion to the number of ADSs held by
them respectively and in such manner as the Depositary may deem practicable for
accomplishing such distribution (i) upon receipt of payment or net of the
applicable fees and charges of, and expenses incurred by, the Depositary (as
provided herein and in the Deposit Agreement), and (ii) net of any taxes
withheld. The Depositary may dispose of all or a portion of the property so
distributed and deposited, in such amounts and in such manner (including public
or private sale) as the Depositary may deem practicable or necessary to satisfy
any taxes (including applicable interest and penalties) or other governmental
charges applicable to the distribution.
If the conditions above are not satisfied, the Depositary shall sell or
cause such property to be sold in a public or private sale, at such place or
places and upon such terms as it may deem practicable and shall (i) cause the
proceeds of such sale, if any, to be converted into Dollars and (ii) distribute
the proceeds of such conversion received by the Depositary (net of applicable
(a)
A-14
fees and charges of, and expenses incurred by, the Depositary (as provided
herein and in the Deposit Agreement), and (b) taxes) to the Holders as of the
ADS Record Date upon the terms hereof and of the Deposit Agreement. If the
Depositary is unable to sell such property, the Depositary may dispose of such
property for the account of the Holders in any way it deems reasonably
practicable under the circumstances.
Neither the Depositary nor the Company shall be responsible for (i) any
failure to determine whether it is lawful or practicable to make such other
property available to Holders in general or any Holders in particular, nor (ii)
any foreign exchange exposure or loss incurred in connection with the sale or
disposal of such other property. The Depositary shall not be responsible for the
content of any materials forwarded to the Holders on behalf of the Company in
connection with the distribution or sale of such other property.
(15) REDEMPTION. Upon timely receipt of notice from the Company that it
intends to exercise its right of redemption in respect of any of the Deposited
Securities, and a satisfactory opinion of counsel, and upon determining that
such proposed redemption is practicable, the Depositary shall (to the extent
practicable) provide to each Holder a notice setting forth the Company's
intention to exercise the redemption rights and any other particulars set forth
in the Company's notice to the Depositary. Upon receipt of confirmation from the
Custodian that the redemption has taken place and that funds representing the
redemption price have been received, the Depositary shall convert, transfer,
distribute the proceeds (net of applicable (a) fees and charges of, and expenses
incurred by, the Depositary (as provided herein and in the Deposit Agreement),
and (b) taxes), retire ADSs and cancel ADRs, if applicable, upon delivery of
such ADSs by Holders thereof upon the terms of the Deposit Agreement. If less
than all outstanding Deposited Securities are redeemed, the ADSs to be retired
will be selected by lot or on a pro rata basis, as may be determined by the
Depositary. The redemption price per ADS shall be the dollar equivalent of the
per share amount received by the Depositary (adjusted to reflect the
ADS(s)-to-Share(s) ratio) upon the redemption of the Deposited Securities
represented by ADSs (subject to the terms of the Deposit Agreement and the
applicable fees and charges of, and expenses incurred by, the Depositary, and
taxes) multiplied by the number of Deposited Securities represented by each ADS
redeemed.
(16) FIXING OF ADS RECORD DATE. Whenever the Depositary shall receive
notice of the fixing of a record date by the Company for the determination of
holders of Deposited Securities entitled to receive any distribution (whether in
cash, Shares, rights or other distribution), or whenever for any reason the
Depositary causes a change in the number of Shares that are represented by each
ADS, or whenever the Depositary shall receive notice of any meeting of, or
solicitation of consents or proxies of, holders of Shares or other Deposited
Securities, or whenever the Depositary shall find it necessary or convenient in
connection with the giving of any notice, solicitation of any consent or any
other matter, the Depositary shall fix a record date ("ADS Record Date") for the
determination of the Holders of ADS(s) who shall be entitled to receive such
distribution, to give instructions for the exercise of voting rights at any such
meeting, to give or withhold such consent, to receive such notice or
solicitation or to otherwise take action, or to exercise the rights of Holders
with respect to such changed number of Shares represented by each ADS. Subject
to applicable law and the terms and conditions of
A-15
this ADR and the Deposit Agreement, only the Holders of ADSs at the close of
business in New York on such ADS Record Date shall be entitled to receive such
distributions, to give such voting instructions, to receive such notice or
solicitation, or otherwise take action.
(17) VOTING OF DEPOSITED SECURITIES. As soon as practicable after receipt
of notice of any meeting at which the holders of Deposited Securities are
entitled to vote, or of solicitation of consents or proxies from holders of
Deposited Securities, the Depositary shall fix the ADS Record Date in respect of
such meeting or solicitation of such consent or proxy. The Depositary shall, if
requested by the Company in writing in a timely manner (which request must be
received by the Depositary at least thirty (30) days prior to the date of such
vote or meeting) and as soon as reasonably practicable after receipt thereof, at
the Company's expense and provided no U.S. legal prohibitions exist, distribute
to Holders as of the ADS Record Date: (a) such notice of meeting or solicitation
of consent or proxies, (b) a statement that the Holders at the close of business
on the ADS Record Date will be entitled, subject to any applicable law, the
provisions of the Deposit Agreement, the Company's Articles of Association and
the provisions of or governing Deposited Securities (which provisions, if any,
shall be summarized in pertinent part by the Company), to instruct the
Depositary as to the exercise of the voting rights, if any, pertaining to the
Deposited Securities represented by such Holder's ADSs and (c) a brief statement
as to the manner in which such voting instructions may be given (including an
indication that instructions will be deemed to have been given in accordance
with Section 4.10(b) of the Deposit Agreement (if no instructions are received
by the Depositary prior to the deadline set for such purposes) to the Depositary
to give a discretionary proxy to a person designated by the Company). Voting
instructions may be given only in respect of a number of ADSs representing an
integral number of Deposited Securities. In the event the notice of meeting or
vote and request of the Company is not received by the Depositary at least
thirty (30) days prior to such meeting or vote, the Depositary shall not have
any obligation to notify the Holders and shall not under any circumstances vote
the Deposited Securities, cause the Deposited Securities to be voted or grant
any discretionary proxy to the Company. Upon the timely receipt of voting
instructions from a Holder of ADSs as of the ADS Record Date in the manner
specified by the Depositary, the Depositary shall endeavor, insofar as
practicable and permitted under applicable law and the provisions of the Deposit
Agreement, the Articles of Association of the Company and the provisions of the
Deposited Securities, to vote, or cause the Custodian to vote, the Deposited
Securities (in person or by proxy) represented by such Holder's ADSs in
accordance with such instructions, either on a show of hands, in which case, the
Depositary shall vote or shall instruct the Custodian to vote in accordance with
instructions received from a majority of Holders giving instructions, or on a
poll, in which case the Depositary shall vote or cause the Custodian to vote in
accordance with the instructions as received from the Holders giving
instructions.
Under the Articles of Association of the Company (as in effect as of the
date hereof), a poll may be demanded at any meeting by (i) the chairman of the
meeting, (ii) at least three shareholders present in person or by proxy and
entitled to vote at the meeting, (iii) a shareholder or shareholders present in
person or by proxy (1) who represent in the aggregate not less than 10% of the
total voting rights of all shareholders having the right to attend and vote at
the meeting, or (2) who hold Shares conferring the right to attend and vote at
the meeting on which
A-16
there have been paid sums in the aggregate equal to not less than 10% of the
total sum paid up on all Shares conferring that right. The Depositary will not
join in demanding a poll, whether or not requested to do so by Holders of ADSs.
Neither the Depositary nor the Custodian shall under any circumstances
exercise any discretion as to voting and neither the Depositary nor the
Custodian shall vote, attempt to exercise the right to vote, or in any way make
use of, for purposes of establishing a quorum or otherwise the Deposited
Securities represented by ADSs, except pursuant to and in accordance with the
voting instructions timely received from Holders or as otherwise contemplated
herein and in the Deposit Agreement.
If the Depositary timely receives voting instructions from a Holder which
fail to specify the manner in which the Depositary is to vote the Deposited
Securities represented by such Holder's ADSs, the Depositary will deem such
Holder (unless otherwise specified in the notice distributed to Holders) to have
instructed the Depositary to vote in favor of the items set forth in such
instructions.
If the Depositary does not receive instructions from a Holder as of the
ADS Record Date on or before the date established by the Depositary for such
purpose, such Holder shall be deemed, and the Depositary shall deem such Holder,
to have instructed the Depositary to give a discretionary proxy to a person
designated by the Company to vote the Deposited Securities; provided, however,
that no such discretionary proxy shall be given by the Depositary with respect
to any matter to be voted upon as to which the Company informs the Depositary
that (i) the Company does not wish such proxy to be given, (ii) substantial
opposition exists, or (iii) the rights of holders of Deposited Securities may be
adversely affected; further, provided, that no such discretionary proxy will be
given by the Depositary with respect to a particular item for which no
instructions have been received in the event that the vote is on a show of
hands.
Notwithstanding anything else contained herein, the Depositary shall, if
so requested in writing by the Company, represent all Deposited Securities
(whether or not voting instructions have been received in respect of such
Deposited Securities from Holders as of the ADS Record Date) for the sole
purpose of establishing quorum at a meeting of shareholders.
Notwithstanding anything else contained in the Deposit Agreement or this
ADR, the Depositary shall not have any obligation to take any action with
respect to any meeting, or solicitation of consents or proxies, of holders of
Deposited Securities if the taking of such action would violate U.S. laws. The
Company agrees to take any and all actions reasonably necessary to enable
Holders and Beneficial Owners to exercise the voting rights accruing to the
Deposited Securities and to deliver to the Depositary an opinion of U.S. counsel
addressing any actions requested to be taken if so reasonably requested by the
Depositary.
There can be no assurance that Holders or Beneficial Owners generally or
any Holder or Beneficial Owner in particular will receive the notice described
above with sufficient time to enable the Holder to return voting instructions to
the Depositary in a timely manner.
A-17
(18) CHANGES AFFECTING DEPOSITED SECURITIES. Upon any change in nominal or
par value, split-up, cancellation, consolidation or any other reclassification
of Deposited Securities, or upon any recapitalization, reorganization, merger or
consolidation or sale of assets affecting the Company or to which it is a party,
any securities which shall be received by the Depositary or the Custodian in
exchange for, or in conversion of or replacement of or otherwise in respect of,
such Deposited Securities shall, to the extent permitted by law, be treated as
new Deposited Securities under the Deposit Agreement, and the ADRs shall,
subject to the provisions of the Deposit Agreement and applicable law, evidence
ADSs representing the right to receive such additional securities. The
Depositary may, with the Company's approval, and shall, if the Company shall so
request, subject to the terms of the Deposit Agreement and receipt of
satisfactory documentation contemplated by the Deposit Agreement, execute and
deliver additional ADRs as in the case of a stock dividend on the Shares, or
call for the surrender of outstanding ADRs to be exchanged for new ADRs, in
either case, as well as in the event of newly deposited Shares, with necessary
modifications to the form of ADR contained in Exhibit A to the Deposit
Agreement, specifically describing such new Deposited Securities or corporate
change. Notwithstanding the foregoing, in the event that any security so
received may not be lawfully distributed to some or all Holders in the
reasonable judgment of the Depositary in consultation with the Company, the
Depositary may, with the Company's approval, and shall, if the Company requests,
subject to receipt of satisfactory documentation contemplated in the Deposit
Agreement, sell such securities at public or private sale, at such place or
places and upon such terms as it may deem proper and may allocate the net
proceeds of such sales (net of (a) fees and charges of, and expenses incurred
by, the Depositary (as provided herein or in the Deposit Agreement) and (b)
taxes) for the account of the Holders otherwise entitled to such securities and
distribute the net proceeds so allocated to the extent practicable as in the
case of a distribution received in cash pursuant to the Deposit Agreement.
Neither the Depositary nor the Company shall be responsible for (i) any failure
to determine that it may be lawful or feasible to make such securities available
to Holders in general or any Holder in particular, (ii) any foreign exchange
exposure or loss incurred in connection with such sale, or (iii) any liability
to the purchaser of such securities. The Depositary shall not be responsible for
the content of any materials forwarded to the Holders on behalf of the Company
in connection with the distribution or sale of such securities.
(19) EXONERATION. The Depositary and the Company undertake to perform such
duties and only such duties as are specifically set forth herein or in the
Deposit Agreement, and no implied covenants or obligations shall be read into
this ADR or the Deposit Agreement against the Depositary or the Company. Neither
the Depositary nor the Company shall be obligated to do or perform any act which
is inconsistent with the provisions of the Deposit Agreement or incur any
liability (i) if the Depositary or the Company shall be prevented or forbidden
from, or subjected to any civil or criminal penalty or restraint on account of,
or delayed in, doing or performing any act or thing required by the terms of the
Deposit Agreement and this ADR, by reason of any provision of any present or
future law or regulation of the United States, Hong Kong or any other country,
or of any other governmental authority or regulatory authority or stock
exchange, or on account of possible criminal or civil penalties or restraint, or
by reason of any provision, present or future, of the Articles of Association of
the Company or any provision of or governing any Deposited Securities, or by
reason of any act of God or war or other
A-18
circumstances beyond its control (including, without limitation,
nationalization, expropriation, currency restrictions, work stoppage, strikes,
civil unrest, acts of terrorism, revolutions, rebellions, explosions and
computer failure), (ii) by reason of any exercise of, or failure to exercise,
any discretion provided for in the Deposit Agreement or in the Articles of
Association of the Company or provisions of or governing Deposited Securities,
(iii) for any action or inaction in reliance upon the advice of or information
from legal counsel, accountants, any person presenting Shares for deposit, any
Holder, any Beneficial Owner or authorized representative thereof, or any other
person believed by it in good faith to be competent to give such advice or
information, (iv) for the inability by a Holder or Beneficial Owner to benefit
from any distribution, offering, right or other benefit which is made available
to holders of Deposited Securities but is not, under the terms of the Deposit
Agreement, made available to Holders of ADSs or (v) for any consequential or
punitive damages for any breach of the terms of the Deposit Agreement. The
Depositary and any Custodian, and each of their respective directors, officers,
employees, agents and Affiliates, and the Company, its controlling persons and
its agents may rely and shall be protected in acting upon any written notice,
request or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties. No disclaimer of liability under
the Securities Act is intended by any provision of the Deposit Agreement or this
ADR.
(20) STANDARD OF CARE. The Company, the Depositary and their respective
agents assume no obligation and shall not be subject to any liability under the
Deposit Agreement or this ADR to any Holder(s) or Beneficial Owner(s), except
that the Company, the Depositary and their respective agents agree to perform
their respective obligations specifically set forth in the Deposit Agreement and
this ADR without negligence or bad faith.
Neither the Depositary and its agents nor the Company shall be liable for
any failure to carry out any instructions to vote any of the Deposited
Securities, or for the manner in which any vote is cast or the effect of any
vote, or for any failure to determine that any distribution or action may be
lawful or reasonably practicable, provided that any such action, omission or
determination is in good faith and in accordance with the terms of the Deposit
Agreement. Neither the Depositary nor the Company shall incur any liability for
any investment risk associated with acquiring an interest in the Deposited
Securities, for the validity or worth of the Deposited Securities, for any tax
consequences that may result from the ownership of ADSs, Shares or Deposited
Securities or for the credit-worthiness of any third party. The Depositary shall
not incur any liability for the content of any information submitted to it by
the Company for distribution to the Holders or for any inaccuracy of any
translation thereof, for allowing any rights to lapse upon the terms of the
Deposit Agreement or for the failure or timeliness of any notice from the
Company. No waiver of any rights of any Holder or Beneficial Owner under the
U.S. securities laws is intended by any provision of this paragraph. In
addition, notwithstanding anything in this paragraph to the contrary, no
provision in this paragraph shall prevent either party from pursuing its rights
to indemnification pursuant to Section 5.8 of the Deposit Agreement.
(21) RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR
DEPOSITARY. The Depositary may at any time resign as Depositary under the
Deposit Agreement
A-19
by written notice of resignation delivered to the Company, such resignation to
be effective on the earlier of (i) the 90th day after delivery thereof to the
Company, or (ii) upon the appointment of a successor depositary and its
acceptance of such appointment as provided in the Deposit Agreement. The
Depositary may at any time be removed by the Company by written notice of such
removal, which removal shall be effective on the later of (i) the 90th day after
delivery thereof to the Depositary, or (ii) upon the appointment by the Company
of a successor depositary and its acceptance of such appointment as provided in
the Deposit Agreement. In case at any time the Depositary acting hereunder shall
resign or be removed, the Company shall use its best efforts to appoint a
successor depositary, which shall be a bank or trust company having an office in
the Borough of Manhattan, the City of New York. Every successor depositary shall
execute and deliver to its predecessor and to the Company an instrument in
writing accepting its appointment under the Deposit Agreement, and thereupon
such successor depositary, without any further act or deed (except as required
by applicable law), shall become fully vested with all the rights, powers,
duties and obligations of its predecessor (other than as contemplated in the
Deposit Agreement). The predecessor depositary, upon payment of all sums due it
and on the written request of the Company, shall (i) execute and deliver an
instrument transferring to such successor all rights and powers of such
predecessor hereunder (other than as contemplated in the Deposit Agreement),
(ii) duly assign, transfer and deliver all right, title and interest to the
Deposited Securities to such successor, and (iii) deliver to such successor a
list of the Holders of all outstanding ADSs and such other information relating
to ADSs and Holders thereof as the successor may reasonably request. Any such
successor depositary shall promptly provide notice of its appointment to such
Holders. Any corporation into or with which the Depositary may be merged or
consolidated shall be the successor of the Depositary without the execution or
filing of any document or any further act.
(22) AMENDMENT/SUPPLEMENT. Subject to the terms and conditions of this
paragraph 22, the Deposit Agreement and applicable law, this ADR and any
provisions of the Deposit Agreement may at any time and from time to time be
amended or supplemented by written agreement between the Company and the
Depositary in any respect which they may deem necessary or desirable without the
prior written consent of the Holders or Beneficial Owners. Any amendment or
supplement which shall impose or increase any fees or charges (other than the
charges in connection with foreign exchange control regulations, and taxes and
other governmental charges, delivery and other such expenses), or which shall
otherwise materially prejudice any substantial existing right of Holders or
Beneficial Owners, shall not, however, become effective as to outstanding ADSs
until the expiration of thirty (30) days after notice of such amendment or
supplement shall have been given to the Holders of outstanding ADSs. The parties
hereto agree that any amendments or supplements which (i) are reasonably
necessary (as agreed by the Company and the Depositary) in order for (a) the
ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs to be
settled solely in electronic book-entry form and (ii) do not in either such case
impose or increase any fees or charges to be borne by Holders, shall be deemed
not to materially prejudice any substantial rights of Holders or Beneficial
Owners. Every Holder and Beneficial Owner at the time any amendment or
supplement so becomes effective shall be deemed, by continuing to hold such
ADS(s), to consent and agree to such amendment or supplement and to be bound by
the Deposit Agreement and this ADR as amended or supplemented thereby. In no
event shall any amendment or supplement impair the
A-20
right of the Holder to surrender such ADS and receive therefor the Deposited
Securities represented thereby, except in order to comply with mandatory
provisions of applicable law. Notwithstanding the foregoing, if any governmental
body should adopt new laws, rules or regulations which would require an
amendment of, or supplement to, the Deposit Agreement to ensure compliance
therewith, the Company and the Depositary may amend or supplement the Deposit
Agreement and this ADR at any time in accordance with such changed laws, rules
or regulations. Such amendment or supplement to the Deposit Agreement and this
ADR in such circumstances may become effective before a notice of such amendment
or supplement is given to Holders or within any other period of time as required
for compliance with such laws, or rules or regulations.
(23) TERMINATION. The Depositary shall, at any time at the written
direction of the Company, terminate the Deposit Agreement by providing notice of
such termination to the Holders of all ADSs then outstanding at least thirty
(30) days prior to the date fixed in such notice for such termination. If ninety
(90) days shall have expired after (i) the Depositary shall have delivered to
the Company a written notice of its election to resign, or (ii) the Company
shall have delivered to the Depositary a written notice of the removal of the
Depositary, and in either case a successor depositary shall not have been
appointed and accepted its appointment as provided herein and in the Deposit
Agreement, the Depositary may terminate the Deposit Agreement by providing
notice of such termination to the Holders of all ADSs then outstanding at least
thirty (30) days prior to the date fixed for such termination. On and after the
date of termination of the Deposit Agreement, the Holder of ADS(s) will, upon
surrender of such ADS(s) at the Principal Office of the Depositary, upon the
payment of the charges of the Depositary for the surrender of ADSs referred to
in paragraph (2) hereof and in the Deposit Agreement and subject to the
conditions and restrictions therein set forth, and upon payment of any
applicable taxes or governmental charges, be entitled to Delivery, to him or
upon his order, of the amount of Deposited Securities represented by such
ADS(s). If any ADSs shall remain outstanding after the date of termination of
the Deposit Agreement, the Registrar thereafter shall discontinue the
registration of transfers of ADSs, and the Depositary shall suspend the
distribution of dividends to the Holders thereof, and shall not give any further
notices or perform any further acts under the Deposit Agreement, except that the
Depositary shall continue to collect dividends and other distributions
pertaining to Deposited Securities, shall sell rights as provided in the Deposit
Agreement, and shall continue to deliver Deposited Securities, subject to the
conditions and restrictions set forth in the Deposit Agreement, together with
any dividends or other distributions received with respect thereto and the net
proceeds of the sale of any rights or other property, in exchange for ADSs
surrendered to the Depositary (after deducting, or charging, as the case may be,
in each case the charges of the Depositary for the surrender of an ADS, any
expenses for the account of the Holder in accordance with the terms and
conditions of the Deposit Agreement and any applicable taxes or governmental
charges or assessments). At any time after the expiration of six months from the
date of termination of the Deposit Agreement, the Depositary may sell the
Deposited Securities then held hereunder and may thereafter hold uninvested the
net proceeds of any such sale, together with any other cash then held by it
hereunder, in an unsegregated account, without liability for interest for the
pro rata benefit of the Holders whose ADSs have not theretofore been
surrendered. After making such sale, the Depositary shall be discharged from all
obligations under the Deposit Agreement with
A-21
respect to the ADSs, this ADR and the Deposited Securities, except to account
for such net proceeds and other cash (after deducting, or charging, as the case
may be, in each case, the charges of the Depositary for the surrender of ADSs,
any expenses for the account of the Holder in accordance with the terms and
conditions of the Deposit Agreement and any applicable taxes or governmental
charges or assessments). Upon the termination of the Deposit Agreement, the
Company shall be discharged from all obligations under the Deposit Agreement
except as set forth in the Deposit Agreement.
(24) COMPLIANCE WITH U.S. SECURITIES LAWS. Notwithstanding any provisions
in this ADR or the Deposit Agreement to the contrary, the withdrawal or delivery
of Deposited Securities will not be suspended by the Company or the Depositary
except as would be permitted by Instruction I.A.(1) of the General Instructions
to the Form F-6 Registration Statement, as amended from time to time, under the
Securities Act.
(25) CERTAIN RIGHTS OF THE DEPOSITARY; LIMITATIONS. Subject to the further
terms and provisions of this paragraph (25) and the Deposit Agreement, the
Depositary, its Affiliates and their agents, on their own behalf, may own and
deal in any class of securities of the Company and its Affiliates and in ADSs.
The Depositary may issue ADSs against evidence of rights to receive Shares from
the Company, any agent of the Company or any custodian, registrar, transfer
agent, clearing agency or other entity authorized by the Company to maintain
ownership or transaction records in respect of the Shares. Such evidence of
rights shall consist of written blanket or specific guarantees of ownership of
Shares. In its capacity as Depositary, the Depositary shall not lend Shares or
ADSs; provided, however, that the Depositary may, except in the case of
Restricted ADSs (as defined in the Deposit Agreement) (i) issue ADSs prior to
the receipt of Shares pursuant to Section 2.3 of the Deposit Agreement and (ii)
deliver Shares prior to the receipt of ADSs for withdrawal of Deposited
Securities pursuant to Section 2.7 of the Deposit Agreement, including ADSs
which were issued under (i) above but for which Shares may not have been
received (each such transaction a "Pre-Release Transaction"). The Depositary may
receive ADSs in lieu of Shares under (i) above and receive Shares in lieu of
ADSs under (ii) above. Each such Pre-Release Transaction will be (a) subject to
a written agreement whereby the person or entity (the "Applicant") to whom ADSs
or Shares are to be delivered (w) represents that at the time of the Pre-Release
Transaction the Applicant or its customer owns the Shares or ADSs that are to be
delivered by the Applicant under such Pre-Release Transaction, (x) agrees to
indicate the Depositary as owner of such Shares or ADSs in its records and to
hold such Shares or ADSs in trust for the Depositary until such Shares or ADSs
are delivered to the Depositary or the Custodian, (y) unconditionally guarantees
to deliver to the Depositary or the Custodian, as applicable, such Shares or
ADSs and (z) agrees to any additional restrictions or requirements that the
Depositary deems appropriate, (b) at all times fully collateralized with cash,
U.S. government securities or such other collateral as the Depositary deems
appropriate, (c) terminable by the Depositary on not more than five (5) business
days' notice and (d) subject to such further indemnities and credit regulations
as the Depositary deems appropriate. The Depositary will normally limit the
number of ADSs and Shares involved in such Pre-Release Transactions at any one
time to thirty percent (30%) of the ADSs outstanding (without giving effect to
ADSs outstanding under (i) above), provided, however, that the Depositary
reserves the right to change or disregard such limit from time to time as it
deems
A-22
appropriate. The Depositary may also set limits with respect to the number of
ADSs and Shares involved in Pre-Release Transactions with any one person on a
case by case basis as it deems appropriate. The Depositary may retain for its
own account any compensation received by it in conjunction with the foregoing.
Collateral provided pursuant to (b) above, but not earnings thereon, shall be
held for the benefit of the Holders (other than the Applicant).
A-23
(ASSIGNMENT AND TRANSFER SIGNATURE LINES)
FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and
transfer(s) unto ______________________________ whose taxpayer identification
number is _______________________ and whose address including postal zip code is
________________, the within ADS and all rights thereunder, hereby irrevocably
constituting and appointing ________________________ attorney-in-fact to
transfer said ADS on the books of the Depositary with full power of substitution
in the premises.
Dated: Name:________________________________
By:
Title:
NOTICE: The signature of the Holder to
this assignment must correspond with
the name as written upon the face of
the within instrument in every
particular, without alteration or
enlargement or any change whatsoever.
If the endorsement be executed by an
attorney, executor, administrator,
trustee or guardian, the person
executing the endorsement must give
his/her full title in such capacity
and proper evidence of authority to
act in such capacity, if not on file
with the Depositary, must be forwarded
with this ADR.
____________________
SIGNATURE GUARANTEED
All endorsements or assignments of
ADRs must be guaranteed by a member of
a Medallion Signature Program approved
by the Securities Transfer
Association, Inc.
LEGENDS
[The ADRS issued in respect of Partial Entitlement American Depositary Shares
shall bear the following legend on the face of the ADR: "This ADR evidences ADSs
representing 'partial entitlement' ordinary shares of China Netcom Group
Corporation (Hong Kong) Limited and as such do not entitle the holders thereof
to the same per-share entitlement as other Shares (which are 'full entitlement'
Shares) issued and outstanding at such time. The ADSs represented by this ADR
shall entitle holders to distributions and entitlements identical to other ADSs
when the Shares represented by such ADSs become 'full entitlement' Shares."]
A-24
EXHIBIT B
FEE SCHEDULE
DEPOSITARY FEES AND RELATED CHARGES
All capitalized terms used but not otherwise defined herein shall have the
meaning given to such terms in the Deposit Agreement.
I. DEPOSITARY FEES
The Company, the Holders, the Beneficial Owners and the persons depositing
Shares or surrendering ADSs for cancellation agree to pay the following fees of
the Depositary:
SERVICE RATE BY WHOM PAID
------- ---- ------------
(1) Issuance of ADSs upon deposit Up to U.S. $5.00 per 100 ADSs (or Person depositing Shares or person
of Shares (excluding fraction thereof) issued. receiving ADSs.
issuances contemplated by
paragraphs (3)(b) and (5)
below).
(2) Delivery of Deposited Up to U.S. $5.00 per 100 ADSs (or Person surrendering ADSs for
Securities against surrender fraction thereof) surrendered. purpose of withdrawal of Deposited
of ADSs. Securities or person to whom
Deposited Securities are delivered.
(3) Distribution of (a) cash No fee, to the extent prohibited by Person to whom distribution is made.
dividends or (b) ADSs the exchange upon which the ADSs
pursuant to stock dividends are listed. If the charging of
(or other free distribution such fee is not prohibited, the
of stock). fees specified in (1) above shall
be payable in respect of a
distribution of ADSs pursuant to
stock dividends (or other free
distribution of stock) and the fees
specified in (4) below shall be
payable in respect of distributions
of cash.
(4) Distribution of cash proceeds Up to U.S. $2.00 per 100 ADSs (or Person to whom distribution is made.
(i.e., upon sale of rights fraction thereof) held.
and other entitlements).
B-1
(5) Distribution of securities Up to U.S. $5.00 per unit of 100 Person to whom distribution is made.
other than ADSs or rights to securities (or fraction thereof)
purchase additional ADSs distributed.
(i.e., spin-off shares).
(6) Depositary Services. To the extent permitted by the Person holding ADSs on last day of
exchange upon which the ADSs are calendar year.
listed, up to U.S. $2.00 per 100
ADSs (or fraction thereof) held as
of the last day of each calendar
year, except to the extent of any
cash dividend fee(s) charged under
paragraph (3)(a) above during the
applicable calendar year.
(7) Distribution of ADSs pursuant Up to U.S. $5.00 per 100 ADSs (or Person to whom distribution is made.
to exercise of rights to fraction thereof) issued.
purchase additional ADSs.
II. CHARGES
Holders, Beneficial Owners, persons depositing Shares for deposit and
persons surrendering ADSs for cancellation and for the purpose of withdrawing
Deposited Securities shall be responsible for the following charges:
(i) taxes (including applicable interest and penalties) and other governmental
charges;
(ii) such registration fees as may from time to time be in effect for the
registration of Shares or other Deposited Securities on the share register
and applicable to transfers of Shares or other Deposited Securities to or
from the name of the Custodian, the Depositary or any nominees upon the
making of deposits and withdrawals, respectively;
(iii) such cable, telex and facsimile transmission and delivery expenses as are
expressly provided in the Deposit Agreement to be at the expense of the
person depositing or withdrawing Shares or Holders and Beneficial Owners
of ADSs;
(iv) the expenses and charges incurred by the Depositary in the conversion of
foreign currency;
(v) such fees and expenses as are incurred by the Depositary in connection
with compliance with exchange control regulations and other regulatory
requirements applicable to Shares, Deposited Securities, ADSs and ADRs;
and
(vi) the fees and expenses incurred by the Depositary, the Custodian or any
nominee in connection with the servicing or delivery of Deposited
Securities.
B-2
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.............................................................................................. 1
Section 1.1 "Affiliate"................................................................................... 2
Section 1.2 "ADS Record Date"............................................................................. 2
Section 1.3 "American Depositary Receipt(s)", "ADR(s)" and "Receipt(s)"................................... 2
Section 1.4 "American Depositary Share(s)" and "ADS(s)"................................................... 2
Section 1.5 "Applicant"................................................................................... 2
Section 1.6 "Beneficial Owner"............................................................................ 3
Section 1.7 "Certificated ADS(s)"......................................................................... 3
Section 1.8 "Commission".................................................................................. 3
Section 1.9 "Company"..................................................................................... 3
Section 1.10 "Custodian"................................................................................... 3
Section 1.11 "Deliver" and "Delivery"...................................................................... 3
Section 1.12 "Deposit Agreement"........................................................................... 3
Section 1.13 "Depositary".................................................................................. 3
Section 1.14 "Deposited Securities"........................................................................ 3
Section 1.15 "Dollars" and "$"............................................................................. 4
Section 1.16 "DTC"......................................................................................... 4
Section 1.17 "DTC Participant"............................................................................. 4
Section 1.18 "Exchange Act"................................................................................ 4
Section 1.19 "Foreign Currency"............................................................................ 4
Section 1.20 "Full Entitlement ADR(s)", "Full Entitlement ADS(s)" and "Full Entitlement Share(s)".......... 4
Section 1.21 "Holder(s)"................................................................................... 4
Section 1.22 "Hong Kong"................................................................................... 4
Section 1.23 "Partial Entitlement ADR(s)", "Partial Entitlement ADS(s)" and "Partial Entitlement Share(s) 4
section 1.24 "Pre-Release Transaction"..................................................................... 4
Section 1.25 "Principal Office"............................................................................ 4
Section 1.26 "Registrar"................................................................................... 4
Section 1.27 "Restricted Securities"....................................................................... 5
Section 1.28 "Restricted ADR(s)", "Restricted ADS(s)" and "Restricted Shares".............................. 5
Section 1.29 "Securities Act".............................................................................. 5
Section 1.30 "Share Registrar"............................................................................. 5
Section 1.31 "Shares"...................................................................................... 6
Section 1.32 "Uncertificated ADS(s)"....................................................................... 6
Section 1.33 "United States" and "U.S.".................................................................... 6
ARTICLE II APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS; DEPOSIT OF SHARES; EXECUTION AND DELIVERY, TRANSFER AND
SURRENDER OF RECEIPTS.............................................................................................. 6
Section 2.1 Appointment of Depositary. ................................................................... 6
Section 2.2 Form and Transferability of ADSs. ............................................................ 6
Section 2.3 Deposit With Custodian. ...................................................................... 8
Section 2.4 Registration and Safekeeping of Deposited Securities. ........................................ 10
Section 2.5 Issuance of ADSs. ............................................................................ 10
Section 2.6 Transfer, Combination and Split-up of ADRs. .................................................. 11
i
Table of Contents (Cont'd)
Section 2.7 Surrender of ADSs and Withdrawal of Deposited Securities. .................................... 12
Section 2.8 Limitations on Execution and Delivery, Transfer, etc. of ADSs; Suspension of Delivery,
Transfer, etc. ............................................................................... 13
Section 2.9 Lost ADRs, etc. .............................................................................. 14
Section 2.10 Cancellation and Destruction of Surrendered ADRs; Maintenance of Records. .................... 14
Section 2.11 Partial Entitlement ADSs. .................................................................... 14
Section 2.12 Certificated/Uncertificated ADSs. ............................................................ 15
Section 2.13 Restricted ADSs. ............................................................................. 16
ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS AND BENEFICIAL OWNERS OF ADSs........................................... 19
Section 3.1 Proofs, Certificates and Other Information. .................................................. 19
Section 3.2 Liability for Taxes and Other Charges. ....................................................... 19
Section 3.3 Representations and Warranties on Deposit of Shares. ......................................... 20
Section 3.4 Compliance with Information Requests. ........................................................ 20
Section 3.5 Ownership Restrictions. ...................................................................... 20
ARTICLE IV THE DEPOSITED SECURITIES................................................................................ 21
Section 4.1 Cash Distributions. .......................................................................... 21
Section 4.2 Distribution in Shares. ...................................................................... 22
Section 4.3 Elective Distributions in Cash or Shares. .................................................... 22
Section 4.4 Distribution of Rights to Purchase Additional ADSs. .......................................... 23
Section 4.5 Distributions Other Than Cash, Shares or Rights to Purchase Shares. .......................... 25
Section 4.6 Distributions With Respect to Deposited Securities in Bearer Form. ........................... 26
Section 4.7 Redemption. .................................................................................. 26
Section 4.8 Conversion of Foreign Currency. .............................................................. 26
Section 4.9 Fixing of ADS Record Date. ................................................................... 27
Section 4.10 Voting of Deposited Securities. .............................................................. 27
Section 4.11 Changes Affecting Deposited Securities. ...................................................... 29
Section 4.12 Available Information. ....................................................................... 30
Section 4.13 Reports. ..................................................................................... 30
Section 4.14 List of Holders. ............................................................................. 31
Section 4.15 Taxation. .................................................................................... 31
ARTICLE V THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY............................................................ 32
Section 5.1 Maintenance of Office and Transfer Books by the Registrar. ................................... 32
Section 5.2 Exoneration. ................................................................................. 33
Section 5.3 Standard of Care. ............................................................................ 33
Section 5.4 Resignation and Removal of the Depositary; Appointment of Successor Depositary. ............. 34
Section 5.5 The Custodian. .............................................................................. 35
Section 5.6 Notices and Reports. ........................................................................ 35
Section 5.7 Issuance of Additional Shares, ADSs etc. .................................................... 36
Section 5.8 Indemnification. ............................................................................ 37
Section 5.9 Fees and Charges of Depositary. ............................................................. 38
Section 5.10 Pre-Release Transactions. ................................................................... 39
ii
Table of Contents (Cont'd)
SECTION 5.11 Restricted Securities Owners. ............................................................... 39
ARTICLE VI AMENDMENT AND TERMINATION.............................................................................. 40
Section 6.1 Amendment/Supplement. ....................................................................... 40
Section 6.2 Termination. ................................................................................ 40
ARTICLE VII MISCELLANEOUS......................................................................................... 41
Section 7.1 Counterparts. ............................................................................... 41
Section 7.2 No Third-Party Beneficiaries. ............................................................... 41
Section 7.3 Severability. ............................................................................... 42
Section 7.4 Holders and Beneficial Owners as Parties; Binding Effect. ................................... 42
Section 7.5 Notices. .................................................................................... 42
Section 7.6 Governing Law and Jurisdiction. ............................................................. 43
Section 7.7 Assignment. ................................................................................. 44
Section 7.8 Compliance with U.S. Securities Laws. ....................................................... 44
Section 7.9 Hong Kong Law References. ................................................................... 45
Section 7.10 Titles and References. ...................................................................... 45
EXHIBITS
Form of ADR. ................................................................................ A-1
Fee Schedule. ............................................................................... B-1
iii
