Exhibit 1.2
GUARANTEE
dated 21 December 2005
created by
ORASCOM TELECOM HOLDINGS S.A.E.
as the Guarantor
in favour of
XXXXXXXXX TELECOMMUNICATIONS INVESTMENT HOLDINGS LIMITED
CONTENTS
1. Definitions and interpretation......................................1
2. Guarantee and indemnity.............................................2
3. Interest............................................................4
4. Tax gross up and indemnities........................................4
5. Indemnities separate................................................5
6. Undertaking.........................................................6
7. Costs and expenses..................................................6
8. Governing law and enforcement.......................................6
9. Rights, amendments, waivers and determinations......................7
10. Partial invalidity..................................................7
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THIS DEED is dated 21 December 2005 and made by ORASCOM TELECOM HOLDING S.A.E.,
a company established in accordance with the laws of the Arab Republic of Egypt
whose principal place of business is at 2005A Nile City Towers, Cornish El Nile,
Ramlet Xxxxxxx, Cairo, Egypt (the "Guarantor") for the benefit of XXXXXXXXX
TELECOMMUNICATIONS INVESTMENT HOLDINGS LIMITED, a company incorporated in the
British Virgin Islands whose registered office is at P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands (the "HTIHL").
BACKGROUND
(A) The Guarantor is entering into this Deed in connection with the
Promissory Note and/or the Security Document.
(B) The Board of Directors of the Guarantor is satisfied that entering into
this Deed is for the purposes and to the benefit of the Guarantor and
its business.
(C) The Guarantor intends this document to take effect as a deed.
WHEREAS:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Deed:
"Borrower" means Orascom Telecom Eurasia Limited, a company incorporated
under the laws of the British Virgin Islands.
"Business Day" means a day (other than a Saturday or Sunday or public
holiday) when commercial banks are open for business in Cairo, Hong
Kong, London and New York.
"Group" means the Guarantor and its subsidiary companies for the time
being.
"HTIL" means Xxxxxxxxx Telecommunications International Limited, a
company incorporated under the laws of the Cayman Islands, and whose
shares are listed on the Stock Exchange of Hong Kong Ltd. (Stock Code:
2332), and whose American depositary shares are listed on the New York
Stock Exchange, Inc. (Ticker: HTX).
"Promissory Note" means the promissory note of even date herewith issued
by the Borrower to HTIHL as part of the consideration for the purchase
of the Sale Shares.
"Sale Shares" means the 917,759,172 issued shares of HK$0.25 each in the
share capital of HTIL purchased by the Borrower from HTIHL pursuant to a
share purchase agreement of even date herewith.
"Security Document" means the legal mortgage of the Sale Shares by the
Borrower of even date herewith in favour of HTIHL.
"SPA" means the share purchase agreement of even date herewith between
HTIHL, the Guarantor, the Borrower and HWL relating to the purchase of
the Sale Shares by the Borrower.
"Tax" has the meaning given to it in the Security Document.
"US$ LIBOR" means the London rate of Hongkong and Shanghai Banking
Corporation as applied to a United States Dollar deposit.
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1.2 INCORPORATION OF DEFINED TERMS
Unless a contrary indication appears, a term defined in the Promissory
Note has the same meaning in this Deed.
1.3 CLAUSES
In this Deed any reference to a "Clause" or a "Schedule" is, unless the
context otherwise requires, a reference to a Clause of or a Schedule to
this Deed.
1.4 THIRD PARTY RIGHTS
No person other than HTIHL (for whose benefit the provisions in this
Deed have been made) has any right under the Contracts (Rights of Third
Parties) Xxx 0000 to enforce or to enjoy the benefit of any term of this
Deed.
2 GUARANTEE AND INDEMNITY
2.1 GUARANTEE AND INDEMNITY
Subject to Clause 2.5, the Guarantor irrevocably and unconditionally:
(a) guarantees to HTIHL punctual performance by the Borrower of all
the Borrower's financial and payment obligations under the
Promissory Note;
(b) undertakes with HTIHL that whenever the Borrower does not pay
any amount when due under or in connection with the Promissory
Note, the Guarantor shall immediately on demand pay that amount
(without set-off or counterclaim) as if it was the principal
obligor; and
(c) indemnifies HTIHL immediately on demand against any cost, loss
or liability suffered by it if any obligation guaranteed by it
is or becomes unenforceable, invalid or illegal. The amount of
the cost, loss or liability shall be equal to the amount which
HTIHL would otherwise have been entitled to recover.
2.2 CONTINUING GUARANTEE
This guarantee is a continuing guarantee and will extend to the ultimate
balance of sums payable by the Borrower and/or the Guarantor under the
Promissory Note regardless of any intermediate payment or discharge in
whole or in part and shall remain in force until all amounts payable
under the Promissory Note have been satisfied.
2.3 REINSTATEMENT
If any payment by the Borrower and/or the Guarantor or any discharge
given by HTIHL (whether in respect of the obligations of the Borrower
and/or the Guarantor or any security for those obligations or otherwise)
is avoided or reduced as a result of insolvency or any similar event:
(a) the liability of the Guarantor shall continue as if the payment,
discharge, avoidance or reduction had not occurred; and
(b) HTIHL shall be entitled to recover the value or amount of that
security or payment from the Guarantor, as if the payment,
discharge, avoidance or reduction had not occurred.
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2.4 WAIVER OF DEFENCES
The obligations of the Guarantor under this Clause 2 will not be
affected by an act, omission, matter or thing which, but for this
Clause, would reduce, release or prejudice any of its obligations under
this Clause 2 (without limitation and whether or not known to it or
HTIHL) including:
(a) any time, waiver or consent granted to, or composition with, the
Borrower, the Guarantor or any other person;
(b) the release of the Borrower or any other person under the terms
of any composition or arrangement with any creditor of any
member of the Group;
(c) the taking, variation, compromise, exchange, renewal or release
of, or refusal or neglect to perfect, take up or enforce, any
rights against, or security over assets of, the Borrower, the
Guarantor or any other person or any non-presentation or
non-observance of any formality or other requirement in respect
of any instrument or any failure to realise the full value of
any security;
(d) any incapacity or lack of power, authority or legal personality
of or dissolution or change in the members or status of the
Borrower, the Guarantor or any other person;
(e) any amendment, novation, supplement, restatement (however
fundamental) or replacement of the Promissory Note or the
Security Document or any other document or security, including
any increase in, extension of or change;
(f) any unenforceability, illegality or invalidity of any obligation
of any person under the Promissory Note or the Security Document
or any other document or security; or
(g) any insolvency or similar proceedings.
2.5 FIRST RECOURSE
Before making any claim against the Guarantor under this Clause 2, HTIHL
(or any trustee or agent on its behalf) must claim payment from the
Borrower for any amounts payable under the Promissory Note and, in the
event any security rights have become enforceable by HTIHL against the
Borrower under the Security Document, enforce such security rights.
Accordingly, it is the intent of the Guarantor and of HTIHL that the
maximum amount that may be claimed under the guarantee and indemnity in
this Clause 2 should be the difference between the total amount due
under the Promissory Note and the net amount realised following the
enforcement of such security rights including the sale of the Charged
Assets under the Security Document.
2.6 DEFERRAL OF GUARANTOR'S RIGHTS
Until all amounts which may be or become payable by the Borrower or the
Guarantor under or in connection with the Promissory Note have been
irrevocably paid in full and unless HTIHL otherwise directs, the
Guarantor will not exercise any rights which it may have by reason of
performance by it of its obligations under the Promissory Note:
(a) to be indemnified by the Borrower;
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(b) to claim any contribution from any other guarantor of the
Borrower's obligations under this Deed, the Promissory Note
and/or the Security Document; and/or
(c) to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of HTIHL under this
Deed, the Promissory Note and/or the Security Document or of any
other guarantee or security taken pursuant to, or in connection
with, this Deed, the Promissory Note and/or the Security
Document by HTIHL.
2.7 ADDITIONAL SECURITY
This guarantee is in addition to and is not in any way prejudiced by any
other guarantee or security now or subsequently held by HTIHL.
3 INTEREST
DEFAULT INTEREST
If the Guarantor fails to pay any amount payable by it under this Deed
on its due date, interest shall accrue from day to day on the overdue
amount from the due date up to the date of actual payment (both before
and after judgment) at the rate of 3.25 per cent per annum above US$
LIBOR from time to time, accrued and compound daily. Any interest
accruing under this Clause 3 shall be immediately payable by the
Guarantor on demand by HTIHL.
4 TAX GROSS UP AND INDEMNITIES
4.1 DEFINITIONS
(a) In this Deed:
"Tax Credit" means a credit against, relief or remission for, or
repayment of any Tax.
"Tax Deduction" means a deduction or withholding for or on account of
Tax from a payment under the Promissory Note or the Security Document.
"Tax Payment" means either the increase in a payment made by the
Guarantor to HTIHL under Clause 4.2 (Tax gross-up) or a payment under
Clause 4.3 (Tax indemnity).
(b) Unless a contrary indication appears, in this Clause 4 a reference to
"determines" or "determined" means a determination made in the absolute
discretion of the person making the determination.
4.2 TAX GROSS-UP
(a) The Guarantor shall make all payments to be made by it without any Tax
Deduction, unless a Tax Deduction is required by law.
(b) The Guarantor shall promptly upon becoming aware that it must make a Tax
Deduction (or that there is any change in the rate or the basis of a Tax
Deduction) notify HTIHL accordingly. Similarly, HTIHL shall notify the
Guarantor on becoming so aware in respect of a payment payable to it.
(c) If a Tax Deduction is required by law to be made by the Guarantor, the
amount of the payment due from the Guarantor shall be increased to an
amount which (after making any Tax Deduction) leaves an amount equal to
the payment which would have been due if no Tax Deduction had been
required.
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(d) If the Guarantor is required to make a Tax Deduction, it shall make that
Tax Deduction and any payment required in connection with that Tax
Deduction within the time allowed and in the minimum amount required by
law.
(e) Within thirty days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, the Guarantor shall
deliver to HTIHL evidence reasonably satisfactory to HTIHL that the Tax
Deduction has been made or (as applicable) any appropriate payment paid
to the relevant taxing authority.
4.3 TAX INDEMNITY
(a) To the extent not paid by the Borrower, the Guarantor shall (within
three Business Days of demand by HTIHL) pay to HTIHL an amount equal to
the loss, liability or cost which HTIHL determines will be or has been
(directly or indirectly) suffered for or on account of Tax by it in
respect of this Deed, the Promissory Note and/or the Security Document.
(b) Paragraph (a) above shall not apply:
(i) with respect to any Tax assessed on HTIHL under the law of the
jurisdiction in which HTIHL is incorporated or, if different,
the jurisdiction (or jurisdictions) in which HTIHL is treated as
resident for tax purposes if that Tax is imposed on or
calculated by reference to the net income received or receivable
(but not any sum deemed to be received or receivable) by HTIHL;
or
(ii) to the extent a loss, liability or cost is compensated for by an
increased payment under Clause 4.2 (Tax gross-up).
4.4 TAX CREDIT
If the Guarantor makes a Tax Payment and HTIHL determines that:
(a) a Tax Credit is attributable either to an increased payment of
which that Tax Payment forms part, or to that Tax Payment; and
(b) HTIHL has obtained, utilised and retained that Tax Credit,
HTIHL shall pay an amount to the Guarantor which HTIHL determines will
leave it (after that payment) in the same after-Tax position as it would
have been in had the Tax Payment not been required to be made by the
Guarantor.
4.5 STAMP TAXES
The Guarantor shall pay and, within three Business Days of demand,
indemnify HTIHL against any cost, loss or liability HTIHL incurs in
relation to all stamp duty, registration and other similar Taxes payable
in respect of this Deed.
5 INDEMNITIES SEPARATE
Each indemnity in each of this Deed, the Promissory Note and the
Security Document shall:
(a) constitute a separate and independent obligation from the other
obligations in this Deed, the Promissory Note and the Security
Document;
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(b) give rise to a separate and independent cause of action;
(c) apply irrespective of any indulgence granted by HTIHL;
(d) continue in full force and effect despite any judgment, order,
claim or proof for a liquidated amount in respect of any sum due
under any of this Deed, the Promissory Note and the Security
Document or any other judgment or order; and
(e) apply whether or not any claim under it relates to any matter
disclosed by the Guarantor or otherwise known to HTIHL or HWL.
6 UNDERTAKING
The Guarantor undertakes as a separate and distinct obligation for the
benefit of HTIHL that the Guarantor shall procure that the Borrower
shall at all times be a direct or indirect wholly owned subsidiary of
the Guarantor and that the Borrower is, and shall at all times remain, a
special purpose vehicle, which does not carry on any trade or activity
whatsoever other than acting as a pure holding company for the Sale
Shares, the subject of the Security Document (and acting as the
registered (but not beneficial) owner of a single share in five other
wholly owned subsidiaries of the Guarantor) and has not incurred any
liabilities other than immaterial administrative fees and expenses.
7 COSTS AND EXPENSES
7.1 TRANSACTION EXPENSES
To the extent not paid by the Borrower, the Guarantor shall promptly on
demand pay HTIHL the amount of all costs and expenses payable by the
Borrower pursuant to Clause 17.1 (Transaction Expenses) of the Security
Document.
7.2 ENFORCEMENT COSTS
To the extent not paid by the Borrower, the Guarantor shall, within
three Business Days of demand, pay to HTIHL the amount of all costs and
expenses (including legal fees) incurred by HTIHL in connection with the
enforcement of, or the preservation of any rights under, this Deed, the
Promissory Note and/or the Security Document.
8 GOVERNING LAW AND ENFORCEMENT
8.1 GOVERNING LAW
This Deed is governed by English law.
8.2 SERVICE OF PROCESS
Without prejudice to any other mode of service allowed under any
relevant law, the Guarantor:
(a) irrevocably appoints Law Debenture Corporate Services Limited of
Xxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx, Xxxxxxx XX0X 0XX as its
agent for service of process in relation to any proceedings
before the English courts in connection with this Deed, the
Promissory Note and/or the Security Document; and
(b) agrees that failure by a process agent to notify the Guarantor
of the process will not invalidate the proceedings concerned.
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9 RIGHTS, AMENDMENTS, WAIVERS AND DETERMINATIONS
9.1 AMBIGUITY
Where there is any ambiguity or conflict between the rights conferred by
law and those conferred by or pursuant to this Deed, the terms of this
Deed shall prevail.
9.2 REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of
HTIHL any right or remedy under this Deed shall operate as a waiver, nor
shall any single or partial exercise of any right or remedy prevent any
further or other exercise or the exercise of any other right or remedy.
The rights and remedies provided in this Deed are cumulative and not
exclusive of any rights or remedies provided by law.
9.3 AMENDMENTS AND WAIVERS
Any term of this Deed may be amended or waived only with the consent of
HTIHL and the Guarantor.
9.4 CERTIFICATES AND DETERMINATIONS
Any certification or determination by HTIHL under this Deed is, in the
absence of manifest error, conclusive evidence of the matters to which
it relates.
10 PARTIAL INVALIDITY
If, at any time, any provision of this Deed is or becomes illegal,
invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions nor the legality, validity or enforceability of
such provision under the law of any other jurisdiction will in any way
be affected or impaired.
This Deed has been delivered on the date stated at the beginning of this Deed.
THE GUARANTOR
Address: 2005A Nile City Towers - South Tower
Cornish El Xxxx
Xxxxxx Xxxxxxx - 00000
Xxxxx
Xxxxx
Fax No: 000 000 0000
Attention: Xx Xxxxxx Xxxxxxx
With a copy to the Guarantor at: Address: 2005A Nile City Towers - South Tower
Cornish El Xxxx
Xxxxxx Xxxxxxx - 00000
Xxxxx
Xxxxx
Fax No: 000 000 0000
Attention: Legal Department
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EXECUTION PAGE FOR GUARANTEE DEED
SIGNED as a DEED on behalf of ORASCOM TELECOM
HOLDINGS S.A.E. incorporated in the Arab Republic /s/ Xxxxxx Xxxxxxx
of Egypt by XXXXXX XXXXXXX --------------------
who, in accordance with the laws of that territory,
is (or are) acting under the authority of that
company.
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