Exhibit 10.60
Dated 24 September 2004
XXXXXXXXX WHAMPOA LIMITED
and
XXXXXXXXX TELECOMMUNICATIONS INTERNATIONAL LIMITED
NON-COMPETITION AGREEMENT
Linklaters
00xx Xxxxx, Xxxxxxxxx Xxxxx
Xxxxxx Xxxx
Xxxx Xxxx
Telephone (000) 0000 0000
Facsimile (000) 0000 0000/2810 1695
Ref: RHG/CMYG
NON-COMPETITION AGREEMENT
This Agreement is made on 24 September 2004 between:
(1) XXXXXXXXX WHAMPOA LIMITED a company incorporated under the laws of Hong
Kong whose registered office is at 00xx Xxxxx, Xxxxxxxxx Xxxxx, 00
Xxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx ("HWL"); and
(2) XXXXXXXXX TELECOMMUNICATIONS INTERNATIONAL LIMITED a company
incorporated under the laws of the Cayman Islands whose business address
in Hong Kong is at 18/F, Two Harbourfront, 00 Xxx Xxxx Xxxxxx, Xxxxxxx,
Xxxxxxx, Xxxx Xxxx ("HTIL"),
each a "Party" and together the "Parties".
WHEREAS:
(A) HTIL has applied for permission to list its ordinary shares on the Main
Board of The Stock Exchange of Hong Kong Limited and for permission to
list American depositary shares (the "ADS"), representing its ordinary
shares, on the New York Stock Exchange, Inc. (together the "Listings").
(B) Prior to the Listings, HTIL is a wholly-owned subsidiary of HWL.
(C) HTIL and HWL have agreed to enter into this Agreement to clearly
delineate their respective geographical markets, and their businesses
within those markets, and to regulate their ongoing relationship upon
completion of the Listings.
Now it is agreed as follows:
1 INTERPRETATION
In this Agreement, unless the context otherwise requires, the provisions
in this Clause 1 apply:
1.1 DEFINITIONS
"ADS" has the meaning given in Recital A;
"Business Day" means a day on which banks in Hong Kong are open for
business (excluding Saturday and Sunday);
"Competing Entity" means an entity which is engaged in any part of the
Defined Businesses;
"Competing Portion" has the meaning given in Clause 3.4.4(iv);
"Competing Portion Offer Procedure" means the procedure described in
Clause 3.6;
"Competing Portion Offer" has the meaning given in Clause 3.4.4(iv);
"Competing Portion Offeree" has the meaning given in Clause 3.6.1;
"Competing Portion Offeror" has the meaning given in Clause 3.6.1;
"Counter-Notice" has the meaning given in Clause 3.5.3;
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"Defined Businesses" means the business of the provision of
telecommunications services for voice, data and/or video, whether
between fixed locations and/or moving locations, whether by wireline or
wireless means, and the establishment, operation and maintenance of
related facilities including the business of reselling such facilities
and services but does not include:
(a) the business of providing satellite-based telecommunication
services including but not limited to the ownership and
operation of satellites, VSAT services, satellite, radio or
television services, services provided through global satellite
systems and global positioning services;
(b) radio or television broadcasting for simultaneous reception by
the general public in a territory, whether free or for a charge;
or
(c) cable television services.
"Fair Value" has the meaning given in Clause 3.6.3;
"Fair Value Determination Date" has the meaning given in paragraph 1.4.1
of Schedule 2;
"Fixed Telecommunications Business" means the business of the provision
of telecommunication services for voice, data and/or video between fixed
locations and/or locations with limited mobility around fixed points,
whether by wireline or wireless means and the establishment, operation
and maintenance of related facilities including the business of
reselling such facilities and services, and which falls within the
definition of Defined Businesses;
"Group" means the HWL Group or the HTIL Group, as the case may be;
"HKSE" means The Stock Exchange of Hong Kong Limited, being an
internationally recognised stock exchange;
"Hong Kong" means the Hong Kong Special Administrative Region of the
People's Republic of China;
"HTIL Affected Party" means any Subsidiary of HTIL and any company which
is accounted for and consolidated in the audited consolidated accounts
of HTIL, and "HTIL Affected Parties" shall be construed accordingly;
"HTIL Group" means HTIL and the HTIL Affected Parties;
"HTIL Territory" means all areas of the world other than the territories
which comprise the HWL Territory;
"HWL Affected Party" means any Subsidiary of HWL and any company which
is accounted for and consolidated in the audited consolidated accounts
of HWL, but excluding any member of the HTIL Group and "HWL Affected
Parties" shall be construed accordingly;
"HWL Group" means HWL and the HWL Affected Parties;
"HWL Territory" means Western Europe, Xxxxxxxxx, Xxx Xxxxxxx, xxx Xxxxxx
Xxxxxx, Xxxxxx and, unless and until HTIL has completed the purchase of
shares in Xxxxxxxxx Telecommunications Argentina S.A. pursuant to the
exercise of the Option, Argentina;
"Investment Purposes" means, in relation to the holding of shares in a
company, a holding of such shares principally for the purpose of
generating revenue or capital
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appreciation and not conferring any direct or indirect board, management
or other control over such company;
"Listings" has the meaning given in Recital A;
"New Opportunities" means any business opportunity offered to a member
of the HWL Group or the HTIL Group, as the case may be, after the date
of this Agreement which relates to the Defined Businesses;
"Notice of Interest" has the meaning given in Clause 3.5.1;
"Notice of Offer" has the meaning given in Clause 3.6.1;
"Offeree" has the meaning given in Clause 3.5.1;
"Offeror" has the meaning given in Clause 3.5.1;
"Option" means the option granted to HTIL pursuant to an agreement dated
on or around the date hereof to acquire the HWL Group's interest in
Xxxxxxxxx Telecommunications Argentina S.A. and any rights and
obligations of any company within the HWL Group relating to Xxxxxxxxx
Telecommunications Argentina S.A.;
"Right of First Refusal Procedure" means the procedure described in
Clause 3.5;
"Subsidiary" shall bear the meaning as defined in the Companies
Ordinance, Chapter 32 of the laws of Hong Kong;
"Territory" means the HWL Territory or the HTIL Territory, as the case
may be;
"VSAT" means Very Small Aperture Terminal; and
"Western Europe" shall mean the member countries of the European Union
(prior to its enlargement in 2004), Vatican City, San Marino, the
Channel Islands, Monaco, Switzerland, Norway, Greenland and
Liechtenstein.
1.2 SINGULAR, PLURAL, GENDER
References to one gender include all genders and references to the
singular include the plural and vice versa.
1.3 REFERENCES TO PERSONS AND COMPANIES
References to:
1.3.1 a person include any company, partnership or unincorporated
association (whether or not having separate legal personality);
and
1.3.2 a company shall include any company, corporation or any body
corporate, wherever incorporated.
1.4 SCHEDULES ETC.
References to this Agreement shall include any Recitals and the
Schedules to it and references to Clauses, Recitals and the Schedules
are to Clauses of, and the Recitals and Schedules to, this Agreement.
1.5 HEADINGS
Headings shall be ignored in interpreting this Agreement.
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2 CONDITION AND DURATION
2.1 CONDITION PRECEDENT
The undertakings and obligations contained in Clauses 3.1 to 3.6 are
conditional upon completion of either of the two Listings. If this
condition is not satisfied on or before 31 December 2004, or such later
date as the Parties may agree, this Agreement shall lapse and neither
Party shall have any claims against the other, or any rights or
obligations, under it.
2.2 Subject to the provisions of Clause 2.1, the restrictions in Clause 3
shall continue in full force and effect without limit in point of time
until the earlier of:
2.2.1 the date which is one year after HWL ceases to control, directly
or indirectly, more than 30% of HTIL's issued ordinary share
capital, unless upon such cessation of HWL's interests, another
party controls, directly or indirectly, 30% or more of HTIL's
issued ordinary share capital, in which case the restrictions
will terminate upon such cessation of HWL's interests; and
2.2.2 the date upon which HTIL's shares and the ADS (or whichever of
the HTIL shares and the ADS is listed if only one of the
Listings is completed) cease to be listed on any internationally
recognised stock exchange (provided that such delisting is
voluntary and at the instigation of HTIL).
3 BUSINESS OPPORTUNITIES AND CROSS-REFERRALS
3.1 RESTRICTIONS ON COMPETITION
3.1.1 HWL shall not solely or jointly or through representation of any
person, enterprise or company, carry on, engage in or make any
investment in any Defined Businesses within the HTIL Territory
without HTIL's prior consent or, in the case of New
Opportunities, compliance with the Right of First Refusal
Procedure. Nothing in the foregoing shall restrict the continued
holding of an interest in HTIL's issued share capital by HWL,
whether directly or indirectly.
3.1.2 HTIL shall not solely or jointly or through representation of
any person, enterprise or company, carry on, engage in or make
any investment in any Defined Businesses within the HWL
Territory without HWL's prior consent or, in the case of New
Opportunities, compliance with the Right of First Refusal
Procedure.
3.1.3 For the purpose of Clauses 3.1.1 and 3.1.2, the consent of HWL
or HTIL means an affirmative vote of directors in the case of
HWL or independent non-executive directors in the case of HTIL
who do not have and are not deemed to have a material interest
in the relevant matter, and such consent shall be given if the
relevant Party is engaging in or proposing to engage in Defined
Businesses which, in the opinion of the relevant directors of
the other Party, the other Party is prevented from pursuing by
itself for regulatory, commercial or other reasons, provided
that the relevant Party engaging in or proposing to engage in
such Defined Businesses negotiates in good faith the manner in
which such opportunities may be pursued jointly in order to
maximise the commercial benefit for both Parties, subject to
compliance with all applicable regulatory requirements and
ensuring that any joint participation does not infringe, nor is
likely to infringe, any anti-trust, fair trading or similar
legislation in any jurisdiction.
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3.2 RIGHTS OF FIRST REFUSAL FOR NEW OPPORTUNITIES
3.2.1 HWL shall use its reasonable endeavours to procure that any New
Opportunities arising from time to time, within the HTIL
Territory, in which a member of the HWL Group is offered the
chance to participate, are first offered to HTIL in accordance
with the Right of First Refusal Procedure.
3.2.2 HTIL shall use its reasonable endeavours to procure that any New
Opportunities arising from time to time, within the HWL
Territory, in which a member of the HTIL Group is offered the
chance to participate, are first offered to HWL in accordance
with the Right of First Refusal Procedure.
3.3 HWL AND HTIL AFFECTED PARTIES
3.3.1 HWL agrees to use reasonable commercial endeavours to procure
that each HWL Affected Party shall comply with the provisions of
Clauses 3.1.1, 3.2.1, 3.5 and 3.6 as though they applied to such
party.
3.3.2 HTIL agrees to use reasonable commercial endeavours to procure
that each HTIL Affected Party shall comply with the provisions
of Clauses 3.1.2, 3.2.2, 3.5 and 3.6 as though they applied to
such party.
3.4 EXCEPTIONS
Nothing in this Agreement shall prevent any member of the HTIL Group or
HWL Group from:
3.4.1 carrying on, engaging in or making an investment in a business
which is limited to the manufacture, sale, distribution or
marketing of telecommunications equipment or accessories,
whether or not such equipment or accessories are used in
conjunction with the Defined Businesses, in any part of the
world;
3.4.2 providing roaming services to its own customers in the other
Party's Territory as long as such services arise from and are
directly connected to the provision of wireless or mobile
telecommunications services offered by itself in its own
Territory;
3.4.3 carrying on, engaging in or making an investment in Fixed
Telecommunications Business in the other Party's Territory
provided that such business emanates from and is an integral
part of its ordinary course of business and has its substantial
operations and headquarters in its own Territory;
3.4.4 the acquisition or holding of shares in a Competing Entity
within the other Party's Territory provided that:
(i) such shares are held for Investment Purposes and are, or
are proposed to be, listed on any internationally
recognised stock exchange and such investment does not
exceed 15% of the outstanding voting stock of such
Competing Entity; or
(ii) the consolidated revenues of such Competing Entity from
any service or activity constituting part of the Defined
Businesses do not exceed 15% of the total consolidated
revenues of such Competing Entity at the date of
investment; or
(iii) such shares are held for Investment Purposes and do not
confer rights to be involved directly or indirectly with
the operations of such Competing
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Entity and are disclosed in writing by HWL or HTIL (as
the case may be) as holder of the shares to the other
Party prior to the date of the prospectus issued in
connection with the Listings; or
(iv) immediately after such acquisition or becoming the
holder of the shares in such Competing Entity or
acquiring a business which makes an existing entity a
Competing Entity within the other Party's Territory, the
other Party shall be given the right to buy the portion
of the Competing Entity's business that is in direct
competition (the "Competing Portion") in accordance with
the Competing Portion Offer Procedure (the "Competing
Portion Offer"); or
3.4.5 providing services incidental to a business solution/service
where the revenue derived from such services is less than 15% of
the combined revenue derived from providing the business
solution/service.
3.5 RIGHT OF FIRST REFUSAL PROCEDURE
The Right of First Refusal Procedure shall be as follows:
3.5.1 The Party required to make the right of first refusal offer (the
"Offeror") shall serve a notice (the "Notice of Interest") on
the other Party (the "Offeree") of its intended interest in the
New Opportunity prior to it having such actual interest.
3.5.2 The Notice of Interest shall include, or offer to provide
reasonable access to, in so far as the Offeror is able, such
information, documents, records and management as is reasonably
necessary for the Offeree to make an informed assessment of the
New Opportunity which is the subject of the Notice of Interest.
3.5.3 If the Offeree is interested in pursuing the New Opportunity, it
shall serve a notice on the Offeror (the "Counter-Notice")
within 7 Business Days of receipt of the Notice of Interest
indicating its interest and the Offeror shall as soon as
reasonably practicable thereafter provide or procure the
provision of information pertinent to consideration of the New
Opportunity to the Offeree (to the extent that such information
has not been provided pursuant to Clause 3.5.2).
3.5.4 The Offeror shall use its reasonable endeavours to procure that
the New Opportunity shall remain available for pursuit by the
Offeree for at least 45 days from (i) the date all reasonable
information pertinent to consideration of the New Opportunity
has been provided to the Offeree pursuant to Clause 3.5.3 or
(ii) the date of the Counter Notice if all reasonable
information pertinent to consideration of the New Opportunity
has been provided prior to the date of the Counter-Notice. The
Offeror acknowledges that if the New Opportunity is in a market
in which the Offeree has an existing business and, in the
opinion of the Offeree, would compete with such existing
business and, due to such competition the Offeree does not wish
to pursue such New Opportunity, the Offeree will have to seek
approval of its board comprising directors in the case of HWL or
independent non-executive directors in the case of HTIL who do
not, and are not deemed to, have a material interest in the
matter for consideration of whether to reject the New
Opportunity and whether to grant its consent to the Offeror
pursuing the New Opportunity. The Offeree shall promptly notify
the Offeror of any decision taken to reject the New Opportunity
and to grant consent to the Offeror pursuing the New Opportunity
or of any decision taken to withhold consent to the Offeror
pursuing the New Opportunity.
6
3.5.5 The Offeror shall be deemed to have complied with the Right of
First Refusal Procedure and shall be free to pursue its interest
in the New Opportunity if prior to such pursuit:
(i) the Offeror has received a Counter-Notice from the
Offeree in the form described in Clause 3.5.3 but the
Offeree has not taken such reasonable steps as are
necessary to pursue the New Opportunity by the end of
the 45-day period referred to in Clause 3.5.4;or
(ii) the Offeror has received a notice from the Offeree
stating that it does not wish to pursue the New
Opportunity and consenting to the Offeror pursuing the
New Opportunity pursuant to Clause 3.5.4; or
(iii) the Offeror has not received any notice from the Offeree
concerning the New Opportunity within a period of 45
days from serving the Notice of Interest on the Offeree,
in which case the Offeree shall be deemed to have given
its consent to the Offeror pursuing such New
Opportunity.
3.5.6 Notwithstanding the above, the Parties hereby agree that where
the New Opportunity must be pursued faster than the time frame
set out in this Clause 3.5 due to third party limitations, the
Parties shall agree to such reasonable time frame to achieve and
complete the Right of First Refusal Procedure to ensure that the
New Opportunity may be duly pursued.
3.6 COMPETING PORTION OFFER PROCEDURE
The Competing Portion Offer Procedure shall be as follows:
3.6.1 The Party required to make the offer (the "Competing Portion
Offeror") shall serve a notice on the other Party (the
"Competing Portion Offeree") setting out the offer to purchase
the Competing Portion (referred to in this Clause 3.6 as the
"Notice of Offer").
3.6.2 The Notice of Offer shall include, or offer to provide
reasonable access to, such information, documents, records and
management as is reasonably necessary to enable the Competing
Portion Offeree to make an informed assessment of the Competing
Portion which is the subject of the Notice of Offer.
3.6.3 The consideration to be paid by the Competing Portion Offeree
for the Competing Portion shall be the fair market value of the
Competing Portion (the "Fair Value") which shall be determined
in accordance with Schedule 2.
3.6.4 The Competing Portion Offeree shall serve a notice on the
Competing Portion Offeror, within 30 Business Days after the
Fair Value Determination Date indicating either:
(i) that the Competing Portion Offeree wishes to acquire the
Competing Portion; or
(ii) that the Competing Portion Offeree does not wish to
acquire the Competing Portion.
3.6.5 If the Competing Portion Offeree serves a notice described in
Clause 3.6.4 (i), the Competing Portion Offeror and the
Competing Portion Offeree shall execute such agreements as may
be reasonably necessary and on such terms as the Parties may
agree to effect the transfer of the Competing Portion to the
Offeree, provided
7
that the Competing Portion Offeror shall furnish to the
Competing Portion Offeree, such representations, warranties and
undertakings as have been provided to the Competing Portion
Offeror in its acquisition of the relevant Competing Entity in
so far as they are referable to the Competing Portion and
subject to appropriate limitations and disclosures.
3.6.6 If the Competing Portion Offeree serves a notice of the kind
described in Clause 3.6.4 (ii) or does not serve any notice of
the kind described in Clause 3.6.4 within the 30 Business Day
period referred to in Clause 3.6.4, the Competing Portion Offer
shall lapse.
3.7 REASONABLENESS OF RESTRICTIONS
Each Party agrees that the restrictions contained in Clauses 3.1 and 3.2
are no greater than is reasonable and necessary for the protection of
their interests but if any such restriction shall be held to be void but
would be valid if deleted in part or reduced in application, such
restriction shall apply with such deletion or modification as may be
necessary to make it valid and enforceable.
3.8 RE-NEGOTIATION OF RESTRICTIONS
If technological developments in relation to the Defined Businesses or
changes in the competitive landscape for the Defined Businesses after
the date of this Agreement are such that the underlying philosophy of
delineating each Party's respective markets along geographical lines set
out in this Agreement, when applied in accordance with the terms of this
Agreement, becomes commercially impractical or unreasonable, either
Party may by giving notice to the other Party request that this Clause 3
be re-negotiated. The Parties shall thereafter co-operate with each
other and undertake such re-negotiation in good faith.
4 OTHER PROVISIONS
4.1 FURTHER ASSURANCE
At any time after the date of this Agreement each Party shall execute
such documents and do such acts and things as the other Party may
reasonably require for the purpose of giving to such other Party the
full benefit of all the provisions of this Agreement.
4.2 WHOLE AGREEMENT
This Agreement contains the whole agreement between the Parties relating
to the subject matter of this Agreement at the date of this Agreement to
the exclusion of any terms implied by law which may be excluded by
contract and supersedes any previous written or oral agreement between
the Parties in relation to the matters dealt with in this Agreement.
4.3 REASONABLENESS
Each of the Parties confirms it has received independent legal advice
relating to all the matters provided for in this Agreement and agrees
that the provisions of this Agreement are fair and reasonable.
8
4.4 ASSIGNMENT
This Agreement is personal to the Parties. Accordingly neither Party
may, without the prior written consent of the other, assign the benefit
of all or any of the other's obligations under this Agreement, or any
benefit arising under or out of this Agreement.
4.5 VARIATION
No variation of this Agreement shall be effective unless in writing and
signed by or on behalf of each of the Parties.
4.6 TIME OF THE ESSENCE
Time shall be of the essence of this Agreement both as regards any dates
and periods mentioned and as regards any dates and periods which may be
substituted for them in accordance with this Agreement or by agreement
in writing between the Parties.
4.7 COSTS
Except as agreed otherwise, each Party shall bear its own costs which it
incurs in connection with the preparation, negotiation, entry into and
performance of this Agreement.
4.8 NOTICES
4.8.1 Any notice or other communication in connection with this
Agreement shall be in writing in English, delivered by fax,
pre-paid first class post or courier.
4.8.2 A notice shall be sent to the relevant address specified in
Schedule 1, or such other address as may be notified to all the
Parties;
4.8.3 A notice shall be effective upon receipt and shall be deemed to
have been received at the time of delivery if delivered by
pre-paid first class post or courier or at the time of
transmission if delivered by fax.
4.9 INVALIDITY
If any provision in this Agreement shall be held to be illegal, invalid
or unenforceable, in whole or in part, the provision shall apply with
whatever deletion or modification is necessary so that the provision is
legal, valid and enforceable and gives effect to the commercial
intention of the Parties.
4.10 COUNTERPARTS
This Agreement may be entered into in any number of counterparts, all of
which taken together shall constitute one and the same instrument. The
Parties may enter into this Agreement by signing any such counterpart.
4.11 CONFIDENTIALITY
4.11.1 Each Party shall treat as strictly confidential and not disclose
or use any information received or obtained as a result of
entering into this Agreement and not disclose the terms of this
Agreement.
4.11.2 Clause 4.11.1 shall not prohibit disclosure or use if and to the
extent:
(i) the disclosure or use is required by law, any regulatory
body or the rules and regulations of any internationally
recognised stock exchange (including
9
but not limited to disclosure of this agreement in any
offering document prepared by either Party in connection
with its listing on any internationally recognised stock
exchange);
(ii) the disclosure or use is required to vest the full
benefit of this Agreement in either Party;
(iii) the disclosure or use is required for the purpose of any
judicial proceedings arising out of this Agreement or
any other agreement entered into under or pursuant to
this Agreement or the disclosure is reasonably required
to be made to a taxation authority in connection with
the taxation affairs of the disclosing Party;
(iv) the disclosure is made to professional advisers of the
disclosing Party on terms that such professional
advisers undertake to comply with the provisions of
Clause 4.11.1 in respect of such information as if they
were a party to this Agreement;
(v) the information or the terms of the Agreement become
publicly available (other than by breach of this
Agreement);
(vi) the other Party has given prior written approval to the
disclosure or use;
(vii) the information is independently developed by either
Party,
provided that prior to disclosure or use of any information
pursuant to Clause 4.11.2(i), (ii), (iii) (except in the case of
disclosure to a taxation authority) or (iv), the Party concerned
shall promptly notify the other Party of such requirement with a
view to providing the other Party with the opportunity to
contest such disclosure or use or otherwise to agree the timing
and content of such disclosure or use.
4.12 GOVERNING LAW AND DISPUTE RESOLUTION
4.12.1 This Agreement shall be governed by and construed in accordance
with the laws of Hong Kong.
4.12.2 The Parties irrevocably agree that the courts of Hong Kong are
to have exclusive jurisdiction to settle any dispute which may
arise out of or in connection with this Agreement. The Parties
irrevocably submit to the jurisdiction of such courts and waive
any objection to proceedings in any such court on the ground of
venue or on the ground that proceedings have been brought in an
inconvenient forum.
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In witness whereof this Agreement has been duly executed.
SIGNED by
for and on behalf of
XXXXXXXXX WHAMPOA
LIMITED:
SIGNED by
for and on behalf of
XXXXXXXXX
TELECOMMUNICATIONS
INTERNATIONAL LIMITED:
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SCHEDULE 1
NOTICES
PARTY CONTACT DETAILS
---------------------------------------- -------------------------------------
Xxxxxxxxx Whampoa Limited 00xx Xxxxx, Xxxxxxxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxxxxxx
Xxxx Xxxx
Fax: x000 0000 0000
Attention: The Company Secretary
Xxxxxxxxx Telecommunications 18/F, Two Harbourfront
International Limited 00 Xxx Xxxx Xxxxxx
Xxxxxxx
Xxxxxxx
Xxxx Xxxx
Fax: x000 0000-0000
Attention: The Company Secretary
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SCHEDULE 2
PRICE OF COMPETING PORTION
1.1 The Fair Value shall be determined in accordance with this Schedule 2.
1.2 In this Schedule,
"Investment Bank" shall mean any one of the largest five international
investment banks with a recognised area of expertise of valuing
companies of the type that carry on the business comprising the
Competing Portion, as agreed by the Parties, or failing such agreement,
such international investment bank chosen by the President of the Law
Society of Hong Kong;
1.3 Determination of Fair Value
1.3.1 Appointment of expert
The Fair Value shall be determined by the Investment Bank, which
shall be jointly appointed by the Parties, in accordance with
the provisions below or as the Parties may otherwise agree. The
Investment Bank shall be appointed within 14 Business Days after
the date on which the Competing Portion Offeror has served the
Notice of Offer. The fees of the Investment Bank shall be borne
by the Parties equally.
1.3.2 Method and adjustments
The Investment Bank shall determine the Fair Value of the
Competing Portion on the following assumptions and bases:
(a) valuing the sale of the Competing Portion as an arm's
length sale between a willing seller and a willing
buyer;
(b) if the Competing Portion comprises a business carried on
as a going concern, the continuing of the Competing
Portion as a going concern and assuming that the
Competing Portion Offeree would be able to continue to
enjoy all rights and benefits accruing to the Competing
Portion as at the date immediately prior to the
completion of the proposed sale; and
(c) valuing the Competing Portion as a rateable proportion
of the total value of the Competing Entity without any
premium or discount being attached.
1.3.3 The Investment Bank shall determine the Fair Value to reflect
any other factors which the Investment Bank reasonably believes
should be taken into account.
1.3.4 If any difficulty arises in applying any of these assumptions or
bases then the Investment Bank shall resolve that difficulty in
such manner as it shall in its absolute discretion think fit.
1.4 Determination
1.4.1 The Investment Bank shall be instructed to determine the Fair
Value within 30 Business Days of its appointment or prior to
such other date as may be agreed in writing by the Parties and
shall notify the Parties of its determination in
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accordance with such time-frame (the date of notification being
the "Fair Value Determination Date").
1.4.2 The Investment Bank shall act as expert and not as arbitrator
and its determination shall be final and binding on the Parties
(in the absence of fraud or manifest error).
1.4.3 In determining Fair Value pursuant to this Schedule, the
Competing Portion Offeror shall, subject to any confidentiality
obligations to which the Competing Portion Offeror is subject,
grant the Investment Bank access to all accounting records or
other relevant documents of the Competing Entity and the
Competing Portion and shall procure that the Competing Entity
shall instruct its agents, representatives, employees, directors
and executives to give such assistance to the Investment Bank as
the Investment Bank reasonably requests in order to determine
the Fair Value.
1.4.4 In determining Fair Value pursuant to this Schedule, the Parties
may make representations to the Investment Bank which the
Investment Bank may, in its sole discretion, choose to take
account of, provided that the taking into account of any such
representations shall not delay the time frame for determining
Fair Value set out in this Schedule.
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TABLE OF CONTENTS
CONTENTS PAGE
1 Interpretation.........................................................1
2 Condition and Duration.................................................4
3 Business Opportunities and Cross-Referrals.............................4
4 Other Provisions.......................................................8
Schedule 1 Notices............................................................12
Schedule 2 Price of Competing Portion.........................................13
