EXHIBIT 10.5
NON-COMPETION AGREEMENT
BY AND BETWEEN
CHINA NETWORK COMMUNICATIONS GROUP CORPORATION
CHINA NETCOM GROUP CORPORATION (HONG KONG) LIMITED
AND
CHINA NETCOM (GROUP) COMPANY LIMITED
NON-COMPETION AGREEMENT
This Non-competition Agreement (this "Agreement") is made and entered into
on [-], 2004 in Beijing, People's Republic of China ("PRC") by and among the
following parties:
CHINA NETWORK COMMUNICATIONS GROUP CORPORATION (the "GROUP CORPORATION"),
a state-owned enterprise established under the laws of PRC, with its registered
address at: Xx.000, Xxxxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxx
CHINA NETCOM GROUP CORPORATION (HONG KONG) LIMITED ("CNC (HK)"), a company
duly incorporated and validly existing under the laws of Hong Kong Special
Administrative Region ("Hong Kong") with limited liability.
CHINA NETCOM (GROUP) COMPANY LIMITED ("NEW CNC"), a company duly
incorporated and validly existing under the laws of PRC with limited liability
as a wholly foreign-owned enterprise ("WFOE"), with its registered address at:
Xxxxxxxx X, Xx.000, Xxxxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxx.
WHEREAS, the Group Corporation is the indirect majority shareholder of CNC
(HK), and New CNC, wholly owned by CNC (HK); and
WHEREAS, CNC (HK) plans to be listed on The Stock Exchange of Hong Kong
Limited (Hong Kong Stock Exchange") offering red-chip stocks to overseas
investors and to be listed on the New York Stock Exchange in the form of
American Depositary Share (ADS).
NOW, THEREFORE, in consideration of the foregoing recitals and in order to
avoid possible competition within the same industry, the parties hereto agree as
follows:
ARTICLE 1 DEFINITIONS
In this Agreement, unless otherwise stipulated by the context, the
following terms have the meanings set out below in this Agreement:
1. Effective Date
The term "Effective Date" means the day on which this Agreement is signed
by the legal representatives or authorized representatives of the Group
Corporation, CNC (HK) and New CNC.
2. Subsidiary Companies
For parties to this Agreement, the term "Subsidiary Companies" means any
companies, enterprises or any entities with legal person capacity under
direct or indirect control of the relevant party, provided
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that (a) over half of the voting power is held directly or indirectly by
such party; or (b) over half of the distributable profit goes directly or
indirectly into such party's account; or (c) the Board of Directors is
directly or indirectly under such party's control; or (d) over half of the
registered capital is held directly or indirectly by such party.
For the purpose of this Agreement, the subsidiary companies of the Group
Corporation mentioned herein do not include CNC (HK), New CNC and their
respective subsidiary companies.
3. CNC (HK) Competing Business
The term "CNC (HK) Competing Business" means the telecommunication
services provided by CNC (HK) and its subsidiary companies (herein not
including New CNC and its subsidiary companies, same as below) based on
their telecommunication businesses permitted by their current business
operating licenses in regions outside China (herein not including Hong
Kong, Macao and Taiwan for the purpose of this Agreement) after the
restructuring and in the future.
4. New CNC Competing Business
The term "New CNC Competing Business" means the basic telecommunication
services (not including wireless paging services) listed in the
Categorized Catalog of Telecommunication Services promulgated by Ministry
of Information Industry of the PRC on Feb. 21, 2003, and the following
value-added telecommunication services: (1) Multi-party Conferencing
Service; (2) Internet Access Service; (3) Internet Data Center (IDC)
Service; and (4) Internet Protocol based Virtual Private Network Service.
The New CNC had been operating and will be operating such services in its
business regions after the restructuring and in the future.
ARTICLE 2 COMMITMENTS OF THE GROUP CORPORATION
2.1 The Group Corporation undertakes to CNC (HK) and New CNC respectively
that: unless disclosed in the Prospectus of CNC (HK) or otherwise
stipulated by this Agreement or with written consent from CNC (HK), in any
period, if CNC (HK) shares are listed on the Hong Kong Stock Exchange or
on other stock exchanges and the Group Corporation holds, directly or
indirectly, 30% or more of the issued share capital of CNC (HK), or if the
Group Corporate is deemed to be the majority shareholder of CNC (HK)
according to relevant listing rules, stock exchange regulations or other
relevant laws, (1) the Group Corporation will not, and will also cause its
subsidiary companies not to, at any time directly or indirectly and in any
forms (including but not limited to means of wholly-owned subsidiary,
joint-venture, or holding shares, other interests or options of another
company or enterprise, or any other types of cooperation), operate the CNC
(HK) Competing Business or New CNC Competing Business that will/may bring
direct or indirect competition against CNC (HK) and New CNC as well as
their subsidiary companies after restructuring or in the future in the
business regions of CNC (HK) and New CNC as well as their subsidiary
companies; (2) the Group Corporation will use its best effort
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to prevent its investors from operating the CNC (HK) Competing Business or
New CNC Competing Business that will/may bring direct or indirect
competition against CNC (HK) and New CNC as well as their subsidiary
companies after restructuring or in the future in the business regions of
CNC (HK) and New CNC as well as their subsidiary companies.
ARTICLE 3 EQUAL RESPONSIBILITIES
Unless otherwise stipulated by this Agreement, all the commitments made by
the Group Corporation are made on behalf of the corporation itself and its
wholly owned subsidiaries, branches and subsidiary companies. Unless otherwise
stipulated, the Group Corporation mentioned in this Agreement includes the
corporation itself and its wholly owned subsidiaries, branches and subsidiary
companies.
ARTICLE 4 TERMS
This Agreement shall become effective from the Effective Date and will
remain in force unless terminated when: (1) according to relevant listing rules,
stock exchange regulations or other related laws, the Group Corporation is no
longer regarded as the direct or indirect majority shareholder of CNC (HK); or
(2) CNC (HK) stops its listing on the Hong Kong Stock Exchange or on any other
stock exchanges.
ARTICLE 5 REPRESENTATIONS, WARRANTIES & UNDERTAKINGS
Each party represents, warrants and undertakes to the other party that:
(1) It has the adequate power and authorization (including but not
limited to any approval, consents or permission granted by the
government departments) to sign this Agreement;
(2) Once signed and affixed with the seal in the manner stipulated by
this Agreement, this Agreement will become effective with binding
force, and enforceable according to its terms and conditions;
(3) No provision in this Agreement violates the constitutive documents
or the laws and regulations of PRC and Hong Kong.
ARTICLE 6 FORCE MAJEURE
If any unforeseeable Force Majeure incident whose occurrence and impact
cannot be prevented or avoided cause one party to fail in performing this
Agreement in accordance with the agreed terms, the affected Party shall
immediately inform the other Parties by written notice within fifteen (15) days
after the said incident, and provide the other Parties details of the incident
and effective certification documents explaining why all or part of the related
obligations under this Agreement and the relevant appendixes can
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not be performed, or need to performed in a prolonged time frame. Based on the
extent of the influence of such incidents on the performance of such affected
obligations, the parties shall negotiate to decide whether or not to terminate,
partially exempt or postpone the performance of such obligations.
ARTICLE 7 CONFIDENTIALITY
Unless otherwise required or stipulated by laws or relevant regulator
authorities, for the purpose of the listing (and maintaining of its listed
status) of CNC (HK), any party, without written consent of other parties, shall
not make any public announcement or provide or disclose to any companies,
enterprises, organizations or individuals the materials and information related
to other parties' businesses or the subject matter of this Agreement.
ARTICLE 8 TRANSFER
Without prior written consent of other parties, no party shall transfer
any of its rights or obligations under this Agreement.
ARTICLE 9 NON-WAIVER
Unless otherwise specified by law, the failure or delay of exercising the
rights, powers or privileges as endowed by this Agreement on the part of any
Party cannot be deemed as the waiver of such rights, power or privileges.
Besides, the partial exercise of such rights, powers or privileges should not
hinder the exercise of such rights, powers or privileges of this Party in the
future.
ARTICLE TEN NOTICES
10.1 All notices required to be delivered pursuant to this Agreement shall be
in writing and in Chinese, and delivered to the address as stated at the
beginning part of this Agreement, or to addresses or facsimile numbers
designated by one Party to the other Parties in writing from time to time.
10.2 Any notice above shall be delivered either by hand, registered mail, or
facsimile. Any notice shall be deemed to have been delivered at the time
of actual receipt if delivered by hand; on the date of return receipt if
delivered by registered mail; and at the time of transmission if delivered
by facsimile.
ARTICLE 11 GOVERNING LAWS
This Agreement shall be governed, interpreted and enforced in accordance
with laws of PRC.
ARTICLE 12 DISPUTES RESOLUTION
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In case of disputes as to the power, interpretation or implementation of
this agreement, all parties shall seek to settle the matters of dispute by
friendly negotiation. If the matters of dispute cannot be settled by negotiation
within thirty (30) days from the day the matters of dispute arise, either party
has the right to resort to litigation at the people's court which has
jurisdiction.
ARTICLE 13 EFFECTIVENESS OF THIS AGREEMENT AND OTHERS
13.1 Upon negotiation and by mutual consent of all parties, this Agreement and
its appendixes may be amended or supplemented. All such amendments or
supplements shall come into effect once signed by the legal
representatives or authorized representatives of the Parties and affixed
with their official seals.
13.2 This Agreement is dividable, which means that if any terms or conditions
of this Agreement and its appendixes is/are determined to be illegal or
not enforceable, the rest terms or conditions shall be effective without
being affected.
13.3 This Agreement is made into six (6) duplicate copies. Each party holds two
(2) copies, and each original shall have the same legal binding effect.
IN WITNESS WHEREOF, the legal representative or authorized representatives
of the Parties hereto have executed this Agreement as of the date and venue
first written above.
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Signature page:
CHINA NETWORK COMMUNICATIONS GROUP CORPORATION (Seal)
By: __________
Legal Representative or Authorized Representative
CHINA NETCOM GROUP CORPORATION (HONG KONG) LIMITED
By: __________
Legal Representative or Authorized Representative
CHINA NETCOM (GROUP) COMPANY LIMITED (Seal)
By : __________
Legal Representative or Authorized Representative
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