DEPOSIT AGREEMENT
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by and among
AU OPTRONICS CORP.
AND
CITIBANK, N.A.,
as Depositary,
AND
THE HOLDERS AND BENEFICIAL OWNERS
OF AMERICAN DEPOSITARY SHARES EVIDENCED BY
AMERICAN DEPOSITARY RECEIPTS ISSUED HEREUNDER
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Dated as of May 29, 2002
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS.......................................................................................................2
Section 1.1 "ADS Record Date"...........................................................................2
Section 1.2 "Affiliate".................................................................................2
Section 1.3 "American Depositary Share(s)"..............................................................2
Section 1.4 "Applicant".................................................................................2
Section 1.5 "Beneficial Owner"..........................................................................2
Section 1.6 "Bonds".....................................................................................3
Section 1.7 "Business Day"..............................................................................3
Section 1.8 "Certificate(s) of Payment" and "COP(s)"....................................................3
Section 1.9 "Commission"................................................................................3
Section 1.10 "Company"...................................................................................3
Section 1.11 "Custodian".................................................................................3
Section 1.12 "Deliver" and "Delivery"....................................................................3
Section 1.13 "Deposit Agreement".........................................................................3
Section 1.14 "Depositary"................................................................................3
Section 1.15 "Deposited Securities"......................................................................3
Section 1.16 "Dollars" and "$"...........................................................................4
Section 1.17 "DTC".......................................................................................4
Section 1.18 "DTC Participant"...........................................................................4
Section 1.19 "Eligible Securities".......................................................................4
Section 1.20 "Eligible Securities Registrar".............................................................4
Section 1.21 "Entitlement Certificate(s)" and "ECs"......................................................4
Section 1.22 "Exchange Act"..............................................................................4
Section 1.23 "Foreign Currency"..........................................................................4
Section 1.24 "Holder"....................................................................................5
Section 1.25 "Initial Deposit"...........................................................................5
Section 1.26 "NT dollars" and "NT$"......................................................................5
Section 1.27 "Offering"..................................................................................5
Section 1.28 "Pre-Cancellation Sale".....................................................................5
Section 1.29 "Pre-Release Transaction"...................................................................5
Section 1.30 "Principal Office"..........................................................................5
Section 1.31 "Prospectus"................................................................................5
Section 1.32 "Receipt(s)"; "American Depositary Receipt(s)" and "ADR(s)".................................5
Section 1.33 "Registrar".................................................................................5
Section 1.34 "Republic of China", "ROC" and "Taiwan".....................................................6
Section 1.35 "Restricted Securities".....................................................................6
Section 1.36 "Restricted ADRs" , "Restricted ADS(s)" and "Restricted Shares".............................6
Section 1.37 "Securities Act"............................................................................6
Section 1.38 "SFC".......................................................................................6
Section 1.39 "Shares"....................................................................................6
Section 1.40 "Share American Depositary Share(s)" and "Share ADS(s)".....................................7
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Section 1.41 "Share American Depositary Receipt(s)" and "Share ADR(s)"...................................7
Section 1.42 "Shareholder Notice"........................................................................7
Section 1.43 "Taiwan Securities Central Depository"......................................................7
Section 1.44 "Taiwan Stock Exchange" and "TSE"...........................................................7
Section 1.45 "Temporary ADS(s)"..........................................................................7
Section 1.46 "Temporary ADR(s)"..........................................................................7
Section 1.47 "Temporary EC ADS(s)".......................................................................7
Section 1.48 "Temporary EC ADR(s)".......................................................................7
Section 1.49 "Temporary COP ADS(s)"......................................................................8
Section 1.50 "Temporary COP ADR(s)"......................................................................8
Section 1.51 "Trust Deed"................................................................................8
Section 1.52 "United States".............................................................................8
Section 1.53 "Voting Representative".....................................................................8
ARTICLE II
APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS; DEPOSIT OF ELIGIBLE SECURITIES; EXECUTION AND DELIVERY, TRANSFER AND
SURRENDER OF RECEIPTS.............................................................................................8
Section 2.1 Appointment of Depositary...................................................................8
Section 2.2 Form and Transferability of Receipts........................................................9
Section 2.3 Deposit with Custodian.....................................................................10
Section 2.4 Registration and Safekeeping of Deposited Securities.......................................12
Section 2.5 Execution and Delivery of Receipts.........................................................13
Section 2.6 Transfer, Combination and Split-up of Receipts.............................................13
Section 2.7 Surrender of ADSs and Withdrawal and Sale of Deposited Securities..........................14
Section 2.8 Additional Limitations on Execution and Delivery, Transfer, etc.
of Receipts; Suspension of Delivery, Transfer, etc.........................................16
Section 2.9 Lost Receipts, etc.........................................................................17
Section 2.10 Cancellation and Destruction of Surrendered Receipts;
Maintenance of Records.....................................................................18
Section 2.11 Partial Entitlement ADSs...................................................................18
Section 2.12 Temporary COP ADSs.........................................................................18
Section 2.13 Temporary EC ADSs..........................................................................20
Section 2.14 Restricted ADSs............................................................................22
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS AND BENEFICIAL
OWNERS OF ADSs...................................................................................................23
Section 3.1 Proofs, Certificates and Other Information.................................................23
Section 3.2 Liability for Taxes and Other Charges......................................................24
Section 3.3 Representations and Warranties on Deposit of Eligible Securities...........................24
Section 3.4 Compliance with Information Requests.......................................................25
Section 3.5 Ownership Restrictions.....................................................................26
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ARTICLE IV
THE DEPOSITED SECURITIES.........................................................................................26
Section 4.1 Cash Distributions.........................................................................26
Section 4.2 Distribution in Eligible Securities........................................................27
Section 4.3 Elective Distributions in Cash or Eligible Securities......................................27
Section 4.4 Distribution of Rights to Purchase Additional ADSs.........................................28
Section 4.5 Distributions Other Than Cash, Eligible Securities or
Rights to Purchase Eligible Securities.....................................................30
Section 4.6 Intentionally Omitted......................................................................31
Section 4.7 Intentionally Omitted......................................................................31
Section 4.8 Conversion of Foreign Currency.............................................................31
Section 4.9 Fixing of ADS Record Date..................................................................31
Section 4.10 Voting of Deposited Securities.............................................................32
Section 4.11 Changes Affecting Deposited Securities.....................................................35
Section 4.12 Available Information......................................................................35
Section 4.13 Reports....................................................................................36
Section 4.14 List of Holders............................................................................36
Section 4.15 Taxation...................................................................................36
ARTICLE V
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY....................................................................37
Section 5.1 Maintenance of Office and Transfer Books by the Registrar..................................37
Section 5.2 Exoneration................................................................................37
Section 5.3 Standard of Care...........................................................................38
Section 5.4 Resignation and Removal of the Depositary;
Appointment of Successor Depositary........................................................39
Section 5.5 The Custodian..............................................................................40
Section 5.6 Notices and Reports........................................................................40
Section 5.7 Issuance of Additional Shares, ADSs, etc...................................................41
Section 5.8 Indemnification............................................................................42
Section 5.9 Fees and Charges of Depositary.............................................................42
Section 5.10 Pre-Release Transactions and Pre-Cancellation Sales........................................43
Section 5.11 Restricted Securities Owners...............................................................44
ARTICLE VI
AMENDMENT AND TERMINATION........................................................................................44
Section 6.1 Amendment/Supplement.......................................................................44
Section 6.2 Termination................................................................................45
ARTICLE VII
MISCELLANEOUS....................................................................................................46
Section 7.1 Counterparts...............................................................................46
Section 7.2 No Third-Party Beneficiaries...............................................................46
Section 7.3 Severability...............................................................................47
Section 7.4 Holders and Beneficial Owners as Parties; Binding Effect...................................47
Section 7.5 Notices....................................................................................47
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Section 7.6 Governing Law and Jurisdiction.............................................................48
Section 7.7 Assignment.................................................................................49
Section 7.8 Compliance with U.S. Securities Laws.......................................................49
Section 7.9 Titles and References......................................................................49
EXHIBITS
Exhibit A Form of Receipt.......................................................................................A-1
Exhibit B Fee Schedule..........................................................................................B-1
Exhibit C Certification Upon Withdrawal.........................................................................C-1
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DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of May 29, 2002 (this Deposit Agreement
and all Exhibits hereto, as amended and supplemented from time to time in
accordance with its terms, the "Deposit Agreement"), by and among (i) AU
OPTRONICS CORP., a company incorporated under the laws of the Republic of China,
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 of American
Depositary Shares evidenced by American Depositary Receipts issued hereunder
(all such capitalized terms as hereinafter defined).
W I T N E S S E T H T H A T:
WHEREAS, the Company has duly authorized the issuance of, and has
outstanding, shares of common stock, having a par value of NT$10.00 per share
(the "Shares"), which are listed for trading on the Taiwan Stock Exchange; and
WHEREAS, the Company and the Depositary desire to provide for the
deposit of the Shares and the creation of (i) American Depositary Shares (the
"ADSs") represented by American Depositary Receipts, the ADSs representing the
Shares so deposited upon the terms set forth herein listed for trading on the
New York Stock Exchange, Inc. (the depositary receipts facility for such ADSs,
the "ADS Facility"); and
WHEREAS, the Company wishes to provide for the deposit of
Certificates of Payment (as hereinafter defined) and the creation of "Temporary
COP American Depositary Shares" representing the Certificates of Payment so
deposited upon the terms set forth herein (the "Temporary COP ADSs") listed for
trading on the New York Stock Exchange, Inc. (the depositary receipts facility
for such Temporary COP ADSs, the "COP ADS Facility"); and
WHEREAS, the Company wishes to provide for the deposit of
Entitlement Certificates (as hereinafter defined), and for the creation of
Temporary EC ADSs representing the Entitlement Certificates so deposited upon
the terms set forth herein (the "Temporary EC ADSs", together with the Temporary
COP ADSs, the "Temporary ADSs"), (the EC ADS Facility, together with the ADS
Facility and the COP ADS Facility, the "ADS Facilities"); and
WHEREAS, the Depositary is willing to act as the Depositary for the
ADS Facilities upon the terms set forth in this Deposit Agreement; and
WHEREAS, the American Depositary Receipts evidencing each series of
the American Depositary Shares 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 Board of Directors of the Company (or an authorized
committee thereof) has duly approved the establishment of the ADS Facilities
upon the terms set forth in this Deposit Agreement, 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 "ADS Record Date" shall have the meaning given to such
term in Section 4.9.
Section 1.2 "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 1.3 "American Depositary Share(s)" and "ADS(s)" shall mean,
individually or collectively, as the context may require, the rights and
interests in the Deposited Securities (as hereinafter defined) granted to the
Holders (as hereinafter defined) and Beneficial Owners (as hereinafter defined)
pursuant to the terms and conditions of this Deposit Agreement and the American
Depositary Receipts issued hereunder to evidence such ADSs. Each American
Depositary Share shall represent (i) in the case of Share ADSs (as hereinafter
defined) ten (10) Shares, (ii) in the case of Temporary COP ADSs, an undivided
interest in a Certificate of Payment deposited by the Company with the Custodian
and representing the irrevocable right to receive the aggregate number of Shares
from the Company, each Temporary COP ADS representing an undivided interest in
the irrevocable right to receive ten (10) Shares from the Company, and (iii) in
the case of Temporary EC ADSs, Entitlement Certificates, each representing the
irrevocable right to receive ten (10) Shares in each case 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 American Depositary Shares are not issued, and thereafter each
American Depositary Share shall represent the Deposited Securities determined in
accordance with the terms of such Sections. Unless otherwise specifically set
forth in this Deposit Agreement or the applicable ADR (as hereinafter defined),
the terms "American Depositary Shares" and "ADSs" shall include Temporary COP
ADSs and Temporary EC ADSs, individually or collectively, as the context may
require.
Section 1.4 "Applicant" shall have the meaning given to such term in
Section 5.10.
Section 1.5 "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 ADR(s) evidencing
such 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 ADR(s)
evidencing the ADS(s) owned by such Beneficial Owner.
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Section 1.6 "Bonds" shall mean any convertible or exchangeable
promissory note or bond issued pursuant to the terms of any Trust Deed (as
hereinafter defined) that may be converted according to its terms into, or
exchanged according to its terms for, (i) Shares or Entitlement Certificates or
(ii) ADSs.
Section 1.7 "Business Day" shall mean any day on which both the
banks in Taipei and the banks in New York are open for business.
Section 1.8 "Certificate(s) of Payment" and "COP(s)" shall mean the
Certificate(s) of Payment issued by the Company evidencing the irrevocable right
to receive Shares from the Company in connection with the Offering or any
subsequent offerings of the same nature as the Offering.
Section 1.9 "Commission" shall mean the Securities and Exchange
Commission of the United States or any successor governmental agency thereto in
the United States.
Section 1.10 "Company" shall mean AU Optronics Corp., a company
incorporated and existing under the laws of the Republic of China, and its
successors.
Section 1.11 "Custodian" shall mean, as of the date hereof,
Citibank, N.A., (Taipei), having its principal office at X0, Xx. 00, Xxxxxxx X.
Xxxx, Xxx. 0, Xxxxxx, Xxxxxx, Xxxxxxxx of China, as the custodian for the
purposes of this Deposit Agreement, and any other entity that may be appointed
by the Depositary 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 1.12 "Deliver" and "Delivery" shall mean, when used in
respect of ADSs, Deposited Securities and Eligible Securities (as such terms are
hereinafter defined) and to the extent permissible under the laws of the
Republic of China, 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 through the Taiwan Securities Central Depository
Co., Ltd., if available.
Section 1.13 "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 1.14 "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 1.15 "Deposited Securities" shall mean, collectively or
individually, as the context may require and unless otherwise specifically set
forth herein, (a) with respect to Share ADSs (as such term is hereinafter
defined), Shares, (b) with respect to Temporary COP ADSs (as such term is
3
hereinafter defined), Certificates of Payment, and (c) with respect to Temporary
EC ADSs (as such term is hereinafter defined), Entitlement Certificates, in each
case, 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.
Notwithstanding anything else contained herein, the securities, property and
cash delivered to the Custodian in respect of Shares and Entitlement
Certificates, and any other deposited securities, from and after the date
hereof, shall be considered to be and treated as, Deposited Securities hereunder
in all respects. The collateral delivered in connection with Pre-Release
Transactions and/or Pre-Cancellation Sales in each case as described in Section
5.10 hereof, shall not constitute Deposited Securities.
Section 1.16 "Dollars" and "$" shall refer to the lawful currency of
the United States.
Section 1.17 "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 1.18 "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 1.19 "Eligible Securities" shall mean, collectively or
individually as the context may require and unless otherwise specifically set
forth herein, (a) with respect to Share ADSs (as such term is hereinafter
defined), Shares, (b) with respect to Temporary COP ADSs (as such term is
hereinafter defined), Certificates of Payment and (c) with respect to Temporary
EC ADSs (as such term is hereinafter defined), Entitlement Certificates, in each
case to the extent eligible for deposit hereunder at any time and from time to
time from and after the date hereof.
Section 1.20 "Eligible Securities Registrar" shall mean National
Securities Corp., or any other institution organized under the laws of the
Republic of China appointed by the Company to carry out the duties of registrar
for holders of (a) Shares, (b) Certificates of Payment and (c) Entitlement
Certificates, and any successor thereto.
Section 1.21 "Entitlement Certificate(s)" and "ECs" shall mean the
scrip known as "Certificates Exchangeable for Shares" to be issued to holders of
Bonds in connection with the exercise of conversion or exchange rights of the
Bonds. Entitlement Certificates evidence the irrevocable right to receive Shares
from the Company after completion of the necessary corporate amendment
registration by the Company.
Section 1.22 "Exchange Act" shall mean the United States Securities
Exchange Act of 1934, as from time to time amended.
Section 1.23 "Foreign Currency" shall mean any lawful currency other
than Dollars.
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Section 1.24 "Holder" shall mean the person in whose name a Receipt
is 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 ADSs evidenced by the Receipt
registered in its name, such person shall be deemed to have all requisite
authority to act on behalf of the Beneficial Owners of the ADSs evidenced by
such Receipt.
Section 1.25 "Initial Deposit" shall mean the initial deposit of
Shares or Certificates of Payment, as the case may be, in connection with the
Offering (as hereinafter defined).
Section 1.26 "NT dollars" and "NT$" shall refer to the lawful
currency of Taiwan, Republic of China.
Section 1.27 "Offering" shall mean the offering of ADSs in the
United States and in countries other than the Republic of China as contemplated
by the Underwriting Agreements, dated as of May 23, 2002, by and among Xxxxxxx
Xxxxx Xxxxxx, Inc., as representatives of the several underwriters listed in
Schedule I thereto, the Company and certain of the Company's shareholders.
Section 1.28 "Pre-Cancellation Sale" shall have the meaning set
forth in Section 5.10(b).
Section 1.29 "Pre-Release Transaction" shall have the meaning set
forth in Section 5.10(a).
Section 1.30 "Principal Office", when used with respect to the
Depositary, shall mean 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 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, X.X.X.
Section 1.31 "Prospectuses" shall mean the Company's Prospectuses,
dated May 23, 2002, delivered in connection with the Offering pursuant to the
Company's Registration Statement on Form F-1 (Reg. No. 333-87418), filed with
the Commission on May 15, 2002 and declared effective on May 22, 2002.
Section 1.32 "Receipt(s)"; "American Depositary Receipt(s)" and
"ADR(s)" shall mean any series of the certificate(s) issued by the Depositary to
evidence the American Depositary Shares issued under the terms of this Deposit
Agreement, as such Receipts may be amended from time to time in accordance with
the provisions of this Deposit Agreement. A Receipt may evidence any number of
American Depositary Shares and may, in the case of American Depositary Shares
held through a central depository such as DTC, be in the form of a "Balance
Certificate." Unless otherwise specifically set forth herein, the term
"Receipts" shall include the Temporary ADRs evidencing the Temporary EC ADSs or
the Temporary COP ADSs issued hereunder, individually or collectively, as the
context may require.
Section 1.33 "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 to register issuances,
transfers and cancellations of Receipts as herein provided, and shall include
5
any co-registrar appointed by the Depositary 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 accepting such appointment and agreeing to be bound by the applicable
terms of this Deposit Agreement.
Section 1.34 "Republic of China", "ROC" and "Taiwan" shall mean the
Republic of China.
Section 1.35 "Restricted Securities" shall mean collectively or
individually, as the context may require, Eligible Securities, Deposited
Securities or ADSs, which (i) have been acquired directly or indirectly from the
Company or any of its Affiliates in a transaction or a chain of transactions not
involving any public offering and are subject to resale limitations under the
Securities Act (as hereinafter defined) 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 (a) the laws of the United States, (b) the laws of the
Republic of China, (c) a shareholders' agreement, (d) the Articles of
Incorporation of the Company, or (e) the regulations of an applicable securities
exchange unless, in each case, (x) such Eligible Securities, Deposited
Securities or ADSs are being transferred or sold to persons other than an
Affiliate of the Company in a transaction (i) covered by an effective resale
registration statement, or (ii) exempt from the registration requirements of the
Securities Act (as hereinafter defined), and (y) the Eligible Securities,
Deposited Securities or ADSs are not, when held by such person(s), Restricted
Securities.
Section 1.36 "Restricted ADRs" , "Restricted ADS(s)" and "Restricted
Shares" shall have the respective meanings set forth in Section 2.14.
Section 1.37 "Securities Act" shall mean the United States
Securities Act of 1933, as from time to time amended.
Section 1.38 "SFC" shall mean the ROC Securities and Futures
Commission, as further described in Section 2.3 hereof.
Section 1.39 "Shares" shall mean the Company's shares of common
stock, each having a par value of NT$10.00 per share, validly issued and
outstanding and fully paid and may, if the Depositary so agrees after obtaining
written consent from the Company, include evidence of the right to receive
Shares (other than Entitlement Certificates or Certificates of Payment);
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 change in par value,
split-up, consolidation, reclassification, exchange, conversion, or other event.
6
Section 1.40 "Share American Depositary Receipt(s)" and "Share
ADR(s)" shall mean the Receipts issued by the Depositary to evidence Share ADSs
issued under the terms of this Deposit Agreement, as such Share ADRs may be
amended from time to time in accordance with the provisions hereof. A Share ADR
may evidence any number of Share ADSs and may, in the case of Share ADSs held
through a central depository such as DTC, be in the form of a "Balance
Certificate". Share ADRs shall, unless otherwise specifically set forth herein,
be deemed to be Receipts for all purposes under this Deposit Agreement.
Section 1.41 "Share American Depositary Share(s)" and "Share ADS(s)"
shall mean the rights and interests in deposited Shares granted to Holders and
Beneficial Owners pursuant to the terms and conditions of this Deposit Agreement
and the Share ADRs issued hereunder to evidence such Share ADSs. Share ADSs
shall, unless otherwise specifically set forth herein, be deemed to be American
Depositary Shares or ADSs, as the context may require, for all purposes under
this Deposit Agreement.
Section 1.42 "Shareholder Notice" shall have the meaning given to
such term in Section 4.10(b).
Section 1.43 "Taiwan Securities Central Depository Co., Ltd." shall
mean the central depository for Shares and Entitlement Certificates in the
Republic of China, and any successor thereto.
Section 1.44 "Taiwan Stock Exchange" and "TSE" shall mean the stock
exchange in Taiwan, Republic of China, upon which the Company's Shares are
listed for trading and any successor stock exchange thereto.
Section 1.45 "Temporary ADS(s)" shall mean, collectively or
individually as the context requires, the Temporary EC ADSs and/or the Temporary
COP ADSs, each as issued under the terms of this Deposit Agreement. Unless
otherwise specifically set forth herein, Temporary ADSs shall be deemed for all
purposes to be American Depositary Shares or ADSs issued under the terms of this
Deposit Agreement.
Section 1.46 "Temporary ADR(s)" shall mean, collectively or
individually as the context requires, the Temporary EC ADRs and/or the Temporary
COP ADRs, each as issued under the terms of this Deposit Agreement. Unless
otherwise specifically set forth herein, Temporary ADRs shall be deemed for all
purposes to be Receipts issued under the terms of this Deposit Agreement.
Section 1.47 "Temporary EC ADS(s)" shall mean the rights and
interests in deposited Entitlement Certificates issued to Holders and Beneficial
Owners pursuant to the terms and conditions of this Deposit Agreement
(including, without limitation, Section 2.13 hereof) and the applicable
Temporary EC ADR(s) (as defined below) issued hereunder to evidence such
Temporary EC ADSs. Temporary EC ADSs shall, unless otherwise specifically set
forth herein, be deemed to be American Depositary Shares or ADSs, as the context
may require, for all purposes under this Deposit Agreement.
Section 1.48 "Temporary EC ADR(s)" shall mean the Receipts issued by
the Depositary to evidence Temporary EC ADSs issued under the terms of this
Deposit Agreement (including, without limitation, Section 2.13 hereof), as such
Temporary EC ADRs may be amended from time to time in accordance with the terms
7
hereof. A Temporary EC ADR may evidence any number of Temporary EC ADSs and may,
in the case of Temporary EC ADSs held through a central depository such as DTC,
be in the form of a "Balance Certificate." Temporary EC ADRs shall, unless
otherwise specifically set forth herein, be deemed to be Receipts for all
purposes under this Deposit Agreement.
Section 1.49 "Temporary COP ADS(s)" shall mean the rights and
interests in deposited Certificate of Payment issued to Holders and Beneficial
Owners pursuant to the terms and conditions of this Deposit Agreement
(including, without limitation, Section 2.12 hereof) and the applicable
Temporary COP ADR(s) issued hereunder to evidence such Temporary COP ADSs.
Temporary COP ADSs shall, unless otherwise specifically set forth herein, be
deemed to be American Depositary Shares or ADSs, as the context may require, for
all purposes under this Deposit Agreement.
Section 1.50 "Temporary COP ADR(s)" shall mean the Receipts issued
by the Depositary to evidence Temporary COP ADSs issued under the terms of this
Deposit Agreement (including, without limitation, Section 2.12 hereof), as such
Temporary COP ADRs may be amended from time to time in accordance with the terms
hereof. A Temporary COP ADR may evidence any number of Temporary COP ADSs and
may, in the case of Temporary COP ADSs held through a central depository such as
DTC, be in the form of a "Balance Certificate." Temporary COP ADRs shall, unless
otherwise specifically set forth herein, be deemed to be Receipts for all
purposes under the Deposit Agreement.
Section 1.51 "Trust Deed" shall mean any trust deed, trust indenture
or similar agreement in respect of Bonds, as the same may be amended from time
to time.
Section 1.52 "United States" shall have the meaning assigned to it
in Regulation S as promulgated by the Commission under the Securities Act.
Section 1.53 "Voting Representative" shall have the meaning given to
such term in Section 4.10(b).
ARTICLE II
APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS;
DEPOSIT OF ELIGIBLE SECURITIES; 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 set forth in this
Deposit Agreement. Each Holder and each Beneficial Owner, upon acceptance of any
ADSs (or any interest therein) issued in accordance with the terms 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 (b) appoint the Depositary as
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 (including,
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without limitation, Sections 2.12 and 2.13 hereof), 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 including, without limitation, the
designation of one of the Holders and Beneficial Owners as the representative of
all Holders and Beneficial Owners (the taking of such actions to be the
conclusive determinant of the necessity and appropriateness thereof). The
Depositary shall cause its nominee, as representative of the Holders and
Beneficial Owners, not to be elected as a director or supervisor of the Company.
Section 2.2 Form and Transferability of Receipts.
(a) Form. ADSs shall be evidenced by definitive Receipts which shall
be engraved, printed, lithographed or produced in such other manner as may be
agreed upon by the Company and the Depositary. Receipts may be issued under the
Deposit Agreement in denominations of any whole number of ADSs. The Receipts
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.
Receipts 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 Receipts. No Receipt and no 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
Receipt shall have been so dated, signed, countersigned and registered. Receipts
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 Receipt by the Depositary. The Share
ADRs, the Temporary EC ADRs and the Temporary COP ADRs shall each bear a
separate and distinct CUSIP number that is different from one another and 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 Receipts
issued hereunder.
(b) Legends. The Receipts may be endorsed with, or have incorporated
in the text thereof, such legends or recitals not inconsistent with the
provisions of the Deposit Agreement (i) as may be necessary to enable the
Depositary to perform its obligations hereunder, (ii) as 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) as
may be necessary to indicate any special limitations or restrictions to which
any particular Receipts or ADSs are subject by reason of the date of issuance or
type of the Deposited Securities or otherwise, or (iv) as may be required by any
book-entry system in which the ADSs are held.
(c) Title. Subject to the limitations contained herein and in the
Receipt, title to a Receipt (and to each ADS evidenced thereby) shall be
transferable upon the same terms as a certificated security under the laws of
the State of New York, provided that such Receipt 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 a
Receipt (that is, the person in whose name a Receipt is registered on the books
9
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 Receipt to any holder of a Receipt
or any Beneficial Owner unless such holder is the Holder of such Receipt
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.
(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 the 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 amount of ADSs from time to time indicated in the
records of the Depositary as being issued hereunder and that the aggregate
amount 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 the 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. The Depositary and the Company
have been advised that under current ROC law, no deposits of Eligible Securities
may be made in the ADS Facility, and no ADSs may be issued against such
deposits, without receipt of specific approval of the ROC Securities and Futures
Commission (the "SFC"), except in connection with the offering and the issuance
of additional Eligible Securities in connection with (i) dividends on or free
distributions of Eligible Securities, (ii) the exercise by Holders of their
preemptive rights applicable to Eligible Securities evidenced by ADSs in the
event of capital increases for cash or (iii) Entitlement Certificates or Shares
delivered to holders of Bonds in connection with the exercise of conversion or
exchange rights of Bonds for ADSs to the extent covered by SFC approval or (iv)
as permitted hereunder, the purchase by any person directly or through the
Depositary of Shares on the TSE or delivery of Shares to the Custodian for
deposit in the ADS Facility, provided that the total number of ADSs outstanding
after an issuance described in clause (iv) does not exceed the number of issued
ADSs previously approved by the SFC (plus any ADSs created pursuant to clauses
(i) and (ii) above). The Depositary and the Company have been advised that under
current ROC law, in calculating the number of ADSs outstanding after the ADSs
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have been canceled upon the withdrawal of the corresponding Shares from the ADS
facility, ADSs will continue to be deemed outstanding solely for such purpose if
such Shares have not been sold in the ROC market following their withdrawal and
continue to be held in the form of Shares by a non-ROC person.
Subject to applicable laws and regulations of the Republic of China
and to the terms and conditions of this Deposit Agreement and applicable law,
Eligible Securities or evidence of rights to receive Eligible Securities (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 maintained by the Eligible
Securities Registrar, if any, are closed, by Delivery of the Eligible Securities
to the Custodian. Every deposit of Eligible Securities shall be accompanied by
the following: (A) (i) in the case of Eligible Securities represented by
certificates issued in registered form, appropriate instruments of transfer or
endorsement, in a form satisfactory to the Custodian, and (ii) in the case of
Eligible Securities delivered by book-entry transfer, confirmation of such
book-entry transfer to the Custodian or that irrevocable instructions have been
given to cause such Eligible Securities 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 Eligible Securities 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 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 a
Receipt or Receipts for the number of ADSs representing the Eligible Securities
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 the Republic of China, provided, however, that no opinion
of counsel shall be necessary in connection with the deposit by the Company of a
free distribution of Eligible Securities by way of dividend or stock split
(other than elective distributions), and (E) if the Depositary so requires, (i)
an agreement, assignment or instrument satisfactory to the Depositary or the
Custodian which provides for the prompt transfer by any person in whose name the
Eligible Securities are or have been recorded to the Depositary, the Custodian
or any nominee of any distribution, or right to subscribe for additional
Eligible Securities or to receive other property in respect of any such
deposited Eligible Securities or, in lieu thereof, such indemnity or other
agreement as shall be satisfactory to the Depositary or the Custodian and (ii)
subject to ROC law and regulations if the Eligible Securities are registered in
the name of the person on whose behalf they are presented for deposit, an
authorization entitling the Depositary, the Custodian or any nominee to exercise
voting rights in respect of the Eligible Securities for any and all purposes
until the Eligible Securities so deposited are registered in the name of the
Depositary, the Custodian or any nominee, as representative of the Holders and
Beneficial Owners.
The Initial Deposit(s) of Eligible Securities into the ADR Facility
will be made, by or on behalf of the Company and certain shareholders approved
to sell ADSs in the Offering, by (i) the Delivery to the Custodian by the
Company of Shares and/or a Certificate of Payment evidencing the irrevocable
right to receive the physical share certificates representing the Shares
registered in the name of the nominee of the Depositary as representative of the
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Holders and Beneficial Owners, as instructed by the Depositary and (ii) the
Delivery to the Custodian of Shares by or on behalf of certain selling
shareholders. Subject to the terms and conditions of this Deposit Agreement,
upon such Initial Deposit(s), the Depositary shall execute and deliver ADRs
evidencing the ADSs representing the Deposited Securities constituting the
Initial Deposit(s) in the manner provided in Section 2.5.
Without limiting any other provision of this Deposit Agreement, the
Depositary shall instruct the Custodian not to, and neither the Depositary nor
the Custodian, nor any nominee, agent or person acting on their behalf, shall
knowingly, accept for deposit (a) any Restricted Securities nor (b) any
fractional Eligible Securities nor (c) a number of Eligible Securities which
upon application of the ADS-to-Eligible Securities ratio would give rise to
fractional ADSs. In addition, the Depositary and the Custodian shall refuse to
accept Shares for deposit (i) whenever notified, as hereafter provided, that the
Company has restricted transfer of such Shares to comply with delivery or
transfer requirements and/or ownership restrictions referred to in this Deposit
Agreement or under applicable law or (ii) in the case of a deposit of Shares
requested under Section 2.3 (iv), if such deposit is not permitted under any
legal restriction notified by the Company to the Depositary from time to time,
which restrictions may specify black-out periods during which deposits may not
be made, minimum or maximum numbers of Shares and frequencies of deposit. Other
than the Eligible Securities deposited by the Company that constitute a free
distribution of Eligible Securities by way of dividend or stock split (other
than elective distributions), no Eligible Securities 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
Eligible Securities under the laws and regulations of the Republic of China and
any necessary governmental approval has been granted in the Republic of China,
if any. The Depositary may issue ADSs against evidence of rights to receive
Eligible Securities from the Company, any agent of the Company or any custodian,
registrar, transfer agent, clearing agency or other entity involved in ownership
or transaction records in respect of the Eligible Securities. Such evidence of
rights shall consist of written blanket or specific guarantees of ownership of
Eligible Securities furnished by the Company or any such custodian, registrar,
transfer agent, clearing agency or other entity involved in ownership or
transaction records in respect of the Eligible Securities.
Section 2.4 Registration and Safekeeping of Deposited Securities.
The Depositary shall instruct the Custodian upon each Delivery of certificates
representing registered Eligible Securities 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 Eligible Securities Registrar for transfer and
registration of the Eligible Securities (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, as
representative of the Holders and Beneficial Owners. 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. Neither the Depositary nor the Custodian may dispose of or
pledge any of the Deposited Securities unless specifically permitted under this
Deposit Agreement.
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Without limitation of the foregoing, neither the Depositary nor the
Custodian, or any nominee, agent or person acting on their behalf shall
knowingly accept for deposit under this Deposit Agreement any Eligible
Securities required to be registered under the provisions of the Securities Act,
unless a registration statement is in effect as to such Eligible Securities, or
any Eligible Securities the deposit of which would violate any provisions of the
Articles of Incorporation of the Company.
Section 2.5 Execution and Delivery of Receipts. The Depositary has
made arrangements with the Custodian to confirm to the Depositary (i) that a
deposit of Eligible Securities has been made pursuant to Section 2.3 hereof,
(ii) that such Deposited Securities have been recorded, or will be recorded as
soon as transfer and registration can be accomplished, in the name of the
Depositary, the Custodian or a nominee of either, as representative of the
Holders and Beneficial Owners, on the shareholders' register maintained by or on
behalf of the Company by the Eligible Securities Registrar if registered
Eligible Securities have been deposited or if deposit is made by book-entry
transfer, confirmation of such transfer in the books of the Taiwan Securities
Central Depository, (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 thereby. 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 Eligible Securities so deposited to
or upon the order of the person(s) named in the notice delivered to the
Depositary and 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 only upon
payment to the Depositary of the charges of the Depositary for accepting a
deposit, issuing ADSs and executing and delivering such Receipt(s) (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 Eligible
Securities and the issuance of the Receipt(s). The Depositary shall only issue
ADSs in whole numbers and deliver ADRs evidencing whole numbers of ADSs. Nothing
herein shall prohibit any Pre-Release Transaction upon the terms set forth in
this Deposit Agreement.
Section 2.6 Transfer, Combination and Split-up of Receipts.
(a) Transfer. The Registrar shall register the transfer of Receipts
(and of the ADSs represented thereby) on the books maintained for such purpose
and the Depositary shall cancel such Receipts and execute new Receipts
evidencing the same aggregate number and type of ADSs as those evidenced by the
Receipts canceled by the Depositary, shall cause the Registrar to countersign
such new Receipts and shall Deliver such new Receipts to or upon the order of
the person entitled thereto, if each of the following conditions has been
satisfied: (i) the Receipts 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 Receipts 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 Receipts have been duly stamped (if required by
the laws of the State of New York or of the United States), and (iv) all
13
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 Receipts, 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 register the
split-up or combination of Receipts (and of the ADSs represented thereby) on the
books maintained for such purpose and the Depositary shall cancel such Receipts
and execute new Receipts for the number of ADSs requested, but in the aggregate
not exceeding the number of the same type of ADSs evidenced by the Receipts
canceled by the Depositary, shall cause the Registrar to countersign such new
Receipts and shall Deliver such new Receipts to or upon the order of the Holder
thereof, if each of the following conditions has been satisfied: (i) the
Receipts 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 Receipts, 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 Receipts 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 the other
requirements of this Section 2.6 by Holders or persons entitled to such Receipts
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. Each co-transfer agent appointed under this Section 2.6 (other
than the Depositary) shall give notice in writing to the Depositary accepting
such appointment and agreeing to be bound by the applicable terms of the Deposit
Agreement.
Section 2.7 Surrender of ADSs and Withdrawal and Sale of Deposited
Securities.
(a) ROC Requirements. The Depositary and the Company have been
advised that under ROC law, until three (3) months after the closing of the
Offering, a Holder is not entitled to withdraw or sell Shares from the ADS
Facility; consequently, the Company and the Depositary agree to prohibit the
surrender of ADSs and the sale or Delivery of any Shares deposited in connection
with the Offering until the expiration of such three-month period. A Holder
wishing to withdraw Shares from the ADS Facility shall be required under ROC law
to appoint an eligible agent in the Republic of China to open a securities
trading account with a local brokerage firm after receiving an approval from the
TSE and a bank account (the securities trading account and the bank account,
collectively, the "Accounts"), to pay ROC taxes, remit funds, exercise
stockholders' rights and perform such other functions as may be designated by
such withdrawing Holder. In addition, such withdrawing Holder is also required
to appoint a custodian bank to hold the securities in safekeeping, make
confirmations and settle trades and report all relevant information. Without
making such appointment and until approval from the TSE is obtained, the
withdrawing Holder would be unable to receive, hold , or subsequently sell the
Deposited Securities withdrawn from the ADS Facilities on the TSE or otherwise.
14
(b) Sale of Deposited Securities. Upon surrender of Receipts at the
Principal Office and upon payment of any fees, reasonable expenses, taxes or
other governmental charges as provided hereunder, subject to the terms of this
Deposit Agreement, and the transfer restrictions applicable to the Deposited
Securities, if any, Holders may request that the Deposited Securities
represented by such Holders' Receipts be sold on such Holders' behalf. Any
Holder requesting a sale of Deposited Securities may be required by the
Depositary to deliver, or cause to be delivered, to the Depositary a written
order requesting the Depositary to sell, or cause to be sold, such Deposited
Securities. Any such sale of Deposited Securities will be conducted in
accordance with applicable ROC law through a securities company in the ROC on
the TSE or in such other manner as is or may be permitted under applicable ROC
law. Any such sale of Deposited Securities will be at the expense and risk of
the Holder requesting such sale.
Upon receipt of any proceeds from any such sale, the Depositary
shall, subject to any restrictions imposed by ROC law and regulations, and as
provided hereunder, convert or cause to be converted any such proceeds into U.S.
dollars and distribute any such proceeds to the Holders entitled thereto after
deduction or payment of any fees, reasonable expenses, taxes or governmental
charges incurred in connection with such sale, as provided under this Deposit
Agreement. Any such sale may be subject to ROC taxation on capital gains, if
any, and will be subject to a securities transaction tax in the ROC.
(c) 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 ADS(s) 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 Receipts evidencing such ADSs) for the purpose of withdrawal
of the Deposited Securities represented thereby, (ii) if so required by the
Depositary, the Receipts 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, (iv) the
Holder has delivered to the Depositary the certification contemplated in Exhibit
C hereof, duly completed by or on behalf of the Beneficial Owner(s) of the ADSs
surrendered for withdrawal (unless the Depositary is otherwise instructed by the
Company), and (v) all applicable fees and charges of, and reasonable 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 Receipts evidencing
the surrendered ADSs, of the Deposit Agreement, of the Company's Articles of
Incorporation and of any applicable laws, and the regulations and rules of the
Republic of China and the rules of the TSE and the Taiwan Securities Central
Depository, 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
Receipts 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
15
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 Receipts evidencing the ADSs so
canceled, of the Articles of Incorporation of the Company, of applicable laws
and the rules and regulations of the Republic of China and the rules of the TSE
and the Taiwan Securities Central Depository, 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 Eligible Security. In the case of the Delivery to it of ADSs
representing a number other than a whole number of Eligible Securities, the
Depositary shall cause ownership of the appropriate whole number of Eligible
Securities 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 Eligible
Security, or (ii) sell or cause to be sold the fractional Eligible Security
represented by the ADS(s) 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. In
addition, trading restrictions on the TSE may result in the price per Eligible
Security or on any lot of any type of Eligible Security other than an integral
multiple of 1,000 Eligible Securities being lower than the price of Eligible
Securities in lots of integral multiples of 1,000 Eligible Securities.
Notwithstanding anything else contained in any Receipt 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 securities 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 Additional Limitations on Execution and Delivery,
Transfer, etc. of Receipts; Suspension of Delivery, Transfer, etc.
(a) Additional Requirements. As a condition precedent to the
execution and delivery, registration, registration of transfer, split-up,
combination or surrender of any Receipt, 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 Eligible Securities or
presenter of ADSs or of a Receipt 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
Eligible Securities 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
16
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 Receipts or ADSs or to the deposit of
Eligible Securities or the withdrawal of Deposited Securities and (B) such
reasonable regulations as the Depositary and the Company may establish
consistent with the provisions of the applicable Receipt, this Deposit Agreement
and applicable law.
(b) Additional Limitations. The issuance of ADSs against deposits of
Eligible Securities generally or against deposits of particular Eligible
Securities may be suspended, or the deposit of particular Eligible Securities
may be refused, or the registration of transfer of Receipts in particular
instances may be refused, or the registration of transfers of Receipts generally
may be suspended, during any period when the transfer books of the Company, the
Depositary, a Registrar or the Eligible Securities 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 Eligible Securities are listed, or
under any provision of this Deposit Agreement or the applicable Receipt(s) 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. In addition, the Depositary and the Custodian
shall refuse to accept Shares for deposit (i) whenever notified, as hereafter
provided, that the Company has restricted transfer of such Shares to comply with
delivery or transfer requirements and/or ownership restrictions referred to in
this Deposit Agreement or under applicable law, (ii) in the case of a deposit of
Shares requested under Section 2.3 (iv), if such deposit is not permitted under
any restriction notified by the Company to the Depositary from time to time,
which restrictions may specify black-out periods during which deposits may not
be made, minimum or maximum numbers of Shares and frequencies of deposit.
(c) Regulatory Restrictions. Notwithstanding any provision of this
Deposit Agreement or any Receipt(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 Eligible Securities 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 Receipts or to the
withdrawal of the Deposited Securities, and (iv) other circumstances
specifically contemplated by Section 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 Receipts, etc. In case any Receipt shall be
mutilated, destroyed, lost, or stolen, the Depositary shall execute and deliver
a new Receipt of like tenor at the expense of the Holder (a) in the case of a
mutilated Receipt, in exchange of and substitution for such mutilated Receipt
upon cancellation thereof, or (b) in the case of a destroyed, lost or stolen
Receipt, in lieu of and in substitution for such destroyed, lost, or stolen
Receipt, 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 Receipt 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, the provision of evidence satisfactory to the Depositary of such
destruction, loss or theft of such Receipt, the authenticity thereof and the
Holder's ownership thereof.
17
Section 2.10 Cancellation and Destruction of Surrendered Receipts;
Maintenance of Records. All Receipts surrendered to the Depositary shall be
canceled by the Depositary. Canceled Receipts 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 Receipts so
canceled, provided the Depositary maintains a record of all destroyed Receipts.
ADSs held in book-entry form (i.e., through accounts at DTC) which are
surrendered for cancellation 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).
Section 2.11 Partial Entitlement ADSs. In the event that any
Eligible Securities are deposited which entitle the holders thereof to receive a
per-Deposited Security distribution or other entitlement in an amount different
from the Deposited Securities then on deposit (the Deposited Securities then on
deposit collectively, "Full Entitlement Deposited Securities" and the Deposited
Securities with different entitlement collectively, "Partial Entitlement
Deposited Securities"), the Depositary shall (i) cause the Custodian to hold
Partial Entitlement Deposited Securities separate and distinct from Full
Entitlement Deposited Securities, and (ii) subject to the terms of this Deposit
Agreement, issue ADSs and deliver ADRs representing Partial Entitlement
Deposited Securities which are separate and distinct from the ADSs and ADRs
representing Full Entitlement Deposited Securities, by means of separate CUSIP
numbering and legending (if necessary) ("Partial Entitlement ADSs/ADRs" and
"Full Entitlement ADSs/ADRs", respectively). If and when the Company informs the
Depositary in writing that the Partial Entitlement Eligible Securities become
Full Entitlement Eligible Securities, 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 Custodian to transfer the Partial
Entitlement Deposited Securities into the account of the Full Entitlement
Deposited Securities, 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 be entitled only to the entitlements of
Partial Entitlement Deposited Securities. Holders and Beneficial Owners of Full
Entitlement ADSs shall be entitled only to the entitlements of Full Entitlement
Deposited Securities. 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 Receipts) to
give effect to the terms of this Section 2.11. The Company agrees to give timely
written notice to the Depositary if any Eligible Securities issued or to be
issued are Partial Entitlement Eligible Securities and shall assist the
Depositary with the establishment of procedures enabling the identification of
Partial Entitlement Eligible Securities upon Delivery to the Custodian.
Section 2.12 Temporary COP ADSs. In the event that, in determining
the rights and obligations of parties hereto with respect to any Temporary COP
ADSs, any conflict arises between (a) the terms of this Deposit Agreement (other
than this Section 2.12) and (b) the terms of (i) the Temporary COP ADSs issued
18
hereunder as set forth in this Section 2.12 or (ii) the applicable Temporary COP
ADR, the terms and conditions set forth in this Section 2.12 and the applicable
Temporary COP ADR shall be controlling and shall govern the rights and
obligations of the parties to this Deposit Agreement pertaining to the
Certificates of Payment, the Temporary COP ADSs and the Temporary COP ADRs.
Whenever the Company proposes to issue Certificates of Payment
eligible for deposit hereunder (in connection with the Offering or otherwise),
the Company shall timely notify the Depositary thereof and provide the
Depositary with written instructions to the effect that, inter alia, (i) the
Certificates of Payment have been or are to be issued pursuant to a bona fide
purchase of Shares from the Company, (ii) the Certificates of Payment are not,
and shall not be deemed to be upon their deposit, Restricted Securities (except
as contemplated in this Section 2.12 and in Section 2.14), (iii) the rights (if
any) to any distribution upon Deposited Securities to be made to Holders of
Temporary COP ADSs representing such Certificates of Payment upon the terms set
forth in Article IV hereof have been set forth in such instructions, and (iv)
the estimated date established by the Company upon which the Company shall
convert or cause to be converted the Certificates of Payment into Shares on its
records and on the records of the Eligible Securities Registrar has been set
forth in such instructions.
Subject always to the laws and regulations of the Republic of China,
upon deposit of Certificates of Payment hereunder and, except in the case of the
Offering, payment to the Depositary of the charges of the Depositary for
accepting a deposit, issuing ADSs and issuing and delivering Receipts (as set
forth in Section 5.9 and Exhibit B hereto), the Depositary shall (i) cause the
Custodian to hold such Certificates of Payment in an account separate and
distinct from the Shares, any series of Entitlement Certificates, any other
series of Certificates of Payment and any other Deposited Securities and (ii)
issue and deliver Temporary COP ADSs representing interests in the Certificates
of Payment so deposited. The Temporary COP ADSs so issued shall be identified
and treated separately and distinctly from any other ADSs representing Deposited
Securities hereunder by means, inter alia, of separate CUSIP numbering and
legending (if necessary). The Depositary may issue Temporary COP ADSs in one or
multiple series as the Depositary in its sole discretion deems necessary and
appropriate. No Temporary COP ADS shall be fungible with any other ADSs issued
hereunder.
The Depositary shall deliver Temporary COP ADSs in book-entry form
only. No certificated Temporary COP ADRs will be issued except for a "Balance
Certificate" evidencing all Temporary COP ADSs held in DTC, which shall be
substantially in the form of the Temporary COP ADR set forth in Exhibit A
hereto, except as may be necessary to identify and treat the Temporary COP ADSs
separate and distinct from any other ADSs issued under the terms of this Deposit
Agreement. The Depositary shall make arrangements for the acceptance of such
Temporary COP ADSs into DTC upon the terms set forth in Section 2.2(d) hereof.
The Temporary COP ADSs and the Temporary COP ADRs evidenced thereby are
identical to and confer all of the rights and obligations set forth herein
relating to Receipts and ADSs represented thereby except that (i) subject always
19
to the applicable laws and regulations of the Republic of China, Holders of
Temporary COP ADRs will not be permitted to withdraw interests in Certificate of
Payment upon surrender of the Temporary COP ADSs of any series, (ii) Temporary
COP ADRs shall bear separate CUSIP numbers that shall be different from any
CUSIP number that is or may be assigned to the other ADSs issued hereunder,
(iii) neither Temporary COP ADSs nor interests in any Certificates of Payment
shall be eligible for any Pre-Cancellation Sale or Pre-Release Transactions
described in Section 5.10 hereof and (iv) in the event that the Company makes
any distributions upon Deposited Securities upon the terms of Article IV of this
Deposit Agreement, the Depositary shall make distributions to Holders of
Temporary COP ADSs on the basis of the distribution(s) received from the Company
in respect of the Certificates of Payment corresponding to the series of
Temporary COP ADSs held by such Holder.
The Company undertakes to make Shares available for exchange for
Certificates of Payment in the manner provided under the terms of the Offering,
as described in the Prospectus, as soon as possible (which at the date hereof is
expected to be approximately forty-five (45) days from the date of issuance of
the Certificates of Payment as reflected on the books of the Company and/or the
Eligible Securities Registrar). The Depositary shall thereupon surrender any
Certificates of Payment then eligible for exchange with the Company and the
Company shall deliver Shares to the Depositary in exchange therefor. Upon
receipt by the Depositary of Shares in exchange for Certificates of Payment,
Temporary COP ADSs representing such Certificates of Payment shall be eligible
for exchange into Share ADSs representing such Shares. Beneficial interests in
Temporary COP ADSs will be automatically exchanged for beneficial interests in
Share ADSs as follows: with no further action by Holders, the Depositary shall
instruct DTC to automatically transfer any position held by a DTC participant
under the CUSIP number assigned to the Temporary COP ADSs to the CUSIP number
assigned to the Share ADSs. Holders and Beneficial Owners of such Temporary COP
ADSs shall thereafter be Holders and Beneficial Owners of Share ADSs issued
hereunder and shall have all the rights and obligations set forth under this
Deposit Agreement and in the Receipts. The Depositary will charge no fee for the
cancellation of the Temporary COP ADSs and issuance of Share ADSs in exchange
therefor.
Notwithstanding anything in the Deposit Agreement to the contrary,
the Depositary shall have no obligation to any party to exchange Temporary COP
ADSs for Share ADSs as provided herein unless and until, upon delivery by the
Depositary of the related Certificates of Payment, the Company shall have
delivered Shares in respect thereof to the Depositary.
Section 2.13 Temporary EC ADSs. In the event that, in determining
the rights and obligations of parties hereto with respect to any Temporary EC
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 Temporary EC ADR, the terms and conditions set forth in this Section
2.13 shall be controlling and shall govern the rights and obligations of the
parties to this Deposit Agreement pertaining to the Entitlement Certificates,
the Temporary EC ADSs and Temporary EC ADRs.
The Company shall timely notify the Depositary and provide the
Depositary with written instructions to the effect that, inter alia, (i)
Entitlement Certificates are to be issued upon a conversion or exchange of
Bonds, (ii) the Entitlement Certificates are not and shall not be deemed to be,
upon their deposit, Restricted Securities (except as contemplated in Section
2.14), (iii) the description of the rights (if any) to any distribution upon
Deposited Securities to be made to Holders of Temporary EC ADSs representing
20
such Entitlement Certificates upon the terms set forth in Article IV hereof have
been set forth in such instructions, and (iv) the estimated date established by
the Company upon which the Company shall convert or cause to be converted the
Entitlement Certificates into Shares on its records and on the records of the
Eligible Securities Registrar has been set forth in such instructions.
Subject always to the laws and regulations of the Republic of China,
upon deposit of Entitlement Certificates and payment to the Depositary of the
charges of the Depositary for accepting a deposit, issuing ADSs and issuing and
delivering Receipts (as set forth in Section 5.9 and Exhibit B hereto)
hereunder, the Depositary shall (i) cause the Custodian to hold such Entitlement
Certificates in an account separate and distinct from the Shares, any series of
Certificates of Payment, any other series of Entitlement Certificates and any
other Deposited Securities and (ii) issue and deliver Temporary EC ADSs
representing the Entitlement Certificates so deposited. EC ADSs so issued shall
be identified and treated separately and distinctly from any other ADSs
representing Deposited Securities hereunder by means, inter alia, of separate
CUSIP numbering and legending (if necessary). The Depositary may issue Temporary
EC ADSs in one or more series as the Depositary in its sole discretion deems
necessary and appropriate. No Temporary EC ADS shall be fungible with any other
ADSs issued hereunder.
The Depositary shall deliver Temporary EC ADSs in book-entry form
only. No certificated Temporary EC ADRs will be issued except for a "Balance
Certificate" evidencing all Temporary EC ADSs of the same series held in DTC,
which shall be substantially in the form of the Temporary EC ADR set forth in
Exhibit A hereto, except as may be necessary to identify and treat the Temporary
EC ADSs as separate and distinct from any other ADSs issued under the terms of
this Deposit Agreement. The Depositary shall make arrangements for the
acceptance of such Temporary EC ADSs into DTC upon the terms set forth in
Section 2.2(d) hereof. The Temporary EC ADSs and the Temporary EC ADRs shall be
identical to and confer all of the rights and obligations set forth herein
relating to Receipts and ADSs represented thereby except that (i) subject always
to the applicable laws and regulations of the Republic of China, Holders of
Temporary EC ADRs will only be entitled to receive Entitlement Certificates of
the applicable series held on deposit with the Custodian upon surrender of the
Temporary EC ADSs corresponding to such series for the purpose of withdrawing
the underlying Deposited Securities (whether for sale upon the terms set forth
in Section 2.7 hereof or otherwise), (ii) Temporary EC ADRs shall bear separate
CUSIP numbers that shall be different from any CUSIP number that is or may be
assigned to the other ADRs issued hereunder, (iii)Temporary EC ADSs and
Entitlement Certificates shall not be eligible for any Pre-Cancellation Sale or
Pre-Release Transactions described in Section 5.10 hereof and (iv) in the event
that the Company makes any distributions upon Deposited Securities upon the
terms of Article IV of this Deposit Agreement, the Depositary shall make
distributions to the Holders of Temporary EC ADSs on the basis of the
distribution(s) received from the Company in respect of the Entitlement
Certificates corresponding to the series of Temporary EC ADSs held by such
Holder. 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
Temporary EC ADSs independently from the determinations for ADSs that are not
Temporary EC ADSs and (ii) shall make distributions under Article IV to Holders
of Temporary EC ADSs only on the basis of the distributions received from the
Company in respect of the Entitlement Certificates corresponding to the
Temporary EC ADSs held by such Holders.
21
The Company undertakes to make Shares available for exchange for
Entitlement Certificates in the manner provided under the terms of the relevant
Bonds, as described in the relevant Trust Deed, as soon as possible after the
issuance of the Entitlement Certificates and to provide timely notice thereof to
the Depositary. The Depositary shall thereupon surrender any Entitlement
Certificates then eligible for exchange with the Company and the Company shall
deliver Shares to the Depositary in exchange therefor. Upon receipt by the
Depositary of Shares in exchange for Entitlement Certificates, Temporary EC ADSs
representing such Entitlement Certificates shall be automatically exchanged for
Share ADSs representing such Shares. Beneficial interests in Temporary EC ADSs
will be automatically exchanged for beneficial interests in Share ADSs as
follows: with no further action by Holders, the Depositary shall instruct DTC to
automatically transfer any position held by a DTC Participant under the CUSIP
number assigned to the Temporary EC ADSs to the CUSIP number assigned to the
Share ADSs. Holders and Beneficial Owners of such Temporary EC ADSs shall
thereafter be Holders and Beneficial Owners of Share ADSs issued hereunder and
shall have all the rights and obligations set forth under this Deposit Agreement
and in the Receipts. The Depositary will charge no fee for the cancellation of
the Temporary EC ADSs and issuance of Share ADSs in exchange therefor.
Notwithstanding anything in this Deposit Agreement to the contrary,
the Depositary shall have no obligation to any party to exchange Temporary EC
ADSs for Share ADSs as provided herein unless and until, upon delivery by the
Depositary of the related Entitlement Certificates, the Company shall have
delivered Shares in respect thereof to the Depositary.
Section 2.14 Restricted ADSs. The Depositary shall, at the request
and expense of the Company (provided that the amount of any expenses to be borne
by the Company shall be subject to prior agreement by the Company and the
Depositary), 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"). 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 satisfactory to the 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
22
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, 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 2.14 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 2.14) and (b) the terms of (i) this
Section 2.14 or (ii) the applicable Restricted ADR, the terms and conditions set
forth in this Section 2.14 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.
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 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 Restricted Shares held on deposit under this Section 2.14
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 2.14 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.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
AND BENEFICIAL OWNERS OF ADSs
Section 3.1 Proofs, Certificates and Other Information. Any person
presenting Eligible Securities 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 Depositary and the Custodian such proof of citizenship or
residence, taxpayer status, payment of all applicable taxes or other
governmental charges, exchange control approvals and any other applicable
regulatory approval, legal or beneficial ownership of ADSs and Deposited
Securities, compliance with applicable laws, the terms of this Deposit Agreement
or the Receipt(s) evidencing the ADS(s) and the provisions of, or governing, the
23
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 Eligible Securities in registered form
presented for deposit, such information relating to the registration on the
books of the Company or of the Eligible Securities 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, the applicable Receipt(s) and
applicable laws and regulations. The Depositary and the Registrar, as
applicable, may withhold the execution or delivery or registration of transfer
of any Receipt 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 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 which it
receives from Holders and Beneficial Owners, (ii) any other information or
documents which the Company may reasonably request and which the Depositary
shall reasonably request and receive from any Holder or Beneficial Owner or any
person presenting Eligible Securities for deposit or ADSs for cancellation,
transfer or withdrawal, and (iii) in the case of withdrawal of Eligible
Securities, any information and documents provided by Holders to the Depositary
in accordance with Exhibit C to this Deposit Agreement. Nothing herein shall
obligate the Depositary 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. If any tax or
other governmental charge shall become payable with respect to any ADR or any
Deposited Securities or ADSs, such tax or other governmental charge 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 or governmental charges
(including applicable interest and penalties), the Holder and the Beneficial
Owner remaining liable for any deficiency. The Custodian may refuse the deposit
of Eligible Securities and the Depositary may refuse to issue ADSs, to deliver
ADRs, register the transfer, split-up or combination of ADRs and (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 may be asked to indemnify the Depositary, the Company, the Custodian, and
any of their respective 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 inaccuracy in the
information provided by such Holder and/or Beneficial Owner in connection with
obtaining any tax benefit for such Holder and/or Beneficial Owner.
Section 3.3 Representations and Warranties on Deposit of Eligible
Securities.
24
(a) Deposit of Shares. Each person depositing Shares under this
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 to
make such deposit, (iv) the Shares presented for deposit are free and clear of
any lien, encumbrance, security interest, charge, mortgage or adverse claim, and
are not, and the ADSs issuable upon such deposit will not be, Restricted
Securities (except as contemplated in Section 2.14) and (v) 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.
(b) Deposit of Certificates of Payment. Each person depositing
Certificates of Payment under this Deposit Agreement shall be deemed thereby to
represent and warrant that (i) such Certificates of Payment 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
Certificates of Payment have been validly waived or exercised, (iii) the person
making such deposit is duly authorized to make such deposit, (iv) the
Certificates of Payment presented for deposit are free and clear of any lien,
encumbrance, security interest, charge, mortgage or adverse claim, and are not,
and the Temporary COP ADSs issuable upon such deposit will not be, Restricted
Securities (except as contemplated in Section 2.14) and (v) the Certificates of
Payment presented for deposit have not been stripped of any rights or
entitlements. Such representations and warranties shall survive the deposit of
Certificates of Payment, the issuance and cancellation of Temporary COP ADSs in
respect thereof and the transfer of such Temporary COP ADSs.
(c) Deposit of Entitlement Certificates. Each person depositing
Entitlement Certificates under this Deposit Agreement shall be deemed thereby to
represent and warrant that (i) such Entitlement Certificates are duly
authorized, validly issued, fully paid and legally obtained by such person, (ii)
all preemptive (and similar) rights, if any, with respect to such Entitlement
Certificates have been validly waived or exercised, (iii) the person making such
deposit is duly authorized to do so, (iv) the Entitlement Certificates presented
for deposit are free and clear of any lien, encumbrance, security interest,
charge, mortgage or adverse claim, and are not, and the Temporary EC ADSs
issuable upon such deposit will not be, Restricted Securities and (v) the
Entitlement Certificates presented for deposit have not been stripped of any
rights or entitlements. Such representations and warranties shall survive the
deposit of Entitlement Certificates, the issuance and cancellation of Temporary
EC ADSs in respect thereof and the transfer of such Temporary EC 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, Certificates of Payment or Entitlement Certificates,
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 Receipt(s), each Holder and
Beneficial Owner agrees to comply with requests from the Company pursuant to
applicable law, the rules and requirements of the TSE, and any other stock
exchange on which the Eligible Securities or ADSs are, or will be, registered,
traded or listed or the Articles of Incorporation of the Company, which are made
25
to provide information, inter alia, as to the capacity in which such Holder or
Beneficial Owner owns ADSs (and Eligible Securities and Deposited Securities, 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 Receipt, the Company may restrict
transfers of the Shares, Eligible Securities or securities convertible into
Shares where the Company informs the Depositary that such transfer might result
in ownership of Shares exceeding limits imposed by applicable law, the SFC, the
TSE or the Articles of Incorporation of the Company. The Company may also
restrict, in such manner as it deems appropriate, transfers of the ADSs where
such transfer may result in the total number of Shares, Deposited Securities, or
securities convertible into Shares represented by the ADSs owned by a single
Holder or Beneficial Owner to exceed any such limits. 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 the mandatory sale or disposition on behalf of
a Holder or Beneficial Owner of the Deposited Securities 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
Incorporation of the Company.
ARTICLE IV
THE DEPOSITED SECURITIES
Section 4.1 Cash Distributions. Subject always to the laws and
regulations of the Republic of China (including, without limitation, the need to
obtain regulatory approvals (if any)), whenever the Depositary receives
directly, or 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 entitlements
held in respect of Deposited Securities under the terms hereof, the Depositary
will (i) subject to compliance with the terms of Section 4.8, promptly convert
or cause to be converted such cash dividend, distribution or proceeds into
Dollars, (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 reasonable 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
26
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 by the Company, the
Custodian or the Depositary to the relevant governmental authority. Evidence of
payment thereof by the Company shall be forwarded by the Company to the
Depositary upon request.
Section 4.2 Distribution in Eligible Securities. Subject always to
the laws and regulations of the Republic of China, if any distribution upon any
Deposited Securities consists of a dividend in, or free distribution of,
Eligible Securities, the Company shall cause such Eligible Securities 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 (of the applicable series), which represent in the
aggregate the number of Eligible Securities received as such dividend, or free
distribution, subject, however, in each case, to the other terms of this Deposit
Agreement (including, without limitation, the limitations set forth in Article
II hereof and net of (a) the applicable fees and charges of, and reasonable
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 (subject, however, in each case, to the
laws and regulations of the Republic of China and net of (a) the applicable fees
and charges of, and expenses incurred by, the Depositary and (b) taxes). In lieu
of delivering fractional ADSs, the Depositary shall sell the number of Eligible
Securities 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 Eligible Securities) 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 Eligible Securities 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 Eligible
Securities 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 such (a) taxes and (b) fees and charges of, and
reasonable 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 Eligible Securities.
Subject always to the laws and regulations of the Republic of China, whenever
the Company intends to distribute a dividend payable at the election of the
holders of Eligible Securities in cash or in additional Eligible Securities, the
Company shall give timely notice thereof to the Depositary prior to such
proposed distribution stating whether or not it wishes such elective
distribution to be made available to Holders of ADSs. Upon receipt of notice
27
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 Depositary shall have
determined that such distribution is reasonably practicable and (ii) 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 to the Holders, on the basis of the same
determination as is made in the Republic of China in respect of the Deposited
Securities for which no election is made, either (X) cash upon the terms
described in Section 4.1 or (Y) additional ADSs representing such additional
Eligible Securities 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 dividend 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 dividend (X) in
cash, the dividend shall be distributed upon the terms described in Section 4.1,
or (Y) in ADSs, the dividend shall be distributed 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 dividend in Eligible Securities (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 Deposited Securities.
Section 4.4 Distribution of Rights to Purchase Additional ADSs.
(a) Distribution to ADS Holders. Subject always to the laws and
regulations of the Republic of China (including, without limitation the need to
obtain regulatory approvals (if any)), whenever the Company intends to
distribute to the holders of the Deposited Securities rights to subscribe for
Eligible Securities, the Company shall give timely notice thereof to the
Depositary prior to such proposed distribution stating whether or not it wishes
such rights to be made available to Holders of ADSs. If and whenever the Company
shall announce its intention to make any offer or invitation to the holders of
Eligible Securities to subscribe for or to acquire Eligible Securities or other
assets by way of rights, the Depositary shall as soon as practicable thereafter
give notice of the same to the Holders, including if applicable, the last date
for acceptance thereof and the manner by which and the time during which Holders
may instruct the Depositary to exercise such rights. The Depositary shall make
such rights available to Holders only if (i) the Company shall have timely
requested the Depositary to make such rights 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
Depositary not make the rights available to Holders of ADSs, the Depositary
shall proceed with the sale of the rights as contemplated in Section 4.4(b)
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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 (x) to distribute rights to purchase additional ADSs (by
means of warrants or otherwise), (y) to enable the Holders to exercise such
rights (upon payment of the subscription price and of the applicable (a) fees
and charges of, and reasonable expenses incurred by, the Depositary and (b)
taxes), and (z) to 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 Eligible Securities
(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 that it
is not lawful or 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 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 or private sale) as it may deem
reasonably 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 the proceeds of such sale (net of
applicable (a) fees and charges of, and reasonable expenses incurred by, the
Depositary 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.
The Depositary shall not 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, (ii) any foreign exchange
exposure or loss incurred in connection with such sale, or exercise, or (iii)
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 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 other applicable
securities 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 Eligible Securities and
29
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 Eligible Securities 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 Deposited Securities or be able to
exercise such rights. Nothing herein shall obligate the Company to file any
registration statement in respect of any rights or Eligible Securities or other
securities to be acquired upon the exercise of such rights.
Section 4.5 Distributions Other Than Cash, Eligible Securities or
Rights to Purchase Eligible Securities. (a) Subject always to the laws and
regulations of the Republic of China, whenever the Company intends to distribute
to the holders of Deposited Securities property other than cash, Eligible
Securities or rights to purchase additional Eligible Securities, 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 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 within the terms of Section 5.7, and (iii) the
Depositary shall have determined 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 respective number of ADSs held by them 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, 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 the Depositary 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
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 in any way it deems reasonably practicable under
the circumstances.
30
Section 4.6 Intentionally Omitted
Section 4.7 Intentionally Omitted.
Section 4.8 Conversion of Foreign Currency. Subject to any
restrictions imposed by ROC law and regulations, 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 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, subject
to the laws and regulations of the Republic of China, 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 such Dollars (net of any applicable
fees, 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 or regulatory 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 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. 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 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, Eligible Securities, rights, or other entitlement
distribution), or whenever for any reason the Depositary causes a change in the
number of Deposited Securities that are represented by each ADS, or whenever the
Depositary shall receive notice of any meeting of, or solicitation of consents
31
or of proxies, of holders of 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 Receipts 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 Deposited Securities 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 the Republic of China. 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 Receipts 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.
(a) Voting by Shareholders. The following is a summary of certain
rights of holders of Shares, interests in Certificate(s) of Payment and
Entitlement Certificate(s), if any, to vote at shareholders' meetings under ROC
Company Law and the Articles of Incorporation of the Company, in each case, as
in effect on the date hereof: (i) a holder of Shares (including holders of
interests in any Certificate of Payment evidencing the irrevocable right to
receive Shares) is entitled to one vote for each Share held, (ii) the election
of directors and supervisors takes place by means of cumulative voting, and
(iii) a shareholder must, as to all matters subject to a vote of shareholders
(other than the election of directors and supervisors), exercise the voting
rights for all Shares held by such shareholder in the same manner (e.g., a
holder of 1,000 Shares cannot split his/her votes but must vote all 1,000 Shares
in the same manner except in the event of cumulative voting for an election of
directors and supervisors). Pursuant to ROC law, the voting rights attaching to
the Deposited Securities must be exercised by, or on behalf of, the Depositary's
nominee, as representative of the Holders and Beneficial Owners, collectively in
the same manner, except in the case of an election of directors and supervisors,
which currently should be on a cumulative basis. Deposited Securities which have
been withdrawn from the applicable ADS Facility and timely transferred on the
Company's register of shareholders to a person other than the Depositary may be
voted by the Registered Holder(s) (as hereinafter defined) thereof directly,
subject, in each case, to the limitations of ROC law and the Articles of
Incorporation of the Company. Holders may not receive sufficient advance notice
of shareholders' meetings to enable them to timely withdraw the Deposited
Securities and vote at such meetings and may not be able to re-deposit the
withdrawn securities under the terms of the Deposit Agreement.
(b) Voting by ADS Holders. Holders of ADSs have no individual voting
rights with respect to the Deposited Securities represented by their ADSs. Each
Holder shall, by acceptance of ADSs or acquisition of any beneficial interest
therein, have authorized and directed the Depositary's nominee, without
liability, to appoint the Chairman of the Board of Directors of the Company (or
the Chairman's designate) (the "Voting Representative"), as representative of
the Depositary's nominee, who is registered in the ROC as representative of the
Holders and Beneficial Owners in respect of the Deposited Securities (the
"Registered Holder"), to vote the Shares or other Deposited Securities in
accordance with the terms hereof.
32
The Company agrees to use its best efforts to timely notify the
Depositary of any proposed shareholders' meeting and to provide to the
Depositary in New York, at least twenty-four (24) calendar days before any
ordinary shareholders' meeting or at least fourteen (14) calendar days prior to
the date of any extraordinary shareholders' meeting, a sufficient number of
copies reasonably requested by the Depositary of an English language translation
of the Company's notice of shareholders' meeting and the agenda of the materials
to be voted on (in the form the Company generally makes available to holders of
Shares in the ROC, including without limitation, a list of candidates proposed
by the Company for an election of directors or supervisors) (such materials
collectively, the "Shareholder Notice"). As soon as practicable after receipt by
the Depositary of the requisite number of Shareholder Notices, the Depositary
shall establish the ADS Record Date (upon the terms of Section 4.9 hereof) and
shall, at the Company's expense and provided that no U.S. legal prohibitions
exist, deliver to Holders as of the applicable ADS Record Date, (i) the
Shareholder Notice, (ii) a depositary notice setting forth the manner in which
Holders of ADSs may instruct the Depositary to cause the Deposited Securities
represented by their ADSs to be voted under the terms of this Deposit Agreement,
including a description of the Management Instruction (as defined below),
together with a form of voting instructions and/or other means to provide voting
instructions (the depositary notice and the related materials prepared by the
Depositary collectively, the "Depositary Notice"). The Depositary is under no
obligation to mail the Shareholder Notice and the Depositary Notice to Holders
if the Company has failed to provide to the Depositary in New York the requisite
number of Shareholder Notices at least twenty-four (24) calendar days prior to
the date of any ordinary shareholders' meeting or at least fourteen (14)
calendar days prior to the date of any extraordinary shareholders' meeting. If
the Depositary has not delivered the Shareholder Notice or Depositary Notice to
Holders, it will endeavor to cause all Deposited Securities represented by ADRs
to be present at the relevant shareholders' meeting insofar as practicable and
permitted under applicable law but will not cause the Shares or other Deposited
Securities to be voted; provided, however, that the Depositary may determine, in
its sole discretion, to send such Shareholder Notice and Depositary Notice to
Holders and/or cause the Shares or other Deposited Securities to be voted as it
deems appropriate. There can be no assurance that Holders generally or any
Holder in particular will receive Shareholder Notices and Depositary Notices
with sufficient time to enable the return of voting instructions to the
Depositary in a timely manner.
Notwithstanding anything else contained in this Deposit Agreement,
the Depositary shall not have any obligation to take any action with respect to
any meeting, or solicitation of consents or proxies or instructions, of holders
of Shares or other Deposited Securities if the taking of such action would
violate U.S. laws.
(c) Voting of Deposited Securities Upon ADS Holders' Instructions.
If Holders of ADSs together holding at least 51% of all the ADSs (including
Temporary ADSs) outstanding as of the relevant ADS Record Date shall instruct
the Depositary, prior to the date established for such purpose by the
Depositary, to vote in the same manner in respect of one or more resolutions to
be proposed at a shareholders' meeting (including resolutions for the election
of directors and/or supervisors), the Depositary shall notify the Voting
33
Representative as the representative of the Registered Holder to attend such
shareholders' meeting and vote all Deposited Securities evidenced by ADSs then
outstanding as of the ADS Record Date (including Temporary ADSs) in the manner
so instructed by such Holders. If voting instructions are received by the
Depositary on or before the date established by the Depositary for the receipt
of such instructions from any Holder as of the ADS Record Date, which are signed
but without further indication as to voting instructions, the Depositary shall
deem such Holder to have instructed a vote in favor of the items set forth in
such instructions. The Depositary and Custodian shall not have any obligation to
monitor, and shall not incur any liability for, the actions, or the failure to
act, of the Voting Representative (or his/her designate) as representative of
the Registered Holder.
(d) Depositary Authorization. If, for any reason (other than a
failure by the Company to supply the requisite number of Shareholder Notices to
the Depositary within the requisite time period provided in this Section 4.10),
the Depositary has not, prior to the date established for such purpose by the
Depositary, received instructions from Holders together holding at least 51% of
all ADSs (including Temporary ADSs) outstanding at the relevant ADS Record Date,
to vote in the same manner in respect of any resolution (including resolutions
for the election of directors and/or supervisors), then, subject to the
following paragraph, the Holders shall be deemed to have authorized and directed
the Depositary's nominee to authorize (the "Depositary Authorization") the
Voting Representative, as the representative of the Registered Holder, to attend
and vote at such meeting all the Deposited Securities represented by ADSs then
outstanding (including Temporary ADSs) in his or her discretion. In such
circumstances, the Voting Representative shall be free to exercise the votes
attaching to the Deposited Securities in any manner she/he wishes, which may not
be in the interests of the Holders.
The Depositary's Authorization, provided in the manner and under the
circumstances described in the preceding paragraph, shall be subject to the
receipt by the Depositary prior to each shareholders' meeting of an opinion of
ROC counsel of the Company addressed to, and in form and substance satisfactory
to, the Depositary to the effect that under ROC law (i) the arrangements
relating to the Depositary Authorization are permissible, and (ii) the
Depositary will not be deemed to be authorized to exercise any discretion when
causing the voting in accordance with this Section 4.10 and will not (in the
absence of negligence, bad faith or breach of contract, and subject to general
principles of agency) be subject to any liability under ROC law for losses
arising from the exercise of the voting arrangements set out in Section 4.10 on
the grounds that voting in accordance with Section 4.10 is in violation of ROC
law. In the event the Depositary does not receive such opinion, the Depositary
will not grant the Depositary Authorization, but will cause the Deposited
Securities to be present at the shareholders' meeting to the extent practicable
and permitted by applicable law and will not cause the Deposited Securities to
be voted.
The Depositary shall not, and the Depositary shall ensure that the
Custodian and its nominees do not, vote or attempt to exercise the right to vote
that attaches to the Shares or other Deposited Securities, other than in
accordance with instructions given in accordance with this Section 4.10. The
terms of this Section 4.10 may be amended from time to time in accordance with
the terms of this Deposit Agreement. By continuing to hold ADSs after the
effective time of such amendment, all Holders and Beneficial Owners shall be
deemed to have agreed to the terms of this Section 4.10 as so amended.
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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
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 substituted for and treated as Deposited Securities under
this Deposit Agreement, and the Receipts shall, subject to the provisions of
this Deposit Agreement and applicable law, evidence ADSs representing the right
to receive such additional or replacement securities, as applicable. 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 by the
Depositary of (a) a written opinion of U.S. counsel (reasonably satisfactory to
the Depositary) stating whether or not: (1) such exchange, conversion or
replacement requires registration of such securities under the Securities Act
and/or Exchange Act or (2) such exchange, conversion or replacement of such
securities as then contemplated is exempt from the registration requirements of
the Securities Act and/or Exchange Act and (b) a written opinion of ROC counsel
(reasonably satisfactory to the Depositary) stating that (1) such exchange,
conversion or replacement does not violate the laws or regulations of the
Republic of China and (2) all requisite regulatory consents and approvals
relating to such exchange, conversion or replacement have been obtained in the
Republic of China, execute and deliver additional Receipts as in the case of a
dividend of Eligible Securities, or call for the surrender of outstanding
Receipts to be exchanged for new Receipts, in either case, as well as in the
event of newly deposited Shares, with necessary modifications to the form of
Receipt 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 Receipts if necessary and
permissible. Notwithstanding the foregoing, in the event that any security so
received may not be lawfully distributed to some or all Holders, the Depositary
may, with the Company's approval, and shall, if the Company requests, subject to
receipt of an opinion of the Company's counsel, 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 reasonable expenses incurred by, the Depositary
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. The Depositary shall not 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.
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.
35
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 mail to Holders copies of such reports when furnished by the Company
pursuant to Section 5.6.
Section 4.14 List of Holders. The Depositary shall, on the fifth day
of each month, provide the Company with the information regarding the aggregate
number of outstanding ADSs as of the end of each preceding month and such other
information as may be required under the applicable laws and regulations of the
Republic of China and is available to the Depositary or obtained from Holders.
In addition, promptly upon written request by the Company, the Depositary shall
furnish to the Company 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 the Company's agents such information
from the Depositary's records as the Company may reasonably request to enable
the Company or the Company's agents to file the necessary tax reports with
governmental authorities or agencies. The Depositary, the Custodian or the
Company and its agents may, but shall not be obligated to, 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.
The Holders and Beneficial Owners may be asked to 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 the inaccuracy of any information provided by such
Holder and/or Beneficial Owner in order to obtain any refund of taxes, reduced
rate of withholding at source or other tax benefit on behalf of such Holder
and/or Beneficial Owner.
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
as soon as practicable 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
36
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.
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 execution and delivery, registration of
issuances, registration of transfers, combination and split-up of Receipts, and
the surrender of Receipts for the purpose of withdrawal of Deposited Securities
in accordance with the provisions of this Deposit Agreement.
The Registrar shall keep books for the registration of issuances and
transfers of Receipts which at all reasonable times shall be open for inspection
by the Company and by the Holders of such Receipts, provided that such
inspection shall not be, to the Registrar's knowledge, for the purpose of
communicating with Holders of such Receipts 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 Receipts.
The Registrar may close the transfer books with respect to the
Receipts, 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 Receipts or the ADSs evidenced thereby 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
co-registrars for registration of Receipts and transfers, combinations and
split-ups, and to countersign such Receipts 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.
Section 5.2 Exoneration. 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 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, the Republic of China or any other country, or of any
37
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 Incorporation of the
Company or any provision of or governing any Deposited Securities, or by reason
of any act of God, terrorism or war or other circumstances beyond its control
(including, without limitation, nationalization, expropriation, currency
restrictions, work stoppage, strikes, civil unrest, 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 Incorporation of the Company or provisions of or governing Deposited
Securities, (iii) for any action or inaction in reliance upon the advice 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, its controlling persons, its agents, any Custodian
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 and its agents assume no
obligation and shall not be subject to any liability under this Deposit
Agreement or the Receipts to Holders or Beneficial Owners or other persons,
except that the Company and its agents agree to perform their obligations
specifically set forth in this Deposit Agreement without negligence or bad
faith.
The Depositary and its agents assume no obligation and shall not be
subject to any liability under this Deposit Agreement or the Receipts to Holders
or Beneficial Owners or other persons, except that the Depositary and its agents
agree to perform their obligations specifically set forth in this Deposit
Agreement without negligence or bad faith.
Without limitation of the foregoing, neither the Depositary, nor the
Company, nor any of their respective controlling persons, or agents, 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 Receipts,
which in its opinion may involve it in expense or liability, unless indemnity
satisfactory to it against all expense (including reasonable 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).
38
The Depositary and its agents shall not 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, provided that any
such action or omission is in good faith and without negligence and in
accordance with the terms of this Deposit Agreement. Provided that the
Depositary acts or omits to act in good faith and without negligence, the
Depositary shall not incur any liability for any failure to determine that any
distribution or action may be lawful or reasonably practicable, 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 any investment
risk associated with acquiring an interest in the Deposited Securities, for the
validity or worth of the Deposited Securities or for any tax consequences that
may result from the ownership of ADSs, Shares or Deposited Securities, for the
credit-worthiness of any third party, 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. Nothing in this Deposit Agreement shall cause the Depositary
or any of its agents to incur any liability as a result of any action or failure
to act by any trustee under a Trust Deed governing Bonds.
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 60th 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 earlier of (i)
the 60th 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 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 immediate predecessor (other than as
contemplated in Sections 5.8 and 5.9). The immediate predecessor depositary,
upon payment of all sums due to 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 Receipts and such other
information relating to Receipts and Holders thereof as the successor may
reasonably request. Any such successor depositary shall promptly provide notice
of its appointment to such Holders.
39
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., (Taipei) 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 Deposited
Securities 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 promptly appoint a
substitute qualified custodian that is organized under the laws of the Republic
of China. 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 substitute 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 Receipts, 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 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 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
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 Incorporation of the Company that may be relevant
or pertain to such notice of meeting or be the subject of a vote thereat. The
Depositary shall arrange, at the request of the Company and at the Company's
expense, for the mailing of 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 Deposited Securities or on such other basis as the Company
may advise the Depositary or as may be required by any applicable law,
40
regulation or stock exchange requirement. The Company has delivered to the
Depositary and the Custodian a copy of the Company's Articles of Incorporation
along with the provisions of or governing the Deposited Securities, and promptly
upon any amendment thereto or change therein, the Company shall deliver to the
Depositary and the Custodian a copy of such amendment thereto or change therein.
The Depositary may rely upon such copy for all purposes of this Deposit
Agreement.
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 Receipts
evidencing the ADSs governed by such provisions 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 (to the extent applicable)
proposes (i) an issuance, sale or distribution of additional Shares, (ii) an
offering of rights to subscribe for Eligible Securities, (iii) an issuance of
securities convertible into or exchangeable for Eligible Securities, (iv) an
issuance of rights to subscribe for securities convertible into or exchangeable
for Eligible Securities, (v) an elective dividend of cash or Eligible
Securities, (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, it will obtain U.S. legal advice and take all steps
necessary to ensure that the application of the proposed transaction to Holders
and Beneficial Owners does not violate the registration provisions of the
Securities Act, or any other applicable U.S. securities laws (including, without
limitation, the Investment Company Act of 1940, as amended, or the Exchange
Act). 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) stating whether or not application of such transaction to Holders
and Beneficial Owners (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 ROC counsel stating that (1) making the
transaction available to Holders and Beneficial Owners does not violate the laws
or regulations of the Republic of China and (2) all requisite regulatory
consents and approvals have been obtained in the Republic of China. 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 Eligible Securities, either upon original
issuance or upon a sale of Eligible Securities previously issued and reacquired
by the Company or by any such Affiliate, or (ii) issue additional Eligible
Securities, rights to subscribe for such Eligible Securities, securities
convertible into or exchangeable for Eligible Securities 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).
41
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 Company agrees to indemnify the
Depositary, the Custodian and any of their respective directors, 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) incurred by them
that may arise (a) out of or in connection with any offer, issuance, sale,
resale, transfer, deposit or withdrawal of Receipts, ADSs, Eligible Securities
or other Deposited Securities, as the case may be, or as a result of any
offering documents in respect thereof or (b) 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 Receipts, the ADSs, the Eligible Securities or any Deposited
Securities, as the same may be amended, modified or supplemented from time to
time, in any such case (i) by the Depositary, the Custodian or any of their
respective directors, employees, agents and Affiliates, except to the extent
such loss, liability, tax, charge or expense is due to negligence or bad faith
of any of them, or (ii) by the Company or any of its directors, employees,
agents and Affiliates.
The Depositary agrees to indemnify the Company and its directors,
employees, agents and Affiliates against, and hold them harmless from, any
direct loss, liability, tax, charge or expense of any kind whatsoever
(including, without limitation, reasonable fees and expenses of counsel)
incurred by them which may arise out of acts performed or omitted by the
Depositary under the terms hereof due to the negligence or bad faith of the
Depositary.
The obligations set forth in this Section 5.8 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 indemnification claim 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 Eligible Securities 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.
42
The Company agrees to promptly pay to the Depositary such other fees
and charges and to reimburse the Depositary for such reasonable 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 (3) 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 extend for those
fees, charges and expenses incurred prior to the effectiveness of such
resignation or removal.
Section 5.10 Pre-Release Transactions and Pre-Cancellation Sales.
(a) 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 Deposited Securities or ADSs; provided, however, that
the Depositary may, to the extent permitted by applicable law, (i) issue ADSs
prior to the receipt of Eligible Securities pursuant to Section 2.3 and (ii)
deliver Deposited Securities only upon the prior receipt of ADSs for
cancellation upon withdrawal of Deposited Securities pursuant to Section 2.7,
including ADSs which were issued under (i) above but for which Eligible
Securities may not have been received (each such transaction in (i) above a
"Pre-Release Transaction"). The Depositary may receive ADSs in lieu of Eligible
Securities under (i) 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 Deposited Securities are to be delivered (w) represents that at the
time of the Pre-Release Transaction the Applicant or its customer owns the
Eligible Securities that are to be delivered by the Applicant under such
Pre-Release Transaction, (x) agrees to indicate the Depositary as owner of such
Eligible Securities in its records and to hold such Eligible Securities in trust
for the Depositary until such Eligible Securities are delivered to the
Depositary or the Custodian, (y) unconditionally guarantees to deliver to the
Depositary or the Custodian, as applicable, such Eligible Securities, and (z)
agrees to any additional restrictions or requirements that the Depositary deems
appropriate, (b) at all times fully collateralized with cash, United States
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 Eligible Securities 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 disregard such limit from time to time as it
deems appropriate and may, with the prior written consent of the Company, change
such limit for purposes of general application.
43
The Depositary may also set limits with respect to the number of
ADSs and Eligible Securities 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). Temporary COP ADSs, Temporary EC ADSs, Certificate of Payment and
Entitlement Certificates shall not be eligible for Pre-Release Transactions
hereunder.
(b) Pre-Cancellation Sales. To the extent permitted under applicable
law, in its capacity as Depositary, the Depositary may, when a Holder of ADSs so
requests, cause the Deposited Shares to be sold and deliver the proceeds of the
sale prior to the receipt and cancellation of ADSs (each such transaction a
"Pre-Cancellation Sale") prior to the receipt of ADSs for cancellation. Each
such Pre-Cancellation Sale will be (a) accompanied by or subject to a written
agreement whereby the person or entity (the "Applicant") to whom the proceeds of
the sale of Deposited Securities are to be delivered which, (i) represents that
at the time of the Pre-Cancellation Sale, the Applicant or its customer owns the
ADSs that are to be delivered by the Applicant under such Pre-Cancellation Sale,
(ii) agrees to indicate the Depositary as owner of such ADSs in its records and
to hold such ADSs in trust for the Depositary until such ADSs are delivered to
the Depositary, (iii) unconditionally guarantees to deliver to the Depositary
such ADSs, and (iv) agrees to any additional restrictions or requirements that
the Depositary deems appropriate; (b) at all times fully collateralized with
cash, United States 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 Deposited
Securities involved in such Pre-Cancellation Sales at any one time to thirty
percent (30%) of the Deposited Securities outstanding, provided, however, that
the Depositary reserves the right to disregard such limit from time to time as
it deems appropriate and may, with the prior written consent of the Company,
change such limit for purposes of general application.
Section 5.11 Restricted Securities Owners. Except as provided for in
Section 2.14 of this Deposit Agreement, the Company agrees to advise in writing
each of the persons or entities who, to the best knowledge of the Company, holds
Restricted Securities that such Restricted Securities are ineligible for deposit
hereunder and, to the extent practicable, shall require each of such persons to
represent in writing that such person will not deposit Restricted Securities
hereunder.
ARTICLE VI
AMENDMENT AND TERMINATION
Section 6.1 Amendment/Supplement. The Receipts outstanding at any
time, the provisions of this Deposit Agreement and the form of Receipt 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
44
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
Receipts until the expiration of thirty (30) days after notice of such amendment
or supplement shall have been given to the Holders of outstanding Receipts. 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
traded 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 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 the
Deposit Agreement and the Receipt as amended and supplemented thereby. In no
event shall any amendment or supplement impair the right of the Holder to
surrender such Receipt 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 or supplement of the
Deposit Agreement to ensure compliance therewith, the Company and the Depositary
may amend or supplement the Deposit Agreement and the Receipts at any time in
accordance with such changed laws, rules or regulations. Such amendment or
supplement to the Deposit Agreement and the Receipts 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 Receipts then outstanding at
least thirty (30) days prior to the date fixed in such notice for such
termination. If sixty (60) 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 Receipts 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 a Receipt will, upon
surrender of such Receipt at the Principal Office of the Depositary, upon the
payment of the charges of the Depositary for the surrender of Receipts referred
to in Section 2.7 and subject to the conditions and restrictions set forth
therein and subject always to the restrictions on withdrawal as may be in effect
under the laws and regulations of the Republic of China, 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
Receipt. If any Receipts shall remain outstanding after the date of termination
of this Deposit Agreement, the Registrar thereafter shall discontinue the
registration of transfers of Receipts, 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
45
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 Receipts
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 a Receipt, 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 Receipts have not theretofore been
surrendered, such Holders thereupon becoming general creditors of the Depositary
with respect to such net proceeds. After making such sale, the Depositary shall
be discharged from all obligations under this Deposit Agreement with respect to
the Receipts, the Deposited Securities and the ADSs, 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 a Receipt, 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 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 Agreement shall (a) preclude the Depositary or any of
its Affiliates from engaging in such transactions or establishing or maintaining
such relationships, (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.
46
Section 7.3 Severability. In case any one or more of the provisions
contained in this Deposit Agreement or in the Receipts 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 the Deposit Agreement and shall be bound by all of the terms and
conditions thereof and of any Receipt by acceptance thereof of 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,
addressed to AU Optronics Corp., 0 Xx-Xxxx Xx. 0, Xxxxxxx-Xxxxx Xxxxxxxxxx Xxxx,
Xxxx-Xxx 000, Xxxxxx, Xxxxxxxx of China, Attention: Max Xxxxxxx Xxxxx, Chief
Financial Officer, Finance Division, 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 mail, air courier or
cable, telex or facsimile transmission, confirmed by letter, addressed to
Citibank, N.A., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X. Attention: ADR
Department, or to any other address which the Depositary may specify in writing
to the Company.
Any and all notices to be given to the Custodian 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, addressed to
Citibank, N.A., (Taipei), having its principal office at X0, Xx. 00, Xxxxxxx X.
Xxxx, Xxx. 0, Xxxxxx, Xxxxxx, Xxxxxxxx of China or to any other address which
the Custodian 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 written 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 Beneficial Owners of ADSs held by such other Holders.
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 to
the actual receipt or time of actual receipt thereof by a Holder. The Depositary
47
or the Company may, however, act upon any cable, telex or facsimile transmission
received by it from the other or from any Holder, notwithstanding that such
cable, telex or facsimile transmission shall not subsequently be confirmed by
letter as aforesaid.
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 Receipts 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 Receipt or any present or future provisions of the laws of the State of New
York, the rights of holders of Deposited Securities and the obligations and
duties of the Company in respect of the holders of Deposited Securities, as
such, shall be governed by the laws of Taiwan (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 Inc. (the
"Agent") now at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its authorized
agent to receive 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 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
48
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 Receipt 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.
Section 7.9 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 this 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
49
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 the applicable laws and
regulations in effect at the relevant time of determination, unless otherwise
required by such laws or regulations.
50
IN WITNESS WHEREOF, AU OPTRONICS CORP., 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 evidenced by Receipts issued in accordance with the terms hereof,
or upon acquisition of any beneficial interest therein.
AU OPTRONICS CORP.
By: /s/ Max Xxxxxxx Xxxxx
------------------------------------
Name: Max Xxxxxxx Xxxxx
Title: Chief Financial Officer
CITIBANK, N.A.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
51
EXHIBIT A
[FORM OF RECEIPT]
Number CUSIP NUMBER: 002255 10 7
AUO __________________
[American Depositary Shares (each
American Depositary Share representing
ten (10) Fully Paid shares of common
stock, par NT$10.00 per share)]
[COP American Depositary Shares (each
COP American Depositary Share
representing an undivided interest in
a global Certificates of Payment, each
interest representing the irrevocable
right to receive ten (10) Fully Paid
shares of common stock par value
NT$10.00 per share)]
[EC American Depositary Shares (each
EC American Depositary Share
representing an undivided interest in
an Entitlement Certificate, each
interest representing the irrevocable
right to receive ten (10) shares of
common stock par NT$10.00 per share)]
A-1
AMERICAN DEPOSITARY RECEIPT
FOR
AMERICAN DEPOSITARY SHARES
representing
[DEPOSITED SHARES OF COMMON STOCK]
[INTERESTS IN THE DEPOSITED CERTIFICATE(S) OF PAYMENT]
[DEPOSITED ENTITLEMENT CERTIFICATE(S)]
of
AU Optronics Corp.
(Incorporated under the laws of the Republic of China)
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 [shares
of common stock] [interests in the global Certificate(s) of Payment representing
the irrevocable right to receive shares of common stock] [Entitlement
Certificate(s) representing the irrevocable right to receive shares of common
stock], par value NT$10.00 per share, or evidence of rights to receive such
[shares of common stock (the "Shares")] [interests in the global Certificate(s)
of Payment (the "Certificate(s) of Payment"][Entitlement Certificate(s) (the
"Entitlement Certificate(s)")] (such [Shares][Certificate(s) of
Payment][Entitlement Certificate(s)] are hereafter called "Eligible Securities")
of AU Optronics Corp., a company incorporated under the laws of the Republic of
China (the "Company"). As of the date of the Deposit Agreement (as hereinafter
defined), each ADS represents [ten (10) Shares][an undivided interest in an
Entitlement Certificate, each interest representing the irrevocable right to
receive [ten (10)] Shares][an undivided interest in a global Certificate(s) of
Payment, each interest representing the irrevocable right to receive ten (10)
Shares] deposited under the Deposit Agreement with the Custodian, which at the
date of execution of the Deposit Agreement is Citibank, N.A., (Taipei) (the
"Custodian"). The ratio of American Depositary Shares to Eligible Securities is
subject to amendment as provided in Article IV of the Deposit Agreement. The
Depositary's Principal Office is located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, X.X.X.
(1) The Deposit Agreement. This American Depositary Receipt is one
of an issue of American Depositary Receipts ("Receipts"), all issued and to be
issued upon the terms and conditions set forth in the Deposit Agreement, dated
as of May 29, 2002 (as amended 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 American Depositary Shares ("ADSs") evidenced by Receipts
issued thereunder, each of whom by accepting an ADS (or an interest therein)
A-2
agrees to become a party thereto and becomes bound by all the terms and
conditions thereof. The Deposit Agreement sets forth the rights and obligations
of Holders and Beneficial Owners of Receipts and the rights and duties of the
Depositary in respect of the Eligible Securities deposited thereunder and any
and all other securities, property and cash from time to time received in
respect of such Eligible Securities and held thereunder (such Eligible
Securities, 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.
The statements made on the face and reverse of this Receipt are
summaries of certain provisions of the Deposit Agreement and the Articles of
Incorporation 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 Incorporation, 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) Surrender of ADSs and Withdrawal and Sale of Deposited
Securities. The Depositary and the Company have been advised that under ROC law,
until three (3) months after the closing of the Offering, a Holder is not
entitled to withdraw or sell Shares from the ADS Facility, consequently, the
Company and the Depositary agree to prohibit the surrender of ADSs and the sale
or Delivery of any Shares deposited in connection with the Offering until the
expiration of such three-month period. A Holder wishing to withdraw Shares from
the ADS Facility shall be required under ROC law to appoint an eligible agent in
the Republic of China to open a securities trading account with a local
brokerage firm after receiving an approval from the TSE and a bank account (the
securities trading account and the bank account, collectively, the "Accounts"),
to pay ROC taxes, remit funds, exercise stockholders' rights and perform such
other functions as may be designated by such withdrawing Holder. In addition,
such withdrawing Holder is also required to appoint a custodian bank to hold the
securities in safekeeping, make confirmations and settle trades and report all
relevant information. Without making such appointment and until approval from
the TSE is obtained, the withdrawing Holder would be unable to receive, hold, or
subsequently sell the Deposited Securities withdrawn from the ADS Facilities on
the TSE or otherwise.
(a) Sale of Deposited Securities. Upon surrender of Receipts at the
Principal Office and upon payment of any fees, reasonable expenses, taxes or
other governmental charges as provided hereunder, subject to the terms of this
Deposit Agreement, and the transfer restrictions applicable to the Deposited
Securities, if any, Holders may request that the Deposited Securities
represented by such Holders' Receipts be sold on such Holders' behalf. Any
Holder requesting a sale of Deposited Securities may be required by the
Depositary to deliver, or cause to be delivered, to the Depositary a written
order requesting the Depositary to sell, or cause to be sold, such Deposited
Securities. Any such sale of Deposited Securities will be conducted in
accordance with applicable ROC law through a securities company in the ROC on
the TSE or in such other manner as is or may be permitted under applicable ROC
law. Any such sale of Deposited Securities will be at the expense and risk of
the Holder requesting such sale.
A-3
Upon receipt of any proceeds from any such sale, the Depositary
shall, subject to any restrictions imposed by ROC law and regulations, and as
provided hereunder and under the Deposit Agreement, convert or cause to be
converted any such proceeds into U.S. dollars and distribute any such proceeds
to the Holders entitled thereto after deduction or payment of any fees,
reasonable expenses, taxes or governmental charges incurred in connection with
such sale, as provided under the Deposit Agreement. Any such sale may be subject
to ROC taxation on capital gains, if any, and will be subject to a securities
transaction tax in the ROC.
(b) 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 ADS(s) 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 Receipts evidencing such ADSs) for the purpose of withdrawal
of the Deposited Securities represented thereby, (ii) if so required by the
Depositary, the Receipts 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, (iv) the
Holder has delivered to the Depositary the certification contemplated in Exhibit
C to the Deposit Agreement, duly completed by or on behalf of the Beneficial
Owner(s) of the ADSs surrendered for withdrawal (unless the Depositary is
otherwise instructed by the Company), and (v) all applicable fees and charges
of, and reasonable 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 the Receipts evidencing the surrendered ADSs, of the
Deposit Agreement, of the Company's Articles of Incorporation and of any
applicable laws and the regulations and rules of the Republic of China and the
rules of the TSE and the Taiwan Securities Central Depository, 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
Receipts 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 Receipts evidencing the ADSs so
canceled, of the Articles of Incorporation of the Company, of applicable laws
and the rules and regulations of the Republic of China and the rules of the TSE
and the Taiwan Securities Central Depository, and to the terms and conditions of
or governing the Deposited Securities, in each case as in effect at the time
thereof.
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The Depositary shall not accept for surrender ADSs representing less
than one Eligible Security. In the case of the Delivery to it of ADSs
representing a number other than a whole number of Eligible Securities, the
Depositary shall cause ownership of the appropriate whole number of Eligible
Securities 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 Eligible
Security, or (ii) sell or cause to be sold the fractional Eligible Security
represented by the ADS(s) 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. In
addition, trading restrictions on the TSE may result in the price per Eligible
Security or on any lot of any type of Eligible Security other than an integral
multiple of 1,000 Eligible Securities being lower than the price of Eligible
Securities in lots of integral multiples of 1,000 Eligible Securities.
Notwithstanding anything else contained in any Receipt 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 securities 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.
(3) Transfer, Combination and Split-Up of Receipts. The Registrar
shall register the transfer of this Receipt (and of the ADSs represented
thereby) on the books maintained for such purpose and the Depositary shall
cancel this Receipt and execute new Receipts evidencing the same aggregate
number and type of ADSs as those evidenced by this Receipt when canceled, shall
cause the Registrar to countersign such new Receipts and shall Deliver such new
Receipts to or upon the order of the person entitled thereto, if each of the
following conditions has been satisfied: (i) this Receipt 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 Receipt has been properly endorsed or is accompanied by
proper instruments of transfer (including signature guarantees in accordance
with standard securities industry practice), (iii) this Receipt 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
Receipt, of the Deposit Agreement and of applicable law, in each case as in
effect at the time thereof.
The Registrar shall register the split-up or combination of this
Receipt (and of the ADSs represented hereby) on the books maintained for such
purpose and the Depositary shall cancel this Receipt and execute new Receipts
for the number of ADSs requested, but in the aggregate not exceeding the number
of the same type of ADSs evidenced by this Receipt (when canceled), shall cause
the Registrar to countersign such new Receipts and shall Deliver such new
Receipts to or upon the order of the Holder thereof, if each of the following
conditions has been satisfied: (i) this Receipt has been duly Delivered by the
A-5
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 Receipt, 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, registration of transfer, split-up,
combination or surrender of any Receipt, 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 Eligible Securities or
presenter of ADSs or of a Receipt 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
Eligible Securities being deposited or withdrawn) and payment of any applicable
fees and charges of the Depositary as provided in the Deposit Agreement and in
this Receipt, (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 Receipts or ADSs or to the
deposit of Eligible Securities or to the withdrawal of Deposited Securities and
(B) such reasonable regulations as the Depositary and the Company may establish
consistent with the provisions of this Receipt, the Deposit Agreement and
applicable law.
The issuance of ADSs against deposits of Eligible Securities
generally or against deposits of particular Eligible Securities may be
suspended, or the deposit of particular Eligible Securities may be refused, or
the registration of transfer of Receipts in particular instances may be refused,
or the registration of transfer of Receipts generally may be suspended, during
any period when the transfer books of the Company, the Depositary, a Registrar
or the Eligible Securities 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 upon which the ADSs
or Eligible Securities are listed, or under any provision of the Deposit
Agreement or this Receipt, 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 (23) hereof. In
addition, the Depositary and the Custodian shall refuse to accept Shares for
deposit (i) whenever notified, as provided in the Deposit Agreement that the
Company has restricted transfer of such Shares to comply with delivery or
transfer requirements and/or ownership restrictions referred to in the Deposit
Agreement or under applicable law, or (ii) in the case of a deposit of Shares
requested under the terms of Section 2.3(iv) of the Deposit Agreement, if such
deposit is not permitted under any restriction notified by the Company to the
Depositary from time to time, which restrictions may specify black-out periods
during which deposits may not be made, minimum or maximum numbers of Shares and
frequencies of deposit.
Notwithstanding any provision of the Deposit Agreement or this
Receipt 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 Eligible Securities in connection with voting at a shareholders'
A-6
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 Receipts or to the withdrawal of the Deposited
Securities, and (iv) other circumstances specifically contemplated by Section
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 Receipt, 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 TSE, and
any other stock exchange on which the Eligible Securities or ADSs are, or will
be, registered, traded or listed, or the Articles of Incorporation 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 Eligible Securities and
Deposited Securities, 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
Receipt or of the Deposit Agreement, the Company may restrict transfers of the
Shares, Eligible Securities or securities convertible into Shares where the
Company informs the Depositary that such transfer might result in ownership of
Shares exceeding limits imposed by applicable law, the SFC, the TSE or Articles
of Incorporation of the Company. The Company may also restrict, in such manner
as it deems appropriate, transfers of ADSs where such transfer may result in the
total number of Shares, Deposited Securities or securities convertible into
Shares represented by the ADSs owned by a single Holder or Beneficial Owner to
exceed any such limits. 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 the mandatory sale or disposition on behalf of a Holder or Beneficial Owner
of the Deposited Securities 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 Incorporation of
the Company.
(7) Liability of Holder for Taxes and Other Charges. If any tax or
other governmental charge shall become payable with respect to any Receipt or
any Deposited Securities or ADSs, such tax or other governmental charge 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 or governmental
charges, (including applicable interest and penalties), the Holder and the
Beneficial Owner hereof remaining liable for any deficiency. The Custodian may
refuse the deposit of Eligible Securities and the Depositary may refuse to issue
ADSs, to deliver ADRs, register the transfer, split-up or combination of ADRs
and (subject to Paragraph (23) hereof) the withdrawal of Deposited Securities
A-7
until payment in full of such tax, charge, penalty or interest is received.
Every Holder and Beneficial Owner may be asked to indemnify the Depositary, the
Company, the Custodian, and any of their respective 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
inaccuracy in the information provided by such Holder and/or Beneficial Owner in
connection with obtaining any tax benefit 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 to make such deposit, (iv) the Shares presented
for deposit are free and clear of any lien, encumbrance, security interest,
charge, mortgage or adverse claim and are not, and the ADSs issuable upon such
deposit will not be, Restricted Securities except (as contemplated in Section
2.14 of the Deposit Agreement), and (v) 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. Each
person depositing Certificates of Payment under the Deposit Agreement shall be
deemed thereby to represent and warrant that (i) such Certificates of Payment
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 Certificates of Payment have been validly waived or exercised,
(iii) the person making such deposit is duly authorized to make such deposit,
(iv) the Certificates of Payment presented for deposit are free and clear of any
lien, encumbrance, security interest, charge, mortgage or adverse claim, and are
not, and the Temporary COP ADSs issuable upon such deposit will not be,
Restricted Securities (except as contemplated in Section 2.14 of the Deposit
Agreement) and (v) the Certificates of Payment presented for deposit have not
been stripped of any rights or entitlements. Such representations and warranties
shall survive the deposit of Certificates of Payment, the issuance and
cancellation of Temporary COP ADSs in respect thereof and the transfer of such
Temporary COP ADSs. Each person depositing Entitlement Certificates under the
Deposit Agreement shall be deemed thereby to represent and warrant that (i) such
Entitlement Certificates are duly authorized, validly issued, fully paid and
legally obtained by such person, (ii) all preemptive (and similar) rights, if
any, with respect to such Entitlement Certificates have been validly waived or
exercised, (iii) the person making such deposit is duly authorized to do so,
(iv) the Entitlement Certificates presented for deposit are free and clear of
any lien, encumbrance, security interest, charge, mortgage or adverse claim, and
are not, and the Temporary EC ADSs issuable upon such deposit will not be,
Restricted Securities and (v) the Entitlement Certificates presented for deposit
have not been stripped of any rights or entitlements. Such representations and
warranties shall survive the deposit of Entitlement Certificates, the issuance
and cancellation of Temporary EC ADSs in respect thereof and the transfer of
such Temporary EC ADSs.
If any such representations or warranties are false in any way, the
Company and Depositary shall be authorized, at the cost and expense of the
person depositing, Shares, Certificates of Payment or Entitlement Certificates,
to take any and all actions necessary to correct the consequences thereof.
A-8
(9) Filing Proofs, Certificates and Other Information. Any person
presenting Eligible Securities 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 Depositary and the Custodian such proof of citizenship or
residence, taxpayer status, payment of all applicable taxes or other
governmental charges, exchange control approvals and any other applicable
regulatory approval, legal or beneficial ownership of ADSs and Deposited
Securities, compliance with applicable laws and the terms of the Deposit
Agreement or this receipt evidencing the ADS(s) 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 Eligible Securities in registered form
presented for deposit, such information relating to the registration on the
books of the Company or of the Eligible Securities Registrar) as the Depositary
or the Custodian may deem reasonably necessary or proper or as the Company may
reasonably require by written request to the Depositary consistent with its
obligations under the Deposit Agreement, this Receipt and applicable laws and
regulations. The Depositary and the Registrar, as applicable, may withhold the
execution or delivery or registration of transfer of any Receipt or the
distribution or sale of any dividend or distribution of rights or of the
proceeds thereof or, to the extent not limited by Paragraph (23) hereof, the
delivery of any Deposited Securities until such proof or other information is
filed or such certificates are executed, or such representations 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 for the services performed under the terms of the Deposit
Agreement:
(i) to any person to whom ADSs are issued upon the deposit of Eligible
Securities, a fee not in excess of U.S. $ 5.00 per 100 ADSs (or fraction
thereof) so issued under the terms of the Deposit Agreement (excluding issuances
pursuant to paragraphs (iii)(b) and (v) below);
(ii) 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
fraction thereof) so surrendered;
(iii) 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) to any Holder of ADSs, a fee not in excess of U.S. $ 2.00 per 100
ADSs (or fraction thereof) held for the distribution of cash proceeds (i.e.,
upon the sale of rights and other entitlements); and
(v) to any Holder of ADSs, a fee not in the excess of U.S. $ 5.00 per 100
ADSs (or fraction thereof) issued upon the exercise of rights to purchase
additional ADSs.
A-9
In addition, Holders, Beneficial Owners, persons depositing Eligible
Securities for deposit and persons surrendering ADSs for cancellation and
withdrawal of Deposited Securities will be required to pay the following
charges:
(a) taxes (including applicable interest and penalties) and other
governmental charges;
(b) such registration fees as may from time to time be in effect for
the registration of Deposited Securities on the share register and applicable to
transfers of Deposited Securities to or from the name of the Custodian, the
Depositary or any nominees upon the making of deposits and withdrawals,
respectively;
(c) 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 Deposited Securities or Holders and
Beneficial Owners of ADSs;
(d) the expenses and charges incurred by the Depositary in the
conversion of foreign currency;
(e) such fees and expenses as are incurred by the Depositary in
connection with compliance with exchange control regulations and other
regulatory requirements applicable to Eligible Securities, Deposited Securities,
ADSs and ADRs; and
(f) the fees and expenses incurred by the Depositary in connection
with the delivery 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 (21) of this Receipt. 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 Receipts. It is a condition of this Receipt, and every
successive Holder of this Receipt by accepting or holding the same consents and
agrees, that title to this Receipt (and to each ADS evidenced hereby) shall be
transferable upon the same terms as a certificated security under the laws of
the State of New York, provided that the Receipt 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
this Receipt (that is, the person in whose name this Receipt 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 Receipt to any holder of
this Receipt or any Beneficial Owner unless such holder is the Holder of this
Receipt 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.
A-10
(12) Validity of Receipt. This Receipt (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 Receipt 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 Receipts. Receipts 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 Receipt 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 issuances and
transfers of Receipts which at all reasonable times shall be open for inspection
by the Company and by the Holders of such Receipts, provided that such
inspection shall not be, to the Registrar's knowledge, for the purpose of
communicating with Holders of such Receipts 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 Receipts.
The Registrar may close the transfer books with respect to the
Receipts, 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 (23) hereof.
Dated: CITIBANK, N.A.,
as Depositary
By:
------------------------------------
Authorized Signatory
X-00
XXXXXXXX, N.A.
Transfer Agent and Registrar
By:
------------------------------------
Authorized Signatory
The address of the Principal Office of the Depositary is 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X.
A-12
[FORM OF REVERSE OF RECEIPT]
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT
(14) Dividends and Distributions in Cash, Eligible Securities, etc.
Subject always to the laws and regulations of the Republic of China, whenever
the Depositary receives directly 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 any entitlements
held in respect of Deposited Securities under the terms of the Deposit
Agreement, the Depositary will (i) 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 Paragraph (15) hereof and 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 reasonable 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 ADS 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 by the Company, the Custodian or the
Depositary to the relevant governmental authority.
If any distribution upon any Deposited Securities consists of a
dividend in, or free distribution of, Eligible Securities, the Company shall
cause such Eligible Securities 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, subject to and in accordance with the Deposit
Agreement and the laws and regulations of the Republic of China, 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 (of the applicable series), which represent in
aggregate the number of Eligible Securities received as such dividend, or free
distribution, subject, however, in each case, to the terms of the Deposit
Agreement (including, without limitation, the limitations set forth on the face
of this Receipt and in Article II of the Deposit Agreement and net of (a) the
applicable fees and charges of, and reasonable 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 interest in the
additional integral number of Shares distributed upon the Deposited Securities
represented thereby (subject, however, in each case, to the laws and regulations
of the Republic of China and net of (a) the applicable fees and charges of, and
the reasonable expenses incurred by, the Depositary and (b) taxes). In lieu of
delivering fractional ADSs, the Depositary shall sell the number of Eligible
Securities 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.
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In the event that the Depositary determines that any distribution in
property (including Eligible Securities) 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 Eligible Securities 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 Eligible
Securities 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 reasonable
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 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 (15) 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 dividend shall be distributed 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 distributed as in the
case of a distribution in Eligible Securities. If such elective distribution is
not lawful or not reasonably practicable, the Depositary shall, to the extent
permitted by law, distribute to Holders, on the basis of the same determination
as is made in the Republic of China in respect of the Deposited Securities for
which no election is made, either (x) cash or (y) additional ADSs representing
such additional Eligible Securities, 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 hereof a method to receive the
elective distribution in Eligible Securities (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
Deposited Securities.
Upon timely receipt by the Depositary of a notice indicating that
the Company wishes rights to subscribe for additional Eligible Securities 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. If and whenever the Company shall
announce its intention to make any offer or invitation to the holders of
Eligible Securities to subscribe for or to acquire Eligible Securities or other
assets by way of rights, the Depositary shall as soon as practicable thereafter
give notice of the same to the Holders, including if applicable, the last date
for acceptance thereof and the manner by which and the time during which Holders
may instruct the Depositary to exercise such rights. The Depositary shall make
A-14
such rights available to any Holders only if (i) the Company shall have timely
requested the Depositary to make such rights available to Holders, (ii) the
Depositary shall have received satisfactory documentation contemplated in the
Deposit Agreement, 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 the
Depositary that the rights not be made available to Holders of ADSs, the
Depositary shall proceed with the sale of rights as contemplated below. In the
event that the 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 (x) to distribute rights to purchase additional ADSs
(by means of warrants or otherwise), (y) to 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 and (b) taxes), and (z)
to 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 Eligible Securities (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 it is not lawful
or 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 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 reasonably practicable.
The Depositary shall, upon such sale, convert and distribute proceeds of such
sale (net of applicable fees and charges of, and reasonable expenses incurred
by, the Depositary and 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. The Depositary shall not 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, (ii) any foreign exchange exposure or loss incurred in connection
with such sale, or exercise, or (iii) the content of any materials forwarded to
the ADR 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 Securities Act (or other applicable law) covering such
offering is in effect or (ii) unless the Company furnishes the Depositary
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 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 other
applicable securities 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
A-15
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 Eligible
Securities 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 Eligible
Securities 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 exercise rights on the same terms
and conditions as the holders of Deposited Securities or be able 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 Eligible
Securities or other securities to be acquired upon the exercise of such rights.
Upon receipt of a notice indicating that the Company wishes property
other than cash, Eligible Securities or rights to purchase additional Eligible
Securities, to be made to Holders of ADSs, the Depositary shall 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 the documentation contemplated in the Deposit
Agreement, and (iii) the Depositary shall have determined 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 respective number of ADSs held by them 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, 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) fees and charges of, and expenses incurred by, the Depositary 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 in any way it deems reasonably
practicable under the circumstances.
(15) 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, Eligible Securities, rights or other
distribution), or whenever for any reason the Depositary causes a change in the
number of Deposited Securities 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 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
Receipts 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
A-16
take action, or to exercise the rights of Holders with respect to such changed
number of Deposited Securities 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 the Republic of China. Subject to applicable law and the terms and
conditions of this Receipt and the Deposit Agreement, only the Holders of
Receipts at the close of business in New York on such ADS Record Date shall be
entitled to receive such distributions, to give such instructions, to receive
such notice or solicitation, or otherwise take action.
(16) Voting of Deposited Securities. (a) Voting by Shareholders. The
following is a summary of certain rights of holders of Shares, interests in
Certificate(s) of Payment and Entitlement Certificate(s), if any, to vote at
shareholders' meetings under ROC Company Law and the Articles of Incorporation
of the Company, in each case, as in effect on the date hereof: (i) a holder of
Shares (including holders of interests in any Certificate of Payment evidencing
the irrevocable right to receive Shares) is entitled to one vote for each Share
held, (ii) the election of directors and supervisors takes place by means of
cumulative voting, and (iii) a shareholder must, as to all matters subject to a
vote of shareholders (other than the election of directors and supervisors),
exercise the voting rights for all Shares held by such shareholder in the same
manner (e.g., a holder of 1,000 Shares cannot split his/her votes but must vote
all 1,000 Shares in the same manner except in the event of cumulative voting for
an election of directors and supervisors). Pursuant to ROC law, the voting
rights attaching to the Deposited Securities must be exercised by, or on behalf
of, the Depositary's nominee, as representative of the Holders and Beneficial
Owners, collectively in the same manner, except in the case of an election of
directors and supervisors, which currently should be on a cumulative basis.
Deposited Securities which have been withdrawn from the applicable ADS Facility
and timely transferred on the Company's register of shareholders to a person
other than the Depositary may be voted by the Registered Holder(s) thereof
directly, subject, in each case, to the limitations of ROC law and the Articles
of Incorporation of the Company. Holders may not receive sufficient advance
notice of shareholders' meetings to enable them to timely withdraw the Deposited
Securities and vote at such meetings and may not be able to re-deposit the
withdrawn securities under the terms of the Deposit Agreement.
(b) Voting by ADS Holders. Holders of ADSs have no individual voting
rights with respect to the Deposited Securities represented by their ADSs. Each
Holder shall, by acceptance of ADSs or acquisition of any beneficial interest
therein, have authorized and directed the Depositary's nominee, without
liability, to appoint the Chairman of the Board of Directors of the Company (or
the Chairman's designate) (the "Voting Representative"), as representative of
the Depositary's nominee, who is registered in the ROC as representative of the
Holders and Beneficial Owners in respect of the Deposited Securities (the
"Registered Holder"), to vote the Shares or Deposited Securities in accordance
with the terms hereof.
The Company agrees to use its best efforts to timely notify the
Depositary of any proposed shareholders' meeting and to timely provide to the
Depositary in New York, at least twenty-four (24) calendar days before any
ordinary shareholders' meeting or at least fourteen (14) calendar days before
any extraordinary shareholders' meeting, a sufficient number of copies
reasonably requested by the Depositary of an English language translation of the
A-17
Company's notice of shareholders' meeting and the agenda of the materials to be
voted on (in the form the Company generally makes available to holders of Shares
in the ROC, including, without limitation, a list of candidates proposed by the
Company for an election of directors or supervisors) (such materials
collectively, the "Shareholder Notice"). As soon as practicable after receipt by
the Depositary of the requisite number of Shareholder Notices, the Depositary
shall establish the ADS Record Date (upon the terms of Paragraph (15) hereof and
Section 4.9 of the Deposit Agreement) and shall, at the Company's expense and
provided that no U.S. legal prohibitions exist, deliver to Holders as of the
applicable ADS Record Date, (i) the Shareholder Notice, (ii) a depositary notice
setting forth the manner in which Holders of ADSs may instruct the Depositary to
cause the Deposited Securities represented by their ADSs to be voted under the
terms of the Deposit Agreement, including a description of the Management
Instruction (as defined below), together with a form of voting instructions
and/or other means to provide voting instructions (the depositary notice and the
related materials prepared by the Depositary collectively, the "Depositary
Notice"). The Depositary is under no obligation to mail the Shareholder Notice
and the Depositary Notice to Holders if the Company has failed to provide to the
Depositary in New York the requisite number of Shareholder Notices at least
twenty-four (24) calendar days prior to the date of any ordinary shareholders'
meeting or at least fourteen (14) calendar days before the date of any
extraordinary shareholders' meeting. If the Depositary has not delivered the
Shareholder Notice or Depositary Notice to Holders, it will endeavor to cause
all Deposited Securities represented by ADRs to be present at the relevant
shareholders' meeting insofar as practicable and permitted under applicable law
but will not cause the Shares or other Deposited Securities to be voted;
provided, however, that the Depositary may determine, in its sole discretion, to
send such Shareholder Notice and Depositary Notice to Holders and/or cause the
Shares or other Deposited Securities to be voted as it deems appropriate. There
can be no assurance that Holders generally or any Holder in particular will
receive Shareholder Notices and Depositary Notices with sufficient time to
enable the return of voting instructions to the Depositary in a timely manner.
Notwithstanding anything else contained in the Deposit Agreement,
the Depositary shall not have any obligation to take any action with respect to
any meeting, or solicitation of consents or proxies or instructions, of holders
of Shares or other Deposited Securities if the taking of such action would
violate U.S. laws.
(c) Voting of Deposited Securities Upon ADS Holders' Instructions.
If Holders of ADSs together holding at least 51% of all the ADSs (including
Temporary ADSs) outstanding as of the relevant ADS Record Date shall instruct
the Depositary, prior to the date established for such purpose by the
Depositary, to vote in the same manner in respect of one or more resolutions to
be proposed at a shareholders' meeting (including resolutions for the election
of directors and/or supervisors), the Depositary shall notify the Voting
Representative as the representative of the Registered Holder to attend such
shareholders' meeting and vote all Deposited Securities evidenced by ADSs then
outstanding as of the ADS Record Date (including Temporary ADSs) in the manner
so instructed by such Holders. If voting instructions are received by the
Depositary on or before the date established by the Depositary for the receipt
of such instructions from any Holder as of the ADS Record Date, which are signed
but without further indication as to voting instructions, the Depositary shall
deem such Holder to have instructed a vote in favor of the items set forth in
such instructions. The Depositary and Custodian shall not have any obligation to
monitor, and shall not incur any liability for, the actions, or the failure to
act, of the Voting Representative (or his/her designate) as representative of
the Registered Holder.
A-18
(d) Depositary Authorization. If, for any reason (other than a
failure by the Company to supply the requisite number of Shareholder Notices to
the Depositary within the requisite time period provided in the Deposit
Agreement), the Depositary has not, prior to the date established for such
purpose by the Depositary, received instructions from Holders together holding
at least 51% of all ADSs (including Temporary ADSs) outstanding at the relevant
ADS Record Date, to vote in the same manner in respect of any resolution
(including resolutions for the election of directors and/or supervisors), then,
subject to the following paragraph, the Holders shall be deemed to have
authorized and directed the Depositary's nominee to authorize (the "Depositary
Authorization") the Voting Representative as the representative of the
Registered Holder to attend and vote at such meeting all the Deposited
Securities represented by ADSs then outstanding (including Temporary ADSs) in
his or her discretion. In such circumstances, the Voting Representative shall be
free to exercise the votes attaching to the Deposited Securities in any manner
she/he wishes, which may not be in the interests of the Holders.
The Depositary's Authorization, provided in the manner and under the
circumstances described in the preceding paragraph, shall be subject to the
receipt by the Depositary prior to each shareholders' meeting of an opinion of
ROC counsel of the Company addressed to, and in form and substance satisfactory
to, the Depositary to the effect that under ROC law (i) the arrangements
relating to the Depositary Authorization are permissible, and (ii) the
Depositary will not be deemed to be authorized to exercise any discretion when
causing the voting in accordance with Section 4.10 of the Deposit Agreement and
will not (in the absence of negligence, bad faith or breach of contract, and
subject to general principles of agency) be subject to any liability under ROC
law for losses arising from the exercise of the voting arrangements set out in
Section 4.10 of the Deposit Agreement on the grounds that voting in accordance
with Section 4.10 of the Deposit Agreement is in violation of ROC law. In the
event the Depositary does not receive such opinion, the Depositary will not
grant the Depositary Authorization, but will cause the Deposited Securities to
be present at the shareholders' meeting to the extent practicable and permitted
by applicable law and will not cause the Deposited Securities to be voted.
The Depositary shall not, and the Depositary shall ensure that the
Custodian and its nominees do not, vote or attempt to exercise the right to vote
that attaches to the Shares or other Deposited Securities, other than in
accordance with instructions given in accordance with Section 4.10 of the
Deposit Agreement. The terms of Section 4.10 of the Deposit Agreement may be
amended from time to time in accordance with the terms of the Deposit Agreement.
By continuing to hold ADSs after the effective time of such amendment, all
Holders and Beneficial Owners shall be deemed to have agreed to the terms of the
Deposit Agreement as so amended.
(17) 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 substituted for and treated as Deposited Securities under
the Deposit Agreement, and the Receipts shall, subject to the provisions of the
Deposit Agreement and applicable law, evidence ADSs representing the right to
receive such additional or replacement securities, as applicable. The Depositary
A-19
may, with the Company's approval, and shall, if the Company shall so request,
subject to the terms of the Deposit Agreement and receipt by the Depositary of
(a) a written opinion of U.S. counsel (reasonably satisfactory to the
Depositary) stating whether or not: (1) such exchange, conversion or replacement
requires registration of such securities under the Securities Act and/or
Exchange Act or (2) such exchange, conversion or replacement of such securities
as then contemplated is exempt from the registration requirements of the
Securities Act and/or Exchange Act and (b) a written opinion of ROC counsel
(reasonably satisfactory to the Depositary) stating that (1) such exchange,
conversion or replacement does not violate the laws or regulations of the
Republic of China and (2) all requisite regulatory consents and approvals
relating to such exchange, conversion or replacement have been obtained in the
Republic of China, execute and deliver additional Receipts as in the case of a
dividend of Eligible Securities, or call for the surrender of outstanding
Receipts to be exchanged for new Receipts, in either case, as well as in the
event of newly deposited Shares, with necessary modifications to the form of
Receipt contained herein, 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, the
Depositary may, with the Company's approval, and shall, if the Company requests,
subject to receipt of an opinion of the Company 's counsel, 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 reasonable expenses
incurred by, the Depositary 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 the Deposit Agreement. The Depositary
shall not 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.
(18) Exoneration. 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 delayed in, doing or performing
any act or thing required by the terms of the Deposit Agreement and this
Receipt, by reason of any provision of any present or future law or regulation
of the United States, the Republic of China 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 Incorporation of the
Company or any provision of or governing any Deposited Securities, or by reason
of any act of God, terrorism or war or other circumstances beyond its control
(including, without limitation, nationalization, expropriation, currency
restrictions, work stoppage, strikes, civil unrest, 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
A-20
Articles of Incorporation of the Company or provisions of or governing Deposited
Securities, (iii) for any action or inaction in reliance upon the advice 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 ADS or (v) for any consequential
or punitive damages for any breach of the terms of the Deposit Agreement. The
Depositary, its controlling persons, its agents, any Custodian 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 Receipt.
(19) Standard of Care. The Company and its agents assume no
obligation and shall not be subject to any liability under the Deposit Agreement
or the Receipts to Holders or Beneficial Owners or other persons, except that
the Company and its agents agree to perform their obligations specifically set
forth in the Deposit Agreement without negligence or bad faith. The Depositary
and its agents assume no obligation and shall not be subject to any liability
under the Deposit Agreement or the Receipts to Holders or Beneficial Owners or
other persons, except that the Depositary and its agents agree to perform their
obligations specifically set forth in the Deposit Agreement without negligence
or bad faith. Without limitation of the foregoing, neither the Depositary, nor
the Company, nor any of their respective controlling persons, or agents, 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
Receipts, which in its opinion may involve it in expense or liability, unless
indemnity satisfactory to it against all expense (including reasonable 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). The Depositary and its agents shall not 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, provided that
any such action or omission is in good faith and without negligence and in
accordance with the terms of the Deposit Agreement. Provided that the Depositary
acts or omits to act in good faith and without negligence, the Depositary shall
not incur any liability for any failure to determine that any distribution or
action may be lawful or reasonably practicable, 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 any investment risk
associated with acquiring an interest in the Deposited Securities, for the
validity or worth of the Deposited Securities or for any tax consequences that
may result from the ownership of ADSs, Shares or Deposited Securities, for the
credit-worthiness of any third party, for allowing any rights to lapse upon the
terms of the Deposit Agreement, for the failure or timeliness of any notice from
the Company. Nothing in this Receipt or in the Deposit Agreement shall cause the
Depositary or any of its agents to incur any liability as a result of any action
or failure to act by any trustee under a Trust Deed governing the Bonds.
(20) Resignation and Removal of the Depositary; Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary under
the Deposit Agreement by written notice of resignation delivered to the Company,
such resignation to be effective on the earlier of (i) the 60th 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
A-21
notice of such removal which notice shall be effective on the earlier of (i) the
60th day after delivery thereof to the Depositary, or (ii) upon the appointment
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
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 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 immediate predecessor other than as
contemplated in the Deposit Agreement. The immediate predecessor depositary,
upon payment of all sums due to 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 rights,
titles and interests to the Deposited Securities to such successor, and (iii)
deliver to such successor a list of the Holders of all outstanding Receipts and
such other information relating to Receipts 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.
(21) Amendment/Supplement. This Receipt 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
Receipts until the expiration of thirty (30) days after notice of such amendment
or supplement shall have been given to the Holders of outstanding Receipts. 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
traded 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 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 as amended or supplemented thereby. In no event shall any
A-22
amendment or supplement impair the right of the Holder to surrender such Receipt
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 amendment or supplement of the Deposit Agreement to ensure
compliance therewith, the Company and the Depositary may amend or supplement the
Deposit Agreement and this Receipt at any time in accordance with such changed
laws, rules or regulations. Such amendment or supplement to the Deposit
Agreement 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.
(22) 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 Receipts then outstanding at least thirty
(30) days prior to the date fixed in such notice for such termination. If sixty
(60) 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 Receipts 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 a Receipt
will, upon surrender of such Receipt at the Principal Office of the Depositary,
upon the payment of the charges of the Depositary for the surrender of Receipts
referred to in Paragraph (2) hereof and in the Deposit Agreement and subject to
the conditions and restrictions therein set forth and subject always to the
restrictions on withdrawal as may be in effect under the laws and regulations of
the Republic of China, 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 Receipt. If any Receipts shall remain
outstanding after the date of termination of the Deposit Agreement, the
Registrar thereafter shall discontinue the registration of transfers of
Receipts, 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 Receipts 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 a Receipt, 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 (6) 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 Receipts have not theretofore been surrendered, such Holders thereupon
becoming general creditors of the Depositary with respect to such net proceeds.
After making such sale, the Depositary shall be discharged from all obligations
under the Deposit Agreement with respect to the Receipts, the Deposited
Securities and the ADSs, 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 a Receipt, 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.
A-23
(23) Compliance with U.S. Securities Laws. Notwithstanding any
provisions in this Receipt 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 Form F-6 Registration Statement, as amended from
time to time, under the Securities Act of 1933.
(24) Certain Rights of the Depositary; Limitations. Subject always
to the laws and regulations of the Republic of China and to the further terms
and provisions of this Paragraph (24) and Section 5.10 of 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. In its capacity as Depositary, the Depositary shall not lend Deposited
Securities or ADSs; provided, however, that the Depositary may, to the extent
permitted by applicable law, (i) issue ADSs prior to the receipt of Eligible
Securities pursuant to Section 2.3 of the Deposit Agreement and (ii) deliver
Deposited Securities only upon the prior receipt of ADSs for cancellation upon
withdrawal of Deposited Securities pursuant to Section 2.7 of the Deposit
Agreement, including ADSs which were issued under (i) above but for which
Eligible Securities may not have been received (each such transaction in (i)
above a "Pre-Release Transaction"). The Depositary may receive ADSs in lieu of
Eligible Securities under (i) 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 Deposited Securities are to be delivered (w)
represents that at the time of the Pre-Release Transaction the Applicant or its
customer owns the Eligible Securities that are to be delivered by the Applicant
under such Pre-Release Transaction, (x) agrees to indicate the Depositary as
owner of such Eligible Securities in its records and to hold such Eligible
Securities in trust for the Depositary until such Eligible Securities are
delivered to the Depositary or the Custodian, (y) unconditionally guarantees to
deliver to the Depositary or the Custodian, as applicable, such Eligible
Securities, and (z) agrees to any additional restrictions or requirements that
the Depositary deems appropriate, (b) at all times fully collateralized with
cash, United States 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 Eligible Securities 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 disregard such
limit from time to time as it deems appropriate and may, with the prior written
consent of the Company, change such limit for purposes of general application.
The Depositary may also set limits with respect to the number of
ADSs and Eligible Securities 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). Temporary COP ADSs, Temporary EC ADSs, Certificate of Payment and
Entitlement Certificates shall not be eligible for Pre-Release Transactions
hereunder.
A-24
In addition, to the extent permitted under applicable law, in its
capacity as Depositary, the Depositary may, when a Holder of ADSs so requests,
cause the Deposited Shares to be sold and deliver the proceeds of the sale prior
to the receipt and cancellation of ADSs (each such transaction a
"Pre-Cancellation Sale") prior to the receipt of ADSs for cancellation. Each
such Pre-Cancellation Sale will be (a) accompanied by or subject to a written
agreement whereby the person or entity (the "Applicant") to whom the proceeds of
the sale of Deposited Securities are to be delivered which, (i) represents that
at the time of the Pre-Cancellation Sale, the Applicant or its customer owns the
ADSs that are to be delivered by the Applicant under such Pre-Cancellation Sale,
(ii) agrees to indicate the Depositary as owner of such ADSs in its records and
to hold such ADSs in trust for the Depositary until such ADSs are delivered to
the Depositary, (iii) unconditionally guarantees to deliver to the Depositary
such ADSs, and (iv) agrees to any additional restrictions or requirements that
the Depositary deems appropriate; (b) at all times fully collateralized with
cash, United States 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 and may, with the prior
written consent of the Company, change such limit for purposes of general
application.
The Depositary will normally limit the number of Deposited
Securities involved in such Pre-Cancellation Sales at any one time to thirty
percent (30%) of the Deposited Securities outstanding, provided, however, that
the Depositary reserves the right to disregard such limit from time to time as
it deems appropriate.
A-25
(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 Receipt and all rights
thereunder, hereby irrevocably constituting and appointing
________________________ attorney-in-fact to transfer said Receipt 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
Receipt.
All endorsements or assignments of
Receipts must be guaranteed by a member
of a Medallion Signature Program
approved by the Securities Transfer
Association, Inc.
SIGNATURE GUARANTEED
A-26
Legends
[The Receipts issued in respect of Partial Entitlement American Depositary
Shares shall bear the following legend on the face of the Receipt: "This
Receipt evidences American Depositary Shares representing partial
entitlement' [common shares][interests in the global Certificates of
Payment][Entitlement Certificates] of AU Optronics Corp., and as such do
not entitle the holders thereof to the same per-security entitlement as
other [common shares][interests in the global Certificates of
Payment][Entitlement Certificates] (which are 'full entitlement' [common
shares][interests in the global Certificates of Payment][Entitlement
Certificates]) issued and outstanding at such time. The American
Depositary Shares represented by this Receipt shall entitle holders to
distributions and entitlements identical to other American Depositary
Shares when the [common shares][interests in the global Certificates of
Payment][Entitlement Certificates] represented by such American Depositary
Shares become 'full entitlement' [common shares][interests in the global
Certificates of Payment][Entitlement Certificates]".]
A-27
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 $5.00 per 100 ADSs (or Person for whom deposits are made
of Eligible Securities fraction thereof) issued. or person receiving ADSs.
(including issuance of (i)
EC ADSs upon deposit of
Entitlement Certificates and
(ii) COP ADSs upon deposit
of Certificate(s) of
Payment, but, excluding
issuances contemplated by
paragraphs (3)(b) and (5)
below).
--------------------------------------------------------------------------------------------------------------------
(2) Delivery of Deposited Up to $5.00 per 100 ADSs (or Person surrendering ADSs or making
Securities, property and fraction thereof) surrendered. withdrawal.
cash against surrender of
ADSs.
--------------------------------------------------------------------------------------------------------------------
(3) Distribution of (a) cash No fee, so long as prohibited by Person to whom distribution is made.
dividend 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 $2.00 per 100 ADSs (or Person to whom distribution is made.
(i.e., upon sale of rights fraction thereof) held.
and other entitlements).
--------------------------------------------------------------------------------------------------------------------
(5) Distribution of ADSs pursuant Up to $5.00 per 100 ADSs (or Person to whom distribution is made.
to exercise of rights to fraction thereof) issued.
purchase additional ADSs.
--------------------------------------------------------------------------------------------------------------------
B-1
II. Charges
Holders, Beneficial Owners, persons depositing Eligible Securities
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 Deposited Securities on the share register and applicable
to transfers of 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 Eligible Securities 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 Eligible Securities, Deposited Securities, ADSs
and ADRs; and
(vi) the fees and expenses incurred by the Depositary in connection with the
delivery of Deposited Securities.
B-2
Form of Certification Upon Withdrawal.
EXHIBIT C
Certification and Agreement of Persons Surrendering
ADSs for the Purpose of Withdrawal of
Deposited Securities Pursuant to Section 2.7 of the
Deposit Agreement
Citibank, N.A.
ADR Department
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: AU Optronics Corp.
We refer to the Deposit Agreement, dated as of May 29, 2002 (the
"Deposit Agreement"), among AU Optronics Corp. (the "Company"), CITIBANK, N.A.,
as Depositary, and Holders and Beneficial Owners from time to time of American
Depositary Shares (the "ADSs") evidenced by American Depositary Receipts (the
"Receipts") issued thereunder. Capitalized terms used but not defined herein
shall have the meanings given them in the Deposit Agreement. We are providing
the information herein to enable the Company to comply with its reporting
obligations under the laws and regulations of the Republic of China and
understand that the Company will rely upon the information provided herein for
such purpose.
1. We are surrendering ADSs or giving withdrawal instructions
through DTC in accordance with the terms of the Deposit Agreement for the
purpose of withdrawal of the Deposited Securities represented by the ADSs (the
"Shares") pursuant to Section 2.7 of the Deposit Agreement.
2. We certify (or if we are acting for the account of another
person, such person has confirmed to us that it certifies) that:
(please check the applicable box in (a) below and fill in the missing
information in (b) below, as appropriate)
|_| (a) |_| We are (it is) a "Related Person" of the Company (as defined
below).
or
|_| We are (it is) not a "Related Person" of the Company (as defined
below).
AND
C-1
|_| (b)(i) We will own ____________________ Shares of the Company, after
(fill in) cancellation of the ADSs
surrendered hereby (do not
include Shares represented by
ADSs included in (b)(ii)
below);
and
(ii) We will own ____________________ ADSs representing Shares of the
(fill in) Company, after cancellation of
the ADSs surrendered hereby.
3. We certify (or if we are acting for the account of another
person, such person has confirmed to us that it certifies) that:
(i) We are (or the person for the account of which we are acting is) the
Beneficial Owner of the ADSs hereby surrendered to the Depositary
for withdrawal of the Shares represented thereby;
AND
(ii) We hereby certify that the following information is true and
correct:
Name of Beneficial Owner of ADSs: __________________________________
Address of Beneficial Owner of ADSs: _______________________________
____________________________________________________________________
____________________________________________________________________
Nationality of Beneficial Owner of ADSs: ___________________________
Name of recipient of Shares withdrawn hereby ("Recipient"): ________
Nationality of Recipient: __________________________________________
Identity Number of Recipient (only required, if Recipient in a ROC
person): ___________________________________________________________
Number of ADSs surrendered hereby: _________________________________
Number of Shares withdrawn hereby and registered in the name of the
Recipient: _________________________________________________________
The aggregate number of Shares and other certificates evidencing
Shares, Recipient has received upon all withdrawals
since execution of this Deposit Agreement: _________________________
Date: ______________________________________________________________
C-2
4. If we are a broker-dealer, we further certify that we are acting
for the account of our customer and that our customer has confirmed the accuracy
of the representations contained in paragraphs 1 through 3 hereof that are
applicable to it.
________________________________________________________________________________
A person or entity is deemed to be a "Related Person" of the Company if the
person or entity is:
(a) (i) a company of which the chairman of the board of directors or
the general manager serves as the chairman of the board of
directors or the chairman of the Company, or the spouse or
member of the immediate second family of the chairman of the
board of directors or general manager of the Company;
(ii) a non-profit organization of which the funds donated from the
Company exceeds one-third of the non-profit organization's
total funds;
(iii) a director, supervisor or general manager, vice-general
manager, assistant vice-general manager, or departmental head
reporting to the general manager;
(iv) the spouse of a director, supervisor or general manager of the
Company; or
(v) a member of the immediate or second immediate families of the
Company's chairman of the board of directors or general
manager.
OR
(b) a person or entity that has control or influence over the Company.
Very truly yours,
[NAME OF CERTIFYING ENTITY]
By:
----------------------------
Name
Title:
C-3
