EXHIBIT 10.20
EXECUTION COPY
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SHARE PURCHASE AGREEMENT
FOR
CERTAIN ORDINARY SHARES
OF CHINA NETCOM CORPORATION (HONG KONG) LIMITED
BY AND BETWEEN
CNC FUND, L.P.
AND
CNET FOUNDATION LIMITED
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EXECUTION COPY
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (this "Agreement") is made by and between
CNET Foundation Limited ("CNET"), a company organized under the laws of the
British Virgin Islands ("BVI"), and CNC Fund, L.P. (the "Fund"), a partnership
organized under the laws of the Cayman Islands with the intention that it is to
take effect from June 28, 2004 ("Effective Date").
R E C I T A L S
WHEREAS, pursuant to Subscription Agreement dated as of September 29,
2000, among China Netcom Holdings (BVI) Limited ("CNC(BVI)"), a company
organized under the laws of the British Virgin Islands, China Netcom Corporation
(Hong Kong) Limited ("CNC (HK)"), a company incorporated in the Hong Kong
Special Administrative Region ("Hong Kong") of the People's Republic of China
("PRC"), China Netcom Corporation Limited (the "OpCo") an enterprise organized
under the laws of the PRC and the Fund, CNC (HK) issued to the Fund 30,967,127
Series A Preferred Shares, par value US$0.01 per share, of CNC (HK) (the
"Preferred Shares");
WHEREAS, CNET has agreed to sell to the Fund 6,400,000 ordinary shares of
CNC (HK) (the "Common Shares") upon the terms set out as follows;
WHEREAS, as at the Effective Date, CNC Holdings owns 100% of CNC (BVI),
which, together with the Fund and CNET, owns 100% of the CNC (HK), which in turn
owns 100% of the OpCo;
WHEREAS, a subsidiary of CNC (BVI) in Hong Kong is expected to conduct an
initial public offering in 2004;
WHEREAS, the Fund has entered into a share purchase and exchange agreement
(as such agreement may be amended from time to time, the "Share Purchase and
Exchange Agreement") with CNC (HK) and CNC (BVI); and
WHEREAS, pursuant to the Share Purchase and Exchange Agreement, the Fund
contemplates entering into transactions whereby the Preferred Shares and the
Common Shares are exchanged for an interest in Listco.
NOW, THEREFORE, in consideration of the above premises and the agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS.
1.1. Capitalized terms not defined herein have the meanings ascribed to
them in the Share Purchase and Exchange Agreement.
1.2. The following terms shall have the following meanings:
"Exchange Period" means the period commencing on the first Trading Day
following the end of the Lock-up Period and ending on the Maturity Date.
"Exchange Share Proceeds" means the net proceeds received by the Fund from
a sale of the Exchange Shares on the SEHK on, or within three Trading Days
after, delivery to the Fund of a Notice of Exchange (in the case of a
payment by the Fund pursuant to Section 3.2 hereof) or within three
Trading Days after the Maturity Date (in the case of a payment by the Fund
pursuant to Section 3.3 hereof), after deduction of all expenses of such
sale (including without limitation brokerage commissions, stamp duty,
legal fees and disbursements (if any) and applicable transactional
levies).
"Exchange Shares" means such number of Listco Shares to be held by the
Fund for the benefit of CNET pursuant to the terms of this Agreement equal
to 0.49% of the total number of Listco Shares in issue immediately prior
to completion of the Listco IPO, subject to dilution only from (A) shares
to be issued in the IPO, (B) shares issuable under Listco's employee stock
option plan and (C) shares issued in exchange for any material additional
assets that CNC(BVI) acquires from any entity outside of mainland China
that is not an affiliate of CNC(BVI) and contributes to Listco between the
Effective Date and the date of completion of the Listco IPO.
"Face Amount" means US$26,400,000.
"HK$" means Hong Kong dollars, the lawful currency of Hong Kong.
"HK$ Equivalent" of any amount denominated in US$ means the HK$ equivalent
of such amount at the US$/HK$ Exchange Rate on the Listing Date.
"Hong Kong" means the Hong Kong Special Administrative Region of the PRC.
"Instrument" has the meaning set forth in Section 2.2.
"IPO Price" means the price, in HK$, at which Listco Shares are issued and
sold to the public in the Listco IPO.
"Listco Shares" means the ordinary shares of Listco.
"Listing Date" means the day on which the Listco Shares commence trading
on the SEHK.
"Limit Order Exchange" means an exchange of the Instrument pursuant to
Section 3.1, in connection with which CNET in the relevant Notice of
Exchange has specified a Limit Order Price.
"Limit Order Price" means a minimum price specified in a Notice of
Exchange.
"Limit Order Expiration Date" means, in connection with a Limit Order
Exchange, the date (if any) specified as the Limit Order Expiration Date
in the relevant Notice of Exchange.
"Lock-up Period" means the period commencing on the Listing Date and
ending on the last day on which sales by the Fund of Listco Shares are
subject to any restriction pursuant to the Share Exchange Agreement and/or
any other agreement entered into between or among the Fund, Listco and/or
the underwriters of the Listco IPO.
"Maturity Date" means the day that is one year after the expiration of the
Lock-up Period; provided that if such day is not a Trading Day, the
Maturity Date shall be the next following Trading Day.
"Notice of Exchange" has the meaning set forth in Section 3.1.
"PRC" means the People's Republic of China.
"SEHK" means The Stock Exchange of Hong Kong Limited.
"Trading Day" means a day on which the SEHK is open for trading and is not
closed for any reason prior to its normal closing time.
"US$" means United States dollars, the lawful currency of the United
States of America.
2. SHARE PURCHASE AND INSTRUMENT ISSUANCE.
2.1. Purchase of Common Shares. The Fund hereby agrees to purchase from
CNET, and CNET hereby agrees to sell to the Fund, all the Common Shares. The
consideration for the purchase and sale of the Common Shares shall be the
payment by the Fund to CNET of an amount equivalent to the Face Amount as is
evidenced by the issuance and delivery to CNET of the Instrument and upon the
terms as set out in this Agreement.
2.2. Issuance of Instrument. Upon execution of this Agreement, the Fund
shall, as soon as practicable and within five days from satisfaction of the
conditions to the Fund's obligations set out in Section 6.1, issue to CNET an
exchangeable Instrument (the "Instrument"), with a face value equal to the Face
Amount, substantially in the form of Exhibit 1 attached hereto, in exchange for
the transfer of the Common Shares to the Fund.
3. EXCHANGE AND CANCELLATION OF INSTRUMENT.
3.1. Exchange. If CNET delivers to the Fund during the Exchange Period a
notice of exchange in the form attached as Exhibit 2 hereto, duly executed by an
authorized signatory of CNET and attaching the original Instrument (a "Notice of
Exchange"), then:
(a) in the case of a Limit Order Exchange, the Fund shall, as soon
as practicable after receipt of such Notice of Exchange, sell the Exchange
Shares on the SEHK and, within three Trading Days after such sale, pay the
Exchange Share Proceeds to CNET; provided that if the Notice of Exchange
specifies a Limit Order Expiration Date and the Fund is unable to sell the
Exchange Shares on the SEHK at a price greater than or equal to the Limit
Order Price on or before the Limit Order Expiration Date, the Notice of
Exchange shall be deemed to be withdrawn as of the close of business on
the Limit Order Expiration Date and shall have no further effect
thereafter;
(b) in any other case, sell the Exchange Shares on the SEHK within
two Trading Days after receipt of such Notice of Exchange and, within
three Trading Days after such sale, pay the Exchange Share Proceeds to
CNET.
CNET shall inform the Fund in writing of the names of all persons from
time to time authorized to execute a Notice of Exchange on behalf of CNET and
shall provide a specimen signature of each such person.
3.2. Maturity. If no Notice of Exchange is delivered by CNET prior to the
Maturity Date, or if a Notice of Exchange in respect of a Limit Order Exchange
has been delivered by CNET prior to the Maturity Date but the Fund has been
unable on or prior to the Maturity Date to sell the Exchange Shares on the SEHK
at a price greater than or equal to the Limit Order Price, then the Fund shall,
within five Trading Days after the Maturity Date, pay to CNET the Exchange Share
Proceeds based on the market price obtained by the Fund on a sale of the
Exchange Shares on the SEHK; provided that the Fund shall not be required to pay
such amount unless and until CNET has delivered the Instrument to the Fund for
cancellation.
3.3. Payments. All payments due from the Fund to CNET shall be made by
wire transfer to the following bank account:
The Hongkong and Shanghai Banking Corporation Limited
A/C no: 004-502-406119-001
The Fund shall be entitled to deduct from and set off against any such payment
any amounts due and payable to the Fund by CNET, for which the Fund has issued a
written demand to CNET which the Fund has certified to be reasonable, but which
amounts have not yet been paid.
3.4. Cancellation of the Instrument. Upon the payment by the Fund of the
amount required to be paid pursuant to Section 3.1 or 3.2, the Fund shall be
discharged from any liability under the Instrument and the Instrument shall be
cancelled.
4. REPRESENTATIONS AND WARRANTIES OF THE FUND.
The Fund hereby represents and warrants to CNET that the statements in the
following paragraphs of this Section 4 are all true and correct:
4.1. Organization, Good Standing and Qualification. The Fund is a
partnership duly incorporated and organized, validly existing, and in good
standing under the laws of the Cayman Islands, and has the requisite corporate
power and
corporate authority to own, lease, and operate their assets, properties and
business, and to carry on its business as it is now being conducted. Subject to
receipt of the limited partner consents referred to in Section 6.1, the Fund
has the corporate power and authority to enter into and perform this Agreement.
4.2. Valid Issuance of the Instrument. The Instrument, when issued as
provided in this Agreement, will be duly authorized, validly issued and CNET
will obtain full right, title and interest to the same.
4.3. Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with any
court, governmental agency, regulatory authority or political subdivision
thereof, or any other entity, other than the consents and approvals referred to
in Section 6.1 is required for the execution, delivery and performance by the
Fund of this Agreement in order to consummate the transactions contemplated in
this Agreement. None of such filings and qualifications are the subject of any
pending or, to the best knowledge of the Fund, threatened attack by appeal or
direct proceeding or otherwise.
The Fund hereby undertakes to CNET on the terms as set forth in the
following statements:
4.4. Status of Obligations. The obligations of the Fund to pay to CNET the
Face Amount and the amounts due upon exchange of the Instrument shall at all
times constitute unsubordinated obligations of the Fund, ranking pari passu with
all other general obligations of the Fund.
4.5. Exchange Shares. The Fund shall at all times set aside the Exchange
Shares to meet its obligations to CNET, which Exchange Shares shall at all times
be unencumbered and shall not in any way directly or indirectly be disposed of
or made available to any other person.
4.6. Approvals. The Fund undertakes to use its reasonable best endeavors
to obtain all the approvals and consents necessary or desirable by it as
referred to in Section 6.1.
4.7. Indemnification. The Fund shall indemnify CNET and hold CNET harmless
from and against any loss, liability, cost or damage, including attorneys fees
and other charges, arising from any breach by the Fund of any of the
representations, warranties or undertakings set forth in this Section 4.
5. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF CNET.
CNET hereby represents, warrants and undertakes to the Fund that as
follows:
5.1. Authorization and Validity. CNET is a company duly organized, validly
existing, and in good standing under the laws of the BVI, and has the requisite
power and authority to own and operate its assets and business, and to carry on
its business as it is now being conducted. CNET has the requisite power and
authority to enter into and perform this Agreement. All action of CNET necessary
for the authorization, execution, delivery of, and the performance of all
obligations of CNET
under this Agreement, has been taken or will be taken prior to execution of this
Agreement, and this Agreement constitutes valid and legally binding obligations
of CNET.
5.2. Governmental and Third Party Consents and Approvals. No consent,
approval, order or authorization of, or registration, qualification,
designation, declaration or filing with any court, governmental agency,
regulatory authority or political subdivision thereof, or any other entity, is
required for the execution, delivery and performance by CNET of this Agreement
in order to consummate the transactions contemplated in this Agreement. None of
such filings and qualifications are the subject of any pending or, to the
knowledge of CNET, threatened attack by appeal or direct proceeding or
otherwise.
5.3. Interests of Governmental Officials, Directors and Officers. No
present or former governmental official of the PRC, Hong Kong or any other
country, region or territory or any political subdivision thereof that has or
has had, in the last two years, or is in any way associated with any
governmental agency or instrumentality that has or has had, in the last two
years, any involvement in
(a) the approval of the Listco IPO, the transactions contemplated by
this Agreement or the Share Purchase and Exchange Agreement, or any matter
related thereto or
(b) the regulation of CNC(HK) or any of its parent or subsidiary
companies or any of their respective businesses,
and no director or officer of CNC (HK), CNC (BVI) or China Network Communication
Group Corp., has any direct or indirect legal or beneficial interest in CNET or
any of its assets, and there is no intention on the part of CNET or any of its
officers or directors or, to the knowledge of CNET, any other person to grant or
transfer any such interest to any such person. To the knowledge of CNET, no such
person has received or will receive any improper benefit in connection with the
Listco IPO the transactions contemplated by this Agreement or the Share Purchase
and Exchange Agreement. CNET shall promptly inform the Fund in writing in any of
the foregoing information in this Section 5.3 ceases to be true and correct.
5.4. Legality. Neither the execution nor the performance of this Agreement
will violate any law of the PRC, Hong Kong or any other country, region or
territory.
5.5. Valid Issuance of the Common Shares. The Common Shares are duly
authorized, validly issued, owned by CNET free of any encumbrance, and the Fund
will obtain full right, title and interest to the same.
5.6. Indemnification. CNET shall indemnify the Fund and hold the Fund
harmless from and against any loss, liability, cost or damage, including
attorneys fees and other charges, arising from any breach by CNET of any of the
representations, warranties or undertakings set forth in this Section 5.
6. CONDITIONS TO OBLIGATIONS.
6.1. Approvals. Consummation of the transactions contemplated in Sections
2 and 3 above will be subject to receipt of all necessary consents and
approvals, including without limitation any consent of the limited partners and
lead investors of the Fund necessary or advisable under the limited partnership
agreement of the Fund. The transactions contemplated in Sections 2 and 3 above
have been or will be approved by the board of directors and shareholders of CNC
(HK) and have been or will be acknowledged by China Netcom Communication Group
Corporation, in each case with full disclosure of any interests or prospective
interests of employees, officers and/or directors of CNC(HK) in CNET, and will
be disclosed in Listco's IPO prospectus, as appropriate. CNET will provide
evidence as reasonably requested by the Fund of such approvals and
acknowledgments.
6.2. Representations and Warranties. The obligation of the Fund to
consummate the transactions contemplated in Sections 2 and 3 above is subject to
the representations and warranties of CNET set forth in Section 5 above being
true and correct in all material respects. The obligation of CNET to consummate
the transactions contemplated in Sections 2 and 3 above is subject to the
representations and warranties of the Fund set forth in Section 4 above being
true and correct in all material respects.
6.3. Legal Opinions. The obligation of the Fund to consummate the
transactions contemplated in Sections 2 and 3 above is subject to receipt by the
Fund of (i) a legal opinion of Freshfields Bruckhaus Xxxxxxxx addressed to the
Fund in the form attached as Exhibit 3 and (ii) a legal opinion of [PRC legal
counsel acceptable to the Fund] addressed to the Fund in the form attached as
Exhibit 4.
6.4. Relationship to Share Purchase and Exchange Agreement. The
obligations of the Fund under this Agreement and the Instrument are subject to
the performance in full by CNC (BVI) and CNC (HK) of their obligations under the
Share Purchase and Exchange Agreement. If CNC (BVI) or CNC (HK) fails to perform
any of its obligations under the Share Purchase and Exchange Agreement, CNET and
the Fund shall consult and agree in good faith on appropriate modifications to
this Agreement and the Instrument.
7. FEES AND EXPENSES.
CNET will bear (i) all reasonable fees and expenses in connection with the
transaction described herein, (ii) the Fund's legal expenses reasonably incurred
in connection with the transaction described herein, subject to CNET's review,
and (iii) all expenses and Hong Kong stamp duty of the Fund reasonably incurred
in connection with the implementation of such transactions, including without
limitation all expenses relating to the acquisition, and disposition and
(subject as provided below in this Section 7) holding of the Exchange Shares. In
addition, CNET will bear all general operational expenses of the Fund incurred
after the disposition or distribution by the Fund of all of its Listco Shares
other than the Exchange Shares to the partners of the Fund, provided, however,
that until the Fund has disposed or distributed all of such Listco Shares, the
Fund shall bear all general operational expenses.
8. TERMINATION.
After execution of this Agreement, if the Option Exercise as set forth in
Section 1.2 of the Share Purchase and Exchange Agreement is not completed by
December 31, 2004, the Common Shares will, at the election of either party, be
returned to CNET in exchange for cancellation of the Instrument. If the Option
Exercise is completed but the Effective Date (as defined in the Share Purchase
and Exchange Agreement) does not occur by December 31, 2004, at the election of
the Fund at any time thereafter the Fund will have the right to return the CNET
Shares to CNC (BVI) in exchange for the Common Shares and to return the Common
Shares to CNET. In such event, the Fund shall have no further liability under
the Instrument, and CNET shall return the Instrument to the Fund for
cancellation.
9. NOTICES.
9.1. Notice Addresses and Method of Delivery. All notices, requests,
demands, consents and other communications ("Notices") required to be given by
any Party to any other Party shall be in writing and delivered by
(a) hand delivery or courier;
(b) prepaid registered letter sent by first class mail (airmail if
to an address in a country other than the country in which the
sender is situated), return receipt request; or
(c) facsimile
to the applicable Party at the address or facsimile number stated
below:
(i) If to the Fund: CNC Fund, L.P.
c/o Bank of Bermuda (Cayman) Limited
00X Xxxxxxx Xxxxx - 0xx Xxxxx
P.O. Box 513 GT
Xx. Xxx'x Drive
Xxxxxx Town, Grand Cayman
Cayman Islands
Attention: General Manager,
Global Fund Services
Facsimile: (0-000) 000-0000
with copies to:
Bermuda Trust (Far East) Limited
00xx Xxxxx, Xxxxxxxxx Tower
The Landmark
00 Xxxxx'x Xxxx Xxxxxxx
Xxxx Xxxx
Attention: Director, Institutional Trust
Telex: 86017 BETRY HX
Facsimile: (000) 0000-0000
and
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
00xx Xxxxx, Xxxx Xxxx Club Xxxxxxxx
0X Xxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
Attention: Xxxx X. Xxxxx
Facsimile: (000) 0000-0000
(ii) If to CNET: CNET Foundation Limited
59th Floor, Bank of Xxxxx Xxxxx
0 Xxxxxx Xxxx
Xxxx Xxxx
Xxxxxxxxx: Wenlong Sun
Facsimile: (000) 0000-0000
or, as to each Party, at such other address or number as shall be
designated by such Party in a notice to the other Parties containing
the new information in the same format as the information set out
above and complying as to delivery with the terms of this Section.
9.2. Time of Delivery. Any Notice delivered:
(a) by hand delivery or courier shall be deemed to have been
delivered on the date of actual delivery;
(b) by prepaid registered letter shall be deemed to have been
delivered seven days after the date of posting; and
(c) by facsimile shall be deemed to have been delivered on the day
the transmission is sent (as long as the sender has a confirmation report
specifying a facsimile, a facsimile number of the recipient, the number of
pages sent and the date of the transmission).
9.3. Proof of Delivery. In proving delivery of any Notice it shall be
sufficient:
(a) in the case of delivery by hand delivery or courier, to prove
that the Notice was properly addressed and delivered;
(b) in the case of delivery by prepaid registered letter, to prove
that the Notice was properly addressed and posted; and
(c) in the case of delivery by facsimile transmission, to prove that
the transmission was confirmed as sent by the originating machine to the
facsimile number of the recipient, on the date specified.
10. GENERAL PROVISIONS.
10.1. Governing Law; Arbitration.
(a) This Agreement shall be governed, interpreted and enforced in
accordance with the laws of the State of New York, U.S.A.
(b) In the event any dispute arises between the parties, which
cannot amicably be resolved, such dispute shall be submitted to the Hong
Kong International Arbitration Centre ("HKIAC") for arbitration in
accordance with the UNCITRAL Arbitration Rules as at present in force and
as amended as follows: (i) the appointing authority shall be HKIAC; (ii)
the place of arbitration shall be in Hong Kong, (iii) there shall be three
arbitrators (one to be appointed by CNET, a second to be appointed by the
Fund, and the third to be appointed jointly by these two arbitrators),
(iv) such arbitration shall be administered in accordance with the HKIAC
Procedures for Arbitration in force as of the date hereof, and (v) the
language to be used in arbitration proceedings shall be English.
10.2. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
10.3. Headings. The headings and captions used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.
10.4. Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of both parties to this Agreement.
10.5. Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision(s) shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
its terms.
10.6. Entire Agreement. This Agreement, together with all exhibits and
schedules hereto, constitutes the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings duties or
obligations between the parties with respect to the subject matter hereof.
10.7. Further Assurances. From and after the Effective Date, upon the
request of either party, each party shall execute and deliver such instruments,
documents or other writings as may be reasonably necessary to confirm and carry
out and to effectuate fully the intent and purposes of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
CNET FOUNDATION LIMITED
By: ________________________________
Name:
Title:
CNC FUND, L.P.
By: CNC CAYMAN LIMITED,
as a General Partner
By: ____________________________
Name:
Title:
By: BEST BLUECHIP INVESTMENTS
LIMITED
as a General Partner
By: ____________________________
Name:
Title:
By: GS CHINA BROADNET GP, L.L.C.
as a General Partner
By: ____________________________
Name:
Title:
EXHIBIT 1
[FORM OF THE INSTRUMENT]
Unsecured Instrument Due [ ]
CNC Fund, L.P., a partnership duly organized and existing under the laws
of the Cayman Islands (the "Issuer"), for value received, hereby promises to pay
to CNET Foundation Limited (the "Holder") the sum specified in the Agreement, in
accordance with the terms of the Agreement. The Face Amount of this Instrument
is US$26,400,000.
The Issuer issued this Instrument under a share purchase agreement
effective as of June 28, 2004 between the Issuer and the Holder (the
"Agreement"). Terms defined in the Agreement and not defined herein have the
meanings ascribed thereto in the Agreement. This Instrument is subject to all of
the terms and conditions set forth in the Agreement.
THIS INSTRUMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF HONG KONG BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD
BE REQUIRED THEREBY.
EXHIBIT 2
[FORM OF EXCHANGE NOTICE]
Exchange Notice
To: CNC Fund, L.P.
c/o Bank of Bermuda (Cayman) Limited
00X Xxxxxxx Xxxxx - 0xx Xxxxx
P.O. Box 513 GT
Xx. Xxx'x Drive
Xxxxxx Town, Grand Cayman
Cayman Islands
We refer to the Share Purchase Agreement effective as of June 28, 2004
between CNC Fund L.P. and CNET Foundation Limited (the "Agreement") and to the
Instrument attached hereto (the "Instrument").
We hereby give notice of exchange of the Instrument pursuant to Section
3.1 of the Agreement.
[This is a Limit Order Exchange. The Limit Order Price is HK$______. [The
Limit Order Expiration Date is _____.]](1)
CNET FOUNDATION LIMITED
By: ________________________________
Name:
As authorized signatory
designated pursuant to Section
3.2 of the Agreement
Dated:________________________
-------------------
(1) Include if applicable.
EXHIBIT 3
[FORM OF FRESHFIELDS OPINION]
EXHIBIT 4
[FORM OF PRC COUNSEL OPINION]
EXECUTION COPY
AMENDMENT NO. 1 TO THE
SHARE PURCHASE AND EXCHANGE AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment") to the SHARE PURCHASE AND
EXCHANGE AGREEMENT (the "Agreement"), dated June 11, 2004 is made as of July 20,
2004, by and among China Netcom Holdings (BVI) Limited, China Netcom Corporation
(Hong Kong) Limited and CNC Fund, L.P. (together, the "Parties"). All
capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Agreement.
R E C I T A L S:
Pursuant to Section 13.5 of the Agreement, the Parties hereby wish
to amend the Agreement.
NOW, THEREFORE, the Agreement is hereby amended as follows:
1. Purchase of the CNC (HK) Interest. Section 1.1(b)(ii) is hereby
amended by deleting the words "$325 million" and replacing them with the words
"$30,967,127".
2. Lock-up Period. Section 6 of the Agreement is hereby amended by
deleting the words "after the first trading day of the IPO of Listco ("Effective
Date")" and replacing them with the words "after the date of Listco's prospectus
(the "Effective Date")."
3. Term. Section 8.1 of the Agreement is hereby deleted and amended
in its entirety to read as follows:
"Drop Dead" Date. In the event that (x) the Listco IPO is not
completed by December 31, 2004, or (y) any entity in the China Netcom Group
(including China Network Communications Group Corporation and its subsidiaries)
other than a subsidiary of CNC (BVI) (such entity, an "Other IPO Subsidiary")
conducts an initial public offering prior to completion of the Listco IPO, the
Fund will have the right, exercisable by written notice to CNC (BVI) and CNC
(HK), to require CNC (BVI) to return or re-issue the 30,967,127 Preferred Shares
and 6,400,000 Common Shares constituting the CNC (HK) Interest to the Fund in
exchange for the Pre-IPO Listco Shares then held by the Fund, and CNC (HK) shall
take all steps necessary to effect the return of the CNC (HK) Interest in the
manner described in this Section 8.1; provided that the number of Common Shares
into which the Preferred Shares will be convertible at the time of any such
return or re-issuance (i) shall be (A) adjusted in accordance with the terms of
the Preferred Shares, as if the Preferred Shares had been continuously
outstanding at all times from the date of this Agreement until the date of such
return or re-issuance and (B) adjusted appropriately to take into account any
conversion of the Preferred Shares prior to any such re-issuance, and (ii) shall
in any event represent not less than the percentage of pre-IPO Listco Shares
determined in accordance with Section 1.1(b)(i). Immediately upon delivery of
such notice, (i) all of the Fund's rights under the Investor Rights Agreement,
the Registration Rights Agreement, the Memorandum and Articles of Association of
CNC (HK) as in effect on the date hereof, the Ancillary Agreements and all other
agreements and corporate documents under which the Fund had any rights
immediately prior to the date hereof shall be restored in full, (ii) if any or
all of the Preferred Shares have been cancelled, converted or modified in any
way, they shall be re-authorized, reissued and otherwise reinstated such that
they are identical in all respects to the Series A Preferred Shares existing
immediately prior to the execution of this Agreement, (iii) CNC (BVI) shall
return to the Fund, and CNC (HK) shall procure the return to the Fund of, the
certificates representing the Preferred Shares and the Common Shares, and (iv)
CNC (BVI) and CNC (HK) shall take all further actions reasonably requested by
the Fund in order to ensure that the Fund and CNET will have substantially the
same rights and interests in respect of CNC (HK) as they had immediately prior
to the execution of this Agreement.
4. Effective Date. This Amendment shall be effective immediately
upon signing by all the Parties.
5. Ratification of the Agreement. Except as otherwise expressly
provided herein, all of the terms and conditions of the Agreement are ratified
and shall remain unchanged and continue in full force and effect.
6. Governing Law; Arbitration.
(a) This Agreement shall be governed, interpreted and enforced in
accordance with the laws of the State of New York, U.S.A.
(b) In the event any dispute arises among the Parties, or any of
them which cannot amicably be resolved, such dispute shall be submitted to the
Hong Kong International Arbitration Centre ("HKIAC") for arbitration in
accordance with the UNCITRAL Arbitration Rules as at present in force and as
amended as follows: (i) the appointing authority shall be HKIAC; (ii) the place
of arbitration shall be in Hong Kong, (iii) there shall be three arbitrators
(one to be appointed by CNC (BVI) and/or CNC (HK), a second to be appointed by
the Fund, and the third to be appointed by these two arbitrators), (iv) such
arbitration shall be administered in accordance with the HKIAC Procedures for
Arbitration in force as of the date hereof, and (v) the language to be used in
arbitration proceedings shall be English.
[remainder of page left intentionally blank]
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
as of the date first written above.
CHINA NETCOM HOLDINGS (BVI)
LIMITED
By: _________________________________
Name:
Title:
CHINA NETCOM CORPORATION
(HONG KONG) LIMITED
By: _________________________________
Name:
Title:
CNC FUND, L.P.
By: CNC CAYMAN LIMITED,
as a General Partner
By: _____________________________
Name:
Title:
By: BEST BLUECHIP INVESTMENTS LIMITED
as a General Partner
By: _____________________________
Name:
Title:
By: GS CHINA BROADNET GP,
L.L.C. as a General Partner
By: _____________________________
Name:
Title:
