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[LINKLATERS & ALLIANCE LETTERHEAD]
Dated 4 October 2000
CHINA MOBILE HONG KONG (BVI) LIMITED
CHINA MOBILE COMMUNICATIONS CORPORATION
CHINA MOBILE (HONG KONG) LIMITED
CONDITIONAL SALE AND PURCHASE AGREEMENT
<PAGE> 2
THIS AGREEMENT is made on 4 October 2000
BETWEEN:
(1) CHINA MOBILE HONG KONG (BVI) LIMITED a company incorporated under the
laws of the British Virgin Islands whose registered office is at P.O. Box
957, Offshore Incorporation Centre, Road Town, Tortola, British Virgin
Islands (the "VENDOR");
(2) CHINA MOBILE COMMUNICATIONS CORPORATION a company incorporated under the
laws of the PRC whose registered office is at 53A Xibianmennei Dajie,
Xuanwuqu, Beijing, PRC ("CMCC");and
(3) CHINA MOBILE (HONG KONG) LIMITED a company incorporated under the laws of
Hong Kong whose registered office is at 60th Floor, The Center, 99
Queen's Road Central, Hong Kong, PRC (the "PURCHASER").
WHEREAS:
(A) Each of Beijing Mobile BVI, Shanghai Mobile BVI, Tianjin Mobile BVI,
Hebei Mobile BVI, Liaoning Mobile BVI, Shandong Mobile BVI and Guangxi
Mobile BVI (each, as defined below and, together, the "TARGET BVI
COMPANIES") is a private company limited by shares incorporated on 1
September 2000 in the British Virgin Islands. Beijing Mobile BVI,
Shanghai Mobile BVI, Tianjin Mobile BVI, Hebei Mobile BVI, Liaoning
Mobile BVI, Shandong Mobile BVI and Guangxi Mobile BVI are the sole
beneficial owners of Beijing Mobile, Shanghai Mobile, Tianjin Mobile,
Hebei Mobile, Liaoning Mobile, Shandong Mobile and Guangxi Mobile (each
as defined below), respectively.
(B) The Vendor is the sole legal and beneficial owner of the entire issued
share capital of each of the Target BVI Companies.
(C) CMCC has effected certain reorganisations in relation to the mobile
communications assets and businesses in each of Beijing, Shanghai,
Tianjin, Hebei, Liaoning, Shandong and Guangxi, and, prior to the signing
of this Agreement, each of the Target Companies (as defined below) became
a wholly-owned subsidiary of Beijing Mobile BVI, Shanghai Mobile BVI,
Tianjin Mobile BVI, Hebei Mobile BVI, Liaoning Mobile BVI, Shandong
Mobile BVI and Guangxi Mobile BVI, respectively, through a series of
transfers pursuant to a Share Transfer Agreement dated 30 September 2000
(the "REORGANISATION").
(D) The Vendor has agreed to sell the entire issued share capital of each of
the Target BVI Companies to the Purchaser for the consideration and upon
the terms and conditions set out in this Agreement.
(E) The Vendor and CMCC have agreed to make certain representations,
warranties and undertakings in relation to the Target Group Companies (as
defined below).
IT IS AGREED as follows:
1 INTERPRETATION
1.1 In this Agreement, the following expressions shall have the
following meanings:
"ACCOUNTS" means in relation to the Target Companies:
(a) the combined audited balance sheets of the Target
Companies as of the relevant Accounts Date in respect
of that financial period; and
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(b) the combined statements of income, owner's equity and
cash flows of the Target Companies for the financial
period ended on the relevant Accounts Date,
together with any notes, reports or statements included in or
annexed to them;
"ACCOUNTS DATE" means, 31 December 1997, 1998 or 1999, or 30
June 2000, as the case may be;
"APPRAISAL REPORT" means the appraisal report prepared by PRC
appraisers in respect of the Target Companies;
"BEIJING MOBILE" means . . . . . . . . . . . . (Beijing Mobile
Communication Company Limited), a company established on 26 July
2000 under the laws of the PRC and wholly-owned by Beijing
Mobile BVI;
"BEIJING MOBILE BVI" means Beijing Mobile (BVI) Limited, a
company incorporated in the British Virgin Islands;
"BUSINESS DAY" means a day (excluding Saturdays) on which banks
generally are open in Hong Kong and the PRC for the transaction
of normal banking business;
"CHINA MOBILE (SHENZHEN)" means China Mobile (Shenzhen) Limited,
a company established under the laws of the PRC and wholly-owned
by the Purchaser;
"CLAIM" means any claim for breach of a Warranty;
"COMPANIES ORDINANCE" means the Companies Ordinance, Chapter 32
of the Laws of Hong Kong;
"COMPLETION" means completion of the sale and purchase of the
Target BVI Shares under this Agreement pursuant to clause 5;
"CONDITIONS PRECEDENT" means the conditions specified in clause
3.1;
"CONNECTED TRANSACTIONS" means those transactions effected
pursuant to the operating agreements as listed in Appendix 1;
"CONSIDERATION SHARES" has the meaning given to it in clause
2.2(c) and (if relevant) clause 2.3;
"COSTS" means liabilities, losses, damages, costs (including
legal costs) and expenses (including taxation), in each case of
any nature whatsoever;
"ENCUMBRANCE" means any claim, charge, mortgage, security, lien,
option, equity, power of sale, hypothecation or third party
rights, retention of title, right of pre-emption, right of first
refusal or security interest of any kind;
"FINANCIAL STATEMENTS" means the combined audited balance sheets
of the Target Companies as of 31 December 1997, 1998 and 1999
and 30 June 2000, and the related combined statements of income,
owner's equity and cash flows for each of the years in the
three-year period ended 31 December 1999 and the six months
ended 30 June 2000, all of which are included in the
Registration Statements;
"GUANGXI MOBILE" means . . . . . . . . . . . . (Guangxi Mobile
Communication Company Limited), a company established on 3
August 2000 under the laws of the PRC and wholly-owned by
Guangxi Mobile BVI;
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<PAGE> 4
"GUANGXI MOBILE BVI" means Guangxi Mobile (BVI) Limited, a
company incorporated in the British Virgin Islands;
"HEBEI MOBILE" means . . . . . . . . . . . . (Hebei Mobile
Communication Company Limited), a company established on 31 July
2000 under the laws of the PRC and wholly-owned by Hebei Mobile
BVI;
"HEBEI MOBILE BVI" means Hebei Mobile (BVI) Limited, a company
incorporated in the British Virgin Islands;
"HOLDING COMPANY" shall be construed in accordance with section
2 of the Companies Ordinance;
"HONG KONG" means the Hong Kong Special Administrative Region of
the PRC;
"HK$" or "HK DOLLARS" means Hong Kong dollars, the lawful
currency of Hong Kong;
"INDEBTEDNESS" means any indebtedness in respect of all
obligations to repay borrowed money, all indebtedness evidenced
by notes, bonds, loan stock, debentures or similar obligations,
acceptances or documentary credit facilities, all rental
obligations under finance leases, and hire purchase contracts,
any other transaction having the commercial effect of a
borrowing or raising of money, the net amount of any liability
under any swap, hedging or other similar treasury instrument,
and all guarantees, sureties, indemnities, counter-indemnities
or letters of comfort of obligations of others of the foregoing
types;
"INDEPENDENT SHAREHOLDERS" means the holders of shares in the
Purchaser other than the Vendor and its Associates (as defined
in the Listing Rules);
"INTELLECTUAL PROPERTY RIGHTS" means patents, trade marks,
service marks, trade names, design rights, copyright (including
rights in computer software), rights in know-how and other
intellectual property rights, in each case whether registered or
unregistered and including applications for the grant of any
such rights and all rights or forms of protection having
equivalent or similar effect anywhere in the world;
"INTRA-GROUP GUARANTEES" means all guarantees, indemnities,
counter-indemnities and letters of comfort of any nature
whatsoever (a) given to any third party by any Target Group
Company in respect of a liability of any Vendor Group Company,
and/or (as the context may require) (b) given to any third party
by any Vendor Group Company in respect of a liability of any
Target Group Company;
"INTRA-GROUP LOANS" means all debts outstanding between any
Target Group Company and any Vendor Group Company;
"LAST ACCOUNTS" means the Accounts of the Target Companies in
respect of the financial period ended on the Last Accounts Date;
"LAST ACCOUNTS DATE" means 30 June 2000;
"LEASED PROPERTIES" means the properties stated in the Property
Legal Opinions that are leased by the Target Companies;
"LIAONING MOBILE" means . . . . . . . . . . . . (Liaoning Mobile
Communication Company Limited), a company established on 7
August 2000 under the laws of the PRC and wholly-owned by
Liaoning Mobile BVI;
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<PAGE> 5
"LIAONING MOBILE BVI" means Liaoning Mobile (BVI) Limited, a
company incorporated in the British Virgin Islands;
"LISTING RULES" means the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited;
"MILLENNIUM COMPLIANT" or "MILLENNIUM COMPLIANCE" means the
ability of a computer system and any related hardware and
software to provide all the following functions:
(a) handle date information before, during and after 1
January 2000 including, but not limited to, accepting
date input, providing date output and performing
calculations on dates or portions of dates;
(b) function accurately and without interruption before,
during and after 1 January 2000, without any change in
operations associated with the advent of the year 2000
and the new century;
(c) respond to two-digit year input and process two-digit
year date information in ways that resolve the
ambiguity as to century in a disclosed, defined and
predetermined manner; and
(d) store and provide output of date information in ways
that are similarly unambiguous as to century,
"OFFERINGS" means the proposed offerings of equity and
convertible debt securities by the Purchaser to raise funds for
the Purchaser to finance part of the purchase price under clause
2.2(a), in each case pursuant to the relevant Underwriting
Agreements;
"OFFERING PRICE" means the price per Share to be paid by the
proposed investors for the subscription of the new Shares which
are the subject of the proposed offering of equity securities
under the Offerings;
"PRC" means the People's Republic of China;
"PRC APPROVALS" means the approvals, consents and authorisations
from all relevant regulatory authorities in the PRC including,
but not limited to the State Council, the State Development and
Planning Commission, the Ministry of Information Industry, the
Ministry of Foreign Trade and Economic Cooperation, the Ministry
of Finance, the Ministry of State Land Resources and the China
Securities Regulatory Commission, which are necessary to effect
the transactions contemplated by the Restructuring Agreements,
this Agreement and the Underwriting Agreements;
"PROPERTIES" means the properties and land use rights stated in
the Property Legal Opinions whether owned or occupied by the
Target Companies;
"PROPERTY LEGAL OPINIONS" means the legal opinions to be issued
by Commerce & Finance Law Offices, PRC counsel for the purposes
of the acquisition contemplated hereunder in relation to the
properties or land use rights owned, occupied or used by the
Target Companies;
"REGISTRATION STATEMENTS" means the Purchaser's Registration
Statements on Form F-3 and such other registration statements
(if any) filed by the Purchaser with
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<PAGE> 6
any regulatory authorities relating to the new Shares and/or the
convertible debt securities to be issued by the Purchaser
pursuant to the Offerings;
"RESTRUCTURING AGREEMENTS" means the agreements listed in
Appendix 2 pursuant to which CMCC transferred its business,
assets and liabilities related to mobile communication services
in Beijing, Shanghai, Tianjin, Hebei, Liaoning, Shandong and
Guangxi to the respective Target Companies;
"RMB" means Renminbi, the lawful currency of the PRC;
"SCHEDULES" means Schedules 1 and 2 to this Agreement and
Schedule shall be construed accordingly;
"SHANDONG MOBILE" means . . . . . . . . . . . . (Shandong Mobile
Communication Company Limited), a company established on 7
August 2000 under the laws of the PRC and wholly-owned by
Shandong Mobile BVI;
"SHANDONG MOBILE BVI" means Shandong Mobile (BVI) Limited, a
company incorporated in the British Virgin Islands;
"SHANGHAI MOBILE" means . . . . . . . . . . . . (Shanghai Mobile
Communication Company Limited), a company established on 4
August 2000 under the laws of the PRC and wholly-owned by
Shanghai Mobile BVI;
"SHANGHAI MOBILE BVI" means Shanghai Mobile (BVI) Limited, a
company incorporated in the British Virgin Islands;
"SHARES" means ordinary shares of par value HK$0.10 each in the
share capital of the Purchaser;
"SHARE TRANSFER AGREEMENT" means the share transfer agreement
referred to in paragraph 29 of Appendix 2;
"SUBSIDIARY" and "SUBSIDIARIES" shall be construed in accordance
with section 2 of the Companies Ordinance;
"TARGET BVI COMPANIES" means Beijing Mobile BVI, Shanghai Mobile
BVI, Tianjin Mobile BVI, Hebei Mobile BVI, Liaoning Mobile BVI,
Shandong Mobile BVI and Guangxi Mobile BVI, details of each of
which are set out in Part A of Schedule 1;
"TARGET BVI SHARES" means all the issued shares in the capital
of each of the Target BVI Companies;
"TARGET COMPANIES" means Beijing Mobile, Shanghai Mobile,
Tianjin Mobile, Hebei Mobile, Liaoning Mobile, Shandong Mobile
and Guangxi Mobile, details of each of which are set out in Part
B of Schedule 1, and shall, in each case, include any
predecessor entity or person carrying on the business of such
Target Company, whether before or after the Reorganisation;
"TARGET GROUP COMPANY" means any of the Target BVI Companies or
any of the Target Companies;
"TAX INDEMNITY" means the Tax Indemnity to be entered into by
the Vendor and CMCC in favour of the Purchaser on Completion, in
the agreed form set out in Appendix 3;
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<PAGE> 7
"TAX WARRANTIES" means the warranties set out in paragraphs 1.1
to 1.9 in Part B of Schedule 2;
"TIANJIN MOBILE" means . . . . . . . . . . . . (Tianjin Mobile
Communication Company Limited), a company established on 24 July
2000 under the laws of the PRC and wholly-owned by Tianjin
Mobile BVI;
"TIANJIN MOBILE BVI" means Tianjin Mobile (BVI) Limited, a
company incorporated in the British Virgin Islands;
"UNDERWRITING AGREEMENTS" means (a) the underwriting agreements
relating to the proposed offering of equity securities by the
Purchaser, and (b) the underwriting agreement relating to the
proposed offering of convertible debt securities by the
Purchaser, in each case to be entered into between the Purchaser
and the several underwriters named therein of the relevant
Offerings;
"US$" or "US DOLLARS" means United States dollars, the lawful
currency of the United States of America;
"VENDOR GROUP COMPANY" means the Vendor, CMCC, any holding
company from time to time of the Vendor (including CMCC) and any
subsidiary from time to time of the Vendor or any of its holding
company (but excluding the Purchaser, any of the Purchaser's
subsidiaries, the Target BVI Companies and the Target
Companies);
"WARRANTIES" means the representations and warranties set out in
Schedule 2;
"WFOE" means a wholly foreign owned enterprise established under
the laws of the PRC.
1.2 In this Agreement, unless the context otherwise requires:
(a) references to persons shall include individuals, bodies
corporate (wherever incorporated), unincorporated
associations and partnerships;
(b) the headings are inserted for convenience only and
shall not affect the construction of this Agreement;
(c) references to one gender include all genders;
(d) any reference to an enactment or statutory provision is
a reference to it as it may have been, or may from time
to time be, amended, modified, consolidated or
re-enacted;
(e) any statement qualified by the expression to the best
knowledge of the Vendor and CMCC or so far as the
Vendor and CMCC are aware or any similar expression
shall be deemed to include an additional statement that
it has been made after due and careful enquiry and
shall be deemed also to include the best of the
knowledge of each Vendor Group Company;
(f) any reference to a document in the agreed form is to
the form of the relevant document agreed between the
parties and for the purpose of identification
initialled by each of them or on their behalf (in each
case with such amendments as may be agreed by or on
behalf of the Vendor and the Purchaser);
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<PAGE> 8
(g) references to any Hong Kong legal term for any action,
remedy, method of judicial proceeding, legal document,
legal status, court, official or any other legal
concept shall, in respect of any jurisdiction other
than Hong Kong, be deemed to include the legal concept
which most nearly approximates in that jurisdiction to
the Hong Kong legal term.
1.3 The Schedules and Appendices comprise schedules and appendices
to this Agreement and form part of this Agreement.
2 SALE OF THE TARGET BVI SHARES AND PRICE
2.1 The Vendor agrees to sell as legal and beneficial owner, and the
Purchaser agrees to purchase, the Target BVI Shares. The Target
BVI Shares shall be sold free from all Encumbrances, together
with all rights attaching to them.
2.2 The total price payable on Completion by the Purchaser to the
Vendor for the Target BVI Shares shall be HK$256,021 million
(the "TOTAL PRICE"), comprising:
(a) HK$67,519 million (or such equivalent amount in US
Dollars) payable in cash;
(b) HK$11,772 million (or such equivalent amount in RMB or
US Dollars), payable in cash;
(c) HK$176,730 million to be satisfied by the allotment by
the Purchaser to the Vendor of the number of Shares,
credited as fully paid, calculated by dividing
HK$176,730 million by the Offering Price (the
"CONSIDERATION SHARES").
2.3 The Purchaser may elect to increase the number of Consideration
Shares provided that the Vendor's shareholding in the Purchaser
following Completion and the issue of the Consideration Shares
referred to in clause 2.2(c) and (if relevant) this clause 2.3
and completion of the Offerings in relation to the proposed
offerings of equity securities shall not exceed 76.5%. If the
number of Consideration Shares to be allotted by the Purchaser
is so increased, the cash portion of the Total Price as referred
to in clauses 2.2(a) and/or 2.2(b) will be reduced by an
aggregate amount calculated by multiplying the Offering Price by
such additional number of Consideration Shares. Subject to the
foregoing, the Purchaser may, in its absolute discretion,
determine the amount of reduction applicable to each of the cash
portion of the Total Price referred to in clauses 2.2(a) and
2.2(b).
3 CONDITIONS PRECEDENT
3.1 Completion of the sale and purchase of the Target BVI Shares
shall be conditional upon the fulfilment of the following
conditions:
(a) the passing of resolutions by the Independent
Shareholders approving the transactions contemplated by
this Agreement and the issue of the Consideration
Shares to the Vendor upon Completion, and the Connected
Transactions;
(b) the passing of resolutions by the shareholders of the
Purchaser approving the increase in the authorised
share capital of the Purchaser;
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<PAGE> 9
(c) the Purchaser having received adequate funding or
financing to satisfy the cash portion of the Total
Price as referred to in clauses 2.2(a) and 2.2(b) but
subject to clause 2.3;
(d) the granting by the Listing Committee of The Stock
Exchange of Hong Kong Limited of listing of, and
permission to deal in, the Consideration Shares to be
issued by the Purchaser upon Completion;
(e) there having been no material adverse change to the
financial conditions, business operations or prospects
of any of the Target Group Companies; and
(f) the receipt by the Purchaser of the PRC Approvals.
3.2 Each of the Vendor and CMCC undertakes to use all reasonable
endeavours to ensure that the Conditions Precedent set out in
clauses 3.1(e) and (f) are fulfilled to the satisfaction of the
Purchaser as soon as reasonably practicable and in any event by
31 December 2000.
3.3 The Purchaser undertakes to use all reasonable endeavours to
ensure that the Conditions Precedent set out in clauses 3.1(a),
3.1(b), 3.1(c) and 3.1(d) are fulfilled to the satisfaction of
the Vendor as soon as reasonably practicable and in any event by
31 December 2000.
3.4 The Purchaser shall be entitled in its absolute discretion, by
written notice to the Vendor, to waive any or all of the
Conditions Precedent set out in clauses 3.1(c) and 3.1(e) either
in whole or in part.
3.5 If any of the Conditions Precedent has not been fulfilled (or
waived) on or before the date specified in clauses 3.2 and 3.3
or such other date as the parties to this Agreement may agree in
writing, this Agreement (other than clauses 14, 16 and 22) shall
automatically terminate and no party shall have any claim of any
nature whatsoever against the other parties under this Agreement
(save in respect of its accrued rights arising from any prior
breach of this Agreement).
4 PRE-COMPLETION UNDERTAKINGS
4.1 Pending Completion, each of the Vendor and CMCC shall ensure
that:
(a) each Target Group Company shall carry on its business
in the ordinary and usual course and shall not make (or
agree to make) any payment other than routine payments
in the ordinary and usual course of trading;
(b) each Target Group Company shall take all reasonable
steps to preserve and protect its assets;
(c) the Purchaser's representatives shall be allowed, upon
reasonable notice and during normal business hours,
access to the books and records of each Target Group
Company (including, without limitation, all statutory
books, minute books, leases, contracts, supplier lists
and customer lists) together with the right to take
copies;
(d) no Target Group Company shall do, allow or procure any
act or omission which would constitute or give rise to
a breach of any Warranty if the
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<PAGE> 10
Warranties were to be repeated on or at any time before
Completion by reference to the facts and circumstances
then existing;
(e) prompt disclosure is made to the Purchaser of all
relevant information which comes to the notice of the
Vendor or CMCC in relation to any fact or matter
(whether existing on or before the date of this
Agreement or arising afterwards) which may constitute a
breach of any Warranty if the Warranties were to be
repeated on or at any time before Completion by
reference to the facts and circumstances then existing;
(f) no dividend or other distribution shall be declared,
paid or made by any Target Group Company;
(g) no share or loan capital shall be allotted or issued or
agreed to be allotted or issued by any Target Group
Company;
(h) all transactions between each Target Group Company and
each Vendor Group Company shall be on arm's length
commercial terms and in their respective ordinary and
usual course of business;
(i) otherwise than in the ordinary course of business, the
amount of any Indebtedness owed by each Target Group
Company or existing as at the date of this Agreement
shall not be increased or extended and no new
Indebtedness shall be entered into or assumed by any
such company; and
(j) no action is taken by any Target Group Company or any
Vendor Group Company which is inconsistent with the
provisions of this Agreement or the consummation of the
transactions contemplated by this Agreement.
4.2 Pending Completion, each of the Vendor and CMCC shall ensure
that the Target Group Companies consult fully with the Purchaser
in relation to any matters which may have a material effect upon
the Target Group Companies. Without the prior written consent of
the Purchaser, the Target Group Companies shall not, and each of
the Vendor and CMCC shall ensure that the Target Group Companies
do not:
(a) enter into any contract or commitment (or make a bid or
offer which may lead to a contract or commitment)
having a material value or involving material
expenditure or which is of a long term or unusual
nature or which could involve an obligation of a
material nature or which may result in any material
change in the nature or scope of the operations of such
Target Group Company;
(b) agree to any variation or termination of any existing
contract to which that Target Group Company is a party
and which may have a material effect upon the nature or
scope of the operations of such Target Group Company;
(c) (whether in the ordinary and usual course of business
or otherwise) acquire or dispose of, or agree to
acquire or dispose of, any material business or any
material asset; or
(d) enter into any agreement, contract, arrangement or
transaction (whether or not legally binding) other than
in the ordinary and usual course of business.
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5 COMPLETION
5.1 The sale and purchase of the Target BVI Shares shall be
completed at 60th Floor, The Center, 99 Queen's Road Central,
Hong Kong (or such other place as the Vendor, the Purchaser and
CMCC may agree upon) on:
(a) the date of completion of the Offerings,
(b) the Business Day following the passing of the
resolutions referred to in clause 3.1(a), or
(c) such other date as may be agreed between the Vendor and
the Purchaser,
whichever is later, following notification by the Purchaser to
the Vendor of the fulfilment to the satisfaction of the
Purchaser (or waiver) of all the Conditions Precedent.
5.2 On Completion, the Vendor shall deliver (or cause to be
delivered) to the Purchaser:
(a) duly executed transfers into the name of the Purchaser
or its nominee in respect of all of the Target BVI
Shares, together with the related share certificates
evidencing the title and ownership of such shares;
(b) the certificates of incorporation, common seal, share
register, share certificate book (with any unissued
share certificates), business licence, the documents
evidencing the PRC Approvals (as the case may be) and
all minute books and other statutory books (which shall
be written-up to but not including Completion) of each
Target Group Company;
(c) all such other documents (including any necessary
waivers of pre-emption rights or other consents) as may
be required to enable the Purchaser and/or its nominee
to be registered as the holder(s) of the Target BVI
Shares;
(d) a counterpart of the Tax Indemnity duly executed by the
Vendor;
(e) a copy of a resolution of the board of directors
(certified by a duly appointed officer as true and
correct) of the Vendor, authorising the execution of
and the performance by the Vendor of its obligations
under this Agreement and each of the other documents to
be executed by the Vendor;
(f) a certified copy of the Share Transfer Agreement
pursuant to which the equity interest of each of the
Target Companies is transferred from CMCC to each of
the Target BVI Companies, respectively, through a
series of transfers, duly executed by each of the
parties thereto; and
(g) a legal opinion from Commerce & Finance Law Offices,
PRC counsel, in form and substance acceptable to the
Purchaser.
5.3 On Completion, CMCC shall deliver (or cause to be delivered) to
the Purchaser:
(a) a counterpart of the Tax Indemnity duly executed by
CMCC; and
(b) all such other documents (including any necessary
waivers of pre-emption rights or other consents) as may
be required to enable the Purchaser and/or its nominee
to be registered as the holder(s) of the Target BVI
Shares.
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<PAGE> 12
5.4 On Completion, the Vendor shall procure that resolutions of the
board of directors of each Target BVI Company are passed to
approve the registration of the transfers in respect of the
Target BVI Shares referred to in clause 5.2.
5.5 Against compliance by the Vendor and CMCC of their respective
obligations under Clauses 5.2, 5.3 and 5.4, the Purchaser shall:
(a) (subject to clause 2.3) in satisfaction of its
obligations under clause 2.2(a), cause the price set
out in clause 2.2(a) to be paid on Completion or such
later date as may be agreed between the Vendor and the
Purchaser by electronic funds transfer (or such other
modes of payment as may be agreed between the Vendor
and the Purchaser) to the bank account of the Vendor or
such other party as the Vendor may direct, details of
which shall be notified in writing to the Purchaser at
least two Business Days prior to Completion;
(b) (subject to clause 2.3) in satisfaction of the
obligations under clause 2.2(b), procure China Mobile
(Shenzhen) to pay the price set out in clause 2.2(b) on
Completion or such later date as may be agreed between
the Vendor and the Purchaser by electronic funds
transfer (or such other modes of payment as may be
agreed between the Vendor and the Purchaser) to the
bank account of the Vendor or such other party as the
Vendor may direct, details of which shall be notified
in writing to the Purchaser at least two Business Days
prior to Completion;
(c) (subject to clause 2.3) in satisfaction of its
obligations under clause 2.2(c), cause the
Consideration Shares to be allotted to the Vendor
credited as fully paid, the Vendor's name to be entered
in the register of members and a certificate in respect
of the Consideration Shares to be delivered to the
Vendor; and
(d) deliver to the Vendor a copy of the board minutes
(certified by a duly appointed officer as true and
correct) of the Purchaser authorising the execution and
performance by the Purchaser of its obligations under
this Agreement.
5.6 The procurement by the Purchaser of payment by China Mobile
(Shenzhen) in accordance with clause 5.5(b) shall constitute a
good discharge for the Purchaser of its obligations under clause
2.2(b) and the Purchaser shall not be concerned to see that the
funds are applied in payment to the Vendor.
5.7 If the Vendor or CMCC fails or is unable to perform any material
obligations (including the transfer of all Target BVI Shares to
the Purchaser or its nominees simultaneously upon Completion)
required to be performed by the Vendor or CMCC (as the case may
be) pursuant to clause 3.2, clause 5.2 and clause 5.3,
respectively, by the last date on which Completion is required
to occur, the Purchaser shall not be obliged to complete the
sale and purchase of the Target BVI Shares and may, in its
absolute discretion, by written notice to the Vendor and CMCC:
(a) rescind this Agreement without liability on the part of
the Purchaser; or
(b) elect to complete this Agreement on that date, to the
extent that the Vendor and CMCC are ready, able and
willing to do so, and specify a later date on
- 11 -
<PAGE> 13
which the Vendor and CMCC shall be obliged to complete
the outstanding obligations of the Vendor and CMCC; or
(c) elect to defer the completion of this Agreement by not
more than 90 days to such other date as it may specify
in such notice, in which event the provisions of this
clause 5.7 shall apply, mutatis mutandis, if the Vendor
and/or CMCC fails or is unable to perform any such
obligations on such other date,
provided that clause 5.7(b) will not apply where the Vendor is
unable or fails to effect transfer of all Target BVI Shares to
the Purchaser or its nominee simultaneously upon Completion.
5.8 Each of the Vendor and CMCC jointly and severally undertakes
that it shall pay in cash to the Purchaser by way of indemnity
all Costs which the Purchaser may suffer or incur if the Vendor
or CMCC breaches any of its obligations under this Agreement
(including to effect the transfer of all Target BVI Shares to
the Purchaser or its nominee simultaneously upon Completion) and
all Costs which the Purchaser has incurred in relation to the
preparation and execution of this Agreement.
6 POST-COMPLETION UNDERTAKINGS
6.1 Within 60 Business Days following Completion or such other date
to be agreed upon between the Vendor, the Purchaser and CMCC,
each of the Vendor and CMCC undertakes to the Purchaser to use
all reasonable endeavours to obtain the release of each Target
Group Company from any Intra-Group Guarantees to which it is a
party and, pending such release, to indemnify the relevant
Target Group Company against all amounts paid by it to any third
party pursuant to any such Intra-Group Guarantee in respect of
any liability of any Vendor Group Company (and all Costs
incurred in connection with such liability) included in the Last
Accounts or arising after the Last Accounts Date.
6.2 Within 60 Business Days following Completion or such other date
to be agreed upon between the Vendor, the Purchaser and CMCC,
the Purchaser undertakes to the Vendor to use all reasonable
endeavours to obtain the release of each Vendor Group Company
from any Intra-Group Guarantees to which it is a party and,
pending such release, to indemnify the relevant Vendor Group
Company against all amounts paid by it to any third party
pursuant to any Intra-Group Guarantees in respect of any
liability of any Target Group Company (and all Costs incurred in
connection with such liability) included in the Last Accounts or
arising after the Last Accounts Date.
6.3 If in the Purchaser's opinion the System (as defined in
paragraph 7.1 of Part A, Schedule 2) is not Millennium Compliant
then, without prejudice to any other right or remedy the
Purchaser may have, upon written request from the Purchaser, the
Vendor and CMCC shall at no charge to the Purchaser use their
best endeavours to amend the System as quickly as possible to
make it Millennium Compliant. The Vendor and CMCC shall supply
an action plan in this regard to the Purchaser as soon as
practicable and in any event no later than 30 days of the
Purchaser's written request.
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<PAGE> 14
6.4 The Vendor and CMCC shall jointly and severally indemnify the
Purchaser against any or all Costs arising out of or in
connection with any failure to meet any of the provisions of
clause 6.3 and any of the warranties set out in paragraphs 7.1
and 7.2 of Part A, Schedule 2.
6.5 Regardless of the terms of clause 8.1, the Vendor and CMCC shall
be liable to the Purchaser for the full amount of all Costs,
including indirect or consequential Costs, arising from any
breach of clause 6.3 and any of the warranties set out in
paragraphs 7.1 and 7.2 of Part A, Schedule 2.
6.6 The provisions of clause 6.3 and the warranties set out in
paragraphs 7.1 and 7.2 of Part A, Schedule 2 shall survive any
other expiration of warranty period or the termination of this
Agreement.
7 WARRANTIES
7.1 Each of the Vendor and CMCC jointly and severally represents,
warrants and undertakes to the Purchaser in the terms of the
Warranties (save that the Warranties set out in paragraphs 2.5
to 2.10 of Part A, Schedule 2 are given by each of the Vendor
and CMCC in respect of itself only) and that such Warranties are
true and accurate. Each of the Vendor and CMCC acknowledges that
the Purchaser has entered into this Agreement in reliance upon
the Warranties.
7.2 Each of the Vendor and CMCC jointly and severally undertakes
(without limiting any other rights of the Purchaser in any way
including its rights to damages in respect of a claim for breach
of any Warranty on any other basis) that it shall pay in cash to
the Purchaser (or, if so directed by the Purchaser, to the
Target Group Company in question) (each an "INDEMNIFIED PERSON")
by way of indemnity on demand:
(a) in the case of a breach of any of the Warranties, a sum
equal to the aggregate of (a) the amount which, if
received by the Indemnified Person, would be necessary
to put that Indemnified Person into the financial
position which would have existed had there been no
breach of the Warranty in question; and (b) all Costs
suffered or incurred by the Indemnified Person,
directly or indirectly, as a result of or in connection
with such breach of Warranty; and
(b) in the case of a breach by the Purchaser of its
representations or warranties set out in the
Underwriting Agreements and which relates to any of the
Target Group Companies, for any and all losses, claims,
damages, actions, liabilities, demands, proceedings or
judgments (in each case whether or not successful,
compromised or settled and whether joint or several) to
which any Indemnified Person may be subject and against
all losses, claims, damages, actions, liabilities,
demands, costs, charges, or expenses (including legal
fees) ("LOSSES") which the Indemnified Person may
suffer or incur (including, but not limited to, all
such Losses, suffered or incurred in disputing any
claim, action, liability, demand, proceeding or
judgment aforesaid and/or in establishing its right to
be indemnified pursuant to this clause, and/or in
seeking advice as to any claim, action, liability,
demand, proceeding or judgment aforesaid or in any way
related to or in connection with this indemnity).
- 13 -
<PAGE> 15
7.3 Each of the Vendor and CMCC agrees to waive the benefit of all
rights (if any) which the Vendor or CMCC may have against any
Target Group Company, or any present or former officer or
employee of any such company, on whom the Vendor or CMCC may
have relied in agreeing to any term of this Agreement and each
of the Vendor and CMCC undertakes not to make any claim in
respect of such reliance.
7.4 Each of the Warranties shall be construed as a separate Warranty
and (save as expressly provided to the contrary) shall not be
limited or restricted by reference to or inference from the
terms of any other Warranty or any other term of this Agreement.
7.5 The Warranties shall be deemed to be repeated on Completion with
reference to the facts and circumstances then existing.
7.6 Each of the Vendor and CMCC undertakes to notify the Purchaser
in writing promptly if it becomes aware of any circumstance
arising after the date of this Agreement which would cause any
Warranty (if the Warranties were repeated with reference to the
facts and circumstances then existing) to become untrue or
inaccurate or misleading in any respect which is material to the
financial or trading position of any of the Target Group
Companies.
8 LIMITATIONS ON CLAIMS
8.1 Subject to clauses 6.5 and 8.2, the aggregate amount of the
liability of each of the Vendor and CMCC for all Claims shall
not exceed the Total Price (as defined in clause 2.2).
8.2 The limitation contained in clause 8.1 shall not apply to any
breach of any Warranty which (or the delay in discovery of
which) is the consequence of dishonest, deliberate or reckless
mis-statement, concealment or other conduct by any Vendor Group
Company or any officer or employee, or former officer or
employee, of any Vendor Group Company.
9 PURCHASER'S RIGHTS TO RESCISSION
The Purchaser may by written notice given to the Vendor and CMCC at any
time prior to Completion rescind this Agreement without liability on the
part of the Purchaser if any of the Underwriting Agreements is terminated
or rescinded or otherwise does not become unconditional in all respects
or if any fact, matter or event (whether existing or occurring on or
before the date of this Agreement or arising or occurring afterwards)
comes to the notice of the Purchaser at any time prior to Completion
which:
(a) constitutes a breach by the Vendor or CMCC of this Agreement
(including, without limitation, any breach of the pre-Completion
undertakings in clause 4); or
(b) would constitute a breach of any Warranty if the Warranties were
repeated on or at any time before Completion by reference to the
facts and circumstances then existing; or
(c) affects or is likely to affect in a materially adverse manner
the business, financial position or prospects of the Target
Group Companies taken as a whole.
- 14 -
<PAGE> 16
10 WITHHOLDING TAX AND GROSSING UP
10.1 Each of the Vendor and CMCC shall pay all sums payable by it
under this Agreement free and clear of all deductions or
withholdings unless the law requires a deduction or withholding.
If a deduction or withholding is so required the Vendor or CMCC
shall pay such additional amount as will ensure that the net
amount the payee receives equals the full amount which it would
have received had the deduction or withholding not been
required.
10.2 If any tax authority charges taxation on any sum paid by the
Vendor or CMCC under or pursuant to this Agreement, then the
Vendor or CMCC shall pay such additional amount as will ensure
that the total amount paid, less the tax chargeable on such
amount, is equal to the amount that would otherwise be payable
under this Agreement.
11 ENTIRE AGREEMENT
This Agreement and the Tax Indemnity constitute the entire agreement and
understanding between the parties in connection with the sale and
purchase of the Target BVI Shares. This Agreement and the Tax Indemnity
supersede all prior agreements or understandings in connection with the
subject matter hereof which shall cease to have any further force or
effect. No party has entered into this Agreement in reliance upon any
representation, warranty or undertaking which is not set out or referred
to in this Agreement and the Tax Indemnity.
12 VARIATION
12.1 No variation of this Agreement (or of any of the legally binding
agreements referred to in this Agreement) shall be valid unless
it is in writing and signed by or on behalf of each of the
parties to it. The expression "VARIATION" shall include any
variation, supplement, deletion or replacement however effected.
12.2 Unless expressly agreed, no variation shall constitute a general
waiver of any provisions of this Agreement, nor shall it affect
any rights, obligations or liabilities under or pursuant to this
Agreement which have already accrued up to the date of
variation, and the rights and obligations of the parties under
or pursuant to this Agreement shall remain in full force and
effect, except and only to the extent that they are so varied.
13 ASSIGNMENT
No party shall be entitled to assign the benefit of any provision of this
Agreement without the prior written approval of the other parties.
14 ANNOUNCEMENTS
14.1 Except as required by law or by any stock exchange or
governmental or other regulatory or supervisory body or
authority of competent jurisdiction to whose rules the party
making the announcement or disclosure is subject, whether or not
having the force of law, no announcement or circular or
disclosure in connection with the existence or subject matter of
this Agreement shall be made or issued by or on behalf of any of
the Vendor Group Companies or the Target Group Companies or
- 15 -
<PAGE> 17
any of them without the prior written approval of the Purchaser
(such approval not to be unreasonably withheld or delayed), or
by or on behalf of the Purchaser without the prior written
approval of the Vendor and CMCC (such approval not to be
unreasonably withheld or delayed).
14.2 Where any announcement or disclosure is made in reliance on the
exception in clause 14.1, the party making the announcement or
disclosure will so far as practicable consult with the other
parties in advance as to the form, content and timing of the
announcement or disclosure.
15 COSTS
Each of the parties shall bear its own Costs incurred in connection with
the negotiation, preparation and completion of this Agreement and the Tax
Indemnity.
16 CONFIDENTIALITY
Each of the Vendor and CMCC undertakes with the Purchaser that it shall
keep confidential (and to ensure that its directors, officers, employees,
agents and professional and other advisers keep confidential) any
information in its possession (whether before or after the date of this
Agreement):
(a) in relation to the subscribers, business, assets or affairs of
the Target Group Companies (including any data held by the
Target Group Companies); or
(b) which relates to the contents of this Agreement (or any
agreement or arrangement entered into pursuant to this
Agreement),
provided that the undertakings contained in this clause 16 shall not
apply to any information which is in or has entered the public domain
(which shall include any public filing or disclosure requirements of the
United States Securities and Exchange Commission or under applicable
laws) otherwise than as a result of publication or disclosure by the
Vendor or CMCC or their respective directors, officers, employees, agents
and professional and other advisers without the prior written consent of
the Purchaser.
Each of the Vendor and CMCC shall not use for its own business purposes
or disclose to any third party any such information (collectively,
"CONFIDENTIAL INFORMATION") without the consent of the Purchaser.
17 SEVERABILITY
If any provision of this Agreement is held to be invalid or
unenforceable, then such provision shall (so far as it is invalid or
unenforceable) be given no effect and shall be deemed not to be included
in this Agreement but without invalidating any of the remaining
provisions of this Agreement. The parties shall then use all reasonable
endeavours to replace the invalid or unenforceable provisions by a valid
and enforceable substitute provision the effect of which is as close as
possible to the intended effect of the invalid or unenforceable
provision.
18 COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
parties to it on separate counterparts, each of which is an original but
all of which together constitute one and the same instrument.
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<PAGE> 18
19 WAIVER
19.1 No failure or delay by any parties hereto in exercising any
right or remedy provided by law under or pursuant to this
Agreement shall impair such right or remedy or operate or be
construed as a waiver or variation of it or preclude its
exercise at any subsequent time and no single or partial
exercise of any such right or remedy shall preclude any other or
further exercise of it or the exercise of any other right or
remedy.
19.2 The rights and remedies of the parties hereto under or pursuant
to this Agreement are cumulative, may be exercised as often as
such party considers appropriate and are in addition to its
rights and remedies under general law.
20 FURTHER ASSURANCE
Each of the Vendor and CMCC agrees to perform (or procure the performance
of) all further acts and things, and execute and deliver (or procure the
execution and delivery of) such further documents, as may be required by
law or as the Purchaser may reasonably require, whether on or after
Completion, to implement and/or give effect to this Agreement and the
transaction contemplated by it and for the purpose of vesting in the
Purchaser the full benefit of the assets, rights and benefits to be
transferred to the Purchaser under this Agreement.
21 NOTICES
21.1 Any notice or other communication to be given by one party to
any other party under, or in connection with, this Agreement
shall be in writing and signed by or on behalf of the party
giving it. It shall be served by sending it by fax to the number
set out in clause 21.2, or delivering it by hand, or sending it
by pre-paid recorded delivery or registered post, to the address
set out in clause 21.2 and in each case marked for the attention
of the relevant party set out in clause 21.2 (or as otherwise
notified from time to time in accordance with the provisions of
this clause 21). Any notice so served by hand, fax or post shall
be deemed to have been duly given:
(a) in the case of delivery by hand, when delivered;
(b) in the case of fax, upon confirmation of transmission;
(c) in the case of prepaid recorded delivery or registered
post, at 10:00 a.m. on the fifth Business Day following
the date of posting,
provided that in each case where delivery by hand or by fax
occurs after 6:00 p.m. on a Business Day or on a day which is
not a Business Day, service shall be deemed to occur at 9:00
a.m. on the next following Business Day.
References to time in this clause are to local time in the
country of the addressee.
21.2 The addresses and fax numbers of the parties for the purpose of
clause 21.1 are as follows:
THE VENDOR:
Address: 60th Floor
The Center
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<PAGE> 19
99 Queen's Road Central
Hong Kong
Fax: (852) 2511 9092
For the attention of: The Directors
CMCC:
Address: 53A Xibianmennei Dajie
Xuanwuqu
Beijing
PRC
Fax: (8610) 6360 4943
For the attention of: The Authorised Representative
THE PURCHASER:
Address: 60th Floor
The Center
99 Queen's Road Central
Hong Kong
Fax: (852) 2511 9092
For the attention of: Legal Counsel
21.3 A party may notify any other party to this Agreement of a change
to its name, relevant addressee, address or fax number for the
purposes of this clause 21, provided that, such notice shall
only be effective on:
(a) the date specified in the notice as the date on which
the change is to take place; or
(b) if no date is specified or the date specified is less
than five Business Days after the date on which notice
is given, the date following five Business Days after
notice of any change has been given.
21.4 All notices under or in connection with this Agreement shall be
in the English language.
22 GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS
22.1 This Agreement and the relationship between the parties shall be
governed by, and interpreted in accordance with, the laws of
Hong Kong.
22.2 Any dispute arising out of or in connection with this Agreement
shall be resolved by arbitration in Hong Kong International
Arbitration Centre by a single arbitrator in accordance with the
UNCITRAL Arbitration Rules in force from time to time. The
parties agree that the arbitral award will be final and binding.
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<PAGE> 20
AS WITNESS this Agreement has been signed on behalf of the parties the day and
year first before written.
- 19 -
<PAGE> 21
SCHEDULE 1
PART A
DETAILS OF THE TARGET BVI COMPANIES
<TABLE>
<S> <C>
(1) BEIJING MOBILE BVI
1 NAME: Beijing Mobile (BVI) Limited
2 DATE OF INCORPORATION: 1 September 2000
3 PLACE OF INCORPORATION: British Virgin Islands
4 CLASS OF COMPANY: International Business Company
5 REGISTERED NUMBER: 404705
6 REGISTERED OFFICE: P.O. Box 957
Offshore Incorporations Centre
Road Town, Tortola
British Virgin Islands
7 DIRECTORS: Wang Xiaochu
Li Zhenqun
Ding Donghua
8 REGISTERED SHAREHOLDER: China Mobile Hong Kong (BVI) Limited
9 AUTHORISED CAPITAL: HK$10,000.00 divided into 10,000 shares of HK$1.00 each
10 ISSUED CAPITAL: One share of HK$1.00 each
11 PRINCIPAL OPERATING SUBSIDIARY: . . . . . . . . . . . . (Beijing Mobile Communication Company Limited)
12 MORTGAGES AND CHARGES: None
</TABLE>
- 20 -
<PAGE> 22
<TABLE>
<S> <C>
(2) SHANGHAI MOBILE BVI
1 NAME: Shanghai Mobile (BVI) Limited
2 DATE OF INCORPORATION: 1 September 2000
3 PLACE OF INCORPORATION: British Virgin Islands
4 CLASS OF COMPANY: International Business Company
5 REGISTERED NUMBER: 404703
6 REGISTERED OFFICE: P.O. Box 957
Offshore Incorporations Centre
Road Town, Tortola
British Virgin Islands
7 DIRECTORS: Wang Xiaochu
Li Zhenqun
Ding Donghua
8 REGISTERED SHAREHOLDERS: China Mobile Hong Kong (BVI) Limited
9 AUTHORISED CAPITAL: HK$10,000.00 divided into 10,000 shares of HK$1.00 each
10 ISSUED CAPITAL: One share of HK$1.00 each
11 PRINCIPAL OPERATING SUBSIDIARY: . . . . . . . . . . . . (Shanghai Mobile Communication Company Limited)
12 MORTGAGES AND CHARGES: None
</TABLE>
- 21 -
<PAGE> 23
<TABLE>
<S> <C>
(3) TIANJIN MOBILE BVI
1 NAME: Tianjin Mobile (BVI) Limited
2 DATE OF INCORPORATION: 1 September 2000
3 PLACE OF INCORPORATION: British Virgin Islands
4 CLASS OF COMPANY: International Business Company
5 REGISTERED NUMBER: 404702
6 REGISTERED OFFICE: P.O. Box 957
Offshore Incorporations Centre
Road Town, Tortola
British Virgin Islands
7 DIRECTORS: Wang Xiaochu
Li Zhenqun
Ding Donghua
8 REGISTERED SHAREHOLDERS: China Mobile Hong Kong (BVI) Limited
9 AUTHORISED CAPITAL: HK$10,000.00 divided into 10,000 shares of HK$1.00 each
10 ISSUED CAPITAL: One share of HK$1.00 each
11 PRINCIPAL OPERATING SUBSIDIARY: . . . . . . . . . . . . (Tianjin Mobile Communication Company Limited)
12 MORTGAGES AND CHARGES: None
</TABLE>
- 22 -
<PAGE> 24
<TABLE>
<S> <C>
(4) HEBEI MOBILE BVI
1 NAME: Hebei Mobile (BVI) Limited
2 DATE OF INCORPORATION: 1 September 2000
3 PLACE OF INCORPORATION: British Virgin Islands
4 CLASS OF COMPANY: International Business Company
5 REGISTERED NUMBER: 404701
6 REGISTERED OFFICE: P.O. Box 957
Offshore Incorporations Centre
Road Town, Tortola
British Virgin Islands
7 DIRECTORS: Wang Xiaochu
Li Zhenqun
Ding Donghua
8 REGISTERED SHAREHOLDERS: China Mobile Hong Kong (BVI) Limited
9 AUTHORISED CAPITAL: HK$10,000.00 divided into 10,000 shares of HK$1.00 each
10 ISSUED CAPITAL: One share of HK$1.00 each
11 PRINCIPAL OPERATING SUBSIDIARY: . . . . . . . . . . . . (Hebei Mobile Communication Company Limited)
12 MORTGAGES AND CHARGES: None
</TABLE>
- 23 -
<PAGE> 25
<TABLE>
<S> <C>
(5) LIAONING MOBILE BVI
1 NAME: Liaoning Mobile (BVI) Limited
2 DATE OF INCORPORATION: 1 September 2000
3 PLACE OF INCORPORATION: British Virgin Islands
4 CLASS OF COMPANY: International Business Company
5 REGISTERED NUMBER: 404700
6 REGISTERED OFFICE: P.O. Box 957
Offshore Incorporations Centre
Road Town, Tortola
British Virgin Islands
7 DIRECTORS: Wang Xiaochu
Li Zhenqun
Ding Donghua
8 REGISTERED SHAREHOLDERS: China Mobile Hong Kong (BVI) Limited
9 AUTHORISED CAPITAL: HK$10,000.00 divided into 10,000 shares of HK$1.00 each
10 ISSUED CAPITAL: One share of HK$1.00 each
11 PRINCIPAL OPERATING SUBSIDIARY: . . . . . . . . . . . . (Liaoning Mobile Communication Company Limited)
12 MORTGAGES AND CHARGES: None
</TABLE>
- 24 -
<PAGE> 26
<TABLE>
<S> <C>
(6) SHANDONG MOBILE BVI
1 NAME: Shandong Mobile (BVI) Limited
2 DATE OF INCORPORATION: 1 September 2000
3 PLACE OF INCORPORATION: British Virgin Islands
4 CLASS OF COMPANY: International Business Company
5 REGISTERED NUMBER: 404510
6 REGISTERED OFFICE: P.O. Box 957
Offshore Incorporations Centre
Road Town, Tortola
British Virgin Islands
7 DIRECTORS: Wang Xiaochu
Li Zhenqun
Ding Donghua
8 REGISTERED SHAREHOLDERS: China Mobile Hong Kong (BVI) Limited
9 AUTHORISED CAPITAL: HK$10,000.00 divided into 10,000 shares of HK$1.00 each
10 ISSUED CAPITAL: One share of HK$1.00 each
11 PRINCIPAL OPERATING SUBSIDIARY: . . . . . . . . . . . . (Shandong Mobile Communication Company Limited)
12 MORTGAGES AND CHARGES: None
</TABLE>
- 25 -
<PAGE> 27
<TABLE>
<S> <C>
(7) GUANGXI MOBILE BVI
1 NAME: Guangxi Mobile (BVI) Limited
2 DATE OF INCORPORATION: 1 September 2000
3 PLACE OF INCORPORATION: British Virgin Islands
4 CLASS OF COMPANY: International Business Company
5 REGISTERED NUMBER: 404714
6 REGISTERED OFFICE: P.O. Box 957
Offshore Incorporations Centre
Road Town, Tortola
British Virgin Islands
7 DIRECTORS: Wang Xiaochu
Li Zhenqun
Ding Donghua
8 REGISTERED SHAREHOLDERS: China Mobile Hong Kong (BVI) Limited
9 AUTHORISED CAPITAL: HK$10,000.00 divided into 10,000 shares of HK$1.00 each
10 ISSUED CAPITAL: One share of HK$1.00 each
11 PRINCIPAL OPERATING SUBSIDIARY: . . . . . . . . . . . . (Guangxi Mobile Communication Company Limited)
12 MORTGAGES AND CHARGES: None
</TABLE>
- 26 -
<PAGE> 28
PART B
DETAILS OF THE TARGET COMPANIES
<TABLE>
<S> <C>
(1) BEIJING MOBILE
1 NAME: Beijing Mobile Communication Company
Limited
2 PLACE OF INCORPORATION: Beijing Municipality, PRC
3 NATURE: Wholly foreign-owned enterprise (WFOE)
4 SCOPE OF BUSINESS: Operating the following businesses in
Beijing: engaging in operation of
mobile communication business
(including voice, data and
multimedia); providing IP phone and
access to internet services; engaging
in the design, investment and
construction of mobile communication
networks, IP phone and internet
networks; engaging in installation,
engineering and construction, and
maintenance of facilities including
mobile communication networks, IP
phone and internet networks; engaging
in system integration, settlement and
clearing of roaming, technological
development, technological service,
advertising business and marketing
equipment etc. in relation to mobile
communication business and IP phone
and internet services; engaging in
sale or lease of mobile communication
terminal equipment, IP phone
equipment, internet network equipment
and their accessories and spare parts
and providing after-sale services.
5 REGISTERED OFFICE: No.58, Dongzhong Avenue, Dongcheng
District, Beijing Municipality, PRC
6 REGISTERED CAPITAL: RMB6,124,696,100
7 TOTAL INVESTMENT: RMB9,244,034,800
8 EQUITY HOLDER: Beijing Mobile (BVl) Limited
9 TAX RESIDENCE: Beijing Municipality, PRC
10 SUBSIDIARIES: None
11 MORTGAGES AND CHARGES: None
</TABLE>
- 27 -
<PAGE> 29
<TABLE>
<S> <C>
(2) SHANGHAI MOBILE
1 NAME: Shanghai Mobile Communication Company
Limited
2 PLACE OF INCORPORATION: Shanghai Municipality, PRC
3 NATURE: Wholly foreign-owned enterprise (WFOE)
4 SCOPE OF BUSINESS: Operating the following businesses in
Shanghai: engaging in operation of
mobile communication business
(including voice, data and
multimedia); providing IP phone and
access to internet services; engaging
in the design, investment and
construction of mobile communication
networks, IP phone and internet
networks; engaging in installation,
engineering and construction, and
maintenance of facilities including
mobile communication networks, IP
phone and internet networks; engaging
in system integration, settlement and
clearing of roaming, technological
development, technological service,
advertising business and marketing
equipment etc. in relation to mobile
communication business and IP phone
and internet services; engaging in
sale or lease of mobile communication
terminal equipment, IP phone
equipment, internet network equipment
and their accessories and spare parts
and providing after-sale services.
5 REGISTERED OFFICE: No.668, Beijing Dong Avenue, Shanghai,
PRC
6 REGISTERED CAPITAL: RMB6,038,667,700
7 TOTAL INVESTMENT: RMB9,100,607,300
8 EQUITY HOLDER: Shanghai Mobile (BVl) Limited
9 TAX RESIDENCE: Shanghai Municipality, PRC
10 SUBSIDIARIES: None
11 MORTGAGES AND CHARGES: None
</TABLE>
- 28 -
<PAGE> 30
<TABLE>
<S> <C>
(3) TIANJIN MOBILE
1 NAME: Tianjin Mobile Communication Company Limited
2 PLACE OF INCORPORATION: Tianjin Municipality, PRC
3 NATURE: Wholly foreign-owned enterprise (WFOE)
4 SCOPE OF BUSINESS: Operating the following businesses in
Tianjin: engaging in operation of
mobile communication business
(including voice, data and
multimedia); providing IP phone and
access to internet services; engaging
in the design, investment and
construction of mobile communication
networks, IP phone and internet
networks; engaging in installation,
engineering and construction, and
maintenance of facilities including
mobile communication networks, IP
phone and internet networks; engaging
in system integration, settlement and
clearing of roaming, technological
development, technological service,
advertising business and marketing
equipment etc. in relation to mobile
communication business and IP phone
and internet services; engaging in
sale or lease of mobile communication
terminal equipment, IP phone
equipment, internet network equipment
and their accessories and spare parts
and providing after-sale services.
5 REGISTERED OFFICE: 64 Zone M, Tianjin Bonded Area,
Tianjin Gang, Tianjin, PRC
6 REGISTERED CAPITAL: RMB2,151,035,500
7 TOTAL INVESTMENT: RMB3,684,402,500
8 EQUITY HOLDER: Tianjin Mobile (BVl) Limited
9 TAX RESIDENCE: Tianjin Municipality, PRC
10 SUBSIDIARIES: Tianjin Mobile owns 90% shareholding
in . . . . . . . . . . . . . (Tianjin
Post and Telecommunications Equipment
Company Limited) and 90% shareholding
in . . . . . . . . . . . . (Tianjin
Tianbo Communication Development
Company Limited), respectively.
11 MORTGAGES AND CHARGES: None
</TABLE>
- 29 -
<PAGE> 31
(4) HEBEI MOBILE
1 NAME: Hebei Mobile Communication Company
Limited
2 PLACE OF INCORPORATION: Hebei, PRC
3 NATURE: Wholly foreign-owned enterprise
(WFOE)
4 SCOPE OF BUSINESS: Operating the following businesses in
Hebei province: engaging in operation
of mobile communication business
(including voice, data and
multimedia); providing IP phone and
access to internet services; engaging
in the design, investment and
construction of mobile communication
networks, IP phone and internet
networks; engaging in installation,
engineering and construction, and
maintenance of facilities including
mobile communication networks, IP
phone and internet networks; engaging
in system integration, settlement and
clearing of roaming, technological
development, technological service,
advertising business and marketing
equipment etc. in relation to mobile
communication business and IP phone
and internet services; engaging in
sale or lease of mobile communication
terminal equipment, IP phone
equipment, internet network equipment
and their accessories and spare parts
and providing after-sale services.
5 REGISTERED OFFICE: No.220, Qingyuan Avenue,
Shijiazhuang, Hebei, PRC
6 REGISTERED CAPITAL: RMB4,314,668,600
7 TOTAL INVESTMENT: RMB8,379,664,000
8 EQUITY HOLDER: Hebei Mobile (BVl) Limited
9 TAX RESIDENCE: Hebei, PRC
10 SUBSIDIARIES: Hebei Mobile owns 80% shareholding in
. . . . . . . . . . (Hebei Provincial
Post and Telecommunications Planning
and Design Institute).
11 MORTGAGES AND CHARGES: None
- 30 -
<PAGE> 32
(5) LIAONING MOBILE
1 NAME: Liaoning Mobile Communication Company
Limited
2 PLACE OF INCORPORATION: Liaoning, PRC
3 NATURE: Wholly foreign-owned enterprise
(WFOE)
4 SCOPE OF BUSINESS: Operating the following businesses in
Liaoning province: engaging in
operation of mobile communication
business (including voice, data and
multimedia); providing IP phone and
access to internet services; engaging
in the design, investment and
construction of mobile communication
networks, IP phone and internet
networks; engaging in installation,
engineering and construction, and
maintenance of facilities including
mobile communication networks, IP
phone and internet networks; engaging
in system integration, settlement and
clearing of roaming, technological
development, technological service,
advertising business and marketing
equipment etc. in relation to mobile
communication business and IP phone
and internet services; engaging in
sale or lease of mobile communication
terminal equipment, IP phone
equipment, internet network equipment
and their accessories and spare parts
and providing after-sale services.
5 REGISTERED OFFICE: 128 Shi Yi Wei Lu, Shen He District,
Shenyang, PRC
6 REGISTERED CAPITAL: RMB5,140,126,700
7 TOTAL INVESTMENT: RMB11,016,504,400
8 EQUITY HOLDER: Liaoning Mobile (BVl) Limited
9 TAX RESIDENCE: Liaoning, PRC
10 SUBSIDIARIES: Liaoning Mobile owns 80% shareholding
in . . . . . . . . . . . . . . .
(Liaoning Mobile Communication
Planning and Design Company Limited)
and 20% shareholding in . . . . . . .
. . . . (Shandong Mobile
Communication Planning and Design
Institute), respectively.
11 MORTGAGES AND CHARGES: None
- 31 -
<PAGE> 33
(6) SHANDONG MOBILE
1 NAME: Shandong Mobile Communication Company
Limited
2 PLACE OF INCORPORATION: Shandong, PRC
3 NATURE: Wholly foreign-owned enterprise
(WFOE)
4 SCOPE OF BUSINESS: Operating the following businesses in
Shandong province: engaging in
operation of mobile communication
business (including voice, data and
multimedia); providing IP phone and
access to internet services; engaging
in the design, investment and
construction of mobile communication
networks, IP phone and internet
networks; engaging in installation,
engineering and construction, and
maintenance of facilities including
mobile communication networks, IP
phone and internet networks; engaging
in system integration, settlement and
clearing of roaming, technological
development, technological service,
advertising business and marketing
equipment etc. in relation to mobile
communication business and IP phone
and internet services; engaging in
sale or lease of mobile communication
terminal equipment, IP phone
equipment, internet network equipment
and their accessories and spare parts
and providing after-sale services.
5 REGISTERED OFFICE: 84 Da Wei Er Lu, Shi Zhong District,
Jinan, Shandong, PRC
6 REGISTERED CAPITAL: RMB6,341,851,300
7 TOTAL INVESTMENT: RMB11,663,861,400
8 EQUITY HOLDER: Shandong Mobile (BVl) Limited
9 TAX RESIDENCE: Shandong, PRC
10 SUBSIDIARIES: Shandong Mobile owns 80% shareholding
in . . . . . . . . . . . . . . .
(Shandong Mobile Communication
Planning and Design Institute) and
20% shareholding in . . . . . . . . .
. . . . . . (Liaoning Mobile
Communication Planning and Design
Company Limited), respectively.
11 MORTGAGES AND CHARGES: None
- 32 -
<PAGE> 34
(7) GUANGXI MOBILE
1 NAME: Guangxi Mobile Communication Company
Limited
2 PLACE OF INCORPORATION: Guangxi Zhuang Zu Autonomous Region,
PRC
3 NATURE: Wholly foreign-owned enterprise
(WFOE)
4 SCOPE OF BUSINESS: Operating the following businesses in
Guangxi Zhuang Zu Autonomous Region:
engaging in operation of mobile
communication business (including
voice, data and multimedia);
providing IP phone and access to
internet services; engaging in the
design, investment and construction
of mobile communication networks, IP
phone and internet networks; engaging
in installation, engineering and
construction, and maintenance of
facilities including mobile
communication networks, IP phone and
internet networks; engaging in system
integration, settlement and clearing
of roaming, technological
development, technological service,
advertising business and marketing
equipment etc. in relation to mobile
communication business and IP phone
and internet services; engaging in
sale or lease of mobile communication
terminal equipment, IP phone
equipment, internet network equipment
and their accessories and spare parts
and providing after-sale services.
5 REGISTERED OFFICE: 92 Min Zu Da Dao, Nanning, Guangxi
Zhuang Zu Autonomous Region, PRC
6 REGISTERED CAPITAL: RMB2,340,750,100
7 TOTAL INVESTMENT: RMB4,683,492,500
8 EQUITY HOLDER: Guangxi Mobile (BVl) Limited
9 TAX RESIDENCE: Guangxi Zhuang Zu Autonomous Region,
PRC
10 SUBSIDIARIES: None
11 MORTGAGES AND CHARGES: None
- 33 -
<PAGE> 35
SCHEDULE 2
THE WARRANTIES
PART A: GENERAL
1 INFORMATION
1.1 All information relating to the Target Group Companies provided
to the Purchaser or its representatives and advisers for the
purposes of inclusion in the Registration Statements or
preparation of the Financial Statements and the Appraisal Report
is true, accurate and not misleading and does not contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading.
1.2 Save as already disclosed in writing to the Purchaser, there are
no other facts or matters which might reasonably be expected to
have a material adverse effect on the financial or trading
position or prospects of any Target Group Company.
2 CORPORATE MATTERS
THE TARGET GROUP COMPANIES
2.1 (a) All of the Target BVI Shares are fully-paid or
properly credited as fully-paid and the Vendor is the
sole legal and beneficial owner of them free from all
Encumbrances. The Target BVI Shares constitute the
entire issued share capital of each of the Target BVI
Companies.
(b) The information in respect of each of the Target BVI
Companies set out in Part A of Schedule 1 is true and
accurate and not misleading.
(c) Each of the Target BVI Companies has been duly
incorporated and is validly existing under the laws of
the British Virgin Islands, with legal right, power and
authority (corporate and other) to own, use, lease and
operate its properties and conduct its business in the
manner presently conducted and as described in the
Registration Statements, and is duly qualified to
transact business in any jurisdiction in which it owns
or leases properties or conducts any business and such
qualification is required, or is subject to no material
liability or disability by reason of the failure to be
so qualified in any such jurisdiction; the Memorandum
of Association and Articles of Association of each
Target BVI Company comply with the requirements of
applicable laws of the British Virgin Islands and are
in full force and effect.
2.2 (a) The Target BVI Companies are the sole legal and
beneficial owner of the whole of the registered capital
of each of the Target Companies, respectively, free
from all Encumbrances.
(b) The information in respect of each of the Target
Companies set out in Part B of Schedule 1 is true and
accurate and not misleading.
(c) Each of the Target Companies is (or a valid application
has been made for it to be registered as) a
wholly-foreign owned enterprise with limited liability
and has been duly organised and is validly existing
under the laws of the PRC, and its business licence is
in full force and effect; the Articles of Association
of each Target Company comply with the requirements of
- 34 -
<PAGE> 36
applicable PRC law and are in full force and effect;
each Target Company has all consents, approvals,
authorizations, orders, registrations, clearances and
qualifications of or with any court, governmental
agency or body having jurisdiction over each Target
Company or any of its properties in each jurisdiction
in which the ownership or lease of property by it or
the conduct of its business (as described in the
Registration Statements) requires such qualification,
except for such consents, approvals, authorizations,
orders, registrations, clearances and qualifications
the absence of which is disclosed in the Registration
Statements or which is not material to such Target
Company, and has the legal right and authority to own,
use, lease and operate its assets and to conduct its
business in the manner presently conducted and as
described in the Registration Statements.
2.3 Save for the unlisted equity securities in the PRC as disclosed
in the Accounts and the interest of the Target BVI Companies in
the Target Companies, none of the Target Group Companies (that
is, the Target BVI Companies and the Target Companies) owns or
has any interest of any nature whatsoever in any shares,
debentures or other securities issued by any undertaking.
2.4 No Target BVI Company carries on any business other than holding
the respective Target Companies, or owns any asset other than
the shares of the respective Target Companies or has any
liabilities.
THE VENDOR AND CMCC
2.5 Each of the Vendor and CMCC (each a "WARRANTOR") is duly
incorporated or established and is validly existing under the
laws of its jurisdiction of incorporation, with full power and
authority to own, lease and operate its properties and assets
and to execute and perform its obligations under this Agreement.
2.6 The execution, delivery and performance by each of the Warrantor
of this Agreement has been duly authorised by it and this
Agreement constitutes a legal, valid and binding obligation of
such Warrantor enforceable in accordance with its terms, subject
to the laws of bankruptcy and other similar laws affecting the
rights of creditors generally.
2.7 All regulatory, corporate and other approvals (including
shareholder approvals) and authorisations required by the
Warrantor for the execution and delivery of this Agreement and
any agreement or instrument contemplated hereby, the performance
of the terms hereof and thereof and the sale of the Target BVI
Shares have been obtained, are unconditional and are in full
force and effect.
2.8 All consents, approvals and authorisations of any court,
government department or other regulatory body required with
respect to the Warrantor for the execution of this Agreement and
the performance of its terms have been obtained and are
unconditional and in full force and effect.
2.9 The execution and delivery by the Warrantor of this Agreement,
and the performance and completion of the transactions herein
contemplated: (a) will not infringe any applicable laws or
regulations; (b) will not result in any breach of the terms of,
or constitute a default under, its constitutional documents and
business licence (as applicable) or any instrument, agreement or
governmental, regulatory or
- 35 -
<PAGE> 37
other judgement, decree or order to which such Warrantor is a
party or by which it or its property is bound; and (c) will not
conflict with any of the certificates, licences or permits of
such Warrantor that enable it to carry on the business or
operations now operated by it.
2.10 The Warrantor is not: (a) in breach of the terms of, or in
default under, any instrument, agreement or order to which it is
a party or by which it or its property is bound to an extent
which is material in the context of the transactions herein
contemplated; (b) involved in or the subject of any current or
pending investigation or proceedings (whether administrative,
regulatory or otherwise), whether in the PRC or elsewhere.
3 FINANCIAL MATTERS
FINANCIAL STATEMENTS
3.1 (a) The Financial Statements give a true and fair view
of the state of affairs and financial results of the
Target Companies for the periods and as at the dates
stated therein.
(b) Without limiting the generality of paragraph (a):
(i) the Accounts of the Target Companies either
make full provision for or disclose all
liabilities (whether actual, contingent or
disputed and including financial lease
commitments and pension liabilities), all
outstanding capital commitments and all bad or
doubtful debts of the Target Companies as at
the Accounts Dates, in each case in accordance
with applicable accounting principles;
(ii) the Accounts of the Target Companies for each
of the periods ended on the Accounts Dates
were prepared under the historical convention,
complied with the requirements of all relevant
laws and regulations then in force and with
all statements of standard accounting practice
(or financial reporting standards) and
applicable accounting principles then in
force;
(iii) the rate of depreciation adopted by the Target
Companies in its Accounts for each of the
periods ended on the Accounts Dates was
sufficient for each of the fixed assets of the
Target Companies to be written down to nil by
the end of its useful life;
(iv) except as stated in its Accounts, no changes
in the accounting policies were made by any of
the Target Companies in any of the periods
ended on the Accounts Dates;
(v) the results shown by the Accounts of the
Target Companies for each of the periods ended
on the Accounts Dates were not (except as
therein disclosed) affected by any
extraordinary or exceptional item or by any
other factor rendering such results for all or
any of such periods unusually high or low.
3.2 None of the financial information provided to the Purchaser or
its representatives and advisers is misleading in any material
respect nor materially over-state the value of the assets nor
materially under-state the liabilities of any Target Company as
at
- 36 -
<PAGE> 38
the dates to which they were drawn up and do not materially
over-state the profits of any Target Company in respect of the
periods to which they relate.
POSITION SINCE LAST ACCOUNTS DATE
3.3 (a) Since the Last Accounts Date and compared to the
Last Accounts, there has been no material adverse
change in the financial or trading position or in the
prospects of any Target Company and no event, fact or
matter has occurred which is likely to give rise to any
such change.
(b) Since the Last Accounts Date and compared to the Last
Accounts:
(i) the business of each Target Company has been
carried on in the ordinary and usual course
and no Target Company has made or agreed to
make any payment other than routine payments
in the ordinary and usual course of trading;
(ii) no dividend or other distribution has been
declared, paid or made by any Target Company;
(iii) there has been no material change in the level
of borrowing or in the working capital
requirements of any Target Company;
(iv) all transactions between each Target Company
and any Vendor Group Company have been on an
arm's length basis and commercial terms;
(v) save for the Restructuring Agreements and the
Connected Transactions, no contract, liability
or commitment (whether in respect of capital
expenditure or otherwise) has been entered
into by any Target Company which is of a long
term or unusual nature or which involved or
could involve an obligation of a material
nature or magnitude;
(vi) save as provided in the Restructuring
Agreements or in the usual and ordinary course
of business of the Target Companies, no Target
Company has (whether in the ordinary and usual
course of business or otherwise) acquired or
disposed of, or agreed to acquire or dispose
of any material business or any material asset
having a value in excess of RMB 50,000,000;
(vii) no debtor has been released by any Target
Company on terms that it pays less than the
book value of its debt and no material debt
owing to any Target Company has been deferred,
subordinated or written off or has proved to
any extent irrecoverable;
(viii) no change has been made in terms of employment
and any benefits in kind payable to employees
and other employment related matters by any
Target Company or any Vendor Group Company
(other than those required by law) which could
materially increase the total costs
attributable to employment and employee
benefits of the Target Companies;
- 37 -
<PAGE> 39
(ix) there has been no material increase or
decrease in the levels of debtors or creditors
or in the average collection or payment
periods for the debtors and creditors
respectively;
(x) no Target Company has repaid any borrowing or
indebtedness in advance of its stated
maturity;
(xi) there has been no material reduction in the
cash balances of any Target Company;
(xii) no resolution of the members of any Target
Company has been passed whether in general
meeting or otherwise (other than resolutions
relating to the routine business of annual
general meetings);
(xiii) the business of each Target Company has not
been affected by any abnormal factor not
affecting to a similar extent generally all
companies carrying on similar businesses; and
(xiv) no Target Company has agreed to any variation
or termination of any existing contract to
which that Target Company is a party and which
may have a material effect upon the nature or
scope of the operations of such Target
Company.
WORKING CAPITAL
3.4 Having regard to existing bank and other financial facilities,
each Target Company has sufficient working capital available to
it as at the date of this Agreement to enable it to continue to
carry on its business in its present form and at its present
level of turnover and for the purpose of performing in
accordance with their terms all orders, projects and other
obligations and discharging all liabilities which ought properly
to be discharged during the period of 12 months after
Completion.
ACCOUNTING AND OTHER RECORDS
3.5 (a) The books of account and other records of each Target
Company:
(i) are up-to-date and have been maintained in
accordance with all applicable laws and
generally accepted accounting practices on a
proper and consistent basis;
(ii) comprise complete and accurate records of all
information required to be recorded therein;
(iii) are in its possession or under its control
together with all documents of title and
executed copies of all existing agreements to
which the relevant Target Company is a party.
(b) All accounts, documents and returns required by law to
be delivered or made by any Target Company to any
government authority or regulatory body or any other
authority have been duly and correctly delivered or
made.
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<PAGE> 40
4 DEBT POSITION
DEBTS OWED TO THE TARGET COMPANIES
4.1 (a) There are no debts owing to any Target Company other
than;
(i) the Intra-Group Loans; and
(ii) trade debts incurred in the ordinary and usual
course of business which do not exceed 120% of
the trade debts as set out in the Last
Accounts.
DEBTS OWED BY THE TARGET COMPANIES
4.2 (a) No Target Company has outstanding any borrowing or
indebtedness in the nature of borrowing (including,
without limitation, any indebtedness for moneys
borrowed or raised under any acceptance credit, bond,
note, bill of exchange or commercial paper, finance
lease, hire purchase agreement, trade bills (other than
those on terms normally obtained), forward sale or
purchase agreement or conditional sale agreement or
other transaction having the commercial effect of a
borrowing) other than:
(i) the Intra-Group Loans; and
(ii) moneys borrowed from or otherwise owed to
third parties which do not exceed 120% of the
money borrowed from or otherwise owed to third
parties as set out in the Last Accounts.
(b) No Target Company has received any notice to repay
under any agreement relating to any borrowing or
indebtedness in the nature of borrowing which is
repayable on demand.
(c) There has not occurred any event of default or any
other event or circumstance which would entitle any
person to call for early repayment under any agreement
relating to any borrowing or indebtedness of any Target
Company or to enforce any security given by any Target
Company (or, in either case, any event or circumstance
which with the giving of notice and/or the lapse of
time and/or a relevant determination would constitute
such an event or circumstance).
5 REGULATORY MATTERS
5.1 (a) Each Target Company has, or will by Completion have,
obtained all licences, permissions, authorisations and
consents required for carrying on its business
effectively in the places and in the manner in which
such business is now carried on.
(b) The licences, permissions, authorisations and consents
referred to in paragraph (a) are (or will by Completion
be) in full force and effect, not limited in duration
or subject to any unusual or onerous conditions, have
been (or will by Completion have been) complied with in
all respects.
(c) To the best knowledge of the Vendor and CMCC, there are
no circumstances which indicate that any of the
licences, permissions, authorisations or consents
referred to in paragraph (a) will or are likely to be
- 39 -
<PAGE> 41
revoked or not renewed, in whole or in part, in the