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EXHIBIT 1.1
CHINA MOBILE (HONG KONG) LIMITED
-- AMERICAN DEPOSITARY SHARES
REPRESENTING
-- ORDINARY SHARES
-------------------------------------
UNDERWRITING AGREEMENT
(U.S./INTERNATIONAL VERSION)
-------------------------------------
,2000
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CHINA INTERNATIONAL CAPITAL CORPORATION LIMITED,
GOLDMAN SACHS (ASIA) L.L.C.,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
As Representatives of the several Underwriters
named in Schedule I hereto
c/o China International Capital Corporation
(Hong Kong) Limited
R4302, 43/F, Central Plaza
18 Harbour Road
Wanchai
Hong Kong;
Goldman Sachs (Asia) L.L.C.
68/F, Cheung Kong Center
2 Queen's Road Central
Hong Kong; and
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
China Mobile (Hong Kong) Limited (the "Company"), a company incorporated
with limited liability under the laws of the Hong Kong Special Administrative
Region of the
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People's Republic of China ("Hong Kong"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") for whom you are acting as
representatives (the "Representatives") an aggregate of -- Ordinary Shares (par
value HK$0.10 per Share) ("Stock") of the Company in the form of -- American
Depositary Shares (the "Firm ADSs") and, at the election of the Underwriters, up
to -- additional shares of Stock in the form of -- ADSs (the "Optional ADSs"),
for sale in the United States and internationally outside Asia (the
"International Offering"). The Firm ADSs and the Optional ADSs that the
Underwriters elect to purchase pursuant to Section 2 hereof are herein
collectively called the "ADSs". The shares of Stock represented by the Firm ADSs
are hereinafter called the "Firm Shares" and the shares of Stock represented by
the Optional ADSs are hereinafter called the "Optional Shares" and the Firm
Shares and the Optional Shares are herein collectively called the "Shares".
The ADSs are to be issued pursuant to a deposit agreement (the "Deposit
Agreement"), dated as of October 23, 1997, amended and restated as of July 5,
2000, among the Company, The Bank of New York, as depositary (the "Depositary"),
and owners and beneficial owners from time to time of the American Depositary
Receipts (the "ADRs") issued by the Depositary and evidencing the ADSs. Each ADS
will initially represent the right to receive five shares of Stock deposited
pursuant to the Deposit Agreement. The Underwriters may, in their discretion,
require that Shares in respect of certain ADSs be delivered in lieu of such
ADSs.
It is understood by all the parties that the Company is concurrently
entering into an agreement (the "Asia Underwriting Agreement") providing for the
offering and sale by the Company in Asia (the "Asia Offering" and, together with
the International Offering, the "Global Offering") of up to a total of -- ADSs,
plus an overallotment option thereunder for -- ADSs, through arrangements with
certain underwriters (the "Asia Underwriters") for whom China International
Capital Corporation Limited, Goldman Sachs (Asia) L.L.C, and Merrill Lynch Far
East Limited are acting as lead managers. Notwithstanding anything herein or
therein to the contrary, the respective closings under this Agreement and the
Asia Underwriting Agreement are hereby made expressly conditional on one
another. The Asia Underwriters may, in their discretion, require that Shares in
respect of certain ADSs be delivered in lieu of such ADSs.
The Underwriters hereunder and the Asia Underwriters are simultaneously
entering into an Agreement between Underwriting Syndicates (the "Agreement
between Syndicates"), which provides, among other things, that China
International Capital Corporation Limited, Goldman Sachs (Asia) L.L.C. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated shall act as the joint global
coordinators and bookrunners (the "Global Coordinators") for the Global Offering
and for the transfer of ADSs and Shares between the two syndicates.
Three forms of prospectus are to be used in connection with the offering
and sale of Shares and ADSs contemplated by the foregoing, the U.S. Prospectus
(as defined below) relating to the offering and sale of Shares and ADSs within
the United States and Canada in the International Offering, one relating to the
offering and sale of Shares and ADSs outside the United States in the
International Offering (the
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"International Prospectus"), and another relating to the offering and sale of
Shares and ADSs in the Asia Offering (the "Asia Prospectus"). The International
Prospectus and the Asia Prospectus will be identical to the U.S. Prospectus
except for certain substitute pages. Except as used in Sections 2,3,4,9,11
herein, and except as the context may otherwise require, reference hereinafter
to the ADSs shall include all of the shares of Stock, whether in the form of
ADSs or shares, that may be sold pursuant to either this Agreement or the Asia
Underwriting Agreement. Except as otherwise indicated or the context otherwise
requires, references herein to any prospectus, whether in preliminary or final
form and whether as amended or supplemented, shall include both the U.S.
Prospectus and the other versions thereof, including the International
Prospectus and the Asia Prospectus, as appropriate. Concurrently with the Global
Offering, the Company plans to undertake an offering and sale of its --%
convertible notes due -- (the "Convertible Notes") within and outside the United
States (the "Convertible Note Offering").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement (as defined below), any preliminary prospectus or the
Prospectus (as defined below) (or other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information which are incorporated by reference therein pursuant to Item 12 of
Form F-3 under the United States Securities Act of 1933, as amended (the "Act"),
as of the date of filing or the date of effectiveness or on the date of the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be; and all references in this Agreement to amendments or supplements
to the Registration Statement, any preliminary prospectus or the Prospectus
shall be deemed to mean and include the filing of any document under the United
States Securities and Exchange Act of 1934, as amended (the "Exchange Act"),
that is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
Except where otherwise specified, the term "subsidiaries" shall be deemed
to refer to the Existing PRC Subsidiaries and the Target Companies, each as
defined in Section 1(j) herein. as well as the BVI Companies as defined in
Section 1(k) herein.
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form F-3 (File No. 333-47256) (the
"Initial Registration Statement") in respect of the Shares (as well as the
Convertible Notes and the shares of Stock and ADSs issuable upon conversion
of the Convertible Notes) has been filed with the United States Securities
and Exchange Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto, each in the form
heretofore delivered to you, and, excluding exhibits thereto but including
all documents incorporated by reference in the prospectus contained
therein, to you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the Act,
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which became effective upon filing, no other document with respect to the
Initial Registration Statement [or documents incorporated by reference
therein] has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has been
initiated or, to the knowledge of the Company, threatened by the Commission
(any preliminary prospectus (the "Preliminary U.S. Prospectus") included in
the Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act,
or the versions thereof prepared in connection with the offering and sale
of Shares and ADSs outside the United States in the International Offering
and in the Asia Offering are collectively hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement and
the Rule 462(b) Registration Statement, if any, including all exhibits
thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the Act
in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the time
it was declared effective, each as amended at the time such part of the
Initial Registration Statement became effective or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Registration
Statement"; and the final Prospectus, in the form first filed pursuant to
Rule 424(b) under the Act (the "U.S. Prospectus"), and the versions thereof
prepared in connection with the offering and sale of Shares and ADSs
outside the United States in the International Offering and in the Asia
Offering, each in the form first delivered to the Underwriters or the Asia
Underwriters following effectiveness of the Registration Statement, are
hereafter collectively called the "Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission; each Preliminary U.S.
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder; and each Preliminary Prospectus as of its date
did 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, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter through the Global Coordinators expressly for use
therein;
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the
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Prospectus and any amendment or supplement thereto, 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; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through the Global Coordinators expressly for use therein;
(d) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, when they were
or hereafter are filed with the Commission, conformed and will conform in
all material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder and, when read together
with the other information in the Prospectus, at the time the Registration
Statement became effective, at the time the Prospectus was filed and at
such Time of Delivery (as defined below), did not and will 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;
(e) A registration statement on Form F-6 (File No. 333-12688) in
respect of the ADSs has been filed with the Commission; such registration
statement in the form heretofore delivered to you and, excluding exhibits,
to you for each of the other Underwriters, has been declared effective by
the Commission in such form; no other document with respect to such
registration statement has heretofore been filed with the Commission; no
stop order suspending the effectiveness of such registration statement has
been issued and no proceeding for that purpose has been initiated or, to
the knowledge of the Company, threatened by the Commission (the various
parts of such registration statement, including all exhibits thereto, each
as amended at the time such part of the registration statement became
effective, being hereinafter called the "ADS Registration Statement"); and
the ADS Registration Statement when it became effective conformed, and any
further amendments thereto will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not, as of the applicable effective date, 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;
(f) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock of the Company or any of its subsidiaries, or any change in
consolidated total short-term debt in excess of US$10 million or any change
in consolidated long-term
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bank and other loans, net of current portion, in excess of US$10 million of
the Company and its subsidiaries, or any material adverse change, or any
event involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus;
(g) The Company and its subsidiaries have valid title to, or valid
leasehold interests in, all of their material real property and valid title
to all material personal property owned by them, in each case free and
clear of all liens, encumbrances, third party rights or interests, defects
or any other restrictions except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid and enforceable leases in full force and effect with such exceptions
as are not material and do not interfere with the use made and proposed to
be made of such property and buildings by the Company and its subsidiaries
and no material default (or event which with notice or lapse of time, or
both, would constitute such a default) by the Company or any of its
subsidiaries has occurred and is continuing under any of such leases;
neither the Company nor any of its subsidiaries owns, operates, manages or
has any other right or interest in any other material real property of any
kind save as reflected in the consolidated balance sheet of the Company as
of June 30, 2000 included in the Prospectus or, with respect to the Target
Companies, as described in the opinions, dated October 10, 2000, of
Commerce & Finance Law Offices, PRC counsel for the Company, and no other
real properties are necessary for the Company and its subsidiaries for the
carrying on of the business of the Company and its subsidiaries in the
manner described in the Prospectus other than as would not, individually or
in the aggregate, have a material adverse effect on the combined financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole;
(h) Since the date of the latest audited financial statements included
in the Prospectus, neither the Company nor any of its subsidiaries has
(i) entered into or assumed any material contract, (ii) incurred any
material liability (including contingent liability) or other obligation,
(iii) acquired or disposed of or agreed to acquire or dispose of any
material business or any other asset or (iv) assumed or acquired any
material liabilities (including contingent liabilities) that are
not described in the Prospectus;
(i) The Company has been duly incorporated and is validly existing
under the laws of Hong Kong, 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 Prospectus, 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
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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 the Company comply with the
requirements of applicable Hong Kong law and are in full force and effect;
(j) Each of China Mobile (Shenzhen) Company Limited, Guangdong Mobile
Communication Company Limited ("Guangdong Mobile"), Zhejiang Mobile
Communication Company Limited ("Zhejiang Mobile"), Jiangsu Mobile
Communication Company Limited ("Jiangsu Mobile"), Fujian Mobile
Communication Company Limited ("Fujian Mobile"), Henan Mobile Communication
Company Limited ("Henan Mobile") and Hainan Mobile Communication Company
Limited ("Hainan Mobile" and, together with the six entities named
immediately preceding hereto, the "Existing PRC Subsidiaries") is a wholly
foreign-owned enterprise with limited liability, and each of Beijing Mobile
Communication Company Limited ("Beijing Mobile"), Shanghai Mobile
Communication Company Limited ("Shanghai Mobile"), Tianjin Mobile
Communication Company Limited ("Tianjin Mobile"), Hebei Mobile
Communication Company Limited ("Hebei Mobile"), Liaoning Mobile
Communication Company Limited ("Liaoning Mobile"), Shandong Mobile
Communication Company Limited ("Shandong Mobile") and Guangxi Mobile
Communication Company Limited ("Guangxi Mobile" and, together with the six
entities named immediately preceding hereto, the "Target Companies") is a
limited liability company; and each of the Existing PRC Subsidiaries and
the Target Companies has been duly organized and is validly existing under
the laws of the People's Republic of China (the "PRC"), and its business
license is in full force and effect; each of the Existing PRC Subsidiaries
has been duly qualified as a foreign investment enterprise under applicable
PRC law; the Articles of Association of each of the Existing PRC
Subsidiaries and the Target Companies comply with the requirements of
applicable PRC law and are in full force and effect; each of the Existing
PRC Subsidiaries and Target Companies has all consents, approvals,
authorizations, orders, registrations, clearances and qualifications of or
with any court, governmental agency or body having jurisdiction over it 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
Prospectus) requires such qualification, except for such consents,
approvals, authorizations, orders, registrations, clearances and
qualifications the absence of which is disclosed in the Prospectus or which
is not material to it, 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 Prospectus;
(k) Each of Jiangsu Mobile (BVI) Limited ("Jiangsu BVI"), Fujian
Mobile (BVI) Limited ("Fujian BVI"), Henan Mobile (BVI) Limited ("Henan
BVI"), Hainan Mobile (BVI) Limited ("Hainan BVI"), Beijing Mobile (BVI)
Limited ("Beijing BVI"), Shanghai Mobile (BVI) Limited ("Shanghai BVI"),
Tianjin Mobile (BVI) Limited ("Tianjin BVI"), Hebei Mobile (BVI) Limited
("Hebei BVI"), Liaoning Mobile (BVI) Limited ("Liaoning BVI"), Shandong
Mobile (BVI) Limited ("Shandong BVI") and Guangxi Mobile (BVI) Limited
("Guangxi BVI" and, together with the ten entities named immediately
preceding hereto, the "BVI Companies")
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has been duly incorporated and is validly existing under the laws of the
British Virgin Islands (the "BVI"), 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 Prospectus, 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 and Articles of Association of each of the BVI
Companies comply with requirements of applicable BVI law and are in full
force and effect; Jiangsu BVI, Fujian BVI, Henan BVI, Hainan BVI, Beijing
BVI, Shanghai BVI, Tianjin BVI, Hebei BVI, Liaoning BVI, Shandong BVI and
Guangxi BVI are the sole legal and beneficial owners of the whole of the
registered capital of Jiangsu Mobile, Fujian Mobile, Henan Mobile, Hainan
Mobile, Beijing Mobile, Shanghai Mobile, Tianjin Mobile, Hebei Mobile,
Liaoning Mobile, Shandong Mobile and Guangxi Mobile, respectively, free
from all security interests, options, equities, claims or other third party
rights (including, without limitation, rights of pre-emption) of any nature
whatsoever; and the Company is the sole legal and beneficial owner of the
whole of the share capital of each of Jiangsu BVI, Fujian BVI, Henan BVI
and Hainan BVI, free from all security interests, options, equities, claims
or other third party rights (including, without limitation, rights of
pre-emption) of any nature whatsoever;
(l) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
conform to the description of the Stock contained in the Prospectus; all of
the equity interests in each subsidiary of the Company have been duly and
validly authorized and issued, and are fully paid; all of the equity
interests in each of the Existing PRC Subsidiaries are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims; the ADSs have been duly approved for listing on the
NYSE, subject to official notice of issuance; approval in principle has
been obtained for listing the Shares on The Stock Exchange of Hong Kong
Limited (the "Hong Kong Stock Exchange"); the holders of outstanding shares
of capital stock of the Company are not entitled to preemptive or other
rights to acquire the Shares; except as disclosed in the Prospectus, there
are no outstanding securities convertible into or exchangeable for, or
warrants, rights or options to purchase from the Company, or obligations of
the Company to issue, the Stock or any other class of capital stock of the
Company; the Shares may be freely deposited by the Company with the
Depositary against issuance of ADRs evidencing ADSs; the ADSs and the
Shares are freely transferable by the Company to or for the account of the
several Underwriters and the several Asia Underwriters and (to the extent
described in the Prospectus) the initial purchasers thereof; and there are
no restrictions on subsequent transfers of the Shares or the ADSs under the
laws of the PRC, Hong Kong or the United States;
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(m) The Shares to be issued and sold by the Company to the
Underwriters hereunder or to the Asia Underwriters under the Asia
Underwriting Agreement have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued and fully paid, will be free and clear of all
liens, encumbrances, equities or claims and will conform to the
descriptions thereof contained in the Prospectus;
(n) The Deposit Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid and legally binding
agreement of the Company, enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity; upon
issuance by the Depositary of ADRs evidencing ADSs against the deposit of
Shares in respect thereof in accordance with the provisions of the Deposit
Agreement, such ADRs will be duly and validly issued and the persons in
whose names the ADRs are registered will be entitled to the rights
specified therein and in the Deposit Agreement; and the Deposit Agreement
and the ADRs conform in all material respects to the descriptions thereof
contained in the Prospectus;
(o) Each of this Agreement and the Asia Underwriting Agreement has
been duly authorized, executed and delivered by the Company; and no
consents, approvals, authorizations, orders, registrations, clearances or
qualifications of or with any court or governmental agency or body or any
stock exchange authorities (hereinafter referred to as a "Governmental
Agency") having jurisdiction over the Company or any of its subsidiaries or
any of their properties (hereinafter referred to as "Governmental
Authorizations") are required for the issue and sale of the Shares, the
deposit of Shares and the issuance of ADSs in respect thereof, and for the
authorization, execution, delivery and performance by the Company of this
Agreement, the Asia Underwriting Agreement or the Deposit Agreement, except
(i) the registration under the Act of the Shares and the ADSs and the
registration of the relevant versions of the Prospectus under the Companies
Ordinance in Hong Kong, (ii) such Governmental Authorizations as have been
duly obtained and are in full force and effect and copies of which have
been furnished to you (including the approval in principle to list the
Shares on the Hong Kong Stock Exchange) and (iii) such Governmental
Authorizations as may be required under state securities or Blue Sky laws
or any laws of jurisdictions outside Hong Kong and the United States in
connection with the purchase and distribution of the Shares and ADSs by or
for the account of the Underwriters or the Asia Underwriters;
(p) All dividends and other distributions declared and payable on the
equity interests in each of the Existing PRC Subsidiaries may under the
current laws and regulations of the PRC be paid to the Company and the
relevant BVI Companies, as applicable, and may be converted into foreign
currency that may be freely transferred out of the PRC, and except as
disclosed in the
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Registration Statement and the Prospectus, all such dividends and other
distributions will not be subject to withholding or other taxes under the
laws and regulations of the PRC and are otherwise free and clear of any
other tax, withholding or deduction in the PRC and may be so paid without
the necessity of obtaining any Governmental Authorization in the PRC;
(q) All dividends and other distributions declared and payable on the
shares of capital stock of the Company may under the current laws and
regulations of Hong Kong be paid to the shareholders of the Company and the
Depositary in Hong Kong dollars, and all such dividends and other
distributions will not be subject to withholding or other taxes under the
laws and regulations of Hong Kong and are otherwise free and clear of any
other tax, withholding or deduction in Hong Kong and may be so paid without
the necessity of obtaining any Governmental Authorization in Hong Kong;
(r) The issue and sale of the Shares to be sold by the Company
hereunder and under the Asia Underwriting Agreement, the deposit of the
Shares being deposited with the Depositary against issuance of the ADRs
evidencing the ADSs and the compliance by the Company with all of the
provisions of this Agreement, the Asia Underwriting Agreement and the
Deposit Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument (including, without limitation, the PRC Loan
Documents defined in subsection 1(mm) below of this Section 1) to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Memorandum of Association,
Articles of Association or business licenses of the Company or any of its
subsidiaries or any law or statute or any order, rule or regulation of any
Governmental Agency having jurisdiction over the Company or any of its
subsidiaries or any of their properties;
(s) Neither the Company nor any of its subsidiaries is (i) in
violation of its Memorandum of Association and Articles of Association or
other constituent documents or (ii) in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound except, in the case of clause (ii),
where such violation or default would not, individually or in the
aggregate, have a material adverse effect on the combined financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole;
(t) Other than as disclosed in the Prospectus, and except for any
capital duty paid or to be paid by the Company, no stamp or other issuance
or transfer taxes or duties and no capital gains, income, withholding or
other
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taxes are payable by or on behalf of the Company in the PRC or Hong Kong or
to any political subdivision or taxing authority of or in the PRC or Hong
Kong in connection with (i) the creation, allotment and issuance of the
Shares, (ii) the deposit with the Depositary of Shares by the Company
against the issuance of ADRs evidencing ADSs, (iii) the sale and delivery
by the Company of the Shares and the ADSs to or for the respective accounts
of the Underwriters or the Asia Underwriters, (iv) the execution, delivery
and performance of this Agreement or the Asia Underwriting Agreement or
(v) the acquisition of the Target Companies and the relevant BVI Companies
(the "Acquisition") (including the transfer of assets and liabilities to
the Company and its subsidiaries pursuant to the Acquisition);
(u) No stamp or other issuance or transfer taxes or duties and no
capital gains, income, withholding or other taxes are payable by or on
behalf of the Underwriters or the Asia Underwriters in the PRC or Hong Kong
or to any political subdivision or taxing authority of or in the PRC or
Hong Kong in connection with (i) the creation, allotment and issuance of
the Shares, (ii) the deposit with the Depositary of Shares by the Company
against the issuance of ADRs evidencing ADSs, (iii) the sale and delivery
by the Company of the Shares and the ADSs to or for the respective accounts
of the Underwriters or the Asia Underwriters, (iv) the execution, delivery
and performance of this Agreement or the Asia Underwriting Agreement or
(v) the sale and delivery outside Hong Kong by the Underwriters or the Asia
Underwriters of the Shares and the ADSs to the initial purchasers thereof,
other than ordinary course Hong Kong profits tax which may arise in respect
of persons carrying on a trade, profession or business in Hong Kong;
(v) Neither the Company nor any of its subsidiaries has taken,
directly or indirectly, any action which was designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares and the ADSs;
(w) The statements set forth in the Prospectus under the captions
"Description of Share Capital" and "Description of American Depositary
Receipts", insofar as they purport to constitute a summary of the terms of
the Stock and the ADSs, respectively, under the caption "Description of
Convertible Notes", insofar as they purport to constitute a summary of the
provisions of the Indenture relating to the Convertible Notes, between the
Company and The Bank of New York, as trustee (the "Indenture") and the
terms of the Convertible Notes, under the caption "Taxation", insofar as
they purport to describe the provisions of the laws and documents referred
to therein and under the caption "Underwriting", insofar as they purport to
describe the provisions of this
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<PAGE> 12
Agreement, the Asia Underwriting Agreement, the Agreements among
Underwriters, the Agreement between Syndicates and the Selling Agreements,
are accurate, complete and fair;
(x) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject (i) which, if determined adversely to the
Company or any of its subsidiaries, would reasonably be expected,
individually or in the aggregate, to have a material adverse effect on the
combined financial position, shareholders' equity or results of operations
of the Company and its subsidiaries, taken as a whole, or (ii) that are
required to be described in the Registration Statement or the Prospectus
and are not so described; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by any Governmental Agency
or threatened by others;
(y) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company", as such term is
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(z) The Registration Statement, the Prospectus and the ADS
Registration Statement and the filing of the Registration Statement, the
U.S. Prospectus and the ADS Registration Statement with the Commission have
been duly authorized by and on behalf of the Company, and the Registration
Statement and the ADS Registration Statement have been duly executed
pursuant to such authorization by and on behalf of the Company;
(aa) Except as disclosed in the Registration Statement and the
Prospectus, each of the Company and its subsidiaries has all necessary
licenses, consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all necessary declarations and filings
with, all Governmental Agencies (including, without limitation, the PRC
State Council, the PRC Ministry of Information Industry (the "MII"), the
State Development and Planning Commission (the "SDPC"), the China
Securities Regulation Commission (the "CSRC"), the Ministry of Foreign
Trade and Economic Cooperation (the "MOFTEC"), the Ministry of Land and
Resources (the "MOLR"), the Ministry of Finance (the "MOF"), and the
relevant provincial and local bureau or branches of the foregoing
authorities and the relevant Provincial Price Bureaus (the "Price
Bureaus")), to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Prospectus and such
licenses, consents, authorizations, approvals, orders, certificates or
permits contain no materially burdensome restrictions or conditions not
described in the Registration Statement or the Prospectus. Except as
described in the
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<PAGE> 13
Prospectus, neither the Company nor any of its subsidiaries has any reason
to believe that the Mll or any other Governmental Agency is considering
modifying, suspending or revoking any such licenses, consents,
authorizations, approvals, orders, certificates or permits and each of the
Company and its subsidiaries is in compliance with the provisions of all
such licenses, consents, authorizations, approvals, orders, certificates
and permits in all material respects;
(bb) The Conditional Sale and Purchase Agreement (the "Acquisition
Agreement") entered into between China Mobile Hong Kong (BVI) Limited
("China Mobile BVI"), China Mobile Communications Corporation ("China
Mobile Group") and the Company on October 4, 2000 has been duly authorized,
executed and delivered by the Company, and constitutes a valid and binding
agreement of the Company enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity;
(cc) The transactions set forth in the Prospectus under the caption
"The Acquisition" will not contravene any provision of applicable law, rule
or regulation and do not contravene the Memorandum of Association and
Articles of Association, other constituent documents or the business
license of the Company or any of its subsidiaries or contravene the terms
or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement, note, lease or other agreement or instrument
binding upon the Company or any of its subsidiaries that, individually or
in the aggregate, is material to the Company and its subsidiaries, or any
judgment, rule or regulation, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any of its
subsidiaries and will not result in the creation or imposition of any lien,
charge, encumbrance or other restriction upon any assets of the Company or
any of its subsidiaries;
(dd) Other than as disclosed in the Prospectus, all consents,
approvals, authorizations, orders, registrations and qualifications
required in the PRC in connection with the transactions set forth in the
Prospectus under the caption "The Acquisition" have been made or
unconditionally obtained in writing (including, without limitation, all
actions necessary for the approval of such transactions by the PRC State
Council, the Mll, the SDPC, the CSRC, the MOFTEC, the MOLR and the MOF, and
no such consent, approval, authorization, order, registration or
qualification has been withdrawn or is subject to any condition precedent
which has not been fulfilled or performed;
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<PAGE> 14
(ee) There are no legal or government proceedings pending against the
Company or any of its subsidiaries in the PRC challenging the effectiveness
or validity of the transactions set forth in the Prospectus under the
caption "The Acquisition" and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by any Governmental
Agencies in the PRC or elsewhere;
(ff) To the best knowledge of the Company after due inquiries, all of
the representations and warranties relating to the Target Companies
provided by China Mobile Group and/or China Mobile BVI in the Acquisition
Agreement are true and correct in all material respects;
(gg) The Company and its subsidiaries own or have valid licenses in
full force and effect or otherwise have the legal right to use, or can
acquire on reasonable terms, all material patents, patent rights,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
(including the "China Mobile" name and logo) currently employed by them in
connection with the business currently operated by them, and neither the
Company nor any of its subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with respect to any of the
foregoing which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any material
adverse change in the condition, financial or otherwise, in the earnings,
business or operation of the Company and its subsidiaries, taken as a
whole; in conducting its business activities, none of the Company or any of
its subsidiaries has infringed any patent, copyright, title, trademark,
service mark, trade name or other intellectual property rights already
registered by a third party in the PRC or Hong Kong; "China Mobile" logo is
a registered trademark in the PRC owned by China Mobile Group, and
application has been made on behalf of China Mobile Group for the use of
the "China Mobile" name and logo in Hong Kong, and the Company has entered
into an agreement with China Mobile Group with respect to the right of the
Company and its subsidiaries to use such name and logo which agreement is
in full force and effect;
(hh) All returns, reports or filings which ought to have been made by
or in respect of the Company and its subsidiaries for taxation purposes
have been made and all such returns are up to date, correct and on a proper
basis, and are not, to the best of their knowledge, the subject of any
dispute with the relevant revenue or other appropriate authorities and the
provisions included in the audited accounts as set out in the Prospectus
included appropriate provisions required under Hong Kong generally accepted
accounting
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<PAGE> 15
principles ("Hong Kong GAAP") for all taxation in respect of accounting
periods ended on or before the accounting reference date to which such
audited accounts relate for which the Company or any of its subsidiaries
was then or might reasonably be expected thereafter to become or have
become liable; neither the Company nor any of its subsidiaries has received
notice of any tax deficiency that has been asserted against the Company or
any of its subsidiaries which, if so assessed, would have a material
adverse effect on the business, results of operations or financial
condition of the Company and its subsidiaries, taken as a whole;
(ii) Other than as disclosed in the Prospectus, the Company has no
material legal obligation to provide retirement, death or disability
benefits to any of the present or past employees of the Company or any of
its subsidiaries or those of China Mobile Group or any of its other
subsidiaries or any other companies or entities;
(jj) Except as disclosed in the Prospectus, no indebtedness (actual or
contingent) and no contract or arrangement (other than employment contracts
or arrangements) is outstanding between the Company and any director of the
Company or any person connected with such director (including his spouse,
infant children, or any company or undertaking in which he holds a
controlling interest);
(kk) No material labor dispute, work stoppage, slow down or other
conflict with the employees of the Company or its subsidiaries exists or,
to the knowledge of the Company, is threatened;
(ll) All guarantees of any indebtedness of the Company or any of its
subsidiaries are in full force and effect;
(mm) (A) Each of Syndicate Loan Agreements (including all appendixes
and annexes) (collectively, the "PRC Loan Documents") has been duly
authorized, executed and delivered by each of the subsidiaries of the
Company that is a party to such document, and constitutes a valid and
binding agreement of each such subsidiary enforceable in accordance with
the terms of such PRC Loan Document, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and to
general principles of equity; (B) other than the approval by the PRC State
Council, which has been obtained and is in full force and effect, no other
Governmental Authorization is required with respect to the transactions
contemplated under the PRC Loan Documents; and (C) the execution, delivery
and performance of such PRC Loan Documents and the compliance by each such
subsidiaries of the Company with the
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<PAGE> 16
provisions of such PRC Loan Documents to which it is a party will not
contravene any provision of applicable law, rule or regulation and do not
contravene the Memorandum of Association and Articles of Association, other
constituent documents or the business license of the Company or any of its
subsidiaries or contravene the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument binding upon the Company or
any of its subsidiaries that, individually or in the aggregate, is material
to the Company and its subsidiaries, taken as a whole, or any judgment,
rule or regulation, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any of its subsidiaries and
will not result in the creation or imposition of any lien, charge,
encumbrance or other restriction upon any assets of the Company or any of
its subsidiaries;
(nn) Under the laws of the PRC, neither the Company nor any of its
properties, assets or revenues are entitled to any right of immunity on the
grounds of sovereignty from any legal action, suit or proceeding, from
set-off or counterclaim, from the jurisdiction of any court, from service
of process, from attachment to or in aid of execution of judgment or from
other legal process or proceeding for the giving of any relief or for the
enforcement of any judgment. The irrevocable and unconditional waiver and
agreement of the Company in Section 14 hereof not to plead or claim any
such immunity in any legal action, suit or proceeding based on this
Agreement is valid and binding under the laws of the PRC and Hong Kong;
(oo) Under the laws of the PRC and Hong Kong, (i) the courts of the
PRC and Hong Kong recognize and give effect to the choice of law provisions
set forth in Sections 14 and 17 hereof and enforce judgments of U.S. courts
obtained against the Company to enforce this Agreement, provided that the
judgment (A) was not obtained by fraud; (B) was final and conclusive;
(C) in the opinion of the relevant PRC court after the review of such
judgment pursuant to international treaties concluded or acceded to by the
PRC government or in accordance with the principle of reciprocity, or
otherwise in accordance with the Civil Procedure Law of the PRC, did not
contradict the basic principles of PRC law; (D) in the opinion of the
relevant PRC court after its review of such judgment pursuant to
international treaties concluded or acceded to by the PRC government or in
accordance with the principle of reciprocity, or otherwise in accordance
with the Civil Procedure Law of the PRC, did not violate state sovereignty,
security or public interest; and (E) was for a definite sum of money;
and (ii) while there is no Hong Kong legislation providing for the
reciprocal enforcement of judgments in the Hong Kong court and the New York
State court, a New York State court judgment may be enforceable in
Hong Kong at common law if (A) it is for a definite sum of money
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<PAGE> 17
(and not relating to taxes or penalties); (B) it is final and conclusive
between the parties; (C) bringing proceedings in the New York State court
was not contrary to any agreement between the parties to the dispute; (D)
the New York State court had jurisdiction to grant the judgment according
to Hong Kong rules on conflicts of law; (E) the New York State court
judgment was not obtained by fraud or in breach of the rules of natural
justice; and (F) enforcement of the New York State court judgment would not
be contrary to public policy in Hong Kong.
(pp) No holder of any of the Shares or the ADSs after the completion
of the Global Offering is or will be subject to any liability in respect of
any liability of the Company by virtue only of its holding of any such
Shares or ADSs. Except as disclosed in the Prospectus, there are no
limitations on the rights of holders of the Shares or the ADSs to hold,
vote or transfer their securities;
(qq) The Company is not a Passive Foreign Investment Company ("PFIC")
within the meaning of Section 1296 of the United States Internal Revenue
Code of 1986, as amended, and the Company believes that the Shares and the
ADSs should not be treated as stock of a PFIC for United States federal
income tax purposes;
(rr) The historical consolidated financial statements (and the notes
thereto) of the Company and its subsidiaries and the combined financial
statements of the Target Companies included in the Prospectus were prepared
in accordance with Hong Kong GAAP consistently applied throughout the
period involved, and fairly present the consolidated financial condition
and results of operations of the Company and its subsidiaries and the
combined financial condition and results of operations of the Target
Companies (as the case may be) at the dates and for the periods presented;
and the pro forma financial information and notes thereto included in the
Prospectus were prepared in accordance with the applicable requirements of
the Act, the Company's assumptions provide a reasonable basis for
presenting the significant effects directly attributable to the events
described therein, the related pro forma adjustments give appropriate
effect to those assumptions, and the calculations made to determine such
pro forma amounts reflect the proper application of those adjustments to
the historical financial statement amounts in the unaudited pro forma
statement of income for the year ended December 31, 1999 and the six-month
period ended June 30, 2000 with respect to certain events, including the
Acquisition, the Global Offering and the Convertible Note Offering. No
other financial statements, schedules or pro forma financial information of
the Company or its subsidiaries are required (A) by the Act or the rules
and regulations thereunder to be included in the Prospectus or (B) by the
Company Ordinance and the rules and regulations thereunder or the rules and
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<PAGE> 18
regulations of the Hong Kong Stock Exchange (as interpreted by the Hong
Kong Stock Exchange) to be included in any of the versions of Prospectus
filed with Hong Kong Stock Exchange;
(ss) KPMG, who have certified certain financial statements of the
Company and its subsidiaries, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder; each of the Company and its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with Hong Kong
GAAP with a reconciliation to generally accepted accounting principles in
the United States ("U.S. GAAP"); (iii) access to assets is permitted only
in accordance with management's general or specific authorization; (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate actions taken with respect to any
differences; and (v) each of the Company and its subsidiaries has made and
kept books, records and accounts which, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of assets of such
entity and provide a sufficient basis for the preparation of combined
financial statements in accordance with Hong Kong GAAP, with a
reconciliation thereof to U.S. GAAP; and
(tt) The forecasted information included in the Prospectus under the
sub-caption "The Acquisition -- Prospective Financial Information" (the
"Estimated Financial Information") (i) is within the coverage of Rule
175(b) of the Act's regulations; (ii) was made by the Company with a
reasonable basis and in good faith; (iii) has been prepared in accordance
with Hong Kong GAAP, applied on a consistent basis with the financial
statements included in the Prospectus; and (iv) has been properly compiled
based on the assumptions described therein; the assumptions used in the
preparation of the Estimated Financial Information (x) are all those that
the Company believes are significant in forecasting the combined net profit
and combined adjusted EBITDA of the Target Companies for the year ending
December 31, 2000, and (y) reflect, for the year ending December 31, 2000,
the Company's best estimate of the events, contingencies and circumstances
described therein; and the Estimated Financial Information presents the
Company's best estimate, as of the date hereof, of the combined net profit
and combined adjusted EBITDA of the Target Companies for the year ending
December 31, 2000.
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<PAGE> 19
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company at a purchase price per
ADS of US$-- (the "ADS Purchase Price"), the number of Firm ADSs (to be adjusted
by you so as to eliminate fractional shares or ADSs) determined by multiplying
the aggregate number of Firm ADSs to be sold by the Company by a fraction, the
numerator of which is the aggregate number of Firm ADSs to be purchased by such
Underwriter as set forth opposite the name of such Underwriter in Schedule I
hereto and the denominator of which is the aggregate number of Firm ADSs to be
purchased by all of the Underwriters from the Company and (b) in the event and
to the extent that the Underwriters shall exercise the election to purchase
Optional ADSs as provided below, the Company agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company at the ADS Purchase Price, that portion of the number
of Optional ADSs as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional ADSs by a fraction, the numerator of which is the
maximum number of Optional ADSs which such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Optional ADSs that all of the
Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to -- Optional ADSs, at the ADS Purchase Price, for the
purpose of covering overallotments in the sale of the Firm ADSs and other
transactions. Any such election to purchase Optional ADSs may be exercised from
time to time by written notice from you to the Company, given within a period of
28 calendar days after the date of the U.S. Prospectus and setting forth the
aggregate number of Optional ADSs to be purchased and the date on which such
Optional ADSs are to be delivered, as determined by you but in no event earlier
than the First Time of Delivery (as defined in Section 4 hereof) or later than
30 calendar days after the date of the U.S. Prospectus.
The Underwriters may, in their discretion but with approval from the Global
Coordinators, require that Shares be delivered in lieu of ADSs. The purchase
price per Share shall be HK$--.
3. (a) Upon the authorization by the Global Coordinators of the
release of the Firm ADSs, the several Underwriters propose to offer the
Firm ADSs for sale upon the terms and conditions set forth in the
Prospectus.
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<PAGE> 20
(b) Subject always to the several obligations of the Underwriters to
purchase the ADSs pursuant to Section 2, the Company acknowledges that, at
the discretion of each Underwriter, the sale of the ADSs referred to in
this Agreement shall be by such Underwriter either as agent of the Company
(in which case the purchase obligation in Section 2 shall be reduced pro
tanto) to procure purchasers of the ADSs, or failing which such Underwriter
itself shall purchase the ADSs as principal.
4. (a) With respect to all or a portion of the ADSs to be purchased
and sold hereunder at each Time of Delivery (as defined below), the Global
Coordinators, on behalf of the several Underwriters and in accordance with
the Agreement between Syndicates, may elect to have Shares delivered and
paid for hereunder in lieu of, and in satisfaction of, the Company's
obligation to sell to the several Underwriters, and the several
Underwriters' obligations to purchase, ADSs. Written notice of such
election shall be given by the Global Coordinators to the Company at least
two Business Days prior to such Time of Delivery (the "Notification Time").
The number of Shares to be purchased by you as a result of the making of
such election shall be adjusted by the Global Coordinators so as to
eliminate any fractional Shares. The Company agrees that the Underwriters
may pay the Company the purchase price for the Shares purchased hereunder
in Hong Kong dollars and the ADSs purchased hereunder in United States
dollars, without any requirement of foreign exchange conversion therefor.
(b) The ADSs to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in
such names as the Global Coordinators may request upon written notice to
the Company prior to the Notification Time, shall be delivered by or on
behalf of the Company to the Global Coordinators through the facilities of
The Depository Trust Company ("DTC"), for the account of such Underwriter,
against payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer through the Federal Wire System in New York in
U.S. dollars in immediately available funds to an account designated by the
Company (which shall be designated to the Global Coordinators by the
Company prior to the Notification Time) at such Time of Delivery specified
in subsection (d) of this Section 4. The Company will cause the form of
certificates representing the ADSs to be made available for checking at
least one Business Day prior to such Time of Delivery with respect thereto
at the office of DTC or its designated custodian.
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<PAGE> 21
The Shares underlying the ADSs to be delivered hereunder shall be
deposited into the facilities of the Hong Kong Securities Clearing Company
Limited ("HKSCC") for the account of The Hongkong and Shanghai Banking
Corporation Limited, as custodian (the "Custodian") for the Depositary
against delivery of a copy of a letter confirming that the Global
Coordinators have given irrevocable instructions to their correspondent
bank in New York to make the wire transfer of payment for the ADSs at such
Time of Delivery specified in subsection (d) of this Section 4.
(c) If an election has been made in accordance with subsection (a)
above, the Shares to be purchased by each Underwriter hereunder to be
delivered in definitive form, and in such authorized denominations and
registered in such names as the Global Coordinators may request upon notice
to the Company prior to the Notification Time, shall be delivered by the
Company to the Global Coordinators, by the delivery of physical Share
certificates to the HKSCC participant account specified by the Global
Coordinators through the facilities of HKSCC, against payment by or on
behalf of such Underwriter of the purchase price therefor by account
transfer in Hong Kong dollars in immediately available funds to an account
specified by the Company at Standard Chartered Bank. The Company will cause
the certificates representing the Shares to be made available for checking
at least one Business Day prior to such Time of Delivery with respect
thereto at the office of HKSCC.
(d) The time and date of the deliveries and payments described in this
Section 4 shall be (i) with respect to the Shares to be delivered pursuant
to subsection (c), 9:00 a.m., Hong Kong time; (ii) with respect to the
Shares underlying the ADSs to be delivered pursuant to subsection (b),
9:00 a.m. Hong Kong time; and (iii) in the case of the ADSs delivered
pursuant to subsection (b), 9:00 a.m., New York City time, in each case on
--, 2000 or such other time and date as the Global Coordinators and the
Company may agree upon in writing. The time and date of delivery and
payment with respect to the Optional ADSs shall be 9:00 a.m., Hong Kong
time, in the case of Optional ADSs delivered in the form of Shares, and
9:00 a.m., New York City time, in the case of the Optional ADSs, in each
case on the date specified by the Global Coordinators in the written notice
given by the Global Coordinators in the Underwriters' election to purchase
such Optional ADSs, or such other time and date as the Global Coordinators
and the Company may agree upon in writing. Such times and dates for
deliveries
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<PAGE> 22
of, and payments for, the ADSs, whether in the form of Shares or ADSs, is
herein called the "First Time of Delivery", such times and dates for
delivery of, and payment for, the Optional ADSs, if not the First Time of
Delivery, is herein called the "Second Time of Delivery", and each such
time and date for delivery and payment is herein called a "Time of
Delivery". The cross-receipt for the ADSs to be delivered at the First Time
of Delivery will be delivered at the Closing Location (defined below) at
9:00 a.m., Hong Kong time on --, 2000.
(e) The documents to be delivered at the First Time of Delivery by or
on behalf of the parties hereto pursuant to Section 7 hereof, including
additional documents requested by the Underwriters pursuant to Section 7(s)
hereof, will be delivered at the offices of Sullivan & Cromwell, 28th
Floor, Nine Queen's Road, Central, Hong Kong (the "Closing Location"), at
such Time of Delivery of the Shares, or such other time as the Company and
the Global Coordinators may agree upon in writing, together with an
irrevocable instruction letter for payment of amounts due in connection
with the delivery of ADSs. A meeting will be held at the Closing Location
at 2:00 p.m., Hong Kong time, on the Business Day next preceding such Time
of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review
by the parties hereto. For the purposes of this Section 4, "Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in New York or Hong Kong are
generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
the U.S. Prospectus pursuant to Rule 424(b) under the Act not later than
the Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or the
Prospectus prior to the last Time of Delivery which shall be reasonably
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish you copies thereof; to file promptly all reports required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c)
or
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<PAGE> 23
15(d) of the Exchange Act subsequent to the date of the Prospectus and for
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares and ADSs; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of the
Shares and ADSs for offering or sale in any jurisdiction, of the initiation
or threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares and ADSs for offering and sale
under the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Shares and ADSs, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the Business Day next
succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with written and electronic copies of the Prospectus in New
York City in such quantities as they may reasonably request, and, if the
delivery of a prospectus is required at any time prior to the expiration of
nine months after the time of issue of the Prospectus in connection with
the offering or sale of the Shares and ADSs and if at such time any events
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the Exchange
Act, the Companies Ordinance of Hong Kong ("Companies Ordinance") or the
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<PAGE> 24
Listing Rules of the Hong Kong Stock Exchange, to notify you and upon your
request to file such document and prepare and furnish without charge to
each Underwriter and to any dealer in securities as many written and
electronic copies as you may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the ADSs at any time nine months or more after the time of issue of
the Prospectus, upon your request but at the expense of such Underwriter,
to prepare and deliver to such Underwriter as many written and electronic
copies as it may request of an amended or supplemented Prospectus complying
with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than 18 months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the
Act), an earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the date 180 days after the date of the Prospectus (the
"Lock-Up Period"), not to offer, sell, contract to sell or otherwise
dispose of, except as provided hereunder or under the Asia Underwriting
Agreement or the underwriting agreement between the Company and the
underwriters for the Convertible Note Offering, any shares of Stock or ADSs
or any other securities of the Company that are substantially similar to
the Shares or ADSs, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive, Shares or ADSs or any such substantially similar securities (other
than pursuant to employee stock option plans existing on, or upon the
conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement), without the prior written
consent of the Global Coordinators; it is understood that China Mobile BVI,
China Mobile (Hong Kong) Group Limited ("CMHK Group") and China Mobile
Group, pursuant to separate "lock-up" agreements as described in
Section 7(t), have agreed to restrictions similar to those set forth above;
(f) To furnish to its shareholders as soon as practicable after the
end of each fiscal year an annual report (in English) (including a
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<PAGE> 25
review of operations and annual audited financial statements of the Company
and its consolidated subsidiaries prepared in conformity with Hong Kong
GAAP), together with a reconciliation of U.S. GAAP of net income,
shareholders' equity and, as necessary, other selected balance sheet and
income statement items and, as soon as practicable after the end of the
second quarter of each fiscal year statements of income prepared in
conformity with Hong Kong GAAP, together with a reconciliation to U.S. GAAP
of certain items contained in such statements;
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and to
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
securities exchange on which any class of securities of the Company is
listed (such financial statements to be on a consolidated basis to the
extent the accounts of the Company and its subsidiaries are consolidated in
reports furnished to its shareholders generally or to the Commission); and
(ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request;
(h) To use the net proceeds received by it from the sale of the Shares
and ADSs pursuant to this Agreement and the Asia Underwriting Agreement in
the manner specified in the Prospectus under the caption "Use of Proceeds";
(i) Prior to each Time of Delivery, to deposit Shares with the
Depositary in accordance with the provisions of the Deposit Agreement and
otherwise to comply with the Deposit Agreement so that ADRs evidencing ADSs
will be executed (and, if applicable, countersigned) and issued by the
Depositary against receipt of such Shares and delivered to the purchasers
at such Time of Delivery;
(j) Not to (and to cause its subsidiaries not to) take, directly or
indirectly, any action which is designed to or which constitutes or which
might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company or facilitate the
sale or resale of the Shares or the ADSs;
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<PAGE> 26
(k) To use its best efforts to list, subject to notice of issuance,
the ADSs on the NYSE and the Shares on the Hong Kong Stock Exchange, and to
maintain such listings;
(l) In addition to the obligations set forth in subsection (c) of this
Section 5, the Company will (i) comply with the Hong Kong Stock Exchange's
rules or other requirements, to publish and disseminate to the public,
under certain circumstances, information affecting any prospective
financial information in the Prospectus and (ii) announce in a press
release (delivered to The Wall Street Journal/Dow Jones News Service or
other news service acceptable to the Global Coordinators) any information
so required by the Hong Kong Stock Exchange to be published and
disseminated to the public; provided, however, that no such press release
shall be issued by the Company without having been submitted to the Global
Coordinators for their review not less than three Business Days (as defined
in Section 4(e)) prior to such issuance, or such lesser period of time as
is necessary for the Company to avoid violation of any law or regulation
applicable to it. Such press release shall also be filed with the
Commission on Form 6-K under the Exchange Act;
(m) For so long as the Shares or the ADSs are outstanding, the Company
agrees to file with the Hong Kong Stock Exchange, the NYSE, the CSRC, the
Commission, and any other governmental agency, authority or instrumentality
in Hong Kong, the PRC and the United States, as the case may be, such
relevant reports, documents, agreements and other information which may
from time to time be required by applicable law or regulation to be so
filed because the Shares or the ADSs are outstanding;
(n) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act;
(o) The Company agrees to indemnify and hold the Underwriters harmless
against any documentary, stamp or similar issuance or transfer taxes,
duties or fees, including any interest and penalties, payable in Hong Kong
or the PRC which are or may be required to be paid in connection with the
creation, allotment, issuance, offer and
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<PAGE> 27
distribution of the Shares or the ADSs and the execution and delivery of
this Agreement, the Asia Underwriting Agreement and the Deposit Agreement;
provided, however, that the Company shall not be responsible for any such
taxes, duties or fees which arise as a result of the distribution of the
ADSs and the Shares by the Underwriters in a manner other than that as is
customary in such transactions. In addition, the Company agrees to
indemnify and hold the Underwriters harmless against any Hong Kong Stock
Exchange transaction levy which may be required to be paid in connection
with the issuance of the Shares and the listing of such Shares on the Hong
Kong Stock Exchange;
(p) None of the Company, its affiliates or any person acting on its or
their behalf has engaged or will engage in any directed selling efforts (as
that term is defined in Regulation S) with respect to the Shares or the
ADSs in the Global Offering outside the United States and the Company, its
affiliates and each person acting on its or their behalf will comply with
the offering restrictions requirement of Regulation S; and
(q) Upon request of a Global Coordinator, to furnish, or cause to be
furnished, to such Global Coordinator an electronic version of the
Company's trademarks, servicemarks and corporate logo for use on the
website, if any, operated by such Global Coordinator for the purpose of
facilitating the online offering of the Securities (the "License");
provided, however, that the License shall be used solely for the purpose
described above, is granted without any fee, may not be assigned or
transferred and shall terminate on the 26th day after the First Time of
Delivery.
6. [Form/Draft (TBD): The Company covenants and agrees and with the several
Underwriters that will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares and ADSs under the Act and all
other expenses in connection with the preparation, printing and filing of the
Registration Statement, the ADR Registration Statement, any Preliminary
Prospectus and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) the cost of printing or producing any Agreement among Underwriters, this
Agreement, the Asia Underwriting Agreements, the Agreement between Syndicates,
the Selling Agreements, the Deposit Agreement, the Blue Sky Memorandum, closing
documents (including compilations thereof) and any other documents in connection
with the offering, purchase, sale and delivery of the Shares and ADSs; (iii) all
expenses in connection with the qualification of
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<PAGE> 28
the Shares and ADSs for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky survey[s]; (iv) all fees and expenses in connection with
listing the Shares and ADSs on the [names of stock exchanges] [(___) the filing
fees incident to, and the fees and disbursements of counsel for the Underwriters
in connection with, securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares and ADSs];
[(v) [to ________, for the account of the several Underwriters and the Asia
Underwriters, $________ in lieu of reimbursement of expenses;] [the fees and
disbursements of Underwriters' counsel in connection with the transactions
contemplated hereby;] [to _________, for the account of the several Asia
Underwriters, up to U.S. $_________ in respect of reasonable out-of-pocket
expenses (including fees, disbursements and expenses of counsel to the Asia
Underwriters) incurred by the Asia Underwriters in connection with the
transactions contemplated in the Asia Underwriting Agreement[, other than the
fees, disbursement and expenses included in clause (iii) above;] [(___) all
expenses and taxes arising as a result of the deposit by the Company of the
Shares with the Depositary and the issuance and delivery of the ADRs evidencing
ADSs in exchange therefor by the Depositary to the Company, of the sale and
delivery of the ADS and the Shares by the Company to or for the account of the
Underwriters and Asia Underwriters, of the sale and delivery outside of
[____________(10)] of the ADSs and the Shares by the Underwriters and the Asia
Underwriters to each other, and of the initial purchasers thereof in the manner
contemplated under the Asia Underwriting Agreements, including, in any such
case, any [_____________(10)] income, capital gains, withholding, transfer or
other tax asserted against an Underwriter or an Asia Underwriter by reason of
the purchase and sale of an ADS or a Share pursuant to the this Agreement, the
Asia Underwriting Agreements or the Agreement Syndicates; (___) the fees and
expenses (including fees and disbursements of counsel), if any, of the
Depositary and any custodian appointed under the Deposit Agreement, other than
the fees and expenses to be paid by holders of ADRs (other than the Underwriters
or the International Underwriters, in connection with the initial purchase of
ADSs and the Shares);] (___) the fees and expenses of the Authorized Agent (as
defined in Section 15 hereof); (___) the cost of preparing stock certificates
and ADRs]; (___) the cost and charges of any transfer agent or registrar; and
(____) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, stock transfer taxes [(other
than any
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<PAGE> 29
imposed by [________________] or any political subdivision or taxing authority
thereof or therein)] on resale of any of the Shares and ADSs] by them, and any
advertising expenses connected with any offers they may make.]
7. The obligations of the Underwriters hereunder, as to the Shares and ADSs
to be delivered at each Time of Delivery, shall be subject, in their discretion,
to the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its and their
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The U.S. Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become effective
by 10:00 P.M., Washington D.C. time, on the date of this Agreement; no stop
order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all requests
for additional information on the part of the Commission, if any, shall
have been complied with to your reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to you such opinion and letter (a draft of such opinion and
letter is attached as Annex II(a) hereto), dated such Time of Delivery, in
form and substance satisfactory to you, and such counsel shall have
received or been permitted access to such papers and information as they
may reasonably request to enable them to give such opinion;
(c) Baker & McKenzie, Hong Kong counsel for the Underwriters, shall
have furnished to you such opinion or opinions (a draft of such opinion is
attached as Annex II(b) hereto), dated such Time of Delivery, in form and
substance satisfactory to you, and such counsel shall have received or been
permitted access to such papers and information as they may reasonably
request to enable them to give such opinion;
(d) Haiwen & Partners, PRC counsel for the Underwriters, shall have
furnished to you such opinion or opinions (a draft of such opinion or
opinions is attached as Annex II(c) hereto), dated such Time of Delivery,
in form and substance satisfactory to you, and such counsel shall have
received or been permitted access to such papers and information as they
may reasonably request to enable them to give such opinion;
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<PAGE> 30
(e) Shearman & Sterling, U.S. counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) Assuming that this Agreement has been duly authorized,
executed and delivered by the Company under Hong Kong law, this
Agreement has been duly executed and delivered by the Company; and
assuming the Asia Underwriting Agreement has been duly authorized,
executed and delivered by the Company under Hong Kong law, the Asia
Underwriting Agreement has been duly executed and delivered by the
Company.
(ii) Assuming that the Deposit Agreement has been duly
authorized, executed and delivered by the Company and the Depositary
and constitutes a valid and legally binding agreement of the Company
under Hong Kong law enforceable in accordance with its terms, the
Deposit Agreement has been duly executed and delivered by the Company
and, assuming due authorization, execution and delivery of the Deposit
Agreement by the Depositary and that each of the Depositary and the
Company has full power, authority and legal right to enter into and
perform its obligations thereunder, constitutes a valid and legally
binding agreement of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general
principles of equity, except that such counsel need express no opinion
with respect to Section 5.8 of the Deposit Agreement;
(iii) Upon due issuance by the Depositary of ADRs evidencing the
ADSs being delivered at such Time of Delivery against the deposit of
the underlying Shares to be deposited by the Company in respect
thereof in accordance with the provisions of the Deposit Agreement,
such ADRs evidencing the ADSs will be duly and validly issued and the
holders thereof will be entitled to the rights specified therein and
in the Deposit Agreement;
(iv) Under the laws of the State of New York relating to personal
jurisdiction, the Company has, pursuant to and to the extent provided
in Section 14 of this Agreement and the Asia Underwriting Agreement,
validly and irrevocably submitted to the personal jurisdiction of any
state or federal court located in the Borough of Manhattan, The City
of New York, New York (each a "New York Court") in any action arising
out of or relating to this Agreement or the Asia
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<PAGE> 31
Underwriting Agreement or the transactions contemplated hereby and
thereby, has validly and irrevocably waived any objection to the venue
of a proceeding in any such court, and has validly and irrevocably
appointed the Authorized Agent (as defined herein) as its authorized
agent for the purpose described in Section 14 hereof and thereof; and
service of process effected on such agent in the manner set forth in
Section 14 hereof and thereof will be effective to confer valid
personal jurisdiction over the Company in the New York Courts;
(v) The Registration Statement has been declared effective under
the Act and the rules and regulations thereunder, the Prospectus
either has been filed with the Commission pursuant to Rule 424(b)
under the Act, or has been included in the Registration Statement (as
the case may be), and such counsel has no knowledge of any stop order
having been issued suspending the effectiveness of the Registration
Statement or of any proceedings for that purpose having been
instituted or threatened or pending by the Commission;
(vi) Each of (A) the issue and sale of the Shares being delivered
at such Time of Delivery to be sold by the Company, (B) the deposit of
the Shares being deposited by the Company with the Depositary pursuant
to the Deposit Agreement and (C) the performance by the Company of its
obligations under this Agreement and the Asia Underwriting Agreement
will not violate any existing federal law of the United States or law
of the State of New York applicable to the Company; provided, however,
that for the purposes of this clause (vi), such counsel need not
express any opinion with respect to Federal or state securities laws,
other antifraud laws and fraudulent transfer laws; provided, further,
that insofar as performance by the Company of its obligations under
this Agreement and the Asia Underwriting Agreement is concerned, such
counsel need not express any opinion as to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights;
(vii) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Company under the
federal laws of the United States and the laws of the State of New
York for the issuance of the Shares and the ADRs evidencing the ADSs,
the sale and delivery of the Shares and the ADSs to the Underwriters
and the Asia Underwriters and the deposit with the Depositary of the
Shares underlying the ADSs have been obtained or made;
(viii) The Company is not an "investment company" as such term is
defined in the Investment Company Act;
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<PAGE> 32
(ix) The documents incorporated by reference in the Prospectus or
any further amendment or supplement thereto made by the Company prior
to such Time of Delivery (other than the financial statements and
other financial data contained therein as to which such counsel
express no opinion), when they were filed with the Commission, appear
in their face to have been appropriately responsive in all material
respects to the requirement of the Exchange Act and the applicable
rules and regulations of the Commission thereunder; they have no
reason to believe that any of such documents, when such documents were
filed, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made
when such documents were so filed, not misleading; and
(x) The Registration Statement, as of its effective date, and the
U.S. Prospectus, as of the date of the U.S. Prospectus, and any
further amendments and supplements thereto made by the Company prior
to such Time of Delivery (other than the financial statements and
other financial data including prospective financial data contained
therein, as to which such counsel need express no opinion) appear on
their face to be appropriately responsive in all material respects to
the requirements of the Act and the applicable rules and regulations
of the Commission thereunder; no facts came to such counsel's
attention which gave such counsel reason to believe that, at the time
it became effective, the Registration Statement or any further
amendment thereto made by the Company prior to such Time of Delivery
(other than the financial statements and other financial data
including prospective financial data contained therein, as to which
such counsel need express no opinion) contained an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that, as of its date and as of such Time of Delivery,
the Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and other financial data including prospective financial
data contained therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. Such counsel may state that they do not assume
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
except for those made in the Registration Statement and the Prospectus
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<PAGE> 33
in the sections entitled "Description of American Depositary
Receipts", insofar as they relate to provisions of the ADRs and the
Deposit Agreement, "Description of Convertible Notes", insofar as they
relate to provisions of the Indenture and the terms of the Convertible
Notes, "Taxation--United States Federal Income Taxation", insofar as
they relate to provisions of Federal tax laws of the United States
therein described, and "Underwriting", insofar as they relate to the
provisions of this Agreement and the Asia Underwriting Agreement.
In rendering the foregoing opinion, Shearman & Sterling may rely,
as to matters governed by Hong Kong and PRC law, upon the respective
opinions of Linklaters & Alliance and Commerce & Finance Law Offices
referred to below.
(f) Linklaters, Hong Kong counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of Hong Kong, with legal
right, power and authority (corporate and other) to own, use, lease
and operate its properties and conduct its business as described in
the Prospectus; the Memorandum of Association and Articles of
Association comply with the applicable requirements of Hong Kong law
and are in full force and effect;
(ii) The Company has corporate power to enter into and to perform
its obligations under this Agreement, the Asia Underwriting Agreement,
the Deposit Agreement and the Acquisition Agreement; each of this
Agreement, the Asia Underwriting Agreement, the Deposit Agreement and
the Acquisition Agreement has been duly and validly authorized,
executed and delivered by the Company; the Acquisition Agreement
constitutes valid and legally binding obligations of the Company
enforceable in accordance with its terms; on the assumption and to the
extent that the Underwriting Agreement, the Asia Underwriting
Agreement and the Deposit Agreement constitute legally bidding and
enforceable obligations of the Company under the laws of the State of
New York by which laws each of such agreements is expressed to be
governed, the obligations of the Company under the Underwriting
Agreement, the Asia Underwriting Agreement and the Deposit Agreement
will be recognized and enforced by the Hong Kong courts; and except
for shareholders' consent of the Acquisition, the Company has taken
all necessary corporate action to authorize performance of each of
such agreements;
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<PAGE> 34
(iii) The Share Transfer Agreement, dated September 30, 2000,
among China Mobile Group, CMHK Group, China Mobile BVI and the BVI
Companies that are parties thereto has been duly authorized, executed
and delivered by CMHK Group and constitutes valid and legally binding
obligations of CMHK Group enforceable in accordance with its terms;
(iv) The Company has an authorized share capital as set forth in
the Prospectus, and all of the issued shares of the Company (including
the Shares being delivered at such Time of Delivery) have been duly
and validly authorized and issued and are fully paid and nonassessable
and are at the time of issue free and clear of all liens,
encumbrances, equities or claims; the Hong Kong Stock Exchange has
formally approved the listing of, and permission to deal in, all of
the issued shares of Stock (including the Shares); the holders of
outstanding shares of the Company are not entitled to preemptive or
other similar rights under the Articles of Association of the Company
and Hong Kong laws to acquire the ADSs or Shares to be purchased from
the Company under this Agreement or the Asia Underwriting Agreement
which have not been complied with; the Shares to be deposited by the
Company may be freely deposited by the Company with the Depositary
against issuance of ADRs evidencing ADSs; the ADSs and the Shares are
freely transferable by the Company to or for the respective accounts
of the several Underwriters and the several Asia Underwriters in the
manner contemplated herein or in the Asia Underwriting Agreement and
the initial purchasers thereof, and there are no restrictions on
subsequent transfers of the ADSs or the Shares under Hong Kong law;
the Shares conform to the description of the Stock contained in the
Prospectus;
(v) All governmental or regulatory consents, approvals,
authorizations or orders required under Hong Kong law by the Company
in connection with the execution, delivery and performance of this
Agreement, the Asia Underwriting Agreement, the Deposit Agreement and
the Acquisition Agreement have been obtained and are in full force and
effect;
(vi) A search conducted against the Company at the cause book
kept at the High Court of Hong Kong reveals no petition for the
winding up of the Company or for the appointment of a receiver of the
Company;
(vii) The issue and sale of the Shares and the sale of the ADSs
being delivered at such Time of Delivery to be sold by the Company,
the deposit of the Shares being deposited by the Company with the
Depositary against issuance of the ADRs evidencing the ADSs to be
delivered at such
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<PAGE> 35
Time of Delivery by the Company and the compliance by the Company with
all of the provisions of this Agreement, the Asia Underwriting
Agreement and the Deposit Agreement and the consummation of the
transactions herein and therein contemplated (a) will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument the
existence and terms of which are actually known to such counsel to
which the Company is a party or by which the Company is bound;
(b) will not result in any violation of the provisions of the
Memorandum of Association or Articles of Association of the Company;
(c) will not result in any violation of any provision of Hong Kong law
or statute; and (d) will not result in a violation of any order, rule
or regulation actually known to such counsel of any Hong Kong
Government Agency having jurisdiction over the Company;
(viii) The execution and delivery of the Acquisition Agreement by
the Company, the compliance by the Company with all of the provisions
of the Acquisition Agreement and the consummation of the transactions
therein contemplated (a) will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument the existence and terms of which are
actually known to such counsel to which the Company is a party or by
which the Company is bound; (b) will not result in any violation of
the provisions of the Memorandum of Association or Articles of
Association of the Company; (c) will not result in any violation of
any provision of Hong Kong law or statute; and (d) will not result in
a violation of any order, rule or regulation actually known to such
counsel of any Hong Kong Government Agency having jurisdiction over
the Company;
(ix) The statements set forth in the Prospectus under the caption
"Description of Share Capital", insofar as they purport to constitute
a summary of the terms of the Stock, under the caption "Description of
Convertible Notes", insofar as they purport to constitute a summary of
the provisions of the Indenture or terms of the Convertible Notes, and
under the captions "Enforceability of Civil Liabilities",
"Relationship with China Mobile Communications Corporation",
"Taxation-Hong Kong" and "Underwriting", insofar as they purport to
describe the provisions of Hong Kong laws and documents referred to
therein, constitute a fair summary thereof under Hong Kong law,
however, counsel expresses no opinion as to whether the same
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<PAGE> 36
constitutes a fair summary in the context of a prospectus in the
United States;
(x) No stamp or other issuance or transfer taxes or duties and no
capital gains, income, withholding or other taxes are payable by or on
behalf of the Underwriters or the Asia Underwriters in Hong Kong or to
any political subdivision or taxing authority of or in Hong Kong in
connection with (i) the deposit with the Depositary of Shares by the
Company against the issuance of ADRs evidencing the ADSs, (ii) the
sale and delivery by the Company of the ADSs and the Shares to or for
the respective accounts of the Underwriters and the Asia Underwriters
or (iii) the sale and delivery outside Hong Kong by the Underwriters
and the Asia Underwriters of the ADSs and the Shares to the initial
purchasers thereof in the manner contemplated herein and in the Asia
Underwriting Agreement, other than ordinary course Hong Kong profits
tax which may arise in respect of persons carrying on a trade,
profession or business in Hong Kong;
(xi) The Company has corporate power to issue and to file the
Registration Statement with the Commission and has taken all necessary
corporate actions to authorize the execution and filing of the
Registration Statement;
(xii) The Company's agreement to the choice of law provisions set
forth in Sections 14 and 17 hereof and of the Asia Underwriting
Agreement and Section 5.8 of the Deposit Agreement will be recognized
by the courts of Hong Kong; the Company can sue and be sued in its own
name under the laws of Hong Kong; the irrevocable submission of the
Company to the exclusive jurisdiction of a New York Court, the waiver
by the Company of any objection to the venue of a proceeding of a New
York Court and the agreement of the Company that this Agreement, the
Asia Underwriting Agreement and the Deposit Agreement shall be
governed by and construed in accordance with the laws of the State of
New York are legal, valid and binding; service of process effected in
the manner set forth in Section 14 hereof and of the Asia Underwriting
Agreement will be effective, insofar as the law of Hong Kong is
concerned, to confer valid personal jurisdiction over the Company; and
judgment obtained in a New York Court arising out of or in relation to
the obligations of the Company under this Agreement, the Asia
Underwriting Agreement and the Deposit Agreement would be enforceable
against the Company in the courts of Hong Kong at common law;
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(xiii) The Company is not entitled to any immunity under Hong
Kong law on the basis of sovereignty or otherwise in respect of its
obligations under this Agreement or the Asia Underwriting Agreement
and could not successfully interpose any such immunity as a defense to
any suit or action brought or maintained in respect of its obligations
under this Agreement or the Asia Underwriting Agreement; and the
waiver by the Company of immunity to jurisdiction (including the
waiver of sovereign immunity to which the Company may become entitled
subsequent to the date of each such agreement) and immunity to
pre-judgment attachment, post-judgment attachment and execution in any
suit, action or proceeding against it arising out of or based on this
Agreement or the Asia Underwriting Agreement is a valid and binding
obligation of the Company under Hong Kong law;
(xiv) Based on Hong Kong case law as at the date hereof, the
indemnification and contribution provisions set forth in Section 8
hereof and of the Asia Underwriting Agreement and in Section 5.8 of
the Deposit Agreement do not contravene public policy or laws of Hong
Kong;
(xv) All dividends and other distributions declared and payable
on the shares of the Company including any such dividends or
distributions to be paid to the Depositary may under the current laws
and regulations of Hong Kong be paid in Hong Kong and may be converted
into foreign currency that may be freely transferred out of Hong Kong,
and all such dividends and other distributions as at the date hereof
are not subject to withholding or other taxes under the laws and
regulations of Hong Kong and may otherwise be made free and clear of
any other tax, withholding or deduction in Hong Kong and without the
necessity of obtaining any Governmental Authorization in Hong Kong;
and
(xvi) So far as it is actually known to such counsel, the Company
is not in violation of its Memorandum of Association and Articles of
Association or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument actually known to such counsel to which the
Company is a party or by which it or any of its properties may be
bound.
(g) Commerce & Finance Law Offices, PRC counsel to the Company, shall
have furnished to you their written opinion, dated such Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) Each of the Existing PRC Subsidiaries has been duly organized
and is validly existing as a wholly foreign-owned enterprise
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with limited liability under PRC law, and its business license is in
full force and effect, and each has been duly qualified as a foreign
investment enterprise under PRC law; each of the Target Companies has
been duly organized and is validly existing as a limited liability
company under PRC law, and its business license is in full force and
effect; the Articles of Association of each of the Company's
subsidiaries comply with the requirements of applicable PRC law and
are in full force and effect; each of these subsidiaries has full
power and authority (corporate and other) and has all consents,
approvals, authorizations, orders, registrations, clearances and
qualifications of or with any court, governmental agency or body
having jurisdiction over it or any of its properties required for the
ownership or lease of property by it and the conduct of its business,
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 Prospectus; the restructuring based
on which it was organized is legal and binding and is in full force
and effect;
(ii) The Company has been duly qualified as a foreign corporation
for transaction of business and is in good standing under the laws of
PRC with full power and authority (corporate and other) to own or
lease its properties and conduct business as described in the
Prospectus;
(iii) The equity interests of each of the Target Companies have
been duly and validly authorized and issued, are fully paid and
non-assessable, and the equity interests of each of the Existing PRC
Subsidiaries have been duly and validly authorized and issued, are
fully paid and non-assessable, and are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims; no Governmental Authorization of or filing with any
Governmental Agency is required under PRC law for the ownership by the
Company, upon completion of the Acquisition, of equity interest in
each of the Target Companies except the approval from the State
Council, MOFTEC and the State Administration for Foreign Exchange,
which has been obtained and is in full force and effect; the liability
of the Company in respect of its equity interest in (A) each of the
Existing PRC Subsidiaries directly owned by it and (B) each of the BVI
Companies is limited to its investment therein, and the liability of
each of the BVI Companies in respect of its equity interest in the
Existing PRC Subsidiaries directly owned by it is or, upon completion
of the Acquisition, in the Target Companies directly owned by it will
be, limited to its investment therein;
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<PAGE> 39
(iv) The Company's subsidiaries have valid title to, or valid
leasehold interests in, all of their material real property and valid
title to all material personal property owned by them, in each case
free and clear of all liens, encumbrances, third party rights or
interests, defects or any other restrictions except such as are
described in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the subsidiaries of the
Company; and any real property and buildings held under lease by the
Company's subsidiaries are held by them under valid and enforceable
leases in full force and effect with such exceptions as are not
material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company's subsidiaries, and
no material default (or event which with notice or lapse of time, or
both, would constitute such a default) by the Company's subsidiaries
has occurred and is continuing under any of such leases (in giving the
opinion in this clause, such counsel may state that no examination of
record titles for the purpose of such opinion has been made, and that
they are relying upon a general review of the titles of the Company's
subsidiaries, upon abstracts, reports and policies of title companies
rendered or issued at or subsequent to the time of acquisition of such
property by the Company's subsidiaries, and, in respect of matters of
fact, upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that they believe
that both you and they are justified in relying upon such opinions,
abstracts, reports, policies and certificates);
(v) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending in the PRC to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate result in any material adverse change, or any event
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, taken as
a whole; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by any Governmental Agency
or threatened by others;
(vi) The issue and sale by the Company of the Shares and ADSs
being delivered at such Time of Delivery, the deposit by the Company
of the Shares being deposited with the Depositary against issuance of
the
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<PAGE> 40
ADRs evidencing the ADSs to be delivered at such Time of Delivery and
the compliance by the Company with all of the provisions of this
Agreement, the Asia Underwriting Agreement and the Deposit Agreement
and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which any of the
Company's subsidiaries is a party or by which any of the Company's
subsidiaries is bound or to which any of the property or assets of the
Company's subsidiaries is subject, nor will such action result in any
violation of the provisions of the Memorandum of Association and
Articles of Association or business licenses of any of the Company's
subsidiaries or any law or statute or any order, rule or regulation
known to such counsel of any Governmental Agency having jurisdiction
over the Company's subsidiaries or any of their properties;
(vii) (A) The execution and delivery of the Acquisition Agreement
by the Company, the compliance by the Company with all of the
provisions of the Acquisition Agreement and the consummation of the
transactions therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such counsel
to which any of the Company's subsidiaries is a party or by which any
of the Company's subsidiaries is bound or to which any of the property
or assets of the Company's subsidiaries is subject, nor will such
action result in any violation of the provisions of the Memorandum of
Association and Articles of Association or business licenses of any of
the Company's subsidiaries or any law or statute or any order, rule or
regulation known to such counsel of any Governmental Agency having
jurisdiction over the Company's subsidiaries or any of their
properties; and the Acquisition Agreement has been duly authorized,
executed and delivered by China Mobile Group and constitutes valid and
legally binding obligation of China Mobile Group enforceable in
accordance with its terms; and
(B) Each of (1) the seven Capital Contribution Agreements,
each dated August 30, 2000, among China Mobile Group and the
respective Target Company and service company named therein,
(2) the seven Share Transfer Agreement, each dated August 30,
2000, among China Mobile Group and the respective Target Company
and service company named therein, (3) the seven Agreements
Regarding the Transfer of Personnel, Finances and
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<PAGE> 41
Assets and the Related Rights and Obligations, each dated August
30, 2000, between the respective Target Company and service
company named therein, (4) the seven Agreements Regarding the
Transfer of Personnel, Finances and Assets Not Directly Related
to Mobile Communication Services, each dated August 30, 2000,
among China Mobile Group and the respective Target Company and
service company named therein and (5) the Share Transfer
Agreement (the agreements in (1) through (5) collectively, the
"Restructuring Agreements") has been duly authorized, executed
and delivered by China Mobile Group and, assuming it has been
duly authorized, executed and delivered by each of the parties to
such agreement, constitutes valid and legally binding obligation
of China Mobile Group and each such party enforceable in
accordance with its terms; all Governmental Authorizations with
respect to the transactions contemplated under the Restructuring
Agreements have been made or obtained and are in full force and
effect; and the execution and delivery of such agreement, the
consummation of the transactions contemplated therein and the
compliance with all the provisions thereof will not conflict with
or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which any of the Company's
subsidiaries is a party or by which any of the Company's
subsidiaries is bound or to which any of the property or assets
of the Company's subsidiaries is subject, nor will such action
result in any violation of the provisions of the Memorandum of
Association and Articles of Association or business licenses of
any of the Company's subsidiaries or any law or statute or any
order, rule or regulation known to such counsel of any
Governmental Agency having jurisdiction over the Company's
subsidiaries or any of their properties;
(viii) No Governmental Authorization or filing of or with any
Governmental Agency is required under PRC law for the consummation by
the Company of the transactions contemplated by this Agreement, the
Asia Underwriting Agreement or the Deposit Agreement, except the
approvals from the State Council and the CSRC, which have been duly
obtained and are in full force and effect;
(ix) The subsidiaries of the Company have all necessary licenses,
consents, authorizations, approvals, orders, certificates and permits
of and from, and have made all declarations and filings with all
Governmental Agencies (including, without limitation, the State
Council, the Mll, the SDPC, the CSRC, the MOFTEC, the MOLR, the MOF,
the provincial and local bureau or branches of the foregoing
authorities and
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<PAGE> 42
the Price Bureaus) to own, lease, license and use its properties,
assets and spectrum and to build, own and operate the base stations to
conduct its business in the manner described in the Prospectus and
such licenses, consents, authorizations, approvals, orders,
certificates and permits contain no materially burdensome restrictions
or conditions not described in the Registration Statement or the
Prospectus. Except as described in the Prospectus, neither the Company
nor any of its subsidiaries has any reason to believe that the Mll or
any other Governmental Agency is considering modifying, suspending or
revoking any such licenses, consents, authorizations, approvals,
orders, certificates or permits and each of the Company and its
subsidiaries is in compliance with the provisions of all such
licenses, consents, authorizations, approvals, orders, certificates or
permits in all material respects;
(x) None of the Company's subsidiaries is in violation of its
constituent documents or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or
any of its properties may be bound;
(xi) The statements set forth in the Prospectus under the caption
"Description of Share Capital", "Description of Convertible Notes",
"Enforceability of Civil Liabilities", "Risk Factors", "Our Company",
"The Telecommunications Industry in China", "Business", "Acquisition",
"Regulation", "Relationship with China Mobile Communications
Corporation" and "Relationship with China Telecommunications
Corporation", to the extent such statements relate to matters of PRC
law or regulation or to the provisions of documents therein described,
are accurate, complete and fair;
(xii) No stamp or other issuance or transfer taxes or duties and
no capital gains, income, withholding or other taxes are payable by or
on behalf of the Underwriters to the PRC or to any political
subdivision or taxing authority thereof or therein in connection with
(i) the deposit with the Depositary of Shares by the Company against
the issuance of ADRs evidencing the ADSs, (ii) the sale and delivery
by the Company of the ADSs and the Shares to or for the respective
accounts of the Underwriters and the Asia Underwriters or (iii) the
sale and delivery outside the PRC by the Underwriters and the Asia
Underwriters of the ADSs and the Shares to the initial purchasers
thereof in the manner contemplated herein or in the Asia Underwriting
Agreement;
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<PAGE> 43
(xiii) The transactions set forth in the Prospectus under the
caption "The Acquisition" do not and will not contravene, in any
material respect, any provision of applicable law, rule or regulation
of the PRC and do not contravene the Memorandum of Association and
Articles of Association, other constituent documents or the business
license of the Company or any of its subsidiaries or contravene the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument binding upon the Company or any of its
subsidiaries that, individually or in the aggregate, is material to
the Company and its subsidiaries, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the
Company or any of its subsidiaries and will not result in the creation
or imposition of any lien, charge, encumbrance or other restriction
upon any assets of the Company or any of its subsidiaries;
(xiv) Except as disclosed in the Prospectus, all consents,
approvals, authorizations, orders, registrations and qualifications
required under PRC law in connection with the transactions set forth
in the Prospectus under the caption "The Acquisition" have been made
or obtained in writing (including, without limitation, all actions
necessary for the approval of such transactions by the PRC State
Council, the Mll, the SDPC, the CSRC, the MOFTEC, the MOLR, the MOF,
and the Price Bureaus), and no such consent, approval, authorization,
order, registration or qualification is subject to any condition
precedent which has not been fulfilled or performed;
(xv) There are no legal or governmental proceedings pending in
the PRC challenging the effectiveness or validity of the transactions
set forth in the Prospectus under the caption "The Acquisition" and,
to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by any Governmental Agencies in the PRC or
elsewhere;
(xvi) Insofar as matters of the law of the PRC are concerned, the
Registration Statement and the filing of the Registration Statement
with the Commission have been duly authorized by and on behalf of the
Company; and the Registration Statement has been duly executed
pursuant to such authorization by or on behalf of the Company;
(xvii) The Company's agreement to the choice of law provisions
set forth in Section 14 hereof and of the Asia Underwriting Agreement
and in Section 5.8 of the Deposit Agreement will be recognized by the
courts of the PRC; if, despite such provisions, any such court would
deem any aspect of this Agreement, the Asia Underwriting Agreement or
the Deposit
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<PAGE> 44
Agreement to be governed by or construed in accordance with the law of
the PRC, then each of this Agreement, the Asia Underwriting Agreement
and the Deposit Agreement would constitute the valid and legally
binding instrument of the Company, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the rights of creditors generally, by general principles of equity and
by the procedural requirements and public policy considerations set
forth in applicable provisions of the Civil Procedure Law of the PRC
relating to the enforceability of foreign judgments;
(xviii) The Company and/or its subsidiaries can sue and be sued
in its own name under the laws of the PRC; the irrevocable submission
of the Company to the exclusive jurisdiction of a New York Court, the
waiver by the Company of any objection to the venue of a proceeding of
a New York Court and the agreement of the Company that this Agreement,
the Asia Underwriting Agreement and the Deposit Agreement shall be
governed by and construed in accordance with the laws of the State of
New York are valid and legally binding; service of process effected in
the manner set forth in Section 14 hereof will be effective, insofar
as the law of the PRC is concerned, to confer valid personal
jurisdiction over the Company; any judgment obtained in a New York
Court arising out of or in relation to the obligations of the Company
under this Agreement, the Asia Underwriting Agreement or the Deposit
Agreement would be enforceable against the Company in the courts of
the PRC in accordance with the Civil Procedure Law of the PRC, subject
to the conditions described in the Prospectus under "Enforceability of
Civil Liabilities"; the Company is not entitled to any immunity on the
basis of sovereignty or otherwise in respect of its obligations under
this Agreement, the Asia Underwriting Agreement or the Deposit
Agreement and could not successfully interpose any such immunity as a
defense to any suit or action brought or maintained in respect of its
obligations under this Agreement, the Asia Underwriting Agreement or
the Deposit Agreement; and the waiver by the Company of immunity to
jurisdiction (including the waiver of sovereign immunity to which the
Company may become entitled subsequent to the date of such agreement)
and immunity to pre-judgment attachment, post-judgment attachment and
execution in any suit, action or proceeding against it arising out of
or based on this Agreement, the Asia Underwriting Agreement and the
Deposit Agreement is a valid and legally binding obligation of the
Company under the law of the PRC; each of this Agreement, the Asia
Underwriting Agreement and the Deposit Agreement is in proper legal
form under the laws of the PRC for the enforcement thereof against the
Company in the
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<PAGE> 45
PRC without further action on the part of the Underwriters, the Asia
Underwriters or the Depositary; and to ensure the legality, validity,
enforceability or admissibility in evidence of any of this Agreement,
the Asia Underwriting Agreement, the Deposit Agreement, the Shares or
ADSs, except for their official translation into Chinese for their
presentation to a PRC court, it is not necessary that any such
document be filed or recorded with any court or other authority in the
PRC or that any stamp or similar tax be paid on or in respect of any
such document or the Shares or the ADSs;
(xix) The indemnification and contribution provisions set forth
in Section 8 hereof and of the Asia Underwriting Agreement and in
Section 5.8 of the Deposit Agreement do not contravene the public
policy of the PRC, and insofar as matters of PRC law are concerned,
constitute the legal, valid and binding obligations of the Company,
enforceable in accordance with the terms therein, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights;
(xx) All dividends and other distributions declared and payable
upon the equity interests in the Company's subsidiaries to the Company
may be converted into foreign currency that may be freely transferred
out of the PRC, and all such dividends and other distributions are not
and, except as disclosed in the Registration Statement and the
Prospectus will not be subject to withholding or other taxes under the
laws and regulations of the PRC and, except as disclosed in the
Registration Statement and the Prospectus are otherwise free and clear
of any other tax, withholding or deduction under PRC law, in each case
without the necessity of obtaining any Governmental Authorization in
the PRC, except such as have been obtained;
(xxi) The entering into, performance and enforcement of this
Agreement and the Asia Underwriting Agreement in accordance with its
terms will not subject the Underwriters or the Asia Underwriters to a
requirement to be licensed or otherwise qualified to do business in
the PRC, nor will any Underwriter or any Asia Underwriter be deemed to
be resident, domiciled, carrying on business through an establishment
or place in the PRC or in breach of any laws or regulations of the PRC
by reason of entering into, performance or enforcement of this
Agreement or the Asia Underwriting Agreement;
(xxii) Under the laws of the PRC, neither the Company, nor any of
its subsidiaries, nor any of their respective properties, assets or
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<PAGE> 46
revenues, are entitled to any right of immunity on the grounds of
sovereignty from any legal action, suit or proceeding, from setoff or
counterclaim, from the jurisdiction of any court, from service of
process, from attachment prior to or in aid of execution of judgment
or from other legal process or proceeding for the giving of any relief
or for the enforcement of any judgment;
(xxiii) The application of the net proceeds from the Global
Offering, as set forth in and contemplated by the Prospectus, will not
contravene any provision of applicable PRC law or the Memorandum of
Association and Articles of Association, other constitutive documents
or the business license of the Company or, to the best of such
counsel's knowledge, contravene the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement, note, lease or other agreement or instrument binding
upon the Company or any of its subsidiaries, or any judgment, order or
decree of any PRC governmental body, agency or court having
jurisdiction over the Company or any of its subsidiaries. In rendering
the opinion in this subsection, such counsel may state that they have
assumed that to the extent any document referred to in this subsection
is governed by the law of a jurisdiction other than the PRC, such
document would be enforced as written;
(xxiv) The Company's PRC subsidiaries are subject to PRC income
tax at the rate of 33%, in accordance with the Income Tax Law of the
PRC for Enterprises with Foreign Investment and Foreign Enterprises
with effect from July 1, 1991; to the best of its knowledge, such
counsel is not aware of any event or circumstance which may result in
such rate being invalid or ineffective or capable of being revoked;
(xxv) The Acquisition Agreement has been duly authorized,
executed and delivered by China Mobile Group and is enforceable by the
Company against China Mobile Group in accordance with its terms;
(xxvi) (A) Each of the PRC Loan Documents has been duly
authorized, executed and delivered by each party thereto, and
constitutes a valid and binding agreement of each such party
enforceable in accordance with the terms of such PRC Loan Document,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general
principles of equity; (B) other than the approval by the PRC State
Council, which has been obtained and is in full force and effect, no
Governmental Authorization
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<PAGE> 47
is required with respect to the transactions contemplated under the
PRC Loan Documents; and (C) the execution, delivery and performance of
such PRC Loan Documents by each subsidiaries of the Company that is a
party to such document and the compliance by each such subsidiary with
the provisions of such document will not contravene any provision of
applicable law, rule or regulation and do not contravene the
Memorandum of Association and Articles of Association, other
constituent documents or the business license of the Company or any of
its subsidiaries or contravene the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement, note, lease or other agreement or instrument binding
upon the Company or any of its subsidiaries that, individually or in
the aggregate, is material to the Company and its subsidiaries, or any
judgment, rule or regulation, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any of
its subsidiaries and will not result in the creation or imposition of
any lien, charge, encumbrance or other restriction upon any assets of
the Company or any of its subsidiaries; and
(xxvii) Although they do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to
in the opinion in subsection (xi) of this Section 7(h), they have no
reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior
to such Time of Delivery (other than the financial statements, as to
which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the Prospectus or any
further amendment or supplement thereto made by the Company prior to
such Time of Delivery (other than the financial statements therein, as
to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as
of such Time of Delivery, the Registration Statement, the Prospectus
or any further amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the financial statements
therein, as to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
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<PAGE> 48
(h) Conyers Dill & Pearman, BVI counsel to the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) Each of the BVI Companies has been duly incorporated and is
validly existing under the laws of the BVI, 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 Prospectus, 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
and Articles of Association of each comply with requirements of
applicable BVI law and are in full force and effect; and
(ii) (A) The Acquisition Agreement has been duly authorized,
executed and delivered by China Mobile BVI, and constitutes valid and
legally binding obligations of China Mobile BVI enforceable in
accordance with its terms; and (B) the Share Transfer Agreement has
been duly authorized, executed and delivered by China Mobile BVI and
each of the BVI Companies that are parties thereto and constitutes
valid and legally binding obligations of China Mobile BVI and each
such BVI Company;
(i) Emmet, Marvin & Martin LLP, counsel for the Depositary, shall have
furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Deposit Agreement has been duly authorized, executed and
delivered by the Depositary and, assuming due authorization, execution
and delivery of the Deposit Agreement by the Company and further
assuming that the Deposit Agreement is a vlid and binding agreement of
the Company, constitutes a valid and legally binding obligation of the
Depositary, enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws of general applicability
relating to or affecting creditors' rights and by general equity
principles;
(ii) Upon issuance by the Depositary of ADRs evidencing the ADSs
against the deposit of Shares in respect thereof in accordance with
the provisions of the Deposit Agreement (assuming such Shares were, at
the
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<PAGE> 49
time of such deposit, (a) duly authorized and validly issued, fully
paid and nonassessable and (b) registered in compliance with the Act),
such ADRs will be duly and validly issued and will entitle the holders
thereof to the rights specified therein and in the Deposit Agreement;
and
(iii) The ADS Registration Statement and any amendments thereof
or supplements thereto, as of their respective effective dates, have
been declared effective under the Act and, to the best of such
counsel's knowledge, no stop order suspending the effectiveness of the
ADS Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and the ADS Registration Statement and any
amendments thereof or supplements thereto, have been complied as to
form in all material respects with the requirements of the Act and the
rules and regulations of the Commission thereunder;
(j) On the date of the Prospectus, or if a time prior to the execution
of this Agreement, at 9:30 a.m., New York City time, on the effective date
of any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery,
KPMG shall have furnished to you a letter or letters, dated the respective
dates of delivery thereof, in form and substance satisfactory to you, to
the effect set forth in Annex I hereto;
(k) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus,
and (ii) since the respective dates as of which information is given in the
Prospectus, there shall not have been any change in the capital stock of
the Company or any of its subsidiaries, or any change in consolidated
short-term debt or consolidated long-term debt of the Company and its
subsidiaries, or any change, or any event involving a prospective change,
in or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is in the judgment of the Representatives so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares and the ADSs being delivered
at such Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
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<PAGE> 50
(l) On or after the date hereof, (i) no downgrading shall have
occurred in the rating accorded to the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities;
(m) On or after the date hereof, there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the NYSE or the Hong Kong Stock Exchange; (ii) a
suspension or material limitation in trading in the Company's securities on
the NYSE or the Hong Kong Stock Exchange; (iii) a general moratorium on
commercial banking activities in New York or Hong Kong or the PRC declared
by the relevant authorities; (iv) a change or development involving a
prospective change in United States, Hong Kong or PRC taxation affecting
the Company, the Shares or the ADSs or the transfer thereof or the
imposition of exchange controls by the United States or Hong Kong, or any
change or development involving a prospective change in the PRC exchange
controls, if the effect of any such event specified in this clause (iv)
would materially and adversely affect the financial markets or the market
for the ADSs, the Shares and other equity securities; or (v) the outbreak
or escalation of hostilities involving the United States, Hong Kong or the
PRC or the declaration by the United States, Hong Kong or the PRC of a
national emergency or war, if the effect of any such event specified in
this clause (v) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the ADSs or the Shares being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus; or (vi) the
occurrence of any material adverse change in the existing financial,
political or economic conditions in the United States, Hong Kong or the PRC
or elsewhere which, in the judgment of the Representatives would materially
and adversely affect the financial markets or the market for the ADSs, the
Shares and other equity securities (the Global Coordinators shall if
practicable consult with the Company before electing to terminate the
Underwriters' obligations hereunder pursuant to clauses (v) and (vi) of
this Section 7(o));
(n) The ADSs to be sold by the Company at such Time of Delivery shall
have been duly listed, subject to notice of issuance, on the NYSE, and the
Shares shall have been approved in principle for listing on the Hong Kong
Stock Exchange;
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(o) The Acquisition Agreement shall be in full force and effect and no
material amendment shall have been made thereto;
(p) The Depositary shall have furnished or caused to be furnished to
you at such Time of Delivery certificates satisfactory to you evidencing
the deposit with it of the Shares being so deposited against issuance of
ADRs evidencing the ADSs to be delivered by the Company at such Time of
Delivery, and the execution, countersignature (if applicable), issuance and
delivery of ADRs evidencing such ADSs pursuant to the Deposit Agreement;
(q) The Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to
the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, and as to such other
matters as you may reasonably request, and the Company shall have furnished
or caused to be furnished certificates as to the matters set forth in
subsections (a) and (k) of this Section 7 and as to such other matters as
you may reasonably request;
(r) (i) Each of the Company and China Mobile BVI shall have executed a
"lock-up" agreement to the effect that, without the prior written consent
of the Global Coordinators, it will not, during the period beginning from
the date hereof and continuing to and including the date 180 days after the
date of the Prospectus, offer, sell, contract to sell, hedge or otherwise
dispose of (A) any shares or ADS of the Company or any securities of the
Company which are substantially similar to the shares of Stock or ADSs or
which are convertible or exchangeable into or exercisable for securities of
the Company which are substantially similar to the shares of Stock or ADSs
or (B) any of its own shares or similar securities; (ii) CMHK Group shall
have executed a similar "lock-up" agreement with respect to (A) any shares
of China Mobile BVI or any securities which are convertible or exchangeable
into or exercisable for shares of China Mobile BVI or (B) any of its own
shares or similar securities; and (iii) China Mobile Group shall have
executed a similar "lock-up" agreement with respect to any shares of CMHK
Group or any securities which are convertible or exchangeable into or
exercisable for shares of CMHK Group or (B) any of its own shares or
similar securities;
(s) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the Business
Day next succeeding the date of this Agreement;
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(t) The respective listing agreements (A) between the Company and the
Hong Kong Stock Exchange with respect to shares of Stock and (B) between
the Company and the NYSE with respect to ADSs shall be in full force and
effect; and
(u) MOFTEC shall have approved (A) the conversion of each of the
Target Companies into a wholly foreign-owned enterprise and (B) the revised
Articles of Association of each of the Target Companies; and each of the
Target Companies shall have been duly qualified as a foreign investment
enterprise under applicable PRC law.
8.(a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any of the
Preliminary Prospectus, the Registration Statement, the ADS Registration
Statement and the Prospectus or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any of the
Preliminary Prospectus, the Registration Statement, the ADS Registration
Statement and the Prospectus, or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Global Coordinators expressly for
use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any of the Preliminary Prospectus, the Registration
Statement, the ADS Registration Statement and the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but
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<PAGE> 53
only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in any of the Preliminary
Prospectus, the Registration Statement, the ADS Registration Statement and
the Prospectus, or any such amendment or supplement thereto, in reliance
upon and in conformity with written information furnished to the Company by
such Underwriter through the Global Coordinators expressly for use therein;
and will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any
such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve the indemnifying
party from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be
brought against any indemnified party, such indemnified party shall notify
the indemnifying party of the commencement thereof and the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such
indemnified party (which shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification
or contribution may be sought hereunder (whether or not the indemnified
party is an actual or potential party to such action or claim) unless such
settlement, compromise or judgment (i) includes an unconditional release of
the indemnified party from all liability arising out of such action or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
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<PAGE> 54
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Shares
and the ADSs. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then
each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Shares
and the ADSs purchased under this Agreement (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Shares and the
ADSs purchased under this Agreement, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one
hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this subsection (d)
were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Shares and the ADSs
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
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<PAGE> 55
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9.(a) If any Underwriter shall default in its obligation to purchase
the Shares and the ADSs which it has agreed to purchase hereunder at a Time
of Delivery, you may in your discretion arrange for you or another party or
other parties to purchase such Shares and ADSs on the terms contained
herein. If within thirty-six hours after such default by any Underwriter
you do not arrange for the purchase of such Shares and ADSs, then the
Company shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to you to
purchase such Shares and ADSs on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so
arranged for the purchase of such Shares and ADSs, or the Company notifies
you that it has so arranged for the purchase of such Shares and ADSs, you
or the Company shall have the right to postpone such Time of Delivery for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements, and the Company agrees to file
promptly any amendments to the Registration Statement or the Prospectus
which in your opinion may thereby be made necessary. The term "Underwriter"
as used in this Agreement shall include any person substituted under this
Section with like effect as if such person had originally been a party to
this Agreement with respect to such Shares and ADSs.
(b) If, after giving effect to any arrangements for the purchase of
the Shares and ADSs of a defaulting Underwriter or Underwriters by you and
the Company as provided in subsection (a) above, the aggregate number of
such Shares and ADSs which remains unpurchased does not exceed one-eleventh
of the aggregate number of all of the Shares and ADSs to be purchased at
such Time of Delivery, then the Company shall have the right to require
each non-defaulting
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<PAGE> 56
Underwriter to purchase the number of Shares and ADSs which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro
rata share (based on the number of Shares and ADSs which such Underwriter
agreed to purchase hereunder) of the Shares and ADSs of such defaulting
Underwriter or Underwriters for which such arrangements have not been made;
but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares and ADSs of a defaulting Underwriter or Underwriters by you and
the Company as provided in subsection (a) above, the aggregate number of
such Shares and ADSs which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares and ADSs to be purchased at such Time
of Delivery, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
Shares and ADSs of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to the Second Time of Delivery, the obligations
of the Underwriters to purchase and of the Company to sell the Optional
Shares and the Optional ADSs) shall thereupon terminate, without liability
on the part of any non-defaulting Underwriter or the Company, except for
the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares and ADSs.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason any Shares or
ADSs are not delivered by or on behalf of the Company as provided herein, the
Company shall reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares and ADSs not so delivered, but the
Company shall then be under no further liability to any Underwriter in respect
of the Shares and ADSs not so delivered except as provided in Sections 6 and 8
hereof.
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<PAGE> 57
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by the Global Coordinators on behalf of you as the
Representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the Representatives in care of China
International Capital Corporation (Hong Kong) Limited at R4302, 43/F, Central
Plaza, 18 Harbour Road, Wanchai, Hong Kong, facsimile: (852) 2872-2107,
Attention: Legal Department; Goldman Sachs (Asia) L.L.C. at 68/F, Cheung Kong
Center, 2 Queen's Road Central, Hong Kong, facsimile: (852) 2978-0440,
Attention: Legal Department; and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, North Tower, World Financial Center, New York, New York
10281-1209, facsimile: 212-449-5559, Attention: Registration Department; and if
to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
10 hereof, the respective affiliates and agents of each Underwriter, the
officers and directors of the Company and each person who controls the Company
or any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares or ADSs
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Each of the parties hereto irrevocably (i) agrees that any legal suit,
action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in any New York Court,
(ii) waives, to the fullest extent it may effectively do so, any objection which
it may now or hereafter have to the laying of venue of any such proceeding and
(iii) submits to the exclusive jurisdiction of such courts in any such suit,
action or proceeding. The Company irrevocably waives any immunity to
jurisdiction to which it may otherwise be entitled or become entitled (including
sovereign immunity, immunity to pre-judgment attachment, post-judgment
attachment and execution) in any legal suit, action or proceeding against it
arising out of or based on this Agreement or the transactions
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<PAGE> 58
contemplated hereby which is instituted in any New York Court or in any
competent court in Hong Kong or the PRC. The Company has appointed CT
Corporation System, 111 Eighth Avenue, 13th Floor, New York, New York 10011, as
its authorized agent (the "Authorized Agent") upon whom process may be served in
any such action arising out of or based on this Agreement or the transactions
contemplated hereby which may be instituted in any New York Court by any
Underwriter or by any person who controls any Underwriter, expressly consents to
the jurisdiction of any such court in respect of any such action, and waives any
other requirements of or objections to personal jurisdiction with respect
thereto. Such appointment shall be irrevocable. The Company represents and
warrants that the Authorized Agent has agreed to act as such agent for service
of process, and agrees to take any and all action, including the filing of any
and all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of such service to the Company shall be
deemed, in every respect, effective service of process upon the Company.
15. In respect of any judgment or order given or made for any amount due
hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company, will indemnify each Underwriter
against any loss incurred by such Underwriter as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the judgment currency for the purpose of such judgment or order
and (ii) the rate of exchange at which an Underwriter is able to purchase United
States dollars with the amount of the judgment currency actually received by
such Underwriter. The foregoing indemnity shall constitute a separate and
independent obligation of the Company and shall continue in full force and
effect notwithstanding any such judgment or order as aforesaid. The term "rate
of exchange" shall include any premiums and costs of exchange payable in
connection with the purchase of or conversion into United States dollars.
16. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
17. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
18. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
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<PAGE> 59
If the foregoing is in accordance with your understanding, please sign and
return to us (one for the Company and one for each of the Representatives plus
one for each counsel) counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters (U.S. Version), the form of which shall be
furnished to the Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
CHINA MOBILE (HONG KONG) LIMITED
By:
---------------------------------------
Name: Wang Xiaochu
Title: Chairman and Chief Executive
Officer
Accepted as of the date hereof on behalf of each of the Underwriters by:
CHINA INTERNATIONAL CAPITAL CORPORATION LIMITED
By:
---------------------------------------------
Name:
Title:
GOLDMAN SACHS (ASIA) L.L.C.
By:
---------------------------------------------
Name:
Title:
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<PAGE> 60
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
---------------------------------------------
Name:
Title:
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<PAGE> 61
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF OPTIONAL
ADSS TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM ADSS MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
<S> <C> <C>
China International Capital Corporation Limited -- --
Goldman Sachs (Asia) L.L.C. -- --
Merrill Lynch, Pierce, Fenner & Smith -- --
Incorporated
-- -- --
Total -- --
</TABLE>
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<PAGE> 62
ANNEX I
FORM OF COMFORT LETTER
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ANNEX II(a)
DRAFT OPINION AND LETTER OF SULLIVAN & CROMWELL
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ANNEX II(b)
DRAFT OPINION OF BAKER & MCKENZIE
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ANNEX II(c)
DRAFT OPINION OF HAIWEN & PARTNERS
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